The “Africa Rising”: An Exploratory Analysis with the Gross Domestic Product Data

Abstract

The race toward inclusive development in developing economies has prompted researchers to reconsider the drivers of growth in view of achieving the Sustainable Development Goals (SDGs). The purpose of this research note is an exploration of the determinants of African growth after analysing reference literature to select the explanatory variables and conducting a replication study. We examine growth in a panel of 54 African countries using the generalised method of moment system estimators (GMM-sys). Using GMM-sys to estimate growth models is not novel, and many previous studies have used this appropriate approach for growth analyses. As a data source, the main international organisations (UN, WB, IMF) have been used. The covered period is 2010-2019 where the data are more complete. We have used the real per-capita GDP as a dependent variable. Based on the time-series data collected and the estimation methodology used, our findings show the variables that have had a significant impact on African growth from 2010 to 2019. The real per-capita GDP with one order of lags is the variable with the highest magnitude in all models, and it is expected of us. We have found evidence that there is trade dependency with the Southern and Eastern Asian developing countries’ cluster, mainly led by the economies of the “two Asian giants”, i.e., China and India, but also that there is a third trade dependency with the developing countries’ cluster in Europe and Central Asia, mainly led by the Russian economy.