scholarly journals Impact of Governance on Financial Development: evidence from West Africa

2020 ◽  
Vol 3 (3) ◽  
pp. 103
Author(s):  
Yahaya Ibrahim Abubakar ◽  
Rafiu Ayobanji Mustapha ◽  
Emmanuel Shola Ajiboye
Keyword(s):  
Interest Rate ◽  
West Africa ◽  
Private Sector ◽  
Financial Development ◽  
Trade Openness ◽  
Political Stability ◽  
Governance Indicators ◽  
Domestic Credit ◽  
World Governance Indicators ◽  
And Control

The study explores the impacts of governance on financial development in West African countries.Data for the study were obtained from the World Bank Database covering the period from 2006-2017. The variables for governance comprises of the six world governance indicators while financial development was represented by ratio of bank deposit to GDP and domestic credit to private sector. The control variables included in the model are interest rate, inflation, GDP per capita and trade openness. The findings from the study revealed that political stability and absence of violence, and regulatory quality have significant effects on both proxies of financial development. Also, voice and accountability, trade openness and interest rate show significances on the ratio bank deposit to GDP while government effectiveness (negative), rule of law, and control of corruption show significances on domestic credit to private sector. Thus, improving the quality of governance through strengthening legal and institutional frameworks, enforcement of standards and empowering of supervisory agencies, introducing an efficient regulatory environment to facilitate financial inclusion will play significant roles in the pace of financial development in the West Africa region. Keywords: Governance, Financial Development and West Africa

scholarly journals The Relationship Between Cote D'ivoire's Political Situation And Burkina Faso's Maritime Transit Cargo Throughput That Passed Through Ghana

2020 ◽  
Vol 2 (3) ◽  
pp. 8-16
Author(s):  
Augustine Kwabena Tufuor ◽  
Mumuni Ishawu ◽  
Thomas Akrofi ◽  
Bernice Adu-Bekoe
Keyword(s):  
West Africa ◽  
Negative Relationship ◽  
Political Stability ◽  
Governance Indicators ◽  
Major Stakeholder ◽  
Significant Negative Relationship ◽  
World Governance Indicators ◽  
Using Data ◽  
Cargo Throughput ◽  
In Transit

Ghana rose from an insignificant position in 1997/8 to become the topmost maritime transit corridor for landlocked countries in West Africa and particularly for Burkina Faso around 2006. Since then, Ghana's transit corridor has, generally, been recording a declining trend in the yearly percentage throughput of Burkina Faso's maritime transit cargo that is transported along it. Popular opinion in the transit business in West Africa suggests a negative relationship between the level of Ce d'Ivoire's political stability and Burkina Faso's maritime transit cargo throughput that is transported along Ghana's transit corridor. This work, using data drawn from 1998, 2000 and 2002-2014 investigated the empirical veracity of such an opinion. Data were sourced from World Governance Indicators and also through questionnaires that were administered to a sample drawn from five major stakeholder official institutions involved in transit trade in Ghana. The study found a significant negative relationship between Ce d'Ivoire's political stability rank and Burkina Faso's maritime transit cargo throughput that was transported through Ghana's corridor over the specified period. The study, among others, recommends a reduction in the number of transit check points and the associated delays and bribery along Ghana's road corridor so as to make it more efficient and competitive in West Africa. Keywords: Land-locked country; transit; cargo; throughput; corridor; and 'transitor'

scholarly journals Governance Indicators in the OIC Countries: A Descriptive Study for the Period 1996 – 2018

2020 ◽  
Vol 14 (14) ◽  
pp. 27-86
Author(s):  
Basheer Hazzam Salih Mahdi
Keyword(s):  
Islamic Law ◽  
Political Stability ◽  
Public Governance ◽  
Governance Indicators ◽  
Regulatory Quality ◽  
Aggregate Index ◽  
Islamic Countries ◽  
World Governance Indicators ◽  
Four Levels ◽  
And Control

The study aims to describe and analyze the governance indicators in OIC countries during the 1996-2018 period based on the data of World Governance Indicators (WGI). The descriptive-analytical approach had been adopted for using statistical methods to analyze the level and evolution of governance indicators. The researcher relied on aggregated indicators of governance based on the six sub-indicators of WGI indicators and then classified the level of governance in the OIC countries into four levels. The study reaped a number of results, the most important of them are: i) In general, the level of the aggregate index of governance in the OIC is lower than the world average by 0.62 and 0.70 points in 1996 and 2018, respectively; ii) Most Islamic countries fall within the low level of governance, and there is no Islamic country in the first level of governance (very high); iii) the average of governance index in Islamic countries declined by (0.07) points between 1996 and 2018. The study recommended that Islamic countries shall adopt policies aiming at improving public governance and combating corruption, by taking advantage from the sub-indicators of governance. The researchers also recommended to develop indicators of governance that are compatible with the principles of the Islamic Law and that can be used by the OIC. Keywords: Governance indicators, Islamic countries, OIC countries, Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption.

scholarly journals Do Remittances Enhance Financial Development in Transitional Markets?

2019 ◽  
Vol 22 (4) ◽  
pp. 73-89
Author(s):  
Kunofiwa Tsaurai ◽  
Patience Hlupo
Keyword(s):  
Human Capital ◽  
Stock Market ◽  
Private Sector ◽  
Financial Development ◽  
Positive Influence ◽  
Transitional Economies ◽  
Human Capital Development ◽  
Domestic Credit ◽  
Capital Development ◽  
Market Capitalisation

The paper explored (1) the impact of remittances on financial development and (2) whether the interaction between remittances and human capital development had an influence on financial development in transitional economies using the dynamic GMM approach, with data ranging from 1996 to 2014. Remittances were found to have had a non‑significant positive influence on financial development in transitional economies when stock market turnover, stock market value traded, domestic credit to the private sector by banks, and public bond sector development were used as measures of financial development. When stock market capitalisation, domestic credit to the private sector by financial sector, and private bond sector development were used as measures of financial development, remittances had a non‑significance negative effect on financial development. Using all other measures of financial development except stock market capitalisation (which produced a negative sign), the interaction between remittances and human capital development had an insignificant positive influence on financial development. Transitional economies are therefore urged to avoid over‑relying on remittance inflow and human capital development as sources of financial development.

scholarly journals An Examination of Drivers of Financial development: Evidence in West African Countries.

2018 ◽  
Vol 6 (1) ◽  
pp. 132-143
Author(s):  
Adewosi, O. Adegoke ◽  
Manu Donga ◽  
Adamu Idi ◽  
Buba Abdullahi
Keyword(s):  
Financial Development ◽  
Developing Economies ◽  
Negative Impact ◽  
Trade Openness ◽  
Government Expenditure ◽  
Political Stability ◽  
Vital Role ◽  
West African ◽  
African Countries ◽  
Panel Data Estimation

Financial development has been considered to play a vital role in promoting rapid growth and development of the developing economies. This paper examined the drivers of financial development in West African Countries. Benin Republic, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone and Togo over the period of 2000 to 2015, with the proper utilization of panel data estimation technique on the annual country data obtained from World Development Indicators (WDI) 2016 and Worldwide Governance Indicators (WGI) 2016. The results reveals that some important variables such as coefficient of rule of law, political stability, foreign direct investment, government expenditure, inflation and savings positively determined financial development. While, credit to private sector, GDP, interest rate, trade openness, and capital formation were found to negative impact on financial development. The study then recommends amongst others formulation and implementation of fiscal and monetary policies that foster financial development.

Modelling the Nexus Between Foreign Aid and Economic Growth: A Case of Afghanistan and Egypt

2021 ◽  
Vol 39 (2) ◽  
Author(s):  
Muhammed Ashiq Villanthenkodath ◽  
Ubaid Mushtaq
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Time Series Data ◽  
Trade Openness ◽  
Political Stability ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
Annual Time Series ◽  
And Control

This paper tries to explore the existence of a long-run relationship between foreign aid and economic growth by using the data from the two highest foreign aid recipient countries. Using the annual time series data from 1965 to 2017 this study uses several econometric models such as Johansen and Juselius cointegration, Granger causality and vector auto regression to establish the long and short-run relationships among foreign aid inflows and economic growth while also considering financial development and trade openness from both the countries. The empirical results suggest that no long-run relationship exists among foreign aid inflows and economic growth for both the countries. However, unidirectional causality running from foreign aid to economic growth is indicative in both countries. Therefore, the findings in this paper support the adequate need for foreign aid for effective economic growth amid an upright policy environment, related issues of conditionality and political stability. Our results are robust to independent, and control variables and estimation techniques are also on par with robustness.

scholarly journals A Comparative Study on Contribution of Governance on Economic Growth Countries in the East African Community

2016 ◽  
Vol 3 (2) ◽  
pp. 89 ◽  
Author(s):  
Joseph Abuga Orayo ◽  
George Nyarigoti Mose
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Rule Of Law ◽  
Good Governance ◽  
Political Stability ◽  
Economic Growth Rate ◽  
East African Community ◽  
Governance Indicators ◽  
And Control ◽  
Control Of Corruption

<p>This study sought to explore the relationship between good governance and economic growth among the East Africa Community (EAC) countries. The study utilized panel data to analyse six major World Bank governance indicators namely: Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption effect on economic growth in the respective country and region for the period 1999-2013. The Random effect model (REM) and Ordinary Least Square (OLS) estimation techniques were employed for comparative analysis. The study showed that among the governance indicators, political stability, quality regulatory and control of corruption were significant. The first two indices were negatively related to economic growth rate while the latter was positively related to economic growth rate. From the OLS models, voice and accountability had a significant effect on economic growth rate in Kenya and Uganda. The quality of regulation had significant effect in Kenya and Tanzania while rule of law was found to be significant only in Kenya. The study suggests that in order to advance the economic performance in EAC countries, the EAC states need to invest in more effective regulation on both public and private institutions to enhance social, political and sustainable economic interactions. Similarly, the government needs to encourage national cohesion and peaceful co-existence that would foster political stability and reduce violence. By investing in good governance through establishment of key institutions of governance are likely to spur economic growth.</p>

Investigation for Finance–Growth Nexus: A Dynamic Common Correlated Estimator Approach

2021 ◽  
pp. 097215092110162
Author(s):  
Saqib Mehmood ◽  
Ahmad Raza Bilal
Keyword(s):  
Developing Countries ◽  
Private Sector ◽  
Least Squares ◽  
Financial Development ◽  
Well Being ◽  
Ordinary Least Squares ◽  
Consumption Expenditures ◽  
Long Run ◽  
Domestic Credit ◽  
The Impact

The study investigated the impact of financial development in bringing the economic well-being, using the data of 10 selected developing countries, as a sample for the period from 1991 to 2017. However, the study utilizes the regression of group mean dynamic common correlated estimator (DCCE) by Chudik and Pesaran (2015) to analyse the said circumstance. For estimation, the present study is considering the major tycoons of financial development and their relevant areas that are significantly effecting the economic growth. However, the broad money (GAM1), domestic credit to private sector to GDP (GAM2), domestic credit to private sector by banks (GAM3), government’s final consumption expenditures (GAFCE) and foreign direct investment GAFC are major contributors in attaining the GDP per capita (GADA). However, the estimation of the concerned circumstance was also evaluated in terms of shorter and longer run estimations. The results of the short– and long–run estimations also authenticate the results of DCCE estimations. The robustness of the results is verified with the help of Pedroni (2004) test, fully modified ordinary least squares (FMOLS) test by Pedroni (2001) and dynamic ordinary least squares (DOLS) by Stock and Watson (1993) . The robustness tests also verify the factors that are considered as the major players of financial development for uplifting the concerned economies. Selected developing countries have the potential for utilizing their financial development options to manage their growth at the economic level. For practical implications and for policymaking, the ingredients of this particular study can be endorsed to get the desired results.

scholarly journals Financial Development and Manufacturing Performance: The Nigerian Case

2018 ◽  
Vol 13 (1) ◽  
pp. 97-111 ◽  
Author(s):  
Ekundayo Mesagan ◽  
Ndubuisi Olunkwa ◽  
Ismaila Yusuf
Keyword(s):  
Private Sector ◽  
Money Supply ◽  
Financial Development ◽  
Positive Impact ◽  
Manufacturing Sector ◽  
Capacity Utilization ◽  
Value Added ◽  
Manufacturing Performance ◽  
Domestic Credit ◽  
Short Run

AbstractThe study focused on financial sector development and manufacturing performance in Nigeria over the period of 1981 to 2015. In the study, three indicators such as manufacturing capacity utilization, manufacturing output and manufacturing value added were employed to proxy manufacturing performance while money supply as a percentage of GDP, domestic credit to the private sector and liquidity ratio were employed to proxy financial development. The study observed that credit to the private sector and money supply positively but insignificantly enhanced capacity utilization and output, but negatively impacted value added of the manufacturing sector in the short run. There is slight improvement in the long where both money supply and credit to private sector exert positive impact manufactured output. Hence, it becomes crucial for commercial banks to make available certain percentage of their profits for industrial expansion in order to create linkages between both sectors.

scholarly journals Deciphering African Financial Development Interaction With Institutional Quality And Economic Growth Nexus

ETIKONOMI ◽  
2021 ◽  
Vol 20 (1) ◽  
pp. 23-44
Author(s):  
Easmond Baah Nketia ◽  
Yusheng Kong
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
Financial Development ◽  
Institutional Quality ◽  
Political Stability ◽  
Estimation Technique ◽  
Government Effectiveness ◽  
Development Indicators ◽  
Regulatory Quality ◽  
Domestic Savings

The paper scrutinized the correlation between financial development interaction with institutional quality and economic growth in Africa. The study adopted 30 different interactions. The study used the Augmented mean group estimation technique to estimate the model. Gross domestic savings/GDP and broad money/GDP positively influenced growth with the majority of interactions with institutional quality indicators. Credit to Private Sector/GDP interaction with Voice & Accountability; and Political Stability has a higher impact on growth than any interaction variable. However, government effectiveness, regulatory quality, and corruption control are weak in Africa; even if interacted with financial development indicators, it mostly reduces economic growth. This study recommends that governments in Africa strengthen financial development indicators; Bank Deposit/GDP, Gross Domestic Savings/GDP and Credit to private sector/GDP, and institutional quality indicator political stability & absence of violence since their interaction has proven to aid rapid economic growth.JEL Classification: E17, F62, F63How to Cite:Nketia, E. B., & Kong, Y. (2021). Decipheting African Financial Development Interaction with Institutional Quality and Economic Growth Nexus. Etikonomi: Jurnal Ekonomi, 20(1), 23 – 44. https://doi.org/10.15408/etk.v20i1.16177.

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