The Effect of Gross Domestic Product, Exchange Rate, and Inflation on Import Trade Growth: Empirical Evidence from Sub-Saharan Africa.

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Abstract

Using a dynamic difference Generalized Method of Moments (GMM) model, this study investigates the complex relationship between import trade and key economic variables such as GDP, inflation, and exchange rate within sub-Saharan Africa, covering the period from 2000 to 2021. The analysis indicates that import behavior is highly persistent with current dynamics significantly influenced by prior import levels. Results also indicate that while inflation negatively affects import volumes, GDP has a positive correlation with imports, highlighting the significance of stability in economic policy. Additionally, changes in exchange rates were found to negatively affect imports, emphasizing the necessity of prudent monetary policy. These findings provide valuable insights for policymakers aiming to improve trade dynamics and promote regional economic growth.

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