SUBSTITUTABILITY BETWEEN GOVERNMENT AND PRIVATE CONSUMPTION IN SUB-SAHARAN AFRICA

2021 ◽  
Author(s):  
GRACE NKANSA ASANTE ◽  
GIDEON AMANKWAH ◽  
GODWILL BRUCE NYARKOH ◽  
SAMUEL TAWIAH BAIDOO
Keyword(s):  
Government Spending ◽  
Private Consumption ◽  
Think Tanks ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Public Consumption ◽  
Private And Public ◽  
Policy Measures ◽  
Sub Saharan

The question of whether private and public consumption are complements or substitutes has been an issue of concern and hence, attracted the attention of researchers and policy think tanks. This study therefore investigates this important phenomenon within the context of sub-Saharan Africa (SSA) to inform the design of fiscal policy measures. Using panel data spanning the period 1981–2016 for 21 sub-Saharan African countries, the results indicate that, government and private consumption are substitutes. This indicates that government spending crowds out private consumption in the sub region. Vital policy implications have been provided for consideration based on the findings.

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.

scholarly journals Structural transformation and economic development in the best performing sub-Saharan African states

Equilibrium ◽  
2017 ◽  
Vol 12 (4) ◽  
pp. 547-571 ◽  
Author(s):  
Katarzyna Świerczyńska
Keyword(s):  
Economic Development ◽  
Structural Changes ◽  
Labour Productivity ◽  
Value Added ◽  
Data Availability ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Sub Saharan ◽  
New Structural Economics

Research background: Economic development in sub-Saharan Africa is of paramount importance, yet it escapes most of the attempts to understand it better in the economic dis-course, and it remains a sensitive issue in politics, contradicting stakeholders at national and international levels. The region still lags behind others in terms of technological advancement and economic development. It has grown  significantly in the precedent decade, but the extent of growth has not sufficiently translated to its development. Determining strategies for sub-Saharan Africa is a scientific challenge, which requires more attention. In the globalized, interconnected reality, solving problems of the South is in the best interest of the North. Purpose of the article: The aim of this research is to analyze structural changes as factors of economic development in the best performing sub-Saharan African countries on the grounds of new structural economics in order to provide policy implications.   Methods: Namibia, Botswana, South Africa and Gabon were selected as best performing economies in the region. Based on the literature review and the analysis of descriptive statis-tics, profiles of sample countries were set. This in turn allowed to determine the potential explanatory variables for OLS model of economic development. In the model, factors relating to labour productivity, technology and structural change were included. The data was sourced from WDI (World Development Indicators) database, Gretl software was used for computations. Findings & Value added: This paper contributes to the literature by attempting to explain structural changes in the process of economic development in the sub-Saharan region on the sample of best performing states. The paradigm of new structural economics provided theo-retical grounds for empirical analysis. Based on the results, policy implications were proposed with respect to technology promotion, natural resources management, and quality of institutions. The research was limited by data availability and reliability.

Rational Asymmetric Development

2016 ◽  
pp. 282-302 ◽  
Author(s):  
Simplice A. Asongu
Keyword(s):  
Financial Reporting ◽  
Transfer Pricing ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Extreme Poverty ◽  
Financial Reporting Standards ◽  
The World ◽  
Sub Saharan ◽  
Rich Countries

A recent publication by the World Bank on Millennium Development Goals (MDGs) has established that extreme poverty has been decreasing in all regions of the world with the exception of sub-Saharan Africa (SSA), in spite of over two decades of growth resurgence. This chapter explores the role of transfer mispricing in SSA's extreme poverty tragedy. The analytical structure entails: (1) emphasis of rational asymmetric development as the dark side of transfer pricing; (2) linkages between financial reporting, international financial reporting standards (IFRS), transfer pricing and poverty; (3) evidence that the recent growth resurgence in African countries has been driven substantially by resource-rich countries which are experiencing high levels of exclusive growth and extreme poverty; (4) the practice of transfer mispricing by multinationals operating in resource-rich countries of SSA and (5) a Zambian case study of extreme poverty and transfer mispricing schemes by Glencore in the copper industry. While transfer mispricing is contributing to diminishing African growth, available evidence shows that the component of growth that is not captured by transfer mispricing does not trickle down to the poor because the African elite is also animated by practices of rational asymmetric development. Policy implications for the fight against extreme poverty are discussed.

scholarly journals Success in Africa: People with disabilities share their stories

2019 ◽  
Vol 8 ◽  
Author(s):  
Tom Shakespeare ◽  
Anthony Mugeere ◽  
Emily Nyariki ◽  
Joseph Simbaya
Keyword(s):  
Life Histories ◽  
People With Disabilities ◽  
Sub Saharan Africa ◽  
Economic Success ◽  
Disabled People ◽  
Framework Analysis ◽  
African Countries ◽  
Private And Public ◽  
Sub Saharan ◽  
The Right

Background: Whereas most narratives of disability in sub-Saharan Africa stress barriers and exclusion, Africans with disabilities appear to show resilience and some appear to achieve success. In order to promote inclusion in development efforts, there is a need to challenge narratives of failure.Objectives: To gather life histories of people with disabilities in three sub-Saharan African countries (Kenya, Uganda and Sierra Leone) who have achieved economic success in their lives and to analyse factors that explain how this success has been achieved.Methods: Qualitative research study of economic success involving life history interviews with 105 participants with disabilities from both urban and rural settings recruited through disabled people’s organisations and non-governmental organisation partners, framework analysis of transcripts to chart success and success factors.Results: Participants had faced barriers in education, employment and family life. They had largely surmounted these barriers to achieve success on an equal basis with others. They were working in private and public sectors and were self-employed farmers, shopkeepers and craftspeople.Conclusion: The findings of this study suggest that, given the right support, disabled people can achieve economic success, with the implication being that investment in education or training of disabled people can be productive and should be part of overall development efforts for economic reasons, not solely to achieve social justice goals.

scholarly journals Lending Rate, Exchange Rate and Household Consumption Relations in Sub-saharan Africa: Mean Group Approach

2020 ◽  
Author(s):  
Abayomi Toyin Onanuga ◽  
Sheriffdeen Adewale Tella
Keyword(s):  
Exchange Rate ◽  
Consumer Credit ◽  
Household Consumption ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Lending Rate ◽  
The Exchange Rate ◽  
Sub Saharan ◽  
The Cost

Abstract Household consumption expenditure in Africa to the world aggregate is comparatively little, considering the population of the region. But empirical credence that elucidates estimated elasticities of the exchange rate, lending rate, and consumption relations remains dimply discerned in sub-Saharan Africa (SSA) amidst a high population growth rate. Therefore, this paper present new insights into the causative structure of the cost of consumer credit and exchange rate management as leverage for mass consumption in Africa. We rely on the mean group estimator to analyse the panel data with a sample of 37 African countries in 2008 through 2017. We found that lending and exchange rate induces positive changes in household consumption in SSA. Efficient management of the cost of consumer credit and stability of the exchange rate may significantly improve consumption in the region. Policy implications were discussed.JEl Classification: E21; E43; F31; C21; C23

scholarly journals Finance-growth nexus in sub-Saharan Africa

2021 ◽  
Vol 24 (1) ◽  
Author(s):  
Celsa M.D.C. Machado ◽  
António F.M.G. Saraiva ◽  
Paulo D.D. Vieira
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Low Income ◽  
Developed Countries ◽  
Dynamic Panel Data ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
Empirical Literature ◽  
African Countries ◽  
Sub Saharan

Background: There is now significant empirical literature suggesting that finance is good for growth only up to a threshold level of financial development, becoming harmful after that level, in developed and developing countries.Aim: This study extends this literature that investigates non-linearities on the finance-growth link, by testing the inverted U-shape hypothesis in sub-Saharan African countries, which are among the least developed ones.Setting: 36 countries from sub-Saharan Africa over the period 1980–2015.Method: Estimation of quadratic dynamic panel data models by system-generalised method of moments.Results: Empirical results show that there is a hump-shaped relationship between financial development and economic growth in sub-Saharan African countries.Conclusion: Results suggest that the hypothesis of ‘too much finance harms economic growth’ also holds for low-income and less developed countries, but for much lower threshold levels of financial development than those of more developed and higher-income countries. As for policy implications, measures to strengthen finance quality and other growth-enhancing strategies need to be undertaken, rather than increasing finance size.

Rational Asymmetric Development

2019 ◽  
pp. 1334-1354
Author(s):  
Simplice A. Asongu
Keyword(s):  
Financial Reporting ◽  
Transfer Pricing ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Extreme Poverty ◽  
Financial Reporting Standards ◽  
The World ◽  
Sub Saharan ◽  
Rich Countries

A recent publication by the World Bank on Millennium Development Goals (MDGs) has established that extreme poverty has been decreasing in all regions of the world with the exception of sub-Saharan Africa (SSA), in spite of over two decades of growth resurgence. This chapter explores the role of transfer mispricing in SSA's extreme poverty tragedy. The analytical structure entails: (1) emphasis of rational asymmetric development as the dark side of transfer pricing; (2) linkages between financial reporting, international financial reporting standards (IFRS), transfer pricing and poverty; (3) evidence that the recent growth resurgence in African countries has been driven substantially by resource-rich countries which are experiencing high levels of exclusive growth and extreme poverty; (4) the practice of transfer mispricing by multinationals operating in resource-rich countries of SSA and (5) a Zambian case study of extreme poverty and transfer mispricing schemes by Glencore in the copper industry. While transfer mispricing is contributing to diminishing African growth, available evidence shows that the component of growth that is not captured by transfer mispricing does not trickle down to the poor because the African elite is also animated by practices of rational asymmetric development. Policy implications for the fight against extreme poverty are discussed.

Corporate governance and corporate internet reporting in sub-Saharan Africa:the case of Kenya and Tanzania

2019 ◽  
Vol 19 (4) ◽  
pp. 751-773 ◽  
Author(s):  
Nelson Waweru ◽  
Musa Mangena ◽  
George Riro
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
Ownership Concentration ◽  
Governance Structures ◽  
African Countries ◽  
Content Type ◽  
Exchange Panel ◽  
Sub Saharan

PurposeThis paper aims to investigate corporate internet reporting (CIR) by Kenyan and Tanzanian listed companies and whether the level of CIR is related to corporate governance structures.Design/methodology/approachThe authors collect data over a four-year period from companies listed on the Nairobi Securities Exchange and the Dar es Salaam Securities Exchange. Panel data models (random effects) are used for the analysis.FindingsThe results indicate that the level of CIR in both countries is high, but the highest in Kenya. The authors find that CIR increases with foreign ownership, audit committee independence and financial expertise but decreases with domestic ownership concentration. They also show that the effects of ownership concentration are moderated by country-specific factors. Overall, the results demonstrate that effective governance structures may lead to higher levels CIR in sub-Saharan Africans.Originality/valueThis study extends, as well as contributes to the existing literature by the examining the corporate governance-disclosure nexus relating to CIR in sub-Saharan Africa. These findings have policy implications for African countries looking to attract foreign investment.

scholarly journals The Macroeconomic Implications of Climate Change on Sub-Saharan Africa: A Case for Sustainable Development

2021 ◽  
Vol 9 (1) ◽  
pp. 8-36
Author(s):  
A. Sandalli
Keyword(s):  
Climate Change ◽  
Sustainable Development ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
Income Growth ◽  
African Countries ◽  
Temperature Variations ◽  
Distributed Lag ◽  
Temperature And Precipitation ◽  
Sub Saharan

While climate change has harsh universal impacts, it is believed that its negative effects fall disproportionately on hotter, developing regions. This paper examines these claims using a panel datasets for 84 OECD and Sub- Saharan African countries between 1970–2018. I document both the evolution of country-specific temperatures and the long-term economic impact of temperature and precipitation variations on GDP per-capita. Using a panel auto-regressive distributed lag model on the sample mentioned above, I found that temperatures have unanimously increased for all sample-countries and that variations in temperature above historical norms significantly reduced income-growth. No significant relationship was found between precipitation and income growth. When interacting ‘poor’ and ‘hot’ country variables, I found that temperature variations disproportionately affected both hotter and poorer Sub-Saharan African countries. In OECD countries, temperatures have increased more quickly relative to their historical norms than Sub-Saharan African countries. Finally, while poorer and developing countries are more adversely affected by temperature variations, they seem to recover more quickly from temperature shocks than sample averages. I explain these results and link them to potential policy implications regarding global sustainable development and greenhouse gas abatement.

scholarly journals Evaluating Changes in the Transmission Mechanism of Government Spending Shocks

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Nooman Rebei
Keyword(s):  
Government Spending ◽  
Private Consumption ◽  
Public Spending ◽  
Transmission Mechanism ◽  
Elasticity Of Substitution ◽  
Public And Private ◽  
Elasticity Of Intertemporal Substitution ◽  
Public Consumption ◽  
Private And Public ◽  
Rolling Windows

AbstractWe empirically revisit the crowding-in effect of government spending on private consumption based on rolling windows of U.S. data. Results show that in earlier samples government spending is increasingly crowding in private consumption; however, this relation is reverted in the latest periods. We propose a model embedding non-separable public and private consumption in the utility function and rule-of-thumb consumers to assess the sources of non-monotonic changes in the transmission of the shock. The iterative full information estimation of the model reveals that changes in the co-movement between private and public spending is primarily driven by the fluctuations in the elasticity of substitution between private and public consumption, the share of financially constrained consumers, and the elasticity of intertemporal substitution.

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