The Global DHL Connectedness Index (GDCI) 2020 indicates that Nigeria ranks behind 10 other African countries out of which Ghana, Cote d’Ivoire and Togo are from West Africa (Olaiya, 2020). The report tracks the cross-border movement of trade, capital, information, and people in 169 countries which account for about 99% of the global GDP. The lead author of GCI Prof. Steven Altman attributed the drop in Nigeria’s index position to restrictive policies such as the border closure while noting that globalisation would fast-track post-covid recoveries among economies. The author however assured a brighter future given that the country had embraced and ratified the African Continental Free Trade Agreement (AfCFTA) the crux of which is trade liberalisation in Africa. Can Nigeria in isolation drive the growth of the ECOWAS sub region without other countries joining in the globalisation trend? How globalised are other countries in West Africa besides the above mentioned?
Globalisation entails the integration of individuals, firms, and governments globally. It could be economic, political, or cultural. The International Monetary Fund (IMF) identified four main aspects of globalisation to include trade and transactions; capital and investment movements; migration and movement of people, and knowledge dissemination (Giovanni, et al., 2008). Economic globalisation is the unification of the global factor and product markets through technology, it connotes trade openness (Gyglia, Haelg, & Sturm, 2018). The impact of this development on economic growth has become a subject of debate by the business community, professionals, the academia among others as to the emerging issues both positive and negative. The theory of Comparative advantage provides that countries would gain from opening their borders to licit businesses. The practicability of this theory was thrown into question after World War I and the Great Depression of 1930, this led to the proliferation of trade restrictions by nations to insulate their economies from the negative impact of trade liberalisation. Similarly, the Global financial crisis of 2007–2009 has casted more doubt on the gains from trade openness. Consequently, globalisation has received attention from scholars with a view to evaluating the actual impact of the global interconnectedness among countries.
The term also implies that regions, countries, and even sectors of an economy could be susceptible to crises spillovers among themselves. The form of such spillovers depends on the phase of the business cycle being experinenced by the source economy. This has been rightly captured by Billio et al. (2016) who tagged some countries as vulnerable territories to shocks from other territories. Available literature has attributed the level of septicity to globalisation, and that a shock in an economy or a union can throw the trade partners of such an economy or union is disarray depending however on the sophistication of their financial authorities (Claessens & Forbes, 2004). Globalisation also entails that there is a high level of correlations among the economic entities (Phylaktis & Xia, 2009). These imply that the higher the level of integration among countries, the higher the propensity to transfer risks. Globalisation has negative effects on almost every aspect of human life; it increases health hazards (Goryakin, Lobstein, James, & Suhrcke, 2015). The origin and spread of Covid-19 could also be blamed on globalisation. This has in turn caused the global economy in losses due to business shutdowns (Coibion, Gorodnichenko, & Weber, 2020). Obviously, the phenomenon has created temporary dislocations to jobs within nations. Artificial Intelligence for instance has taken over jobs hitherto handled by lawyers, accountants, physicians among others with security concerns especially with the fear of Chinese domination of the world economy (Hammes, 2016). The scenario has threatened the security of nations (Cîrdei, 2019). The Fourth Industrial Revolution for example has brought about income inequalities by increasing the gap between returns to capital and returns to labour though in the short run (Schwab, 2016). The net displacement to jobs by technology would in the long run lead to better jobs. Globalisation is a double-edged process with both winners and losers both domestic and international, this is the root of current forces of deglobalisation. (Roccu & Talani, 2019). Globalisation is not entirely evil. It may have promoted money laundering through cryptocurrency, but financial globalisation has also facilitated transparency and can instil financial system stability, ensuring liquidity and growth of an economy (Ezeanyeji & Maureen, 2019). With these conflicting views on the positives and negatives of globalisation, this research has been undertaken to evaluate the actual impact of globalisation on the economy of the West Africa sub-region.
1.1 Research Hypothesis
H1: Globalisation does not affect economic growth in West Africa in the Long Run
1.2 Significance of the Study
With a population of about 412,996,732, 5.16% of the World’s population, and a net migration of about − 177,000 (UN, 2021), it implies that there are more emigrants than there are immigrants to West Africa. It is therefore imperative to examine the linkages between the growth of the regional economy and the degree of integration with other economies in terms of movement of goods and capital and how these affect the growth of the subregion.
As outlined above, this paper intends to add to the existing literature on linkages of economies. It would analyse the spill-overs from trading partners of the sub-region. Evidence from the literature only indicates the direction of causality. This study would go a step further to measure the degree of impact of globalisation on economic growth and how fast an equilibrium could be restored should there be a disequilibrium within the economy because of the country’s open borders.