Economic openness, trade restrictions and external shocks: modelling short run effects in Sub-Saharan Africa

1998 ◽  
Vol 15 (2) ◽  
pp. 257-286 ◽  
Author(s):  
Jørn Rattsø ◽  
Ragnar Torvik
Keyword(s):  
Sub Saharan Africa ◽  
External Shocks ◽  
Trade Restrictions ◽  
Economic Openness ◽  
Short Run ◽  
Sub Saharan

scholarly journals Implications of Governance, Natural Resources, and Security Threats on Economic Development: Evidence from Sub-Saharan Africa

2021 ◽  
Vol 18 (12) ◽  
pp. 6236
Author(s):  
Husam Rjoub ◽  
Chuka Uzoma Ifediora ◽  
Jamiu Adetola Odugbesan ◽  
Benneth Chiemelie Iloka ◽  
João Xavier Rita ◽  
...  
Keyword(s):  
Economic Development ◽  
Natural Resources ◽  
Causal Effect ◽  
Sub Saharan Africa ◽  
Security Threats ◽  
African Countries ◽  
Significance Level ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan

Sub-Saharan African countries are known to be bedeviled with some challenges hindering the economic development. Meanwhile, some of these issues have not been exhaustively investigated in the context of the region. Thus, this study aimed at investigating the implications of government effectiveness, availability of natural resources, and security threats on the regions’ economic development. Yearly data, spanning from 2007 to 2020, was converted from low frequency (yearly) to high frequency (quarterly) and utilized. Data analysis was conducted using Dynamic heterogeneous panel level estimators (PMG and CS-ARDL). Findings show that while PMG estimator confirms a long-run causal effect of governance, natural resources, and security threats on economic development, only natural resources show a short-run causal effect with economic development, while the CS-ARDL (model 2) confirms the significance of all the variables both in the long and short-run. Moreover, the ECT coefficients for both models were found to be statistically significant at less than 1% significance level, which indicates that the systems return back to equilibrium in case of a shock that causes disequilibrium, and in addition, reveals a stable long-run cointegration among the variables in the model. Finally, this study suggests that the policy makers in SSA countries should place more emphasis on improving governance, managing security challenges, and effectively utilizing rents from the natural resources, as all these have severe implications for the economic development of the region if not addressed.

scholarly journals Long-Run and Short-Run Effects of Trade Openness on Life Quality in Sub-Saharan Africa

2021 ◽  
Vol 11 (8) ◽  
pp. 72-83
Author(s):  
Guivis Zeufack Nkemgha ◽  
Aimée Viviane Mbita ◽  
Symphorin Engone Mve ◽  
Rodrigue Tchoffo
Keyword(s):  
Trade Openness ◽  
Life Quality ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Pooled Mean Group ◽  
Long Run ◽  
Short Run ◽  
French Colonies ◽  
Sub Saharan ◽  
British Colonies

This paper contributes to the understanding of the other neglected effects of trade openness by analysing how it affects life quality in sub-Saharan African countries over the period 2000–2016. We used two trade openness indicators, namely: Squalli and Wilson index and the rate of trade. The empirical evidence is based on a pooled mean group approach. With two panels differentiated by their colonial origin, the following findings are established: the trade openness variable measured by Squalli and Wilson index has no effect on life quality in the both groups of countries in the short-run. However, it has a positive and significant effect on life quality in the both group of countries in the long-run. The use of the rate of trade confirms the results in the both groups of countries in the long-run. The contribution of trade openness to life quality is 3.27 and 5.19 times higher in the Former British Colonies than that recorded in the Former French Colonies of SSA respectively to the use of Squalli and Wilson index and the rate of trade. Overall, we find strong evidence supporting the view that trade openness promotes life quality in SSA countries in the long run.

scholarly journals Carbon Lock-In and Sustainable Growth Challenges : Evidence from Sub-Saharan Africa

2020 ◽  
pp. 01-25
Author(s):  
Aminatou Kemajou Pofoura ◽  
Huaping Sun ◽  
Maxwell Opuni Antwi ◽  
Charles Kwarteng Antwi
Keyword(s):  
Carbon Emissions ◽  
Path Dependency ◽  
Sub Saharan Africa ◽  
Financial Resources ◽  
Low Carbon ◽  
Income Per Capita ◽  
Short Run ◽  
Per Capita ◽  
Sub Saharan ◽  
Lock In

This research seeks to investigate the risks of carbon lock-in by examining the potential factors influencing carbon dioxide emissions levels in Sub-Saharan Africa. Given this, we employed a panel Sub-Saharan Africa comprised of 35 countries in the sub-region, from 2000 to 2014 with cross-sectional dependence among variables. We used the Two-step robust System Generalized Method of Moments to estimate the influencing factors of carbon emissions level that create path dependency. The main findings are: (1) income per capita, urbanization, and financial resources contribute to the increase of carbon emissions level in the Sub-Saharan Africa countries, in the short-run; (2) we noticed that in the short-run, the impacts of fossil fuels per capita, energy intensity and total energy consumption are insignificant; (3) in the long-run, income per capita, urbanization and financial resources increase carbon emissions level; (4) from various factors that increase carbon emissions level, these factors form a path dependency that slow the introduction of low-carbon systems, thus, creating carbon lock-in in the Sub-Saharan Africa countries. Considering this, policymakers and governments should ensure the strict compliance of environmental regulations by financial institutions and organizations, promote low-carbon cities during economic transformation, and encourage investments in low-carbon projects. The government should also educate and build awareness on the effects of environmental pollution on population health, provide incentives for energy conservation and promote the use of clean products to avoid future risks of lock-in in the sub-region.

scholarly journals After the lockdown: macroeconomic adjustment to the COVID-19 pandemic in sub-Saharan Africa

2020 ◽  
Vol 36 (Supplement_1) ◽  
pp. S338-S358 ◽  
Author(s):  
Christopher Adam ◽  
Mark Henstridge ◽  
Stevan Lee
Keyword(s):  
Low Income ◽  
Poverty Reduction ◽  
Sub Saharan Africa ◽  
Policy Options ◽  
Macroeconomic Adjustment ◽  
The Public ◽  
Global Recession ◽  
Significant Difference ◽  
Short Run ◽  
Sub Saharan

Abstract The COVID-19 pandemic is ripping around most of the world, but not in Africa; at least, not yet. At the same time, the policy response is remarkably uniform: most of sub-Saharan Africa went into lockdown from the second week in March. What happens next for the pandemic across Africa is uncertain, but the March lockdowns are unlikely to have contained the epidemic by themselves. What is clear is that the combination of domestic lockdowns and the spill-over from the global recession means immediate and severe hardship. This paper looks beyond the public health aspects of the pandemic to examine the medium-term macroeconomic adjustment challenge confronting domestic policy-makers and international donors. We combine epidemiological and macroeconomic models to calibrate the scale of the combined shock to a representative low-income African economy and to show how alternative policy options for slowing transmission of COVID-19 impact on public revenue, and on GDP in the short run, and hence shape the path to recovery. Noting that the first lockdown, however costly, does not by itself eliminate the likelihood of a re-emergence of the epidemic, we then frame the agenda for key macroeconomic and public finance policies to sustain recovery, growth, and poverty reduction in sub-Saharan Africa. The initial hit to consumption will be up to one-third. All the public policy options are grim. International donor finance of US$40–50 billion, together with domestic reform to accelerate recovery, would make a significant difference to the outlook for poverty.

Nutrition and economic growth in sub-Saharan Africa: a causality test using panel data

2017 ◽  
Vol 16 (2) ◽  
pp. 174-189
Author(s):  
Kolawole Ogundari ◽  
Adebayo Aromolaran
Keyword(s):  
Economic Growth ◽  
Design Methodology ◽  
Sub Saharan Africa ◽  
Dynamic Panel ◽  
Causality Test ◽  
Panel Causality ◽  
Content Type ◽  
Causality Tests ◽  
Short Run ◽  
Sub Saharan

Purpose This study aims to investigate the causal relationship between nutrition and economic growth in sub-Saharan Africa. Design/methodology/approach A dynamic panel causality test based on the Blundell-Bond’s system generalized methods-of-moment was used. To make efficient inference for the estimates, the authors check for the panel unit root and co-integration relationship amongst the variables. Findings The variables were found to be non-stationary at level, stationary after first difference and co-integrated. The results of the causality tests reveal evidence of long and short-run bidirectional causality between nutrition and economic growth, which implies that nutritional improvement is a cause and consequence of economic growth and vice versa. Originality/value This is the first study to consider causality between nutrition and economic growth in the region.

scholarly journals Deconstructing the Impact of Entrepreneurship on Income Inequality in Sub-Saharan Africa Countries

2020 ◽  
Vol 34 (1) ◽  
pp. 273-284
Author(s):  
Jimoh S. Ogede
Keyword(s):  
Income Inequality ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Macroeconomic Factors ◽  
Significance Level ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan ◽  
Entrepreneurial Activities ◽  
The Impact

Abstract The study examines the impacts of entrepreneurship on income inequality in a panel of 29 Sub-Saharan African countries spanning from 2004 to 2020. The paper employs a dynamic heterogeneous panel approach to differentiate between long-run and short-run impacts of entrepreneurship on income inequality. The findings establish a robust and direct nexus between entrepreneurial activities and income disparity. The results of the two entrepreneurial indicators are stable. Besides, the coefficient of the human capital is positive in the regression and statistically significant at a 5 percent significance level. The proxies for macroeconomic factors exhibit diverse signs and impact, which suggest a policy stimulus aimed at refining macroeconomic situations and also ignite prospects for households to increase their incomes.

scholarly journals The Dynamic Impact of Public External Debt on Capital Formation in Sub-Saharan Africa: The Pooled Mean Group Approach

2021 ◽  
Vol 3 (4) ◽  
pp. 144-157
Author(s):  
Chukwunenye N Kocha ◽  
Marshal Iwedi ◽  
James Sarakiri
Keyword(s):  
External Debt ◽  
Capital Formation ◽  
Debt Service ◽  
Sub Saharan Africa ◽  
Interest Payment ◽  
Debt Sustainability ◽  
Pooled Mean Group ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan

The increasing reliance on public external debt stocks in Africa and other developing countries has raised the question of debt sustainability, especially in the face of Covid-19, which has forced many counties (both developed and developing) into an unforeseen and unplanned recession. This study contributes to the literature on debt sustainability by examining the effect of public debt on capital formation in Sub-Saharan Africa (SSA) from 2000 to 2008 using the pooled mean group estimation approach. The debt variables considered are external debt stock, debt service on external debt, and interest payment on external debt. Consistent with the overhang theory, our results show that increasing external debt stock and interest payment on external debts only have a marginal impact on capital formation in the short run and exerts a serious negative effect in the long run. Our results also show that debt service burden has a positive effect on gross fixed capital formation in the long run. Therefore, we argue that despite being faced with a huge debt service burden resulting from large external debt stock, SSA countries are not neglecting investments in critical infrastructures needed to drive economic growth. However, we recommend that increasing government revenue base, minimizing economic waste associated with public expenditure, and intensifying negotiations for debt relief may be a plausible way out.

scholarly journals Infectious disease, development, and climate change: a scenario analysis

2007 ◽  
Vol 12 (5) ◽  
pp. 687-706 ◽  
Author(s):  
RICHARD S.J. TOL ◽  
KRISTIE L. EBI ◽  
GARY W. YOHE
Keyword(s):  
Climate Change ◽  
Infectious Disease ◽  
Infant Mortality ◽  
Infectious Diseases ◽  
Sub Saharan Africa ◽  
Absolute Poverty ◽  
Control Programs ◽  
Short Run ◽  
Sub Saharan

We study the effects of development and climate change on infectious diseases in Sub-Saharan Africa. Infant mortality and infectious disease are closely related, but there are better data for the former. In an international cross-section, per capita income, literacy, and absolute poverty significantly affect infant mortality. We use scenarios of these three determinants and of climate change to project the future incidence of malaria, assuming it to change proportionally to infant mortality. Malaria deaths will first increase, because of population growth and climate change, but then fall, because of development. This pattern is robust to the choice of scenario, parameters, and starting conditions; and it holds for diarrhoea, schistosomiasis, and dengue fever as well. However, the timing and level of the mortality peak is very sensitive to assumptions. Climate change is important in the medium term, but dominated in the long term by development. As climate can only be changed with a substantial delay, development is the preferred strategy to reduce infectious diseases even if they are exacerbated by climate change. Development can, in particular, support the needed strengthening of disease control programs in the short run and thereby increase the capacity to cope with projected increases in infectious diseases over the medium to long term. This conclusion must, however, be viewed with caution, because development, even of the sort envisioned in the underlying socio-economic scenarios, is by no means certain.

Can Black Africa afford to be Green Africa?

2016 ◽  
Vol 43 (1) ◽  
pp. 48-58 ◽  
Author(s):  
Gregory N. Price ◽  
Juliet U. Elu
Keyword(s):  
Carbon Emissions ◽  
Sub Saharan Africa ◽  
Parameter Estimates ◽  
African Countries ◽  
Content Type ◽  
Black Africa ◽  
The World ◽  
Short Run ◽  
Cross Country ◽  
Sub Saharan

Purpose – The purpose of this paper is to use a neoclassical factor pricing approach to carbon emissions, and consider whether the productivity of carbon emissions differs in Sub-Saharan Africa relative to the rest of the world. Design/methodology/approach – Allowing for possible cross-country dependency and correlation in the effects of the factors of production on the level of gross domestic product per capita, the authors estimate the parameters of a cross-country net production function with carbon emissions as an input. Findings – While there is a “Sub-Saharan Africa effect” whereby carbon emissions are less productive as an input relative to the rest of the world; practically it is equally productive relative to all other countries suggesting a unfavorable distributional impact if Sub-Saharan Africa were to implement carbon emissions reductions consistent with the Kyoto Protocol. Research limitations/implications – If global warming is not anthropogenic or caused by carbon emissions, the parameter estimates do not inform an optimal and equitable carbon emissions policy based upon Sub-Saharan Africans reducing their short-run living standards. Practical implications – Fair and equitable global carbon emissions policies should aim to treat Sub-Saharan African countries in proportion to their carbon emissions, and not unfairly impose emissions constraints on them equal to that of countries in the industrialized west. Social implications – As Sub-Saharan Africa has a disproportionate number of individuals in the world living on less than one dollar a day, the results suggest “Black Africa” may not be able to afford being a “Green Africa.” Originality/value – The results are the first to quantify the effects of carbon emissions restrictions on output and their distributional implications for Sub-Saharan Africa.

scholarly journals Analysis of Savings-Investment Gap in Sub-Saharan Africa: Does the nexus between Foreign Remittances and Domestic Financial Sector matter?

2021 ◽  
Author(s):  
Oluwatosin Adeniyi ◽  
Joshua Ogunjimi ◽  
Wasiu Adekunle ◽  
Musibau Babatunde ◽  
Edward Omiwale
Keyword(s):  
Financial Development ◽  
Migrant Workers ◽  
Forecast Accuracy ◽  
Sub Saharan Africa ◽  
Interactive Effects ◽  
Panel Ardl ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan

Abstract In recent times, increasing attention is being paid to examine the developmental impact of remittances inflow, particularly due to the emergence of remittances as the fastest growing source of capital flows for developing countries. To this end, we contribute to the literature by analyzing the interactive effects of remittances and financial development on savings-investment gap for a panel of 18 Sub-Saharan African (SSA) countries over the period of 1990 to 2017. Our Panel ARDL model estimation showed that higher remittances have significant reducing effect on savings-investment gap in the long run, and this becomes magnified while accounting for individual and interactive effects of remittances and financial development. We also uncovered the widening effects of rising real GDP growth and bank deposits over a long-term horizon, whereas higher private sector credit widens the savings-investment gap only in the short-run. Meanwhile, liquid liabilities have no significant effect on savings-investment gap both in the short run and long run. We further offered evidence on the complementarity and substitutability effects of remittances and financial development over the short-term and long-term horizons, respectively. We also demonstrated the superior forecast accuracy of the predictive savings-investment gap model - that accounts for both individual and interactive effects - over other specifications, and this is robust to the choice of financial development indicators, samples and forecast horizons. Our results underscore the urgent need for a reduction of transfer costs, so as to encourage both migrant workers and their beneficiaries to make use of the official channels for sending and receiving remittances in the region.

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