Economic Growth In West Africa Research Articles

The Relationship between Trade Openness, Foreign Direct Investment and Economic Growth in West Africa: Static Panel Data Model

This study investigates empirically the relationship between Trade openness (OPEN) and Foreign Direct Investment (FDI) on the economic growth for a panel of four (4) West African countries (Cote d’Ivoire, Ghana, Nigeria, and Senegal) during the period of 1998 to 2017. The static panel regression techniques were employed to assess the causal link of our regressors, namely, FDI, trade openness, investment and Inflation to economic growth measured by Gross Domestic Product (GDP). Levin-Lin-Chu unit-root test was conducted to find the stationarity of the panel data. The evidence from the statistical analysis suggests that aggregated trade openness, investment, and inflation do have a positive and significant impact on economic growth and is thus consistent with the literature, especially for developing countries. Based on static random effects, the addition of the foreign direct investment (FDI) did not deviate from the results, notwithstanding its negative impact on economic growth. The contribution of trade openness, investment and inflation are observed to be relatively higher than foreign direct investment.

The impact of structural change in exports on economic growth in West Africa: cointegration and causality analysis

The paper used the Panel Vector Autoregression(VAR) and Generalized method of moments (GMM) to view the impact of structural Change in export on economic growth in West Africa. Due to many challenges African export is the lowest compare to other regions in the world. The similarity of the export of many countries in West Africa is responsible for the trend it exhibits. The results of our analysis have shown that the shocks in Export levels have a direct impact on the contemporaneous GDP growth, while the current GDP growth change affects Export only in the future also there is a short run relationship between the GDP, the Export and the Import. The structural change occurs in the Export and the Import is responsible for the change in the GDP growth holding other things constant.

Corruption, Institutional Quality and Economic Growth in West African Countries (1995-2017)

This study examines the relationship among corruption, institutional quality and economic growth; and analyses the interaction effects of corruption and institutional qualities such as political stability and absence of violence (pv), government effectiveness (ge), regulatory quality (rq), control of corruption (cc), voice and accountability (va), and rule of law (rl) on economic growth (gdp) in West African Countries. Time series data covering the period between 1995 and 2017 were employed with Panel VAR method. Our results showed that corruption (cp) and economic growth are negatively related at lag one, and positively related at lag two, but the results were statistically insignificant. All institutional quality indicators, except ge are negatively related to economic growth at lag one, but at lag 2, positively related except rq, cc, and pv. These results were also statistically insignificant, except that of pv which is statistically significant.Our results also showed that interaction of control of corruption with corruption (cccp); regulatory quality with corruption (rqcp); and political stability and absence of violence with corruption (pvcp) negatively affect economic growth in West Africa both at lag one and two and were statistically insignificant. These results are expected in countries that are poorly rated both in terms of corruption and institutional quality. The study suggests reasonable policy interventions aimed at reducing the incidence of corruption as well as improving institutional quality in West Africa Countries.

Regional integration and growth: New empirical evidence from WAEMU

This study provides a pioneer analysis of the growth effect of WAEMU integration at the econometric level, unlike the extant literature that relied on descriptive analysis of the sub-region’s trade statistics. The study used robust instrumental variables system GMM regression in the framework of a cross-country growth model and annual panel data for the period 2000 to 2015. Contrary to the widely held view that regional economic integration fosters economic growth of the participating countries, we did not find any empirical support for a positive growth impact of WAEMU integration in West Africa, which may be due to a variety of factors that mainly point to the characteristics of the WAEMU economies. However, the results indicate that foreign direct investment (FDI), institutional quality, capital, labour and the initial real per capita GDP are important drivers of growth in the sub-region. Interestingly, the results further indicate that FDI and institutional quality are the channels through which WAEMU integration may impact on growth in West Africa. The study therefore concludes that policy reforms towards improved institutions and increased FDIs will enhance economic growth in West Africa.

Human Capital Development and Economic Growth in Developing Economies

The perceptible contribution of human capital in economic growth in an economy cannot be exaggerated. Human capital is the essential resource needed in every sector of an economy. Unfortunately, for many decades human capital development has been saddled with multifarious challenges that has hampered economic growth in many economies; with less developed economies suffering the effect of poorly developed human capital the most. This study was conducted to investigate the impact of human capital on economic growth in West Africa, specifically Ghana over a period of 40 years. The researchers used secondary data on human capital development and economic growth that was extracted from the economic data of Ghana Statistical Service, the World Bank, journals of economic studies and the Bank of Ghana Research Unit. The researchers applied ordinary least squares regression to estimate the models and also perform data analysis. In the end, it was found out that human capital whether it is developed or under developed has a tremendous impact on the growth of an economy both in the short and long term. The findings of this study hold important policy implications for countries in West Africa, specifically Ghana.

HIV/AIDS and economic growth: Evidence from West Africa.

Human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS) is one of the leading causes of morbidity and mortality in West Africa. Prevalence among the most productive age group in West and Central Africa stood at 1.5%, 3.4.0%, 2.5%, and 2.1% in 1990, 2000, 2010, and 2015 respectively. This study examined the effect of HIV/AIDS on economic growth in West Africa with focus on 11 countries. The augmented Solow model, rooted in the neoclassical growth theory, was used, which was operationalized using dynamic panel data modeling approach. Incidence, prevalence, number of people living with HIV/AIDS (PLWHA), and AIDS-related deaths were used to measure HIV/AIDS. Estimations using system GMM returned statistically significant results while those of first difference and difference GMM were not. From the outcome of system GMM analysis, a percentage increase in incidence, prevalence, PLWHA, and AIDS deaths correspondingly reduced growth significantly through their effects on life expectancy by 0.15%, 0.02%, 0.004%, and 0.03%. Acquired immune deficiency syndrome deaths and PLWHA lowered economic growth through enrolment but not significantly. The import of the findings is that HIV/AIDS threatens growth through life expectancy in West Africa. Therefore, its spread in the subregion should be effectively contained while proper treatment should be provided for all infected persons.

Economics of Nigeria and West Africa Population Growth: Panel ARDL Approach for West Africa

The puzzle for the relationship between population growth and economic growth is yet to be concluded and this has generated three school of thought in this area. The first states that population growth relates positively with economic growth, the second states that population growth relates negatively with economic growth and lastly the third states that there is a neutral relationship between population growth and economic growth. This debate necessitated this study to determine the relationship between population growth and economic growth in West Africa and also Nigeria specifically. This study employs the Panel ARDL estimation technique using data which ranges from 1990-2015 for 13 West Africa countries for West Africa and the ordinary least square estimation technique for Nigeria using time series data that ranges from 1981-2015. The Pairwise Dumitrescu Hurlin Panel Causality Test and Granger causality test was also used to determine the direction of the link between population growth and economic growth. The result of the Panel ARDL regression reveals that there is a negative significant relationship between population growth and economic growth both in the short run and long run in West Africa while the OLS regression results shows that there is a positive insignificant relationship between population growth and economic growth in the short run but a negative significant relationship between population growth and economic growth in the long run in Nigeria at 10% significant level. The causality tests results indicated that there is a unidirectional causality link between economic growth and population growth and concluded that it is population growth that causes economic growth.

International Migration, Workers’ Remittances and Permanent Income Hypothesis

Summary Studies that examine the long-run impact of remittances on economic growth in West Africa and the Caribbean show that remittances are not growth enhancing. Money has been used toward consumption rather than investment. Because migrants from these regions are mostly permanent immigrants who settle in the host countries, we ask if there is a difference for South Asia where migrant workers are flooding for short-term, temporary contracts in the Middle Eastern countries. The permanent income hypothesis states that a permanent increase in income raises current consumption while transitory income increase is saved or smoothed over a life time. We argue that the transitory income remitted by short-term migrants is invested to generate future income when they return. We examine a panel data of five South Asian countries—Bangladesh, India, Nepal, Pakistan, and Sri-Lanka—for a period from 1975 to 2011. Using panel cointegration and Pooled Mean Group (PMG) estimation of dynamic heterogeneous panels, we show that there is a long-run significant impact of workers' remittances on income while the impact on consumption is not significant. A one-percent increase in remittance receipt per person raises per-capita income by approximately 0.23%. The results are robust across different tests.

A Comparative Study of Economic Growth in the West African States

A slowdown in the pace of activity has been observed in most ECOWAS countries. Nigeria which is the biggest economy in African managed to struggle out of recently entered recession this year 2017. In all these there is need to critically examine if there has been a significant economic growth in West Africa within the study period, especially in the face of several regional economic integration and treaties existence in West Africa. The Analysis of Variance technique was used to test to variations across the selected countries (column) and over the years (rows). The results of this study have been presented. The result shows that economic growth variables significantly vary across the selected countries but are significantly the same over the years. This implies that economic growth have over the study period been stagnant. There is statistically significant variation in GDP of selected countries but the GDP of the respective countries do not seem to change over the years. There is no significant variation in GDP growth over the years and across the countries. This paper therefore concludes that the West African States and the selected countries in particular have only witnessed a steady growth rate over the years and little variation in countries economic growth within the study period. Furthermore, due to economic integration that is fully functional in the area, economic growth may have been made stable by the existence of common economic policies.

Population Dynamics and Economic Outcomes in West Africa

In recent times, there appears to have been a resurgence in research investigating the effects of population dynamics on economic outcomes in different regions of the world. This has further been inspired by the performance of some Asian economies, where the demographic transition has been observed to play a prominent role. Most African countries are beginning to experience declining fertility and mortality rates. This is expected to enhance economic outcomes. It is against this backdrop that the present study attempts to examine the effect of population dynamics (declining fertility and mortality, growth of population and labour force) on economic growth in West Africa over the period 1970 to 2011. A panel data modelling approach was employed, using fixed effects and random effects estimation techniques. The findings revealed that the demographic transition is beginning to yield positive and significant effects on growth in the region, while some negative effect through mortality remains. Specifically, growth rates of fertility, labour force and population enhanced economic growth, while infant mortality growth lowered the level of output in West Africa. To maximize the gains from the demographic transition, the study recommends, among other things, increased investment in education and training of the younger population to enhance their productivity.

NATURAL RESOURCES ENDOWMENT AND ECONOMIC GROWTH: THE WEST AFRICAN EXPERIENCE

This study aims at investigating the nexus between natural resource endowment and economic growth using a sample of West African countries. The study adopted a Barrow-type growth model to analyse the impact of natural resource wealth on economic growth. A dynamic panel estimation technique was employed using relevant data from West African Countries. The results from the panel regressions indicate that natural resource endowments have very minimal impact in terms of promoting economic growth in West Africa, more so in resource rich countries. In terms of relative effects, the results indicate that a 10% increase in natural resource export reduces growth in income per capita by approximately 0.4%. Part of the factors explaining this finding amongst others; include high corruption in the public sector as well as the frequency of civil conflicts in resource rich economies of West Africa. For the natural resources of the region to fully benefit its citizens, these countries require , urgently, to improve management of natural resource export revenues and to apply effective policy measures to eradicate/ mitigate incidences of rampant corruption in the public sector.