Foreign Trade and Performance of Agricultural Sector in West African Monetary Zone

AbstractThis study examined the impact of foreign trade on the performance of agricultural sector in West African Monetary Zone (WAMZ). The objectives of the study are to; determine the impact of trade openness, exchange rate and trade restriction on the performance of agricultural in WAMZ.  Panel data used for the study were sourced from World Development Indicators (WDI) and United Nations Conference on Trade and Development (UNCTAD) from 2010 to 2024 for countries such as Nigeria, Ghana, Liberia, Sierra Leone, Gambia, and Guinea. The technique of Hausman test for panel least squares method (random effect model) was utilized. The result showed that, trade openness is positively and significantly related with agricultural sector performance in WAMZ between 2010 and 2024.Also, exchange rate had positive relationship with agricultural sector performance. Nevertheless, trade restriction had negative relationship with agricultural sector performance. Also, the explanatory power of the estimated model is 68%. The study concluded that, foreign trade in terms of trade openness has same effect on the agricultural sectoral performance. While trade restriction and exchange rate have mixed effect on agricultural sectoral performances in WAMZ. Based on the findings, it was recommended amongst others that, trade openness should be strategic in encouraging value chain process in the agricultural sector.