Does regional currency integration ameliorate global macroeconomic shocks in sub-Saharan Africa? The case of the 2008-2009 global financial crisis

2014 ◽  
Vol 41 (5) ◽  
pp. 737-750 ◽  
Author(s):  
Gregory N. Price ◽  
Juliet U. Elu
Keyword(s):  
Economic Growth ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Sub Saharan Africa ◽  
Parameter Estimates ◽  
African Countries ◽  
Macroeconomic Shocks ◽  
Content Type ◽  
Sub Saharan ◽  
The Impact

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.

scholarly journals Financial Inclusion, Income Inequality and Sustainable Economic Growth in Sub-Saharan African Countries

2021 ◽  
Vol 13 (4) ◽  
pp. 1780
Author(s):  
Chima M. Menyelim ◽  
Abiola A. Babajide ◽  
Alexander E. Omankhanlen ◽  
Benjamin I. Ehikioya
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Financial Services ◽  
Sub Saharan Africa ◽  
Kuznets Curve ◽  
African Countries ◽  
Financial Access ◽  
Sub Saharan ◽  
Sustainable Economic Growth ◽  
The Impact

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.

“Does the poor matter” in pro-poor driven sub-Saharan African cities? towards progressive and inclusive pro-poor tourism

2019 ◽  
Vol 5 (3) ◽  
pp. 392-411 ◽  
Author(s):  
Regis Musavengane ◽  
Pius Siakwah ◽  
Llewellyn Leonard
Keyword(s):  
Sustainable Development ◽  
Good Governance ◽  
Urban Tourism ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Content Type ◽  
African Cities ◽  
The Poor ◽  
Sub Saharan ◽  
The Impact

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.

Innovation, institutions and economic growth in sub-Saharan Africa – an IV estimation of a panel threshold model

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Joseph Ato Forson ◽  
Rosemary Afrakomah Opoku ◽  
Michael Owusu Appiah ◽  
Evans Kyeremeh ◽  
Ibrahim Anyass Ahmed ◽  
...  
Keyword(s):  
Economic Growth ◽  
Developing Economies ◽  
Innovation Policy ◽  
Threshold Model ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Panel Regressions ◽  
Sub Saharan ◽  
The Impact ◽  
The Relationship

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.

Does economic freedom improve health outcomes in sub-Saharan Africa?

2020 ◽  
Vol 47 (12) ◽  
pp. 1633-1649
Author(s):  
Anand Sharma
Keyword(s):  
Mortality Rate ◽  
Life Expectancy ◽  
Health Outcomes ◽  
Economic Freedom ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Content Type ◽  
The World ◽  
Sub Saharan ◽  
The Impact

PurposeThe purpose of this study is to examine the impact of economic freedom on four key health indicators (namely, life expectancy, infant mortality rate, under-five mortality rate and neonatal mortality rate) by using a panel dataset of 34 sub-Saharan African countries from 2005 to 2016.Design/methodology/approachThe study obtains data from the World Development Indicators (WDI) of the World Bank and the Fraser Institute. It uses fixed effects regression to estimate the effect of economic freedom on health outcomes and attempts to resolve the endogeneity problems by using two-stage least squares regression (2SLS).FindingsThe results indicate a favourable impact of economic freedom on health outcomes. That is, higher levels of economic freedom reduce mortality rates and increase life expectancy in sub-Saharan Africa. All areas of economic freedom, except government size, have a significant and positive effect on health outcomes.Research limitations/implicationsThis study analyses the effect of economic freedom on health at a broad level. Country-specific studies at a disaggregated level may provide additional information about the impact of economic freedom on health outcomes. Also, this study does not control for some important variables such as education, income inequality and foreign aid due to data constraints.Practical implicationsThe findings suggest that sub-Saharan African countries should focus on enhancing the quality of economic institutions to improve their health outcomes. This may include policy reforms that support a robust legal system, protect property rights, promote free trade and stabilise the macroeconomic environment. In addition, policies that raise urbanisation, increase immunisation and lower the incidence of HIV are likely to produce a substantial improvement in health outcomes.Originality/valueExtant economic freedom-health literature does not focus on endogeneity problems. This study uses instrumental variables regression to deal with endogeneity. Also, this is one of the first attempts to empirically investigate the relationship between economic freedom and health in the case of sub-Saharan Africa.

scholarly journals Institutions and Economic Growth in Sub-Saharan African Countries: The Effect of Investment Climate Quality

2020 ◽  
Vol 8 (04) ◽  
pp. 1706-1730
Author(s):  
Nyemb Pagbe Rémi Degourmond
Keyword(s):  
Economic Growth ◽  
Private Property ◽  
Composite Index ◽  
Principal Component ◽  
Sub Saharan Africa ◽  
Investment Climate ◽  
African Countries ◽  
Composite Indices ◽  
Sub Saharan ◽  
The Impact

This paper assesses the impact of investment climate quality on economic growth for a sample of 21 countries in Sub-Saharan Africa (SSA), over the period 1996-2014. The investment climate is measured simultaneously by individual components and composite indices, in order to capture both its global and specific effects, with a view to possibly identifying the most determining factors in the economic growth of SSA countries. In addition, in order to verify the robustness of our results, two composite indices of investment climate were constructed using the Principal Component Analysis method, with variables from two main databases (the World Governance Indicators database of World Bank and the International Country Risk Guide database).By using fixed and random effects models based on Hausman test results, we generally find that investment climate is a major determinant of economic growth in the countries of the SSA of the study sample. This result is valid regardless of the composite index or the individual component considered. Fight against corruption, protection of private property rights, efficiency of government, the quality of bureaucracy and regulation appear to be the most decisive components in accelerating economic growth for the sample of country considered.

scholarly journals THE EFFECT OF HUMAN CAPITAL ON ECONOMIC GROWTH IN SOME SUB SAHARA AFRICAN COUNTRIES (SSA)

2021 ◽  
Vol 5 (1) ◽  
pp. 1-24
Author(s):  
AISHA AHMAD SAJOH
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Data Base ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
Unique Contribution ◽  
African Countries ◽  
Sub Saharan ◽  
Table Data ◽  
The Impact

Purpose: This research looked into debate on the possible impact of human capital on economic growth in Sub-Saharan Africa (SSA) and considers two alternative measures of human capital: health and education. Methodology: The research used a dynamic model based on the system generalized method of moments (SGMM) and analysed a balanced panel data covering 35 countries from 1986–2018. The research used Microsoft excel to record all the data gotten from the world indicator data base from world bank, penn world table data base and CANA database. The analysis was presented in a tabular form. Findings: This study found that human capital has an overall positive and statistically significant impact on economic growth in the SSA region, although, democracy has a negative and statistically significant impact on economic growth in the region. This finding shows the importance of both measures of human capital and aligns with the argument in the literature that neither education nor health is a perfect substitute for the other as a measure of human capital. Unique contribution to theory, practice and policy:Generally, the finding emphasised that both education and health measures of human capital are important, and that policymakers must consider the level of economic development while formulating policies that can enhance the impact of human capital on economic growth in the Sub-Saharan Africa region.

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 ◽  
...  
Keyword(s):  
Economic Growth ◽  
Healthcare Expenditure ◽  
Health Sector ◽  
Sub Saharan Africa ◽  
Marginal Effect ◽  
Health Crisis ◽  
Content Type ◽  
Interaction Terms ◽  
Sub Saharan ◽  
The Impact

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.

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 Revisiting the Relationship between Poverty and Environmental Sustainability in Sub-Saharan African Countries using Dynamic Econometric Models

Economy ◽  
2021 ◽  
Vol 8 (2) ◽  
pp. 16-25
Author(s):  
Owusu Samuel Mensah ◽  
Chen Jianlin ◽  
Fu Chuambo ◽  
Hu Qio
Keyword(s):  
Economic Growth ◽  
Sustainable Development ◽  
Environmental Sustainability ◽  
Econometric Models ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Development Goals ◽  
Sub Saharan ◽  
The Impact

Sustainable development remains an important issue in the quest to achieve a safe and a better world. The expansion of the 8 millennium development goals into the 17 sustainable development goals is a testament of the conscious desire to improve the human environment to ensure better quality of life for its citizens. This study assembles a collection of four sophisticated econometric models to determine the impact of poverty and other variables on two indicators of environmental sustainability. Beside, economic development, the study confirmed the negative impact of poverty on both indicators of sustainable development. The results prove that poverty in sub-Saharan Africa is a threat to environmental quality and its consequential challenges. The call to promote environmentally responsible behaviours should not be focused on developed countries alone. Poverty is also associated with high levels of pollution and poor countries including countries in sub-Saharan Africa contributes must equally restrategise for effective environmental goals. The study further discloses that poverty is one of the strongest factors that affect environmental sustainability. This observation is not a contradiction to the well-established fact that prosperity or economic growth is a major precursor of unsustainable environment. On the contrary the evidence in this paper amplifies a consequence of a social crisis if they fester at both ends. In one breath, whereas economic growth or economic prosperity can compromise the quality of the environment. In conclusion, this result implies that African countries in their pursuit of economic growth, education and effective healthcare to ameliorate poverty must incorporate other aggressive strategies to hasten poverty reduction.

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