Towards shared prosperity in sub‐Saharan Africa: How does the effect of economic integration compare to social equity policies?

Abstract This study extends the inclusive growth literature on sub‐Saharan Africa (SSA) by addressing two conspicuous gaps. First, the study examines the effects of social equity policies and economic integration on inclusive growth. Second, the study investigates the joint effects of economic integration and resource allocation on inclusive growth. Using data on 43 SSA countries for the period 1980–2019, we provide robust evidence from the GMM estimator to show that relative to economic integration, social equity policies are rather remarkable in enhancing inclusive growth. The results further reveal that, although economic integration induces inclusive growth, the effect is pronounced in the presence of productive resource allocation. Policy recommendations are provided in line with the African Continental Free Trade Area (AfCFTA) agreement and the reversals of welfare gains due to the coronavirus pandemic.