Economies In sub-Saharan Africa Research Articles

A comparative analysis of the spillover effects from human capital skill and infrastructural development on industrial sector growth across sub-regional economies in sub-Saharan Africa

A comparative analysis of the spillover effects from human capital skill and infrastructural development on industrial sector growth across sub-regional economies in sub-Saharan Africa

A Critical Examination of Globalization's Impact on the Economies of Sub-Saharan African Countries

This essay critically examines the impacts of globalization on the economy of Sub-Saharan Africa. Through the method of literature review, this paper explores the impact of globalization on international trade, foreign investment, and local development trends, while also emphasizing the negative consequences, such as economic disparities and cultural shocks. The analysis delves into theories including Friedman's "The World is Flat" and Wallerstein's world systems theory, comparing their global perspectives with the realities in Sub-Saharan Africa. Case studies illustrate the dual nature of globalization: its contribution to economic growth and the emergence of socioeconomic obstacles. The essay provides policy recommendations to effectively utilize the advantages of globalization while mitigating its negative effects, aiming to achieve inclusive economic growth and save the local cultures and traditions in Sub-Saharan Africa. The significance of this paper is to claim that although there are negative impacts of globalization, the benefits it brings are more important and that globalization should occur in Sub-Saharan Africa.

The impact of financial regulations on bank lending in emerging economies in Sub-Saharan Africa

The aim of this study is to investigate the impact of financial regulations on bank lending in emerging economies in Sub-Saharan Africa. The dynamic system-generalized method of measures (GMM) is used to address difficulties such as unexplained periods and nation-specific implications, besides the endogeneity of the variables in question. Spanning from 2012 to 2022, the research used data from 80 banks in 20 sub-Saharan African nations. The findings show that expansive financial regulation, which includes a boost in the amount of cash in circulation, induces bank lending. At the same time, restrictive financial regulations, with the value as an improvement in interest rates by central banks, lead to credit contractions, albeit with little impact because of the attainable poverty of banking sectors, organizational limitations, bank-focused attention, and additional system rigidity typical of developing nations, which compromises the efficiency of the system. Other characteristics that substantially impact bank lending routes include capital sufficiency ratios and the scale of economic activity. Sub-Saharan African countries may boost the efficiency of financial regulations propagation on bank lending by making better use of the transfer process of fluctuations in cash supplies and interest rates.

Financing health in sub-Saharan Africa 1990-2050: Donor dependence and expected domestic health spending.

In 2021, global life expectancy at birth was 74 years whereas in sub-Saharan Africa it was 66 years. Yet in that same year, $92 per person was spent on health in sub- Saharan Africa, which is roughly one fifth of what the next lowest geographic region-North Africa and Middle East-spent ($379). The challenges to healthy lives in sub-Saharan Africa are many while health spending remains low. This study uses gross domestic product, government, and health spending data to give a more complete picture of the patterns of future health spending in sub-Saharan Africa. We analyzed trends in growth in gross domestic product, government health spending, development assistance for health and the prioritization of health in national spending to compare countries within sub-Saharan Africa and globally.We found that while gross domestic product was projected to increase through 2050 in sub-Saharan Africa, the share of gross domestic product that goes to health spending is only expected to increase moderately. Our exploration shows that this tepid growth is expected because the percent of overall government spending that is dedicated to health 7·2% (6·3-8·3) compared to average of 12·4% (11·7-13·2) in other regions) is expected to stay low. Even if the amount, of resources provided from donors climbs some, it is not expected to keep pace with growing economies in sub-Saharan Africa and may transition towards other global public health goods. Critically, development assistance for health provided to sub-Saharan Africa is expected to decrease in some countries, and the expected growth in government health spending might not be enough to cover this expected decline. Increases in spending with a concordant prioritization of health and the appropriate health system governance and structural reforms are critical to ensure that people who live in sub-Saharan Africa are not left behind.

Enhancing Inclusive Finance in Sub‐Saharan Africa: The Collaborative Role of Economic Freedom and Innovative Facilities

ABSTRACTThis paper gives insight into innovative facilities' role in the effect of economic freedom on inclusive finance in sub‐Saharan Africa (SSA) using data from 2008 to 2020. After using the generalized method of moment for the analysis, the study concluded that improving economic freedom promotes financial inclusion while expanding innovative facilities in SSA inhibits inclusive finance. The study also discovered that innovative facilities improve the impact of economic freedom on inclusive finance in SSA and subsequently diminish the effect of economic freedom on inclusive finance after certain thresholds (mobile usage 100.75, internet usage 34.1064, fixed broadband usage not applicable, telephone usage 13.3494, and innovative facility index 1.5619). Hence, policymakers are advised to increase freedom in SSA economies to boost financial inclusion by ensuring the bureaucracy for establishing financial institutions is minimized and institutions that ensure property rights and free will are instituted to encourage people to participate in financial services. When it comes to using innovative facilities to enhance freedom‐induced inclusivity in finance, technical and financial knowledge should be enhanced in addition to lowering the cost of using innovative facilities to access financial services in order to eliminate the threshold levels at which innovative facilities reduce inclusive finance SSA.

The influence of democracy, corruption, economic growth and ICT on carbon emissions in Sub-Saharan African countries: Does FDI matter?

The study analyses empirically the role of FDI as an interactive factor in the democracy, corruption, economic growth, ICT and carbon emissions nexus in sub-Saharan Africa (SSA). We use the Method of Moments Quantile Regression (MMQR) technique with data from 37 SSA countries covering the period 1970–2019. We find evidence that corruption and democracy create a significantly negative association with carbon emissions across most quantiles for the SSA countries. Conversely, economic growth, ICT and FDI develops a significantly positive relationship with environmental quality. Thus, the paper confirms validity of the Pollution Haven Hypothesis in SSA countries. More results demonstrate that the interaction variables, corruption × FDI, democracy × FDI, economic development × FDI also produces positive and significant links with carbon emissions, but the link between ICT × FDI and emissions is insignificantly negative. In conclusion, our findings indicate the need for a targeted approach towards improving FDI to fight corruption, enhance democracy, ICT and economic growth in pursuit of green economy and sustainable development in SSA.

Exploring the Role of AI-Enhanced Online Marketplaces in Facilitating Economic Growth: An Impact Analysis on Trade Relations between the United States and Sub-Saharan Africa

Objective: The integration of artificial intelligence (AI) in the online marketplace represents a turning point in the development of e-commerce and digital trade. This article investigates the transformative potential of AI-enhanced online marketplaces for trade relations between the United States (US) and Sub-Saharan Africa (SSA), with the aim of reviewing the opportunities presented by the AI in enhancing market access, streamlining trade, and driving economic growth. Method: The methodology adopted for this research comprises of expository discussion. We explore theoretical discussion on AI-enhanced online marketplaces and how it has facilitated online marketplaces for trade relations between the United States (US). Results and Discussion: The article finds that there exists a complex mix of opportunities, challenges, and evolving dynamics in the trading landscape between the US and SSA. Furthermore, the rivalry from global powers as well as the geopolitical considerations impact the trade between US and the SSA countries. Implications: The practical and theoretical implications of this research are discussed. The implication of our finding is that by addressing these key areas, stakeholders can navigate the complexities of trade relations effectively and capitalize on opportunities for mutual prosperity and inclusive economic development between the US and SSA in the digital age. Originality/Value: This study contributes to the literature by highlighting how an AI-enhanced online marketplaces can facilitate economic progress by utilizing it for trade relations between the US and SSA economies. The relevance and value of the paper are evidenced by the findings that if both countries leverage on AI-enhance technologies for effective market access, they can unlock their full potential for growth and development. Recommendations: We suggest that stakeholders should leverage on AI technologies by embracing digital transformation, fostering collaboration, prioritizing market research, addressing infrastructure challenges, and ensuring compliance with ethical practices. Future research can explore other areas of emerging technologies, demonstrate the socio-economic implications of AI, and the framework of regulations on AI.

Financial globalization, governance and economic growth in Sub-Saharan Africa

Purpose The study aims to assess the interplay between financial globalization, effective governance and economic growth in sub-Saharan African (SSA) economies. Design/methodology/approach This study uses the Generalized Method of Moment Estimation and the Panel Quantile Regression techniques to analyze how financial globalization and governance impact sub-Saharan African economies. Findings The results show that governance is vital to the region's economic development. In order to achieve significant growth, sub-Saharan African economies must prioritize actions that promote good governance. Research limitations/implications The study is limited to sub-Saharan African economies. Practical implications It is crucial for the sub-Saharan Africa economies to concentrate on strengthening governance frameworks in order to realize its full economic potential because improvements in governance quality would have a favorable effect on economic growth. Social implications The findings indicate that both capital inflows and governance dynamics are essential for fostering economic growth in SSA economies. Also, balancing globalization's benefits with effective governance is crucial for promoting sustainable growth in SSA. Originality/value This paper fills a gap in literature by using the KOF financial globalization index to assess the impact of financial globalization and governance on economic growth in sub-Saharan African economies.

Agribusiness Supply Chain Collaboration: Role of Innovation Capacity and Business Process Agility as Antecedents of Supply Chain Performance

This article examines the role of innovation capacity and business process agility (BPA) in the relationship between supply chain collaboration (SCC) and supply chain performance (SCP) of smallholder agro-based enterprises (SAEs). Based on the relational view and dynamic capability theories and the survey research design, the author used questionnaires to gather data from 226 SAEs who were sampled from agribusiness associations in four regions of Ghana via the quota sampling technique. Smart PLS-SEM 4.0 was used as the statistical method to analyze the data. The results showed that SCC has a significant and positive relationship with SCP, innovation capacity, and BPA. Innovation capacity significantly mediates the relationship between SCC and SCP. Furthermore, BPA fully mediates the relationship between SCC and innovation capacity, with innovation capacity also influencing SCP. This study integrates relational and capability-based views to propose a comprehensive theoretical model showing the inter-relational effect of SCC, BPA, and innovation capacity on SCP. The empirical findings widen the context of SCC literature to include SAEs from emerging economies in sub-Saharan Africa. The empirical findings enrich the understanding of how SAEs can manage their SCCs to develop and use specific capabilities that positively impact SCP. The uniqueness of this article rests in the proposed model and new empirical knowledge, which extends the scope of the relational and capability-based views and SCC literature to include innovation capacity, BPA, and SCP of SAEs in emerging markets.

Exchange rate movement and stock returns in most capitalised economies in Sub-Saharan Africa

In line with the extant literature that financial markets do mutually cooperate, this study investigates the nexus between exchange rate movement and stock returns in the six most capitalised economies in Sub-Saharan Africa (SSA). The study ascertains the relevance of the traditional or portfolio adjustment theory to sub-Saharan Africa’s financial markets. The study accounted for heterogeneity and dependence among the cross-sections and applied the Driscoll and Kraay and the Feasible Generalised Least Square econometric procedures on Bloomberg (2023) monthly datasets spanning between 2000:1 and 2022:12. The study findings reveal the nexus between the variables flows from stock returns to the exchange rate in SSA and some consistency with the argument of the portfolio adjustment theory. Estimates of Dumitrescu-Hurlin's (2012) Granger non-causal test also reveal a unidirectional causal relationship between both variables in the most capitalised economies in SSA. Macroeconomic policies that vitiate the limitations of both variables in SSA are recommended.

Environmental sustainability, terrorism, and military expenditure in Sub-Saharan Africa: Evidence from panel quantile ARDL regression and panel causality

The prevalence of terrorism and military expenditure in Sub-Saharan Africa (SSA) is experiencing rapid and significant growth over time. This study investigates the impact of terrorism and military expenditure on environmental sustainability in 35 economies in SSA from 1990 to 2021, utilizing panel quantile autoregressive distributed lag regression and causality analysis techniques to bridge the gap in existing studies on the military expenditure, environmental sustainability, and terrorism nexus. The study's novelty is evident because it assesses the short-term and long-term impacts of military expenditure and other covariates across various quantiles of CO2 emissions. The study achieves this by categorizing SSA nations based on their varying levels of CO2 emissions, specifically low, moderate, and high, an approach that is extremely rare among SSA countries. The study's findings revealed that terrorism and military expenditure have a positive impact on CO2 emissions across the quantiles, implying that these variables contribute to environmental degradation in the region. The study also reveals a bidirectional relationship between CO2 emissions and the selected predictors (terrorism, military expenditure, trade, and economic growth). Thus, the study proposes military strategies and macroeconomic policies that ensure environmental sustainability.

Re‐evaluating Africa's growth, poverty and inequality nexus

AbstractThis study evaluates the role of growth in poverty reduction within the sub‐Saharan Africa (SSA) region in direct comparison to other global regions along time‐delineated thresholds. The study's results show (i) A significant gulf in the performance of SSA economies in comparison to their global cohorts; (ii) An improved role played by growth after the mid‐2000s for poverty reduction in SSA; (iii) A less deleterious impact of rising income inequality on poverty reduction within the SSA sub‐region relative to other global regions, and (iv) An improved performance of resource‐dependent SSA economies in translating growth to poverty reduction since the mid‐2000s. The convergence in growth‐induced poverty reduction between SSA and its global cohorts energizes prospects for attaining the Sustainable Development Goal of eradicating global extreme poverty by 2030; it however also calls for renewed strategies toward improving the efficacy of growth in future poverty reduction within the sub‐region.

Examining the Role of Trade on the Relationship between Environmental Quality and Energy Consumption: Insights from Sub Saharan Africa

This study looks at the relationship between energy consumption and environmental quality in Sub-Saharan Africa (SSA) and how trade with other countries affects it. It examines data from 35 SSA economies between 1996 and 2020, categorized into low-income (LICs) and middle-income (MIC) countries. Using the cross-sectional augmented autoregressive distributed lag (CS-ARDL) approach, the results show that energy use, especially in MICs, negatively affects environmental quality. Trade, however, considerably lessens these detrimental environmental implications of energy consumption. According to the study, legislative actions intended to stop environmental deterioration in Sub-Saharan Africa should take into account the unique political and economic circumstances of each country. In addition, authorities should strike a balance between economic interests and environmental concerns, particularly in sectors dependent on the importation of used goods, and trade and environmental regulatory agencies must work together to enforce age restrictions on imported used items.

Financial development, institutional quality and economic growth in countries in sub-Saharan Africa (SSA)

Over the years, there have been huge variations in the growth performances of the economies in SSA. Whilst these disparities can be attributed to a wide range of factors, it is generally understood that differences in their economic structures explain the capacity for generating growth and absorbing shocks during a recession. This study contributes to literature by examining the impact of institutional quality and financial development on economic growth in low- and middle-income countries. Data was obtained from the World Bank and covered the period from 1975 to 2020. The study employed an ARDL model to establish both short and long run dynamics in the two sub samples. The study confirmed both short and long run causality from financial and institutional quality to growth. Institutional quality enhances growth in both low- and middle-income countries in the long run. Whilst the direction of the impact is the same, the magnitude of the impact of institutional quality is different within the two categories. Institutional quality plays a more significant role in low-income countries compared to middle income economies. The study brings out potential financial fragility and systemic risks in financial institutions among countries in SSA. Policies that enhance the quality, consistency, and uniformity of legal reasoning in judicial decisions are ideal. Reducing the risk profile for investments may enhance the flow of credit to the private sector by financial institutions.

The Burden of Type 2 Diabetes on the Productivity and Economy in Sub-Saharan Africa: A Life Table Modelling Analysis from a South African Perspective.

The prevalence of type 2 diabetes (T2D) is rapidly increasing in Sub-Saharan Africa (SSA). T2D increases the risk of premature death and reduces quality of life and work productivity. This population life table modelling analysis evaluated the impact of T2D in terms of productivity-adjusted life years (PALYs) on the South African working-age population. Life table modelling was employed to simulate the follow-up of individuals aged 20-65 with T2D in South Africa (SA). Two life table models were developed to simulate health outcomes for a SA cohort with and without diabetes. The difference in the number of deaths, years of life lost (YLL), and PALYs lost between the two cohorts represented the burden of diabetes. Scenarios were simulated in which the proportions of gross domestic productivity (GDP), productivity indices, labour force dropout, and mortality risk trends were adjusted to lower and upper uncertainty bounds. Data were sourced from the International Diabetes Federation, Statistics SA, and both publicly available and published sources. We utilised the World Health Organization (WHO) standard annual discount rate of 3% for YLL and PALYs. In 2019, an estimated 9.5% (7.68% men and 11.37% women) or 3.2 million total working-age people had T2D in SA. Simulated follow-up until retirement predicted 669,427 excess mortality, a loss of 6.2 million years of life (9.3%) and 13 million PALYs (30.6%) in SA. On average, this resulted in 3.1 PALYs lost per person. Based on the GDP per full-time employee in 2019, the PALYs loss equated to US$223 billion, or US$69,875 per person. This study emphasises the significant impact of T2D on society and the economy. Relatively modest T2D prevention and treatment management enhancement could lead to substantial economic benefits in SA.

A Review of Current Status of Green Hydrogen Economy in Sub-Saharan Africa

A Review of Current Status of Green Hydrogen Economy in Sub-Saharan Africa

Forecasting the population development of within-season insect crop pests in sub-Saharan Africa: the Pest Risk Information Service

Abstract Smallholder farmers are the mainstay of the agricultural economies of sub-Saharan Africa (SSA), where they produce several crops, predominantly centered on maize. Smallholder productivity remains limited resulting from a range of confounding factors, but a primary cause is loss from pests and diseases, particularly insects. To improve productivity, recommendations for the mitigation of crop loss globally include early-warning and management systems for in-season indigenous pests. There are many early-warning systems in temperate regions; however, such systems are poorly established in Africa. This is in part due to the need for a combination of pest modeling, data handling and dissemination infrastructure, capacity, and resource provision. While each of these components is progressing in Africa, the means to successfully deploy such systems remain limited. To bridge this, the development of the Pest Risk Information Service (PRISE) began in 2017 for farmers in SSA. Implemented in Kenya, Ghana, Malawi, and Zambia, PRISE developed temperature-driven phenology models for major maize, bean, and tomato pests. Using downscaled and processed Earth Observation data to drive the models, PRISE partnered with African national agencies to communicate pre- and in-season pest alerts that forecast the time to act against key insect pests. Alerts were designed to be integrated into country-specific Good Agricultural Practice (GAP) recommendations to provide a complementary package to agricultural stakeholders. End line studies with farmers showed that those who received information about the target crops including PRISE pest forecasts, generally reported better outcomes in terms of reduced losses and increased incomes compared with farmers who did not.

Kenya’s Mineral Landscape: A Review of the Mining Status and Potential Recovery of Strategic and Critical Metals through Hydrometallurgical and Flotation Techniques

Kenya is an East African country with the third-largest economy in sub-Saharan Africa. The demand for metals and minerals continues to increase due to urbanization, population rise, and new infrastructure growth in different countries. Kenya formally confirmed the discovery of oil and various minerals in April 2013, launching itself as a new player in Africa’s rapidly expanding extractive sector. This review paper highlights the mining status in Kenya and the role of hydrometallurgical and flotation processes in the recovery of deficit metals from ores and mine wastes. The nation’s 2030 Vision is anticipated to benefit greatly from the proceeds from the sale of oil, gas, and valuable metals. Because Kenya was originally mapped as an agricultural region, less mineral prospecting was done in earlier times. The country’s mining industry is now dominated by the manufacture of non-metallic goods, and it is largely neglected for minerals. One of the most serious problems for the mining industry in Kenya is the production of tailings that hold strategic metals. The material is already ground, which means the most energy-consuming process has been already applied, and chemical engineering processes like leaching are more feasible at this point. Hydrometallurgical and flotation recovery of valuable metals from wastes, high and low-grade ores, or tailings is essential. The resources will be preserved, which ensures sustainability in the growth of the mining industry.

Personal income tax, redistribution and income inequality in Sub-Saharan Africa

We assess the roles of personal income tax and fiscal redistribution in income inequality for 30 Sub-Saharan Africa economies from 1980 to 2020, employing the dynamic common correlated effect and cross-sectional augmented autoregressive distributed lag estimators. Empirical results show that personal income tax positively affects income inequality in the full sample SSA economies. Compared to the full sample, the magnitude of the effect remains positive but smaller for non-least developed countries (countries not classified as least developed countries in our sample). However, personal income tax has a negative effect on income inequality for least developed countries. Additionally, fiscal redistribution increases inequality in Sub-Saharan Africa economies and non-least developed countries, while it lowers inequality for least developed countries. Interestingly, fiscal redistribution reduces the level of the positive impact of personal income tax on inequality over the full sample. The main policy implication of this research is that well-designed redistributive fiscal measures associated with anti-corruption policy and good governance may help policymakers to reduce the positive effect of personal income tax on inequality in Sub-Saharan Africa economies.

Unconditional federal transfers and state government spending: The flypaper effect in Nigeria and South Africa

The flypaper effect is undoubtedly among the most interesting concepts in subnational government spending behavior. This study is the first attempt to provide empirical evidence on the existence of the flypaper effect in the two largest economies in Sub-Saharan Africa: Nigeria and South Africa. Using the two-step system generalized method of moment’s estimator, our results show that the flypaper effect exists for both state and provincial governments in Nigeria and South Africa. Provincial governments in South Africa are found to be more responsive to positive changes in unconditional federal transfers than state governments in Nigeria. We therefore recommend sen­sitization on the receipt and disbursement of unconditional federal transfers. This will help reduce the illusion or information asymmetry about the use of unconditional federal transfers.