MARITIME INFRASTRUCTURE, FINTECH ADOPTION AND TRADE INTEGRATION DYNAMICS IN SUB-SAHARAN AFRICA
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Abstract
Exploring the interaction of maritime infrastructure, adoption of financial technology (FinTech) and integration of trade across 32 Sub-Saharan African economies between 2006 and 2023 using second-generation CIPS unit root tests, Pedroni, Kao, and Westerlund cointegration tests, Fully Modified OLS and Pooled Mean Group estimators, Dumitrescu-Hurlin panel causality tests and Hansen threshold analysis to overcome methodological limitations, the findings of this study indicate existence long-term co-integration relationship between trade integration, maritime connectedness, digital infrastructure, mobile money usage, institutional outcomes, and macroeconomic variables with Maritime connectivity (LSCI) exhibiting a negative baseline association with trade-to-GDP, consistent with an import-amplification mechanism specific to structurally constrained African economies; however, this effect reverses at higher governance levels, as confirmed by a statistically significant LSCI×GOVEFF interaction.. Internet usage shows a nonlinear threshold effect, with the effect becoming positive above 29.4%, thus supporting the critical-mass effect hypothesis. Mobile money plays an important role in ensuring trade integration by minimizing transaction costs. All these have been proved by using system GMM estimation with strong diagnostic tests. The negative effects of the AfCFTA are transitional rather than long-term. Overall, the results show that institutions, digital infrastructure, and financial inclusion have important contributions towards regional trade integration. The study recommends pursuing coordination, investment, and governance improvements to maximize gains from integration, irrespective of economic structure.
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FinTech, Mobile Money, Trade Integration, Maritime Infrastructure, AfCFT
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