scholarly journals Exploring the Channels of Transmission between External Debt and Economic Growth: Evidence from Sub-Saharan African Countries

Economies ◽  
2021 ◽  
Vol 9 (2) ◽  
pp. 50
Author(s):  
Adewale Hassan ◽  
Daniel Meyer
Keyword(s):  
Economic Growth ◽  
Public Investment ◽  
Generalized Method Of Moments ◽  
External Debt ◽  
Private Investment ◽  
African Countries ◽  
Linear Effect ◽  
Negative Effect ◽  
Sub Saharan ◽  
Ssa Countries

This study aimed to determine the channels through which external debt transmits its impact on economic growth in sub-Saharan African (SSA) countries. To this end, panel data comprising 30 SSA countries were investigated for the period 1985–2019, using the system generalized method of moments (GMM) estimation technique. The study identified public investment, private investment and total factor productivity as channels transmitting the non-linear effect from external debt to economic growth. Furthermore, the interest rate was also confirmed as a channel but with a direct effect. Contrariwise, the estimates indicated that savings are not a channel of transmission from external debt to economic growth in SSA. These findings call for urgent action from SSA countries to reduce their external debt stocks and implement alternative macroeconomic non-debt strategies to improve the identified channels to counteract the negative effect of high external debt on them.

scholarly journals Growth effect of income inequality in sub-Saharan Africa: exploring the transmission channels

2020 ◽  
Vol 56 (2) ◽  
pp. 176-190
Author(s):  
Ibrahim Abidemi Odusanya ◽  
Anthony Enisan Akinlo
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
Growth Effect ◽  
Credit Market Imperfection ◽  
Negative Effect ◽  
Sub Saharan ◽  
Positive Effect ◽  
Ssa Countries

AbstractSub-Saharan Africa (SSA) ranks as the second most unequal region globally (in terms of income distribution), harboring 10 of the 19 most unequal countries in the world. This paper explores the channels through which income inequality exerts its effects on economic growth in SSA. The study spans the period 1995–2015, focusing on 31 SSA countries. Findings from the two-step system generalized method of moments suggest that income inequality exerts a significant positive effect on economic growth via the saving transmission channel, while it has a statistically significant negative effect on economic growth in the region through the channels of fertility, credit market imperfection, and fiscal policy.

scholarly journals Linkage between alcohol consumption and economic growth in sub-Saharan Africa: Linear effect, threshold effect, or both?

2021 ◽  
Author(s):  
Rodrigue Tchoffo ◽  
Guivis Nkemgha
Keyword(s):  
Economic Growth ◽  
Alcohol Consumption ◽  
Empirical Evidence ◽  
Generalized Method Of Moments ◽  
Threshold Effect ◽  
Sustainable Growth ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Linear Effect ◽  
Sub Saharan

This paper contributes to the literature on the relationship between alcohol consumption and economic growth. Despite growing attention on the topic, existing studies have demonstrated the existence of a threshold beyond which alcohol consumption leads to disease, negatively influences professions such as driving and leads to death. However, the threshold literature has not yet explored the nonlinear relationship between alcohol consumption and economic growth. The per capita alcohol consumption expenditure is used to capture the alcohol variable. The empirical evidence is based on the Pooled Mean Group (PMG) and System Generalized Method of Moments (GMM) with a 32 sub-Saharan African countries dataset over the period 2000-2016. The empirical evidence indicates that alcohol consumption fosters economic growth in sub-Saharan African countries. Moreover, the results show that an alcohol consumption threshold exists below which greater alcohol consumption has beneficial effects on economic growth and above which the alcohol consumption has a perverse effect on economic growth. This result materializes the existence of an inverted U-shape (Laffer Curve of alcohol). Therefore, Sub-Saharan African countries must control the level of alcohol consumption of their citizens in order not only to protect them against alcohol diseases but also to ensure sustainable growth.

scholarly journals HIV/AIDS and Economic Growth: Empirical Evidence from Sub-Saharan Africa

2015 ◽  
Vol 7 (4) ◽  
pp. 30 ◽  
Author(s):  
Danjuma Maijama'a ◽  
Shamzaeffa Samsudin ◽  
Shazida jan Mohd Khan
Keyword(s):  
Economic Growth ◽  
Time Lag ◽  
Hiv And Aids ◽  
Sub Saharan Africa ◽  
Growth Equation ◽  
Solow Model ◽  
African Countries ◽  
Negative Effect ◽  
Per Capita ◽  
Sub Saharan

<p>This study investigates the effects of the HIV and AIDS epidemic on economic growth in 42<br />sub-Saharan African countries using data spanning from 1990-2013. Unlike previous studies,<br />we use a longer data horizon and take the time lag effect of the epidemic’s incubation period<br />that is, after it might have developed to AIDS into consideration in our estimations. We<br />estimated an empirical growth equation within an augmented Solow model and applied the<br />dynamic system GMM estimator. The results suggest that current HIV prevalence rate –<br />associated with rising morbidity, has a negative effect on GDP per capita growth, conversely<br />AIDS – associated with higher mortality in addition to morbidity, increases per capita GDP<br />growth.</p>

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.

scholarly journals Effect of Financial Inclusion on Income Inequality in Sub-Saharan Africa

2020 ◽  
pp. 1-15
Author(s):  
Kipoh Mpele Esther
Keyword(s):  
Income Inequality ◽  
Low Income ◽  
Low Cost ◽  
Panel Study ◽  
Generalized Method Of Moments ◽  
Financial Inclusion ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Negative Effect ◽  
Sub Saharan

Aims: To analyze financial inclusion as a channel to alleviate inequality in order to provide insight into the edifice of inequality reduction. Study Design:  Dynamic panel study. Place and Duration of Study: Sub-Saharan African countries over the period 2004-2018. Methodology: Using the generalized method of moments (GMM) on a sample of 27 Sub-Saharan African countries. Results: The results show that the estimated financial inclusion index has a negative effect on income inequality. Therefore, the depth of commercial bank branches and the effective use of bank accounts reduce income inequality. Conclusion: Increase financial inclusion as well as the development of financial infrastructure and the provision of specific low-cost services tailored to low-income households.

Modelling external debt – growth nexus: how relevant is governance?

2020 ◽  
Vol 27 (4) ◽  
pp. 1323-1340
Author(s):  
Waliu Olawale Shittu ◽  
Nor Asmat Ismail ◽  
Abdul Rais Abdul Latiff ◽  
Hammed Oluwaseyi Musibau
Keyword(s):  
Economic Growth ◽  
Economic Performance ◽  
Positive Impact ◽  
External Debt ◽  
Total Effect ◽  
Content Type ◽  
Development Indicators ◽  
Long Run ◽  
Negative Effect ◽  
Sub Saharan

Purpose Amongst the major concerns of sub-Sahara Africa are the rising external debt and poor performances in governance. This paper aims to lend a voice to the relevance of governance on the relationship between external debt and economic growth in selected five sub-Saharan African (SSA) countries. Design/methodology/approach Using available data from the World Governance and Development Indicators, between 1996 and 2016, the study uses the fully-modified OLS technique after establishing the absence of unit root and existence of long-run relationship amongst the variables of the model. Findings The findings confirm a non-linear relationship between external debt and economic with a positive net effect of $5.05 increase in economic performance for a US$ rise in external debt. While the index of governance depicts a negative association with economic growth, the indicators show mixed results. The interaction effect of external debt and governance on economic performance explain that improved governance quality reduces its negative effect on economic performance by US$1.288 (with a total effect of –4.180 + 1.288*EXDBT); it equally enhances the (net) positive impact of external debt by US$1.288 (with a total effect 5.05 + 1.288*IQ). Practical implications The governments of the selected countries are, therefore, advised to seek other means of financing their expenditure while curbing financial mismanagement and its long-term impacts on growth. Also, governance infrastructures should be improved to restore both domestic and foreign investors’ confidence so that more private capitals may be attracted in lieu of excessive borrowings. Originality/value The research is the first to comprehensively examine the nexus between external debt, governance and economic growth in the selected countries, given their external debt position in SSA. This includes examining the impacts of each of the governance indicators and the comprehensive index of governance on growth. Furthermore, the study adds to the literature by examining the interaction effects of external debt and governance on economic growth of these countries. This gives both the partial and total estimates of the effects of external debt and governance on economic growth in the countries under consideration.

scholarly journals Comparative Sectoral Efficiency in the Fight Against Poverty and Unemployment in Burkina Faso

2018 ◽  
Vol 5 (2) ◽  
pp. 185
Author(s):  
Patrice Rélouendé Zidouemba
Keyword(s):  
Economic Growth ◽  
Burkina Faso ◽  
Poverty Reduction ◽  
Public Investment ◽  
Public Capital ◽  
Added Value ◽  
African Countries ◽  
Capital Productivity ◽  
Sub Saharan ◽  
The Impact

In this paper, we construct an economy-wide recursive dynamic model for Burkina Faso to explore the impact of scaling up public capital in different aggregate sectors. While several researchers emphasize the importance for sub-Saharan African countries of giving higher priority to agriculture to stimulate economic growth and reduce poverty, some authors state that non-agricultural sectors should now receive special attention following the success achieved in some countries in South Asia. These countries have indeed applied a different paradigm: a program of economic growth and poverty reduction based on non-agricultural sectors. This study aims to provide insights into this debate. It draws from the public capital productivity literature to postulate the positive productive externalities of public investment. The results show that, with the same amount of public investment, financed by the same source, public investment in agriculture yields positive impacts that are significantly higher than those yielded by investments in non-agricultural sectors (industry and services). Added value growth in non-agricultural sectors is higher under public investment in agriculture than in non-agricultural sectors.

scholarly journals EFFECT OF TRADE OPENNESS ON ECONOMIC GROWTH IN SUB-SAHARAN AFRICA: DYNAMIC PANEL ANALYSIS

2021 ◽  
pp. 23-35
Author(s):  
Wycliffe Mugun
Keyword(s):  
Economic Growth ◽  
Capital Stock ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
Allocation Of Resources ◽  
African Countries ◽  
Regional Trade ◽  
Explanatory Variables ◽  
Sub Saharan

Theoretically, proponents of traditional trade theories argue that trade openness can enhance economic growth by providing access to goods and services, achieving efficiency in allocation of resources through comparative advantage, creation of employment opportunities and generation of capital that leads to better living standards in terms of higher level of GDP per capita,trade openness may strengthen economic growth through different channels such as efficient allocation of resources. However, owing to the fact that there are limited studies on trade openness, various studies indicate divergent views on the effect of trade openness on economic growth. For this reason, it is not clear whether or not trade openness affect economic growth in Sub-Saharan Africa. The main objective of this study was to investigate the effect of trade openness on economic growth in Sub-Saharan Africa. Control variables used in the regression included oversees development assistance, population growth rate, domestic credit and foreign direct investment. Trade openness, inflation and capital stock were explanatory variables and economic growth the dependent variable. This study was modeled using the Neoclassical Growth theory. One- step difference Generalized Method of Moments results revealed that trade openness had a positive and significant effect on economic growth, capital stock positive and insignificant relationship, while inflation had positive and insignificant relationship with economic growth in SSA.The study thus recommends that there is a need for improving balance of trade by increasing exports diversification and balanced growth and the policy makers of SSA countries should have to give a priority for trade and investment policies which requires some reforms to adjust with changing economic environment. The study concluded that extra-regional trade spurs higher output than intra-regional trade. This may be due to lack of efficiency in the implementation of trade agreements among the intra-regional constituent countries such as Sub-Saharan African countries and lack of full commitment by the member states governments to trade more intensively. KEYWORDS: Trade openness, economic growth, Sub-Saharan Africa

scholarly journals TAX REVENUE PERFORMANCE IN SUB-SAHARAN AFRICA COUNTRIES: ARE THERE EMPIRICAL EVIDENCE FOR MACROECONOMIC VARIABLES?

2020 ◽  
Vol 5 (Special) ◽  
pp. 69-81
Author(s):  
Nosakhare Arodoye ◽  
Dickson Oriakhi ◽  
Milton Iyoha
Keyword(s):  
Empirical Evidence ◽  
Method Of Moments ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
Tax Revenue ◽  
African Countries ◽  
Macroeconomic Factors ◽  
Macroeconomic Variables ◽  
Sub Saharan ◽  
Ssa Countries

This study, examines the dynamic effects of macroeconomic factors on the overall tax revenue performance of thirty-three (33) Sub-Saharan African countries for eighteen years that range from 2000-2017 employing the system generalized method of moments methodology. This study provides empirical evidence for the dynamic and significant effects of macroeconomic variables on tax revenue performance in SSA countries. Arising from our empirical findings, the study recommends that, on the average, governments of SSA countries should establish the necessary macroeconomic preconditions for the effective and efficient administration of the countries’ tax systems to further boost her taxable capacity and fiscal surpluses.

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