Dynamic inference of healthcare expenditure on economic growth in Sub-Saharan Africa: a dynamic heterogenous panel data analysis

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Idris Abdullahi Abdulqadir ◽  
Bello Malam Sa'idu ◽  
Ibrahim Muhammad Adam ◽  
Fatima Binta Haruna ◽  
Mustapha Adamu Zubairu ◽  
...  

PurposeThis article investigates the dynamic implication of healthcare expenditure on economic growth in the selected ten Sub-Saharan African countries over the period 2000–2018.Design/methodology/approachThe study methodology included dynamic heterogenous panel, using mean group and pooled mean group estimators. The investigation of the healthcare expenditure and economic growth nexus was achieved while controlling the effects of investment, savings, labor force and life expectancy via interaction terms.FindingsThe results from linear healthcare expenditure have a significant positive impact on economic growth, while the nonlinear estimates through the interaction terms between healthcare expenditure and investment have a negative statistically significant impact on growth. The marginal effect of healthcare expenditure evaluated at the minimum and maximum level of investment is positive, suggesting the impact of health expenditure on growth does not vary with the level of investments. This result responds to the primary objective of the article.Research limitations/implicationsIn policy terms, the impact of investment on healthcare is essential to addressing future health crises. The impact of coronavirus disease 2019 (COVID-19) can never be separated from the shortages or low prioritization of health against other sectors of the economy. The article also provides an insight to policymakers on the demand for policy reform that will boost and make the health sector attractive to both domestic and foreign direct investment.Originality/valueGiven the vulnerability of SSA to the health crisis, there are limited studies to examine this phenomenon and first to address the needed investment priorities to the health sector infrastructure in SSA.

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Joseph Ato Forson ◽  
Rosemary Afrakomah Opoku ◽  
Michael Owusu Appiah ◽  
Evans Kyeremeh ◽  
Ibrahim Anyass Ahmed ◽  
...  

PurposeThe significant impact of innovation in stimulating economic growth cannot be overemphasized, more importantly from policy perspective. For this reason, the relationship between innovation and economic growth in developing economies such as the ones in Africa has remained topical. Yet, innovation as a concept is multi-dimensional and cannot be measured by just one single variable. With hindsight of the traditional measures of innovation in literature, we augment it with the number of scientific journals published in the region to enrich this discourse.Design/methodology/approachWe focus on an approach that explores innovation policy qualitatively from various policy documents of selected countries in the region from three policy perspectives (i.e. institutional framework, financing and diffusion and interaction). We further investigate whether innovation as perceived differently is important for economic growth in 25 economies in sub-Saharan Africa over the period 1990–2016. Instrumental variable estimation of a threshold regression is used to capture the contributions of innovation as a multi-dimensional concept on economic growth, while dealing with endogeneity between the regressors and error term.FindingsThe results from both traditional panel regressions and IV panel threshold regressions show a positive relationship between innovation and economic growth, although the impact seems negligible. Institutional quality dampens innovation among low-regime economies, and the relation is persistent regardless of when the focus is on aggregate or decomposed institutional factors. The impact of innovation on economic growth in most regressions is robust to different dimensions of innovation. Yet, the coefficients of the innovation variables in the two regimes are quite dissimilar. While most countries in the region have offered financial support in the form of budgetary allocations to strengthen institutions, barriers to the design and implementation of innovation policies may be responsible for the sluggish contribution of innovation to the growth pattern of the region.Originality/valueSegregating economies of Africa into two distinct regimes based on a threshold of investment in education as a share of GDP in order to understand the relationship between innovation and economic growth is quite novel. This lends credence to the fact that innovation as a multifaceted concept does not take place by chance – it is carefully planned. We have enriched the discourse of innovation and thus helped in deepening understanding on this contentious subject.


2019 ◽  
Vol 11 (1) ◽  
pp. 147-168 ◽  
Author(s):  
Nihar Ranjan Jena ◽  
Narayan Sethi

Purpose The purpose of this paper is to empirically examine the effectiveness of foreign aid in improving economic growth prospects in the sub-Saharan Africa (SSA) region from 1993 to 2017. Design/methodology/approach A sample of 45 SSA countries for the period 1993–2017 is considered for this study. The study uses various econometrics tools such as Pedroni and Kao’s cointegration test, Johansen-Fisher Panel cointegration test, FMOLS and PDOLS in order to ascertain the long-run and short-run dynamics among the variables under consideration. Findings The empirical results find that long-run and short-run relationships exist among foreign aid, economic growth, investment, financial deepening, price stability and trade openness of the SSA economies. The authors also find unidirectional causality running from foreign aid to economic growth. The policymakers in these countries are well-advised to implement suitable policy measures to build on the growth momentum created by foreign aid inflows. Originality/value The study uses a dynamic macroeconomic modeling framework to assess the impact of aid flows on economic growth in the SSA region. Taking into account the diversity of level of growth experienced by the 45 countries in the region, the study uses an appropriate regression technique, i.e., panel dynamic OLS whose results are robust. The finding is also supported by the Granger-causality test and robust cointegration techniques.


2014 ◽  
Vol 41 (5) ◽  
pp. 737-750 ◽  
Author(s):  
Gregory N. Price ◽  
Juliet U. Elu

Purpose – The purpose of this paper is to consider whether regional currency integration in sub-Saharan Africa ameliorates global macroeconomic shocks by considering the impact of the 2008-2009 global financial crisis on economic growth. This suggests that Central Africa Franc Zone (CFAZ) eurocurrency union membership amplifies the effects of global business cycles in sub-Saharan Africa. Design/methodology/approach – The authors estimate the parameters of a quantity theory model of economic growth within a Generalized Estimating Equation (GEE) Framework. Findings – Parameter estimates from GEE specifications reveal that the contraction in credit during the financial crisis of 2008-2009 had larger adverse growth effects on sub-Saharan African countries who were members of the CFAZ eurocurrency union. The authors also find that sub-Saharan African countries who were members of the CFAZ eurocurrency union were more likely to experience a contraction in credit. Originality/value – As far as the authors can discern, no existing empirical growth models use a GEE framework to estimate parameters of interest. The GEE parameter estimates are distribution-free, robust with respect to unknown forms of heteroskedasticity, and control for a wide variety of error structures that can induce bias in panel data parameter estimates.


2017 ◽  
Vol 44 (5) ◽  
pp. 683-695 ◽  
Author(s):  
Olusegun Ayodele Akanbi

Purpose The purpose of this paper is to examine the impact of migration on economic growth and human development in selected Sub-Saharan African (SSA) countries. Design/methodology/approach The estimations were carried out in a panel of 19 selected SSA countries over the period 1990-2013, using the two-stage least squares estimation techniques. Two measures of migration, namely stock of international migrants and the ratio of personal remittances received to personal remittances paid were used in the study to carry out this investigation. Findings The results conform to the findings of existing literature, namely that social expenditure, domestic investment, financial inclusion, income inequality, income and human poverty are significant determinants of either human development or per capita GDP in Sub-Saharan Africa. The distinctive feature of the study is the significant but negative role played by migration in explaining human development and economic growth in the region. The results from the panel estimations reveal that an increase in the measures of migration deteriorates the level of human development and growth of the region. Research limitations/implications The major limitation of this study is the unavailability of quality data on migration flows. Therefore, it would be imperative to reinvestigate the specifications adopted in this study in follow-up studies. Practical implications The study includes implications for policy makers, especially in SSA countries, that the pattern and flow of migration does not circulate within the region and has tended to drain out human capital to other regions of the world. In the same event, the stock of migrants residing in the region may be low-skilled migrants that do not contribute directly to the level of human development. Originality/value To assess the impact of migration on economic growth and development such as the SSA region, it is imperative to follow the growth-based, capacity-based and asset-based approaches to development. This study has made this distinction.


2021 ◽  
Vol 13 (4) ◽  
pp. 1780
Author(s):  
Chima M. Menyelim ◽  
Abiola A. Babajide ◽  
Alexander E. Omankhanlen ◽  
Benjamin I. Ehikioya

This study evaluates the relevance of inclusive financial access in moderating the effect of income inequality on economic growth in 48 countries in Sub-Saharan Africa (SSA) for the period 1995 to 2017. The findings using the Generalised Method of Moments (sys-GMM) technique show that inclusive financial access contributes to reducing inequality in the short run, contrary to the Kuznets curve. The result reveals a negative effect of financial access on the relationship between income inequality and economic growth. There is a positive net effect of inclusive financial access in moderating the impact of income inequality on economic growth. Given the need to achieve the Sustainable Development Targets in the sub-region, policymakers and other stakeholders of the economy must design policies and programmes that would enhance access to financial services as an essential mechanism to reduce income disparity and enhance sustainable economic growth.


2019 ◽  
Vol 5 (3) ◽  
pp. 392-411 ◽  
Author(s):  
Regis Musavengane ◽  
Pius Siakwah ◽  
Llewellyn Leonard

Purpose The purpose of this paper is to question the extent to which Sub-Saharan African cities are progressing towards promoting pro-poor economies through pro-poor tourism (PPT). It specifically examines how African cities are resilient towards attaining sustainable urban tourism destinations in light of high urbanization. Design/methodology/approach The methodological framework is interpretive in nature and qualitative in an operational form. It uses meta-synthesis to evaluate the causal relationships observed within Sub-Saharan African pro-poor economies to enhance PPT approaches, using Accra, Ghana, Johannesburg, South Africa, and Harare, Zimbabwe, as case studies. Findings Tourism development in Sub-Saharan Africa has been dominantly underpinned by neoliberal development strategies which threaten the sustainability of tourism in African cities. Research limitations/implications The study is limited to three Sub-Saharan African countries. Further studies may need to be done in other developing countries. Practical implications It argues for good governance through sustainability institutionalization which strengthens the regulative mechanisms, processes and organizational culture. Inclusive tourism approaches that are resilient-centered have the potential to promote urban tourism in Sub-Saharan African cities. These findings contribute to the building of strong and inclusive Institutions for Sustainable Development in the Sub-Saharan African cities to alleviate poverty. Social implications These findings contribute to the building of strong and inclusive institutions for sustainable development in the Sub-Saharan African cities to alleviate poverty. Originality/value The “poor” are always within the communities, and it takes a community to minimise the impact of poverty among the populace. The study is conducted at a pertinent time when most African government’s development policies are pro-poor driven. Though African cities provide opportunities of growth, they are regarded as centres of high inequality.


2020 ◽  
Vol 12 (8) ◽  
pp. 3280 ◽  
Author(s):  
Chindo Sulaiman ◽  
A.S. Abdul-Rahim

This study estimates the impact of wood fuel consumption on economic growth in 19 sub-Saharan African countries over the 1979-2017 period. The study employs dynamic macro-panel estimators, which comprises pooled mean group (PMG), mean group (MG), and dynamic fixed effects (DFE). The estimated result reveals that PMG is the most efficient estimator among the three estimators based on the Hausman h-test. The results from PMG model reveal that wood fuel consumption has significant negative impact on economic growth. Also, when an interaction term between labor and wood fuel consumption was included in the model and estimated, the coefficient of wood fuel consumption yields negative and significant coefficient. This suggests that the interaction term has a negative and significant effect on economic growth. These results unveil that wood fuel consumption negatively and significantly affect economic growth, both directly and indirectly. The policy recommendations from this study are as follows: (1) Governments of these countries should provide adequate and affordable modern fuels to the populace; especially rural dwellers to decrease the use of wood fuel for cooking and heating (2) policy makers should intensify awareness campaign on the risk and danger wood fuel poses to economic growth so as to discourage its use and (3) policy makers should provide adequate solar powered stoves and solar-powered room heaters as cheap substitutes to the use of wood fuel for cooking and heating. These recommendations will assist in negating the negative effects of wood fuel consumption on economic growth of the region.


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