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In a context where many African populations are excluded from the traditional banking system, financial inclusion appears to be a determining factor in enabling agents in need of financing, notably producers and consumers, to have easy access to financial services in order to contribute to the multiple efforts of economic and social progress of nations. However, to date, the literature remains silent on the optimal level of financial inclusion that can boost growth. Consequently, this paper aims to verify whether there is a non-linear relationship between economic growth and financial inclusion in the WAEMU zone. Econometric applications based on the PCSE (panel-corrected standard error) model on a panel of eight countries for the period 2014–2018 reveal a U-shaped relationship between the extended banking rate and economic growth. Economic growth shows two different behaviours depending on whether one is on the side of one or the other of the regimes inherent to the inflection point. In view of these results, we suggest that the public authorities: i) intensify campaigns to open accounts in local languages, ii) promote the development of online sales applications for goods and services, iii) pursue the dematerialisation of financial operations within public administrations. Finally, this paper paves the way for future research on the microeconomic component and a similar treatment of the subject, but taking into account the occurrence of the Covid pandemic19. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to test whether a debt threshold of public debt has any effect on economic growth in Africa. Design/methodology/approach: The authors applied the panel autoregressive distributed models on 38 African countries with annual data from 1970 to 2015. It was established that the threshold and the trajectory of debt has an impact on economic growth. Findings: Specifically, the authors found that public debt hampers economic growth when the depth is in the region of 20 to 80 per cent of GDP. Based on debt trajectory, this study established that increasing public debt beyond 50 to 80 per cent of GDP adversely affects economic growth in Africa. The study also finds that the persistent rise in debt also has adverse effect on economic growth in the African countries in the sample. It must be known to policymakers that the threshold of debt in developing countries, and for that matter African countries, are less than that of developed countries. Practical implications: This study suggests threshold effects between 20 and 50 per cent; this should be a guide for policymakers in the accumulation of debt stock. Interestingly, the findings suggest some debt trajectory effect, which policymakers might consider by increasing efforts to reduce debt levels when they fall between 50 to 80 per cent of GDP. This implies that reducing such debt levels can help African countries increase their economic growth. Originality/value: The study is unique because it seeks to add new evidence on the relationship between public debt and growth in the African region, by considering the impact of the persistent growth of public debt on economic growth. [ABSTRACT FROM AUTHOR]

This paper examines the effect of human immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS) on economic growth in sub-Saharan Africa (SSA) using data from 46 SSA countries spanning the period 2000–2015. Results based on the system-generalized method of moments estimation showed that a 1% increase in the HIV/AIDS prevalence rate in SSA decreased the growth in per capita income by 0.47%. The impact of HIV/AIDS on economic growth was felt most in Eastern Africa followed by West Africa, although the prevalence rate was highest in Southern Africa. In particular, a 1% increase in the prevalence rate of HIV/AIDS in Eastern Africa and West Africa retarded growth in per capita income by 0.64% and 0.47%, respectively, over the study period. The paper suggests that for SSA to minimize the impact of HIV/AIDS prevalence on growth, African governments should take a cue from the southern African countries by making anti-retroviral drugs more accessible and affordable to persons living with the disease. [ABSTRACT FROM AUTHOR]

This paper examined finance-growth nexus in the finance industry and the influencing factors of economic indicators which deliberate on the performance of the Solow Growth model to prove the actuality of financial development (FD) inside the economic growth (EG) model, based on the regional data from 1980 to 2017 in Africa. We applied the econometric method of GMM style panel vector autoregressive (PVAR) and panel quantile regression (PQR). With the optimal finance-growth outcome, the review shows that the economic indicators influence the finance-growth nexus. The quantile results show that high economic indicators help to strengthen the finance-growth nexus, whereas low economic indicators hinder it. The GMM style PVAR results present a mixed effect in terms of the connection and marginal significance, indicating that FD has a varied impact on economic growth. Last, the granger causality results show a two-way causal association amid finance-growth in Western, Central, Eastern, and Southern African economies and a unidirectional causal link of finance-growth in Northern Africa. The policy conclusion is that to gain the long-term economic benefits of FD, African countries should strive for low and steady economic stability. To attain the required economic stability, it may be important to use suitable fiscal and monetary policies. [ABSTRACT FROM AUTHOR]

Scholars and practitioners are torn between diverging viewpoints on the contribution of foreign assistance and foreign direct investment to the economic development, economic growth, and prosperity of Africa. This paper aims to examine the long-term and causal relationship between foreign direct investment, official development assistance, and economic growth for 20 selected African countries from 2000–2018. Autoregressive distributed lags and the error correction model were used as the primary estimation techniques. The results indicated a notable positive long-term cointegrating relationship between official development assistance and economic growth, and between economic growth and foreign direct investment, as well as a cointegrating link between foreign direct investment and official development assistance. Economic growth was found to promote official development assistance, while foreign direct investment was found to encourage economic growth and official development assistance was found to promote economic growth in the long run. Since foreign direct investment and official development assistance are important to economic growth in a spiral effect, African countries are encouraged to put in place policies that attract foreign direct investment and official development assistance. Thus, African countries should align their foreign and domestic investment and official development aid policies with their national developmental goals to attract foreign donations and investments. [ABSTRACT FROM AUTHOR]

This paper uses the dynamic growth framework to model the relationship between trade liberalization policy and economic growth of 42 African countries from 1995 to 2018. Banking on the heterogeneity of income and socioeconomic factor affecting trade policies in African countries, the paper opted for the Pooled Mean Group (PMG) technique which is sufficient for inference in a dynamic heterogeneous environment. The result tells that trade liberalization policy is beneficial to economic growth of African countries up to a certain threshold, beyond which it begins to cause the economy to under-heat. Thus, a confirmation of nonlinear relationship between trade liberalization policy and economic growth in African countries. The paper estimates a threshold value of 139.94% of total Trade to GDP; 345.32% of Export to GDP and 62.80% of Import to GDP. These findings champion that, for countries in Africa to benefit largely from trade, trade openness, export openness, and import openness should rover around the estimated threshold values. The paper documents certain conditions required to moderate the effect of trade liberalization policy on economic growth in African countries. [ABSTRACT FROM AUTHOR]

Purpose Nowadays, foreign capital inflow (FCI) is considered as a catalyst for economic development and an important source of transferring technology and foreign exchange earnings from developed to developing countries. The purpose of this paper is to study, first, the impact of different forms of FCIs, namely, foreign direct investment (FDI), personal remittances (PR) and official development assistant (ODA) on economic growth on 26 top African countries; and, second, which of them is more effective on economic growth of the studied countries. The results of this paper are very important for host governments’ policy and help them to design their economic plans to absorb the suitable foreign inflow.Design/methodology/approach The paper uses Pooled Mean Group (PMG) econometric technique to estimate the heterogeneous panels over the period 1992–2016.Findings The results of the study show that all three forms of FCIs have positive and significant effects on economic growth in the long and short run. However, the PR had the most effect on economic growth in the long and short run. The study suggests that the governments should design and implement appropriate fiscal, monetary and trade policies in order to create and improve an enabling environment to attract FCIs as a supplementary source of domestic investment.Research limitations/implications The research limitations of this paper are as follows: data sets of FDI, PR and ODA were available not for all African countries; and, data sets that were available were of before the year 1992. Thus, the research is done for the African countries which had the data sets after the year 1992.Practical implications The result of this paper indicates the impact of each FDI, PR and ODA in economic growth. So, countries can take more attentions to each of them on economic planning.Social implications FCIs are one of the important external source of exchange for each country. So, the study of importance of each of them is necessary for economic planning.Originality/value Most of the previous studies have examined the impact of three different forms of FCIs on economic growth separately, on different countries and regions and using various models and econometric techniques. One of the contributions of this paper is focused on the impacts of FDI, PR and ODA on economic growth separately and simultaneously in 26 top recipient African countries and using the PMG technique which is an advanced econometrical estimation and studied less about it. The other contribution of this research is the comparison of the impact of different FCIs on economic growth, and it is very important for governments’ economic policy. [ABSTRACT FROM AUTHOR]

This paper examines the non-linear effect of tourism on environmental degradation in 31 African countries. It also determines the moderating effect of tourism on the impact of economic growth on environmental degradation. It employs Pedroni, Johansen-Fisher and Westerlund panel cointegration tests to investigate the cointegration relationship between the variables. It uses the Fully Modified Ordinary Least Squares, dynamic system Generalized Method of Moments and Augmented Mean Group. These techniques enable us to account for various economic and econometric issues such as cointegration, heterogeneity, endogeneity, dynamism and cross-sectional dependence. This study reveals a cointegration relationship between the variables. It shows that tourism has a U-shaped non-linear effect on environmental degradation in African countries. Specifically, at early stage, tourism diminishes environmental degradation, but aggravates it as tourism increases. Besides, this study shows that tourism adversely moderates the impact of economic growth on environmental degradation. This paper makes significant contributions to the extant literature by unveiling the non-linear and moderating effects of tourism on the environment. The implication is that tourism is a significant determinant of environmental degradation, hence, effort to mitigate it should incorporate tourism. It may be necessary for African countries to emphasize green tourism in order to attain sustainable development. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to explore the determinants of international reserves in Algeria using economic growth and real effective exchange rate variables. The paper used quarterly data from 1985Q1 to 2014Q4.Design/methodology/approach The study employs autoregressive distributed lag (ARDL) approach known as the bounds testing method. The ARDL technique works well for small sample studies also. The current study assesses the influence of economic growth and real effective exchange rates on international reserves in Algeria by evaluating both short-run and long-run dynamics.Findings The study establishes a long-run relationship between international reserves, economic growth and real effective exchange rate. It also reveals that economic growth has a positive impact on international reserves while real effective exchange rate shows a negative effect.Originality/value This paper tries to provide a complete picture of the determinants of international reserves in Algeria. Foreign trade policy makers of Algeria can use the model estimated here to draw pertinent policies regarding international reserves. [ABSTRACT FROM AUTHOR]

A panel data analysis of nonlinear financial growth dynamics in a macroprudential policy regime was conducted in a panel of 10 African emerging countries from 1983–2020, where it had been a non-prudential regime from 1983–1999 and a prudential regime from 2000–2020. The paper explored the validity of invented U-shape hypothesis in the prudential policy regime as well as the threshold level at which excessive finance boosts growth using the panel smooth transition regression (PSTR) model. The PSTR model was adopted due to its ability to address the problems of endogeneity and heterogeneity in a nonlinear framework. The results reveal evidence of a nonlinear effect between financial development and economic growth, where the minimum level of financial development is found to be 60.5% of GDP, above which financial development increases growth in African emerging countries. The findings confirmed a U-shaped relationship, contradicting the invented U-curve hypothesis. The focal policy recommendation is that the financial sector should be given adequate consideration and recognition by, for example, implementing appropriate financial reforms, developing a suitable investment portfolio, and keeping spending on technological investment in Africa's emerging countries below the threshold. Again, caution is needed when introducing macroprudential policies at a low level of the financial system. [ABSTRACT FROM AUTHOR]

The purpose of South Africa's White Paper on Science and Technology was to set South Africa on a path away from its historically exclusive and relatively dysfunctional National System of Innovation to one more inclusive in its representation and dealings with civil society, the private sector and the marginalised - particularly the poor. Despite the links of subsequent science, technology and innovation policies and strategies to development outcomes, the focus on the poor was notably overlooked. In the decade since the White Paper was released, the gradual and minimal 'trickle-down benefits' of innovation failed to address increasing inequality, unemployment and subsequent poverty across South Africa. Evidence from our study of four rural district municipalities, using a purposively designed snowball sampling approach, indicates that current innovation activities in these areas appear prominent in the service or tertiary economic sector. This evidence reinforces prevailing ideas that the service sector is an important area for innovation and development, while the primary sector, including agricultural activities, remains important but perhaps less than previously emphasised. The high number of public, private and non-profit enterprises innovating in the service sector delineates this sector as a crucial entry point for innovation linked development. However, several prevailing trends with regard to innovation networks and the diffusion of innovations exist as challenges across all three sectors. These obstacles need to be overcome if the innovation and development nexus is to be strengthened and lead to broader local socioeconomic development and economic growth. [ABSTRACT FROM AUTHOR]

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This paper develops a model positing a nonlinear relationship between public investment and growth. The model is then applied to a panel of African countries, using nonlinear estimating procedures. The growth-maximizing level of public investment is estimated at about 10% of GDP, based on System GMM estimation. The paper further runs simulations, obtaining the constant optimal public investment share that maximizes the sum of discounted consumption as between 8.1% and 9.6% of GDP. Compared with the observed end-of-panel mean value of no more than 7.26%, these estimates suggest that there has been significant public underinvestment in Africa. [ABSTRACT FROM AUTHOR]

This paper uses annual balanced panel data to examine the Granger causal link between foreign direct investment (FDI) and economic growth (measured by real GDP growth) for 23 African countries covering the period from 1970 to 2011. Using recently developed panel econometric techniques the present paper takes into account non-stationary and cross-section dependency in the dataset when analyzing the growth-FDI nexus. The empirical results indicate two-way Granger causality link between FDI and economic growth. Furthermore, we show that this causal link is not homogeneous among individual countries in our sample. More specifically, we observe unidirectional causality from FDI to GDP growth in Egypt, Gabon, and Mauritania, and from GDP growth to FDI in Côte d'Ivoire, Kenya, South Africa and Zambia. Our main finding remains robust to estimation between FDI as a fraction of gross capital formation and real GDP growth. [ABSTRACT FROM AUTHOR]

Following a recent line of research, this paper investigates the aggregated effects of temperature and rainfall on economic growth in Africa. Our econometric approach is based on a reduced-form model and takes account explicitly of parameter heterogeneity and cross section dependence, relying on ARDL modelling and panel estimators with multifactor structures. We find clear supportive evidence of short- and long-run relations between temperature and per-capita GDP growth, while the role played by rainfall appears to be less important and the evidence on its statistical significance is less clear-cut. Very similar results are reported when the analysis is carried out by focusing solely on Sub-Saharan African countries or considering GDP growth per worker. This evidence is in sharp contrast to the results obtained via standard MG estimation and this confirms that, by not controlling for cross section dependence, traditional panel estimators are likely to provide misleading inference. The empirical results suggest that, far from adapting quickly to weather shocks, African economies appear to be significantly damaged by them. In the absence of corrective measures, the current trends in climate change may impose a progressively heavier burden on African countries. [ABSTRACT FROM AUTHOR]

In addition to the standard Granger causality, this paper employs the Toda–Yamamoto approach and instantaneous causality test to examine the causal relationship between domestic savings and economic growth in 10 sub-Saharan African countries utilizing time series data. Findings from both the standard Granger causality and Toda–Yamamoto approach are consistent and robust only in five countries where domestic savings and economic growth are completely independent in three countries. For the remaining two, causality runs from savings to growth. However, for the other five countries, findings produced from both causality tests are grossly inconsistent and mixed leaving us under a quandary although the Toda–Yamamoto test is often reliable on account of its ability to avoid misleading results associated with the asymptotic nature of the standard Granger causality test. Our findings further reveal an instantaneous unidirectional causality from domestic savings to economic growth for only Benin, Mali, and South Africa suggesting that savings-led growth is rapid for these countries. We conclude based on our findings that the myriad of ‘evidence’ in earlier studies on savings-growth causality should be treated with caution given that methodological differences can produce misleading results with the potential of misdirecting policy. [ABSTRACT FROM PUBLISHER]

Purpose – Information communication technologies (ICTs) are widely seen as having the potential to contribute positively to economic growth and development and to improve the livelihoods and quality of life of individuals and households and yet access to ICTs and usage of them remains highly inequitable. This paper aims to identify areas of inequality in access to ICTs between men and women in Africa.Design/methodology/approach – Drawing on the Research ICT Africa (RIA) household and individual ICT survey conducted in 17 African countries between 2007/2008 the paper provides an empirical basis for assessing gender dimensions of ICT access and usage. Additionally, focus group studies were conducted in Cameroon, Ethiopia, Nigeria, South Africa and Uganda to gain a greater qualitative understanding of access to and usage of ICTs from a gender perspective.Findings – Although the results confirmed in many countries the widely held belief that men have greater access to ICTs than women in some instances more women than men owned mobile phones such as in South Africa and Mozambique. In Cameroon women were found to have greater knowledge of the internet than their male counterparts. Most significantly perhaps is the finding that when women have similar income, education and employment status they have comparable access to ICTs as their male counterparts. However, as women generally do not have the same access to those core factors that enhance ICT access and usage, their access to ICT is generally lower.Originality/value – The quantitative as well as focus group results of this study confirm gender differences in access to ICTs, raising important questions about the points of policy intervention to redress such imbalances. [ABSTRACT FROM AUTHOR]

The paper empirically examines the extent to which different forms of capital flows (foreign direct investment [FDI], remittances, foreign aid and external debt) affect the impact of trade (exports) on economic growth in Africa. We do this with the aid of an augmented endogenous growth model which we estimate by dynamic system GMM technique with endogeneity-expunging efficiency. First, we find that whilst the direct impact of trade (exports) has been crucial in driving economic growth in Africa in both the short- and long-run, capital flows (FDI, remittances, foreign aid and external debt) do not. Second, our results clearly show that, in both the short- and long-run, inflows of FDI and remittances serve as important channels through which trade (exports) has its largest impact on economic growth while inflows of foreign aid and external debt do not. Following these outcomes, we conclude that policies aimed at attracting FDI and remittances to African countries are what policy reforms should target. Further, our findings suggest that moderating the inflow of external debt and foreign aid could be beneficial to the effect of trade (exports) on economic growth. [ABSTRACT FROM AUTHOR]

Purpose: African countries are generally fragile. This and other related characteristics affect the potential for growth and development. The purpose of this paper is to investigate whether the effect of FDI on economic growth is contingent on a financial system that accounts for financial market fragility. An important point of departure from earlier studies is the adoption of a new measure of financial market fragility. Design/methodology/approach: Given the uniqueness of the data set, the study uses a panel data and estimates an econometric model using an instrumental variable approach. For robustness purposes, a pooled ordinary least square is also estimated. Findings: The study provides evidence that if the financial market is fragile as in the case of Africa, FDI inflows may have a marginally significant positive impact on economic growth. The findings suggest that fragility in the financial market is a key absorptive capacity and cannot be trivialised when exploring FDI–growth nexus in Africa. Research limitations/implications: The uniqueness of the data set limited the time period of the study. Nonetheless, the findings are still crucial to policy makers in Africa and other developing countries with similar characteristics. Originality/value: To the best of the authors' knowledge, this is the first study in Africa to investigate the FDI–growth nexus which accounts for financial market fragility. [ABSTRACT FROM AUTHOR]

Objective -- The manufacturing sector plays an important role in any economy. However, Africa has experienced significant deindustrialisation over the last few decades, whilst economic growth has been on an upward trend over the same period. The high growth rates have mostly been propelled by improved macroeconomic stability and the commodity price boom. Further, the slowdown in commodity prices has recently caused a deceleration of economic growth which begs the question: Does promoting the manufacturing sector result in higher and sustainable economic growth and reduce unemployment? This study assesses the impact of the manufacturing sector on economic growth in 37 African countries. Methodology/Technique -- This study employs the System-GMM Model for the period between 1990 and 2017. This technique is ideal as the number of cross-sectional units is greater than the number of time periods. This technique also caters for problems of endogeneity and heteroscedasticity. Findings -- The results show that manufacturing value has a positive effect on economic growth in African countries. Therefore, it is recommended that policy makers enact measures to boost manufacturing output. Novelty --The deceleration of economic growth in African countries coupled with high unemployment and poverty levels has brought the issue of re-industrialisation into the spotlight. This study is vital for policy makers in African countries who seek to promote economic growth and employment levels. The study contributes to literature in African countries by incorporating variables such as human capital and institutional quality which are major determinants of economic growth. [ABSTRACT FROM AUTHOR]

This paper uses cross-national data to investigate the extent to which the adoption of human development strategies has resulted in a reduction of poverty in Africa. Inter-country variations in income and human poverty reinforce the established patterns of well-being within the continent, as countries in Northern and Southern Africa have the lowest levels of poverty. The empirical analysis reveals that inter- country differences in poverty levels can be accounted for by variables indicative of the different facets of human development. These include public expenditure on education, primary school enrolment, female educational enrolment, expenditure on health, and good governance. Other significant variables apart from those pertaining to human development are economic growth, high external debt, the prevalence of HIV/AIDS and the geographical disadvantage of being a landlocked country. The paper also shows that foreign aid has had a limited effect on poverty reduction in Africa. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to examine the role of marketing in the economic growth and competitive strategies of Sub-Sahara African firms. It also seeks to offer a backdrop for the papers in the present volume of AJEMS. Design/methodology/approach – It is based on a review of a selection of literature that highlights past and current perspectives of marketing’s contribution to economic growth and firm performance in developing economies. Findings – The review suggests that trade liberalization in African countries since the 1980s has changed the competitive landscape of firms located in these countries and has compelled them to develop market-oriented strategies in order to enhance their performance. But the strategies adopted tend to target the growing middle income segments of the population in the urban areas and to ignore the poor. Originality/value – It provides directions for future research into issues of inclusive marketing policies and strategies – i.e. strategies that embrace the bottom of the pyramid and transforms the production base of African economies. [ABSTRACT FROM AUTHOR]

This paper evaluates the impact of information and communication technology (ICT) on economic growth in Africa based on a sample of 54 countries from 2005 to 2015. The sample is further divided along five sub-regions and the outcomes measured by estimating pooled ordinary least squares, random and fixed effects and system generalised method of moments models. The ICT indicators are individuals using the internet, mobile subscribers and fixed telephone subscribers with trade openness and inflation rate as control variables. Findings, among others, reveal that (1) ICT development has a statistically significant positive relationship with economic growth, (2) the output elasticities of the three ICT indicators are significantly different, (3) the "leapfrogging" hypothesis holds, (4) mobile subscription has the largest output elasticity across all specifications and has the biggest potentials to enable Africa to skip traditional developmental stages, (5) regressions for the sub-samples show statistically significant differences of the output elasticity of ICT indicators. The study recommends that concerted efforts must be directed towards harnessing the inherent benefits of ICT usage which includes reducing the rising cost attributable to the usage of communication technology facilities such as the cost of buying a cellular phone, internet connectivity rates, subscription rates and so on. [ABSTRACT FROM AUTHOR]

This paper examines the growth effects of infrastructure stock and quality in Sub Saharan Africa (SSA). While previous studies established that the poor state of infrastructure in SSA slows economic growth, there is little evidence on infrastructure quality and a robust analysis on the causal links between infrastructure and economic growth. Using principal components analysis to cluster different infrastructure measures and examining the infrastructure-growth nexus in a Generalised Method of Moments while accounting for heterogeneity in a panel setting, our results reveal strong evidence of a positive effect of infrastructure development on economic growth with most contribution coming from infrastructure stock. The quality-growth effect is weak, thus giving credence to the combined effects of infrastructure stock and quality on growth, especially in regions with moderately high quality, and smaller in those with poorer quality. However, the long-term quality effect is higher than the short-term. Among the disaggregated infrastructure components, electricity supply exerted the greatest downward pressure on growth in SSA. Lastly, we find evidence for a unidirectional causality from aggregate infrastructure to growth. A number of policy implications are discussed. [ABSTRACT FROM AUTHOR]

We discuss the link between financial development and economic growth through Total Factor Productivity (TFP) canal in African economies. First, we use a composite index to hierarchize financial development in 40 African countries. Then, we study this relationship by using the methodology of panel data based on the Breusch-Pagan LM Test and Hausman Test, to determine the nature of the specific effect, in a panel of 22 economies. The main results of our study show that the development of the financial sector does not promote total factors productivity in low-income and upper-middleincome countries. For the lower middle-income countries, the Finance-TFP relationship is significantly positive. The reforms of African financial systems should be designed and directed to increase the adequacy of financial services with the needs of each economy. [ABSTRACT FROM AUTHOR]

In this paper we argue that the answer, to the question of whether Africa's recent growth is sustainable, is yes. Our optimism rests on the finding that differences in the level of institutional quality predict cross-country variation in African economic growth during the period 1995–2011. This finding is quite robust. It holds in OLS, LAD and 2SLS settings; it holds for different measures of institutions and different measures of economic growth; and it holds for the period before and the period after the global financial crisis. We also show that changes in institutional quality predict cross-country variation in African economic growth. Moreover, if we split our sample into two equally sized groups, a high-growth and a low-growth group, then the high-growth group has experienced a statistically significant increase in institutional quality, whereas the low-growth group has not. Overall, this makes it probable that institutions have played an important part in Africa's recent growth acceleration. The continent has seen many false dawns, caused in large part by increases in commodity prices, but a growth acceleration driven by institutions is likely to signify a genuine African takeoff. [ABSTRACT FROM PUBLISHER]

The relationship between urbanization and development is a vital policy concern, especially in Africa and Asia. This paper reviews the arguments and evidence for whether rapid urban population growth can help to raise living standards. The main finding is that the development effects of urbanization and the magnitude of agglomeration economies are very variable. There is no simple linear relationship between urbanization and economic growth, or between city size and productivity. The potential of urbanization to promote growth is likely to depend on how conducive the infrastructure and institutional settings are. Removing barriers to rural–urban mobility may enable economic growth, but the benefits will be much larger with supportive policies, markets and infrastructure investments. Cities should use realistic population projections as the basis for investing in public infrastructure and implementing supportive land policies. Governments should seek out ways of enabling forms of urbanization that contribute to growth, poverty reduction and environmental sustainability, rather than encouraging (or discouraging) urbanization per se. [ABSTRACT FROM PUBLISHER]

This paper offers a descriptive analysis approach regarding the influence of some institutional variables on the economic growth in emerging countries. The sample consists of 20 countries covering different zones: European Emerging, Asia Pacific Emerging, Latin America, Middle-East and Africa. We analyze the evolution and the nature of the correlations of economic growth and some of its determinants such as corruption control, government stability and investment profile during 2000-2010. [ABSTRACT FROM AUTHOR]

Economic growth and poverty reduction now take the centre stage in most global policy discourse. This is coming at a time that the Sustainable Development Goals (SDGs) are fast gaining global relevance. Africa has witnessed the highest but non-inclusive level of growth in the last decade because the continent still grapples with high unemployment rate especially among the youths. This paper therefore examines some drivers of and constraints to growth and poverty reduction in Africa. The paper focused on Africa by using secondary data sourced from different such as the United Nations Development Programme (UNDP), Transparency International (TI), Institute of Economics and Peace (IEP) and National Bureau of Statistics (NBS) reports and Annual Abstract of Statistics. Analytical methods employed were mainly descriptive statistics and comparative statistics. Findings showed that economic growth recorded in the continent is a 'jobless' one advancing inequality and poverty. More so, 75 percent of countries with low human development are in Africa with the continent's consistent economic growth imparting insignificantly on the livelihoods of the people. In fact, 27 out of 54 African countries were reported to have GDP of less than $USD 2000 per capita. GDP growth in sub-Saharan Africa was estimated at 4.9 percent in 2013 and this increased to 5.3 percent in 2014 and further estimated to rise to 5.5 percent in 2015. The fight against inequality, poverty and unemployment is tantamount to aiming a moving target. Youth unemployment remains a component of Africa's growth owing to persistent low productivity and underemployment in the informal sector. The resultant implication of this is manifested through persistent inequality, poverty, armed conflict and unchecked migration of young people to industrialised nations in search of the non-existing livelihood opportunities. This paper therefore recommends increased and monitored investments in critical infrastructural facilities. There is a need for multilevel and multinational partnership in the fight against corruption and social conflict to attract foreign direct investment. Investment in social security programmes will also assist the poor and vulnerable people in the continent. [ABSTRACT FROM AUTHOR]

Purpose The commonly adopted view of the relationship between government spending and economic growth follows the Keynesian approach, in which government spending is considered to determine economic growth. However, there is another theory, which suggests that economic growth in fact determines government spending. This is Wagner’s hypothesis. The purpose of this paper is to investigate which of the two approaches applies to South Africa, and further observes the level of non-linearity between the two variables.Design/methodology/approach This study was carried out using quarterly time series data from 1980Q1 to 2015Q1. Granger causality technique was used to observe the direction of causality between the two variables, while regression error specification test (RESET) was employed to determine whether the variables exhibit linear or non-linear behaviour. This was followed by observing the threshold band, using two techniques, namely, sample splitting threshold regression and quadratic generalised method of moments.Findings The causality result shows that South Africa follows Wagner’s law, whereby government spending is determined by economic growth, supporting Odhiambo (2015). The RESET result shows that the variables depict a non-linear relationship, thus the government spending economic growth model is non-linear. It was found that if positive economic development is to be achieved, economic growth should preferably be kept within the −1.69 and 3.0 per cent band, and specifically above 1 per cent band.Originality/value The unique contribution of this study is that no previous study has attempted the non-linear government spending-economic growth nexus whether within the Keynesian or Wagner law for South Africa. [ABSTRACT FROM AUTHOR]

Empirical research has generally attributed the dismal performance of Africa's economic growth to country-specific socio-economic and geo-political factors. This paper shows that while country-specific issues matter for Africa's economic growth, common global economic factors do matter as well. The importance of common global economic factors has been augmented by increased globalization, the introduction of the World Trade Organization and the current global economic crisis. Using system GMM panel data techniques that extend previous literature on Africa's growth, the estimation results provide new insights into the positive relationship between the world business cycle and the growth rates of African countries. Copyright © 2010 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This paper assesses the impact of mobile phone rollout on economic growth in a sample of African countries from 1988 to 2007. Further, in light of the large financial infrastructure gap in African countries, we investigate whether mobile phone development fosters economic growth through better financial inclusion. In estimating the impact of mobile phone development on growth, we use mobile penetration rate as well as the cost of mobile local calls to capture mobile phone diffusion, while financial inclusion is measured by the number of deposits or loans per head. Using the System Generalized Method of Moments (GMM) estimator to address endogeneity issues, the results confirm that mobile phone development contributes significantly to economic growth in African countries. Part of the positive effect of mobile phone penetration on growth comes from greater financial inclusion. [ABSTRACT FROM AUTHOR]

Purpose - The purpose of this paper is to analyse long-term trends in the development of Africa's economic infrastructure. Design/methodology/approach - The importance of infrastructure was examined in social and economic processes, followed by an exploration of the changing nature of infrastructure and its implications for delivery. The paper looked at the development of infrastructure in Africa by focusing on what was inherited at independence versus what had been achieved there since and why this was the case. Findings - The development challenges are immense because delivery of infrastructure requires much more than financial resources - it requires the capacity to deliver massive, complex projects in an efficient manner. It is clear that African states do not possess this level of capacity but this can still be delivered through innovative public-private partnerships, global cooperation, and the support of international institutions. Practical implications - Improving Africa's infrastructure is a necessary but not sufficient condition to promote economic development and attract investment back to the continent. Originality/value - The author assesses what needs to be done to ensure the massive infrastructure delivery required for the continent, which is estimated at 6 percent of output, and the innovation required for such a programme. [ABSTRACT FROM AUTHOR]

Africa is a continent with huge resource endowments and prospects for growth. However, the continent battles with myriads of problems such as poverty, food insecurity and dwindling commodity prices among others. This is because Africa's export is dominated by primary products that are majorly climate-dependent and vulnerable to price volatility. This paper therefore examined the economic situations of Africa considering the dwindling commodity prices in the face of the threat posed by climate change. Climate change remains one of the greatest environmental problems with economic, social, health, security and environmental implications. The paper employed a combination of both secondary and historical information obtained from different sources (UNDP, UNECA, NBS, Trade reviews etc). Analytical method used include descriptive statistics such as tables, averages and percentages. Despite the declining Africa's contribution to global market, commodity prices have been plummeting with very devastating impact on the livelihood of households and general wellbeing of the inhabitants of many of these countries. Countries relying on mineral resources such as oil, copper, gold and platinum to mention just a few have been the worst hit. Therefore, African countries' local currencies and trade balance have weakened against the dollar leading to high inflation in the continent. The terms of trade is declining as Africa continues to import commodities it should be producing because of the weak productive base, decaying infrastructure and the worsening climate conditions. This implies that households' welfare in these countries is likely to be compromised because of more job losses emanating from declining profits accruing to the solid mineral sector in the affected countries. The paper recommends increased investment in infrastructure facilities and human capital development for skills enhancement in Africa. Also, climate change adaptation policies should be formulated and implemented by African governments at all tiers and encouragement of value addition in exportable commodities to enhance favourable trade balance. [ABSTRACT FROM AUTHOR]

The reach and scope of microinsurance have expanded considerably over the last couple of decades. The literature on microinsurance focuses predominantly on its microeconomic impact. In contrast, I examine the contemporaneous and intertemporal effect of microinsurance on economic development using rich census data of microinsurance coverage in African economies. Estimates suggest that microinsurance affects economic growth both on impact and over time, with the magnitude of the intertemporal effect exceeding that of the contemporaneous effect. Evidence also suggests nonlinearities in the microinsurance–growth nexus. The marginal effect of microinsurance is a negative function of the starting level of development. For low-income countries, microinsurance has a robust positive effect on economic growth, both in terms of impact and over time. However, microinsurance may fail to leave a lasting trace on the aggregate economy in "richer" developing countries. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between defence burden and real gross domestic products in Nigeria, using annual time series data. This study uses Johansen's Cointegration approach to investigate the relationship between government's military expenditure (defence burden) and real gross domestic products, among other variables. In light of the lingering controversy on military expenditure and growth nexus, this paper contributes to the existing literature using time-series data from Nigeria, a country with high military spending over the years to re-investigate the impact of military expenditures on economic growth and the direction of causality between military spending and economic growth. Specifically, this study discusses the long run relationship between military expenditure and economic growth using Johansen cointegration approach. The key variables used in the study include: military burden (military expenditure), real GDP, real education expenditure, real health expenditure. The nature of the relationship that exists between military expenditure and economic growth as well as the cointegrating vector, taking into cognizance all other variables is focus of this paper. The results of the study show that increased defence burden is harmful to the Nigerian economy, and there exists a negative long-run relationship between defence burden and increase in the growth of real gross domestic products, the impact of defence burden remains negative both in the short-run and long-run respectively. It is not sufficient to have cuts in military expenditure, but such reallocation from defence should be directed towards productive investment in other sectors of the economy in order to generate economic prosperity and enhance the welfare of the citizens. Implications of having a negative effect of defence burden on growth rate of real Gross Domestic Products result in crowding-out of private sector investment, retards economic progress or growth rate of real gross domestic products, and therefore, is an ineffective tool to stimulate the growth of the economy in Nigeria. Military expenditure cannot be an effective tool of fiscal policy (government revenue and expenditure to regulate the economy), from the results of the study both short-run and long-run impact are negative, hence, the role of military sector should be limited to the maintenance of internal law and order as well as the defence of the country against any form of external aggression. This study will be of immense significance towards shaping policies that relate to military spending in Nigeria. [ABSTRACT FROM AUTHOR]

Asian and African regions have experienced periods of economic growth, yet they continue to grapple with distinct challenges and issues that hinder their ability to sustain and distribute that growth effectively. In addressing this concern, our research investigates the impact of exports, exchange rates, foreign direct investment, bank credit, government spending, and the Human Development Index on the economic growth of developing nations in Asia and Africa. The employed methodology is the panel least square method, which utilizes secondary data. The Asian region comprises 28 countries, and Africa encompasses 34 countries, from 1946 to 2018. The outcomes of the study reveal that within developing Asian countries, variables such as exports, exchange rates, foreign direct investment, bank credit, government spending, and the Human Development Index have positive and noteworthy effects on economic growth. In the context of African nations, the research finds that exports, exchange rates, and government spending have favorable and significant impacts. However, the Human Development Index displays a detrimental and significant influence. On the other hand, foreign direct investment and bank credit exhibit positive yet inconsequential effects on economic growth in developing African countries. Consequently, these findings underscore the need for robust macroeconomic foundations in developing economies to counteract global economic uncertainties. This strategy is imperative to facilitate swift economic expansion that aligns with each nation's distinctive economic development plans. [ABSTRACT FROM AUTHOR]

This paper investigates the role of economic transformation in the form of increased manufacturing share in aggregate output in accelerating growth and reducing growth volatility in Africa. Using cross-section time series data from 50 African countries, the paper examines the key determinants of growth in the share of manufacturing output in aggregate output and its relationship with real GDP growth and growth volatility. Results of system GMM estimation indicate that real GDP growth and domestic investment are among the key drivers of growth in the share of manufacturing output in total output and that growth in the latter has, in turn, the potential to raise GDP growth and reduce growth volatility. It is therefore argued that African countries should pursue effective strategies, including industrial policies and institutional reforms, to promote manufacturing and other innovative activities as a means to accelerate economic growth and diversification, and enhance employment creation. [ABSTRACT FROM AUTHOR]

The study examines the differential effects of capital flows on economic growth in five Sub-Saharan African (SSA) countries over the period 1970-2014. Using the autoregressive distributed lag methodology, the findings show that in the long-run capital flows (i.e. foreign direct investment (FDI), aid, external debt, and remittances) have different effects on economic growth. FDI has a significant positive effect in Burkina Faso and negative effects in Gabon and Niger whereas the impact of debt is negative in all countries. Aid, however, promotes growth in Niger and Gabon whiles it deters growth in Ghana. Remittances, on the other hand, have a significant positive effect in Senegal. Finally, gross capital formation is significant in most of the countries and the impact of trade is mixed. These results suggest that the benefits of capital flows in SSA have been overemphasized. [ABSTRACT FROM AUTHOR]

This paper revisits the 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. The study employs a dynamic model based on the system generalized method of moments (SGMM) and analysed a balanced panel data covering 35 countries from 1980–2008. The empirical results show that the two measures of human capital have positive effects on economic growth, although the contribution of health is relatively larger than the impact of education. This finding emphasizes 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. [ABSTRACT FROM AUTHOR]

An important issue in the finance and growth literature is whether the strength of the relationship between finance and growth may depend on inflation rate. This paper uses time-series data to examine this evidence for seven African countries. The technique of principal component analysis is used to construct an overall index for financial development. This summary measure is used to estimate nonlinear growth equations. The empirical findings did not provide significant evidence of nonlinearity in the finance-growth relationship. Financial development has no significant effect on economic growth regardless of the level of inflation. [ABSTRACT FROM AUTHOR]

In this paper we examine the dynamic causal relationship between financial development, investment and economic growth in South Africa—using the newly developed ARDL-Bounds testing procedure. Unlike the majority of the previous studies, we incorporate investment in the bivariate model between financial development and economic growth—thereby creating a simple trivariate causality model. In addition, we use three proxies of financial development, namely M2/GDP, the ratio of private sector credit to GDP and the ratio of liquid liabilities to GDP in order to test the robustness of the results. Our results show that, on the whole, economic growth has a formidable influence on the financial sector development. The study also finds that there is a distinct unidirectional causal flow from economic growth to investment. Moreover, the study also finds that investment, which results from growth, Granger-causes financial development. The study, therefore, recommends that South Africa should intensify its pro-growth policies in order to bolster investment and financial development. [ABSTRACT FROM AUTHOR]

The literature suggests that investment and economic growth respond very slowly to economic reform due to uncertainty about the permanence of reform. Despite clear theoretical underpinnings for the idea that policy reversal significantly impedes economic performance, there is limited empirical evidence on this topic. This paper derives empirical proxies for the probabilities of different types of policy reversal and investigates their impact on investment and growth in Sub-Saharan African countries. The results show that trade, fiscal, savings and financial policy reversals have been very damaging to investment and economic growth. The paper also finds that it is the prediction or expectation that reversal will occur that hurts performance. There is no evidence that exchange rate policy reversal has damaged performance. [Copyright &y& Elsevier]

This study examines nonlinearities in the inflation-growth nexus in Africa. The study employs a novel dynamic panel threshold regression method developed by Kremer et al. [(2013). Inflation and growth: New evidence from a dynamic panel threshold analysis.Empirical Economics,44, 861–878. doi:10.1007/s00181-012-0553-9] that extends Hansen’s [(1999). Threshold effects in non-dynamic panels: Estimation, testing, and inference.Journal of Econometrics,93, 345–368. doi:10.1016/S0304-4076(99)00025-1] non-dynamic panel threshold model as well as Caner and Hansen [(2004). Instrumental variable estimation of a threshold model.Econometric Theory,20, 813–843. doi:10.1017/S0266466604205011] cross-sectional threshold model to deal with potential endogeneity problems. The findings of this study confirm a non-linear relationship between inflation and economic growth in Africa. More specifically, the results show that the inflation threshold values are 6.7% for the whole sample, 9% for the sub-sample of low-income countries and 6.5% for middle-income countries. The regression results suggest that relatively lower level of inflation appears to be in favor of higher economic growth only in African middle-income countries. However, inflation rate beyond a certain threshold is more likely to be detrimental to economic growth for all the cases. These results are robust by considering additional control variables and using three-year averages of the data. The findings of this study may be useful to African monetary policymakers as they decide on inflation targets to adopt to avoid the detrimental effects of high inflation while reaping the growth benefits of low inflation. [ABSTRACT FROM PUBLISHER]

This paper examines the dynamic interactions between insurance and economic growth in eight African countries for the period of 1970–2013. Insurance demand is measured by insurance penetration which accounts for income differences across the sample countries. A Bayesian Time Varying Parameter Vector Auto regression (TVP-VAR) model with stochastic volatility is used to analyze the short run and the long run among the variables of interest. Using insurance penetration as a measure of insurance to economic growth, we find positive relationship for Egypt, while short-run negative and long-run positive effects are found for Kenya, Mauritius, and South Africa. On the contrary, negative effects are found for Algeria, Nigeria, Tunisia, and Zimbabwe. Implementation of sound financial reforms and wide insurance coverage are proposed recommendations for insurance development in the selected African countries. [ABSTRACT FROM AUTHOR]

This study contributes to the literature on political instability and economic growth by specifically investigating the impact of political instability on the economic growth of member countries of the Economic Community of West African States (ECOWAS). West Africa is regarded as the riskiest sub-region within the African continent. To achieve this objective, this study employed panel data techniques (fixed effects and generalised method of moments) on a sample of 15 ECOWAS member countries for the period 2005–2012. The findings from the analyses showed that terrorism, poor governance, social unrest, youth unemployment, death rate and natural resource rent have negative relationships with economic growth. The findings and policy implications deduced from this study could not have been any timelier considering the recent escalation of instability in West African countries and their fragile growth prospects. [ABSTRACT FROM AUTHOR]

The paper considers the factors that drive a strong and competitive agri-business sector with particular attention to investment in research and development (R&D) for technological innovation as well as the broader drivers and risk factors of influence. It develops a case study and in particular contrasts the very successful value chain in Thailand with the weak one in Nigeria in order to highlight the implications for Nigerian government policy if it wishes to exploit the potential for a strong cassava agri-business sector. [ABSTRACT FROM AUTHOR]

The Nigerian economy in recent times has recorded substantial growth. In spite of this, poverty persists unabated. This article examines issues surrounding the paradox of rising poverty amid high economic growth in Nigeria. It argues that the reasons for this absurdity include jobless growth, a non-pro-poor growth, and failure of poverty alleviation initiatives to address structural transformation required for a sustainable growth, employment generation, and bridging income gap within the economy. It is therefore recommended that focus should be placed on structural transformation, genuine commitment to good governance, fight against corruption, and provision of social protection for the poor and vulnerable. [ABSTRACT FROM PUBLISHER]

This paper examines the long-run and causal relationships among energy consumption, carbon dioxide (CO2) emissions and economic growth for a sample of 12 selected Sub-Sahara African countries. It applies the bounds test to cointegration and Granger causality test to annual data covering the period 1971–2010. The empirical results are mixed across countries. In the long-run, energy consumption and economic growth are associated with increase in atmospheric pollution in most countries. Results from the Granger causality tests show evidence of economic growth causing CO2 emissions in the short-run in Benin, Democratic Republic of Congo, Ghana, Nigeria and Senegal, implying that economic expansion cannot be achieved without affecting the environment. Evidence of reverse causality running from CO2 emissions to economic growth has been found for Gabon, Nigeria and Togo, indicating that environmental policies aiming at reducing air pollution may have adverse effects on economic growth. Moreover, bidirectional causality between economic growth and CO2 emissions has been found in the short-run for Nigeria and in the long-run for Congo and Gabon. In the long-run, energy consumption and economic growth cause CO2 emissions in Benin, Cote d’Ivoire, Nigeria, Senegal, South Africa and Togo. [ABSTRACT FROM AUTHOR]