scholarly journals Effects of Monetary Policy on Economic Growth; Evidence from Five (5) African Countries (Mauritius, Nigeria, South Africa, Namibia and Kenya) from 1980 to 2019

2020 ◽  
Vol 7 (9) ◽  
pp. 293-298
Author(s):  
Asiedu Michael ◽  
Emmanuel Owusu Oppong ◽  
Orazgylyjova Gulnabat
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Monetary Policy ◽  
African Countries

scholarly journals THE SAVINGS-TRADE-FISCAL GAP MODEL: APPLICATION IN SELECTED WEST AFRICAN STATES

2017 ◽  
Author(s):  
Efayena Oba Obukohwo ◽  
Buzugbe Patricia Ngozi
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Policy Making ◽  
Government Expenditure ◽  
Negative Relationship ◽  
Estimation Method ◽  
West African ◽  
Gap Model ◽  
African Countries ◽  
The Impact

With most African economies experiencing adverse economic misalignment in recent times, the need of enhancing the growth process cannot be overemphasized. Using a typical Savings-Trade-Fiscal Gap Model, the paper employed panel data estimation method to examine the impact of savings, trade and fiscal gap on economic growth of 15 West African countries. The paper finds a negative relationship between net trade and economic growth, while savings and government expenditure impacts positively on economic performance. The paper thus, among recommended that it is appropriate for all countries to eliminate fiscal dominance from monetary policy-making, reduce public debt and establish institutions that promote and encourage counter-cyclical fiscal policy, develop their financial systems, establish credibility in fiscal and monetary policy-making as well as encourage trade.

scholarly journals Impact of foreign direct investment on economic growth in Africa

2016 ◽  
Vol 14 (2) ◽  
pp. 289-297 ◽  
Author(s):  
Olawumi D. Awolusi ◽  
Olufemi P. Adeyeye
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Human Capital ◽  
Foreign Direct Investment ◽  
Technology Transfer ◽  
Direct Investment ◽  
Central African Republic ◽  
Capital Formation ◽  
International Technology Transfer ◽  
African Countries

Several studies have been conducted to examine the influence of foreign direct investment (FDI) inflow on economic growth. Indeed, the overall evidence is best characterized as mixed. This paper investigates the effect of FDI on economic growth in some randomly selected African economies from 1980 to 2013, using a modified growth model by Agrawal and Khan (2011). This model consists of Gross Domestic Product, Human Capital, International Technology Transfer, Labor Force, FDI and Gross Capital Formation (GCF). Ordinary least squares and generalized method of moments were used as the estimation techniques. Of all the results, only Gross Capital Formation, Human Capital, and International Technology Transfer in the Central African Republic were found not to have any statistically significant influence on economic growth. In general, the impact of FDI on economic growth in African countries is limited or negligible. Consequently, this study observes that a 1% increase in FDI would result in a 0.12% increase in GDP for South Africa, a 0.05% increase in Egypt, a 0.03% increase in Nigeria, a 0.02% increase in Kenya, and a 1% increase in GDP in the Central African Republic. The findings also reveal that South Africa’s growth is more affected by FDI than the other four countries. The study also provides possible reasons behind South Africa’s great show of FDI and the lessons other African countries could learn from South Africa better utilization of FDI. This study integrates the related drivers of the effectiveness and success of FDI

scholarly journals THE IMPACT OF MACROECONOMIC POLICY ON ECONOMIC GROWTH IN SUB-SAHARA AFRICAN COUNTRIES

2021 ◽  
Author(s):  
Ayana Workneh
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Fiscal Policy ◽  
National Income ◽  
Policy Coordination ◽  
Gross National Income ◽  
African Countries ◽  
The Government ◽  
The Impact ◽  
Panel Vector Autoregression

The prime purpose of this article was to investigate the monetary and fiscal policy interaction and their impact on economic growth in a panel of 35 sub-Saharan African economies from 1980 to 2018. To achieve this objective, the study employs a Panel Vector Autoregression (PVAR) estimation technique. Using a PVAR approach, we show that an expansionary fiscal policy through tax revenue and an unexpected expansionary monetary policy via broad money supply have a positive effect on gross national income, whereas an expansionary fiscal policy through the government spending have a contractionary impact on gross national income. We also find that an unexpected expansionary monetary policy via real exchange rate has no effect on gross national income. Finally, we show evidence that there is a negative and significant relationship between fiscal policy and monetary policy and thus supporting the need of policy coordination between fiscal and monetary policies. Therefore, to have continuous and sustainable economic growth, the coordination of monetary and fiscal policies is vital, and the lack of this coordination leads to a sharp downturn of overall economic performance, even can hurt the economy The empirical results also show that the variation in gross national income is more explained by fiscal policy variables than monetary policy variables which show fiscal policy is more effective than monetary policy in influencing gross national income.

Insurance market development and economic growth

2016 ◽  
Vol 43 (3) ◽  
pp. 321-339 ◽  
Author(s):  
Abdul Latif Alhassan
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Causal Relationship ◽  
Time Series Data ◽  
Insurance Market ◽  
Market Development ◽  
Series Data ◽  
African Countries ◽  
Content Type ◽  
Bound Test

Purpose – The purpose of this paper is to examine the causal relationship between insurance penetration and economic growth in eight selected African countries. Design/methodology/approach – The auto-regressive distributed lags bounds approach to cointegration is employed on annual time-series data from 1990 to 2010 to test the causal relationship between insurance and economic growth in Algeria, Gabon, Kenya, Madagascar, Mauritius, Morocco, Nigeria and South Africa. The ratio of life and non-life insurance premiums to gross domestic product are employed as proxies for insurance market development. Findings – The results of the bound test shows a long-run relationship between insurance market activities and economic growth for Kenya, Mauritius, Morocco, Nigeria and South Africa. Causality analysis within the vector error correction model indicates a uni-directional causality from insurance market development to economic growth except for Morocco where there is evidence of a bi-directional causality. Causality within the vector autoregressive framework also provides evidence of a uni-directional causality for Algeria and Madagascar to support the “supply-leading” hypothesis while mixed causality was found for Gabon. Practical implications – This findings provides policy direction for governments and regulatory authorities for developing insurance market in the sample countries. Originality/value – This is the first study to examine the finance-growth relationship from the perspective of insurance markets in a cross-section of African countries.

Discarding Political Hypocrisy and Mystification of Xenophobia While Maximizing the Economic Weight of Immigrant Nationals in African Economies

2021 ◽  
pp. 189-209
Author(s):  
Keatlegile Moses Mabena
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Government Officials ◽  
Political Leaders ◽  
African Countries ◽  
Economic Weight ◽  
Hard Times ◽  
International Obligations ◽  
Political Speeches

The chapter challenges existing political hypocrisy perpetrated by anti-immigrant proponents including politicians and governments in some purposively selected African countries which form part of this case study. The chapter selected South Africa, Nigeria, Libya and Kenya to provide background to investigate the identified problem. This chapter premises that in the selected countries, manifestations of xenophobia in society are perpetrated by hypocritical political speeches of politicians and government officials. These speeches mystifies xenophobia. Politicians and government officials denied existence of xenophobia to justify their xenophobic rhetoric. There is what others have called ‘denialism' with regard to xenophobia in countries such as South Africa where influential politicians including government officials would create theories such as ‘criminality' and influence of ‘third force' which lead to locals attacking immigrant nationals. The chapter presents that, indeed there have been historical xenophobic manifestations in the selected countries which were in the main sponsored by political hypocrisy of politicians and government officials. Political leaders used inflammatory political rhetoric during economic hard times to exonerate themselves from non-delivery of expected service by their electoral bases, and therefore resorted to xenophobic utterances. Contrary to some assertions, immigrant nationals were crucial for local economic growth and general development. Political leaders and government officials should enforce policies and practices that protect immigrant nationals from any harm or any type of violence. Locals should also be educated about the Human Rights of immigrant nationals in terms of domestic statutes and international obligations of states. Also, locals should be educated on the positive contributions immigrant nationals make in society. Locals could learn appreciation of diversity, and therefore be prepared to embrace multi-culturalism in the era of growing internationalization and globalisation.

scholarly journals Insurance market development: An empirical study of African countries

2015 ◽  
Vol 5 (4) ◽  
pp. 319-330
Author(s):  
Athenia Bongani Sibindi
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Life Insurance ◽  
Insurance Industry ◽  
Insurance Market ◽  
Market Development ◽  
Insurance Markets ◽  
African Countries ◽  
Life Insurance Industry ◽  
Insurance Density

The insurance industry plays a very crucial role in an economy by fostering intermediation and by its mechanism of risk bearing. As such it could be argued that the insurance industry fosters economic growth. In this article we analyse the global insurance market development trends, particularly focusing on Africa. Our sample comprise of the 10 African countries namely—South Africa, Angola, Nigeria, Kenya, Mauritius, Namibia, Algeria, Tunisia, Morocco and Egypt. We employ three insurance market development metrics namely; premium volumes, insurance density and insurance penetrations ratios to establish trends in the level of development of global insurance markets. Our results document that the African countries (excluding South Africa) have the least developed insurance markets. For most of the countries in our sample, the non-life insurance industry dominates the life-insurance industry. As such, it is imperative that their respective governments put in place measures that will grow their economies in order to stimulate the development of insurance markets in Africa.

scholarly journals Financial Development and Poverty Reduction: Evidence from Selected African Countries

2017 ◽  
Vol 8 (4) ◽  
pp. 90 ◽  
Author(s):  
Yaya Keho
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Financial Development ◽  
Cote D'ivoire ◽  
Poverty Reduction ◽  
Côte D’Ivoire ◽  
Financial Deepening ◽  
African Countries ◽  
Long Run ◽  
Positive Effect

This paper examines the relationship between financial development, economic growth and poverty reduction in nine African countries for the period 1970-2013. It uses the ARDL bounds testing approach. The results show evidence of long-run relationship among the variables in height countries with GDP and financial deepening having a positive effect on poverty reduction in five countries (Benin, Cameroon, Cote d’Ivoire, Gabon and South Africa), and poverty reduction having a positive effect on economic growth in three countries (Ghana, Nigeria and Senegal). The study also reveals bidirectional long-run causality between economic growth and poverty reduction in Cote d’Ivoire, Gabon and South Africa, and bidirectional long-run causality between finance and poverty reduction in Benin, Cameroon and South Africa. These findings suggest that policies aimed at increasing economic growth and improving access to credit would reduce poverty but also that measures of poverty reduction would lead to economic growth and financial deepening in these countries.

scholarly journals An investigation into the ability of the reverse yield gap to forecast inflation and economic growth in South Africa

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Keren A. Gossman ◽  
Mark G. Hayes
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Monetary Policy ◽  
Linear Relationship ◽  
South African ◽  
Core Model ◽  
Target Range ◽  
The South ◽  
Yield Gap ◽  
Inflation Forecasting

Background: Monetary policy in South Africa is carried out by the South African Reserve Bank (SARB) with the aim of keeping inflation within a target range of 3% – 6%. The SARB uses a variety of models to aid them, with the core model being the most significant. Aim: The primary aim of this research is to determine whether the reverse yield gap (RYG) contains information that could be useful to the SARB when making monetary policy decisions. Setting: The authors found no evidence that similar studies on the RYG have previously been done in the South African context. Since the yield curve has been found to be significant in South Africa at forecasting economic growth, yet insignificant in Europe, the results for this research may too be different to the global experience. Methods: The authors tested for linear relationships between the RYG and economic growth and inflation over the period 1960–2014. Results: The results indicate that a slight linear relationship may exist in the case of economic growth, with the RYG based on earnings yields showing better out-of-sample forecasting abilities. Further investigation indicates that the linear relationship is stronger during times of economic upturn. The results for inflation forecasting, however, show no signs of a reasonable linear relationship. Conclusion: There is evidence for the SARB to consider whether the RYG can replace other economic variables in its core model without loss of predictive ability. Interestingly, this study found evidence to suggest that the RYG has an inverse relationship to future economic growth in South Africa, which is not what was expected.

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