Shadow economy in Africa: how relevant is financial inclusion?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Folorunsho M. Ajide
Keyword(s):  
Shadow Economy ◽  
Financial Inclusion ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Content Type ◽  
Development Indicators ◽  
Panel Data Estimation ◽  
Sub Saharan ◽  
Data Estimation ◽  
Toda And Yamamoto

Purpose This study aims to investigate the possible relationship between financial inclusion and shadow economy in selected African countries. Design/methodology/approach The study uses panel data estimation technique and Toda and Yamamoto causality approach. The data of selected African counties over a period of 2005–2015 are sourced from World Bank Development Indicators, International Monetary Fund International Financial statistics database and International Country Risk Guide. Findings The results show that financial inclusion reduces the size of shadow economy. The causality results show that there is a unidirectional causality moving from financial inclusion to shadow economy. The results demonstrate that a country with lower level of corruption and higher level of growth can benefit more in reducing the size of shadow economy through financial inclusion. Originality/value This study provides the first evidence of the link between financial inclusion and shadow economy from the Sub-Saharan Africa perspective. The study suggests that financial inclusion may be useful in affecting the size of shadow economy in Africa.

Relationship between financial inclusion, banking stability and economic growth: a dynamic panel approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Richard Boachie ◽  
Godfred Aawaar ◽  
Daniel Domeher
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Financial Inclusion ◽  
Sub Saharan Africa ◽  
Bank Capital ◽  
African Countries ◽  
Content Type ◽  
Regulatory Frameworks ◽  
Banking Stability ◽  
Sub Saharan

PurposeThe purpose of this paper is to analyse the relationship between financial inclusion, banking stability and economic growth in sub-Saharan African countries given the interconnectedness between them. Globally, financial inclusion has gained recognition as a critical channel for promoting economic growth by bringing a large proportion of the unbanked population into the formal financial system. This cannot be achieved exclusive of the banking sector.Design/methodology/approachThis paper focussed on 18 countries in sub-Saharan Africa. Data on financial inclusion and the economy were obtained from the World Bank, and bank soundness indicators data were also obtained from International Monetary Fund covering the 11-year period from 2008 through 2018. Panel system generalised method of moments is employed for the regression analysis because it has the capability to produce unbiased and consistent results even if there is endogeneity in the model.FindingsThe results show that economic growth drives banking stability and not vice versa; confirming a unidirectional causality from gross domestic product to banking stability. So, this study finds support for the demand-following hypothesis. The paper further observed that financial inclusion positively and significantly influences the stability of banks and economic growth. The study established that bank capital regulation negatively influences banking stability in sub-Saharan African countries.Research limitations/implicationsThis study does not capture the unique country-specific relationship.Practical implicationsThe policy implication is that policymakers in sub-Saharan African countries should focus on growth-enhancing policies that improve the level of financial inclusion. The central banks in sub-Saharan African countries should take advantage of the positive effect of financial inclusion to develop regulatory frameworks and policies that make it attractive for banks to continue to expand their operations to the unbanked.Originality/valueThis is, as far as the authors know, the explanation of the interconnection of financial inclusion, banking stability and economic growth in sub-Saharan Africa.

A critical analysis of water PPP failures in sub-Saharan Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Salman Tariq ◽  
Xueqing Zhang
Keyword(s):  
Construction Management ◽  
Design Methodology ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Content Type ◽  
Rigorous Approach ◽  
First Case ◽  
Management Perspective ◽  
Sub Saharan

PurposeTop-down pressure from donors, public sector inefficiencies and fund deficits have steered the introduction of public–private partnerships (PPPs) in sub-Saharan Africa. However, PPP activities in the water sector have been quite insignificant compared to other infrastructure sectors in this region. In addition, a number of water PPPs have encountered great difficulties and subsequent failures. This study aims at unveiling the underlying reasons behind failures.Design/methodology/approachThis study has classified the failure types of water PPPs and reviewed the development of water PPPs in sub-Saharan Africa to identify failed ones. Eight failed case studies are completed through the rigorous approach of event sequence mapping.FindingsNine root causes of water PPP failure are identified through a thorough examination of these failed water PPP cases and the interrelationships between these failure causes are established. The failure causes are further generalized through literature focusing on water PPP failures in developing countries and problematic issues that hinder the implementation of successful water PPPs across different Sub-Saharan African countries. Recommendations are provided for future improvements in carrying out water PPPs in Sub-Saharan Africa by learning past lessons and drawing experiences.Originality/valueThis is the first case study on water PPP failures in Sub-Saharan Africa from a construction management perspective. This study will help governments and the private sector in developing stronger future water PPPs.

scholarly journals The state of business sustainability reporting in sub-Saharan Africa: an agenda for policy and practice

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Carol A. Tilt ◽  
Wei Qian ◽  
Sanjaya Kuruppu ◽  
Dinithi Dissanayake
Keyword(s):  
Sustainability Reporting ◽  
New Institutional Economics ◽  
The State ◽  
Data Availability ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Content Type ◽  
Reporting Practices ◽  
Sub Saharan

Purpose Developing countries experience their own social, political and environmental issues, but surprisingly limited papers have examined sustainability reporting in these regions, notably in sub-Saharan Africa. To fill this gap and understand the state of sustainability reporting in sub-Saharan Africa, this paper aims to investigate the current state of reporting, identifies the major motivations and barriers for reporting and suggests an agenda of future issues that need to be considered by firms, policymakers and academics. Design/methodology/approach This paper includes analysis of reporting practices in 48 sub-Saharan African countries using the lens of New Institutional Economics. It comprises three phases of data collection and analysis: presentation of overall reporting data collected and provided by Global Reporting Initiative (GRI). analysis of stand-alone sustainability reports using qualitative data analysis and interviews with key report producers. Findings The analysis identifies key issues that companies in selected sub-Saharan African countries are grappling within their contexts. There are significant barriers to reporting but institutional mechanisms, such as voluntary reporting frameworks, provide an important bridge between embedding informal norms and changes to regulatory requirements. These are important for the development of better governance and accountability mechanisms. Research limitations/implications Findings have important implications for policymakers and institutions such as GRI in terms of regulation, outreach and localised training. More broadly, global bodies such as GRI and IIRC in a developing country context may require more local knowledge and support. Limitations include limited data availability, particularly for interviews, which means that these results are preliminary and provide a basis for further work. Practical implications The findings of this paper contribute to the knowledge of sustainability reporting in this region, and provide some policy implications for firms, governments and regulators. Originality/value This paper is one of only a handful looking at the emerging phenomenon of sustainability reporting in sub-Saharan African countries.

Turning on the township: financial inclusion in South Africa

2019 ◽  
Vol 31 (3) ◽  
pp. 420-446
Author(s):  
Louise Whittaker ◽  
Graunt Kruger
Keyword(s):  
Financial Services ◽  
Service Providers ◽  
Financial Inclusion ◽  
Subject Position ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Strategic Actions ◽  
Starting Point ◽  
Sub Saharan ◽  
Economic Engagement

Purpose The purpose of this paper is to explore practitioner and academic conceptualisations about what drives individuals (who are the target of financial inclusion efforts) to adopt and use financial services. It compares this with individual’s personal subjectivities to understand how the similarities and differences might contribute to problems in financial inclusion efforts. Design/methodology/approach To uncover such conceptualisations, a Foucauldian discourse analysis of three texts is conducted. Findings The analysis uncovers the ways in which financial subjects are produced. Important points of discontinuity are evident between texts, pointing to potential failures within financial inclusion constructs. Distilling aspects of continuity between texts shows up three kinds of subjects produced predicated on the site of economic engagement as owners of bodies, tangible property and intangible property. These subjects are shown to all share concerns with income and expense management. The analysis shows that subject positions and strategic actions (including the use of financial service providers) are mutually reinforcing, and that therefore financial subjects will engage only to the extent that the product or service enacts their subject position. With the financial subject as the starting point, it is possible to understand the use or rejection of particular financial products and services. Research limitations/implications Asset building is proposed as a field of activity not currently considered part of mainstream financial inclusion, questioning the terms on which individuals are to be financially “included”. Originality/value Approximately 2 billion people globally, and 66 per cent of adults in sub-Saharan Africa, are excluded from the formal financial system. While financial inclusion is considered beneficial, many projects face significant challenges. This suggests insufficient understanding of what drives individuals to adopt and use financial services. This paper makes a contribution by exploring the gap between academics, practitioners and individuals using a method that has not previously been applied in this field, and uncovering differences in understanding that have not previously been explored. The insights into financial inclusion in provided in this paper are original in the literature.

“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.

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 The effects of financial inclusion on agricultural productivity in Nigeria

2020 ◽  
Vol 22 (1) ◽  
pp. 61-79 ◽  
Author(s):  
Babajide Fowowe
Keyword(s):  
Agricultural Productivity ◽  
Financial Inclusion ◽  
Economic Activities ◽  
Data Set ◽  
Content Type ◽  
Individual Level ◽  
Panel Data Estimation ◽  
Agricultural Households ◽  
Household Activities ◽  
Data Estimation

PurposeFarmers are the largest group of financially excluded persons in Nigeria, thereby highlighting the supply shortfall in finance to agriculture in Nigeria. Availability of finance would go a long way in improving output and productivity in agriculture, and consequently help in reducing poverty. This study conducts an empirical investigation of the effects of financial inclusion on agricultural productivity in Nigeria.Design/methodology/approachThis study makes use of the Living Standards Measurement Study–Integrated Surveys on Agriculture (LSMS-ISA). This is a new data set on agricultural households which contains information on agricultural activities and various household activities, including banking, savings and insurance behaviour. Considering the data are such that there are observations for households over three time periods, the study exploits the time series and cross-section dimension of the data by using panel data estimation.FindingsThe empirical results of the study show that financial inclusion, irrespective of how it is measured, has exerted positive and statistically significant effects on agricultural productivity in Nigeria.Originality/valueWhile considerable research has been conducted to examine how finance affects broad macroeconomic aggregates, little is known about the effects of finance at the household and individual level. It is important to explicitly account for financial inclusion when examining the effects of finance on individuals and households. This study improves on existing research and offers new insights into the effects of financial inclusion on the economic activities of agricultural households in Nigeria.

An econophysics non-monetized theory of value

2018 ◽  
Vol 19 (3) ◽  
pp. 519-535 ◽  
Author(s):  
Wolfgang Baer ◽  
Ahmed Bounfour ◽  
Thomas J. Housel
Keyword(s):  
South African ◽  
Distance Measure ◽  
Banking System ◽  
Sub Saharan Africa ◽  
Vector Model ◽  
Social Implications ◽  
African Countries ◽  
High Stake ◽  
Content Type ◽  
Sub Saharan

Purpose Mobile phones are radically transforming micro-finance in Sub-Saharan Africa, and Kenya, in particular. The introduction of the micro-financial transaction mobile phone application, “MPesa,” created a means to facilitate micro-transactions without the need for an intermediary, such as a banking system. The purpose of this paper is to posit an econophysics model to predict the value of Mpesa for Kenyan and South African consumers. The econophysics framework posits several fitness matrices and a distance measure that can account for the concepts of mass, distance, momentum, velocity, action, and force. The authors begin with a table of the match between the physics concepts and the economic concepts followed by the vector model that utilizes these concepts for the MPesa application case. In this paper, the authors will argue that MPesa succeeded in Sub-Saharan African countries, such as Kenya, because the fit between what this group of customers needed and the solutions Safaricom’s MPesa offered was a better fit with a smaller distance to adoption than in the South African case. Design/methodology/approach The research develops an econophysics approach to the assessment of micro-finance development in Sub-Saharan countries. Findings The research shows clearly the reasons of the success of MPesa in Kenya in comparison of its relative failure in South Africa: the distance between customers’ expectations and the system supply. Research limitations/implications The research is limited to two case studies and needs to be extended to other contexts, in order to demonstrate its robustness, especially with regard to the intangible dimension, e.g., the distance between a system potential and what it really offers. Practical implications The research shows the importance of system’s characteristics in its success. Social implications The social implications are very high, especially in this case, where micro-finance is a high stake for developing societies. Originality/value This is one of the first works to develop an econophysics approach for the evaluation of the key characteristics of a system.

What determines financial inclusion in Sub-Saharan Africa?

2017 ◽  
Vol 8 (1) ◽  
pp. 8-18 ◽  
Author(s):  
Sydney Chikalipah
Keyword(s):  
International Development ◽  
World Bank ◽  
Financial Inclusion ◽  
Sub Saharan Africa ◽  
Data Set ◽  
Content Type ◽  
The World Bank ◽  
The World ◽  
Sub Saharan ◽  
Ssa Countries

Purpose The purpose of this paper is to investigate the determinants of financial inclusion (FI) in Sub-Saharan Africa (SSA). Design/methodology/approach The paper uses the World Bank country-level data from 20 SSA countries for the year 2014. Findings The empirical findings in this study indicate that illiteracy is the major hindrance to FI in SSA. The findings provide useful information to government agencies and international development organisations. Also, the findings can help accelerate and strengthen FI strategies among SSA countries. Research limitations/implications Some countries were excluded from the final analysis due to lack of data. Practical implications In the last two decades, there has been renewed interest in fighting financial exclusion in Africa. Therefore, this study provide evidence which clearly shows that enhancing literacy levels in a country can immensely contribute towards building the financially inclusive societies in the SSA region. Originality/value To the best of the author’s knowledge, this is the first study to empirically test the determinants of FI in SSA using the World Bank FI data set. Furthermore, this is the first attempt to estimate the determinants of FI with a combined data of SSA countries.

scholarly journals Effect of economic growth on employment in Sub-Saharan Africa.

2021 ◽  
Vol 16 ◽  
pp. 28-41
Author(s):  
Francis Kamau Ndung’u ◽  
Professor Niu Xiongying
Keyword(s):  
Economic Growth ◽  
Fixed Effects ◽  
Secondary Data ◽  
Sub Saharan Africa ◽  
Economic Sectors ◽  
African Countries ◽  
Total Employment ◽  
Development Indicators ◽  
Domestic Capital ◽  
Sub Saharan

The study aimed at investigating the effect of economic growth on employment in Sub-Saharan African. The study employed secondary data that was sourced from the World Bank, World development indicators and FAOSTAT covering 30 Sub Saharan African Countries for the period 1990 to 2015. The study employed the traditional neo-classical aggregate production function in its estimation of the regression results. The panel data obtained was analysed using the STATA software program. Hausman test was used and it determined that fixed effects estimation was preferred to random effects estimation and therefore fixed effects regression was used during the analysis. Empirical results on effect of economic growth on employment established that total employment, women in employment and men in employment statistically and significantly influenced economic growth and on the other hand economic sectors which comprised of domestic capital, imports, exports and services sectors statistically and significantly influenced economic growth.

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