The impact of GDP, exchange rates, and inflation on export trade growth: empirical evidence from Sub-Saharan Africa

This study examined the impact of Gross Domestic Product (GDP), exchange rates, and inflation on export trade growth in Sub-Saharan African Countries. Since previous studies have examined independently and often relied on static or country-specific models that ignore heterogeneity, endogeneity, and dynamic interactions, this study fills a significant gap in the literature. The study employs a two-step System Generalized Method of Moments (S-GMM) panel model to estimate the dynamic impacts of the dependent variables using annual data of 33 SSA countries for the years from 2000 to 2021. The findings show that GDP growth has a strong and positive influence on export trade performance, demonstrating that trade growth is determined by economic growth. On the other hand, inflation has a negative effect, indicating that rising costs reduce export competitiveness and discourage global trade. The significant positive but economically small impact of the exchange rate shows that domestic currency appreciation slightly increases exports by decreasing the cost of imported merchandise. The results emphasized the importance of sustaining macroeconomic stability, export diversification, and promoting export-oriented economic growth policies in order to improve SSA’s export performance.