Economies In sub-Saharan Africa Research Articles

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.

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.

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.

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.

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.

A Validated Human Resource Management (HRM) Model For Advancing Gender In The Leadership Hierarchy In The Managerial Sphere Of HRM With Resultant Benefits Of Organisational Success

This is one of the few research studies that develops, tests and subsequently proposes a Human Resource Management (HRM) model for the advancement of women in the leadership hierarchy in the HRM domain with resultant benefits of organisational success in the Mauritian workplace. The conceptual theoretical HRM model was developed by an in-depth review of literature, investigating relevant theoretical and empirical aspects of HRM pertinent to the case of women in the HRM domain Mauritius has often been described as an economic miracle and has the most successful economy in Sub-Saharan Africa but gender inequality remains an unfulfilled intent. This resonates classically in the domain of Human Resource Management that even though having a compelling feminised image with women being the numerical majority, they remain concentrated in lower-level positions, with men predominating at senior levels and this is akin to the situation of women in the HRM domain internationally. The efficacy of this conceptual HRM model was gauged by carrying out a questionnaire survey from 106 women in the HRM domain from the different sectors of Mauritius. The empirical data was analysed by using statistical tools such as Correlation and Ordinal Regression Analysis. The causality and regression analysis resulted in seven ordinal regression models that culminated in the new & innovative HRM model that leads to the advancement of women in the HRM domain, reduces hurdles and barriers they experience, enhances their job contribution the cumulative effect of these variables in the long run would generate organisational success in the Mauritian workplace. The HRM model generated is an original contribution to the HRM and gender advancement literature and though it was validated by women in the HRM domain in Mauritius. It definitely can be extended to advancing different types of women in the work-force both in Mauritius and internationally.

Comparing Classical and Bayesian Panel Kink Regression Frameworks in Estimating the Impact of Economic Freedom on Economic Growth

This study aims to accomplish three main tasks. Firstly, it seeks to determine the more appropriate choice between classical and Bayesian methods in estimating a pooled panel kink regression model under the condition of a known but bounded policy variable choice that serves as a kink point. Secondly, as a product of the first target, the study seeks to provide empirical evidence for the economic growth–economic freedom nexus in five top-performing economies in Sub-Saharan Africa. Using index explanatory variables, which are bounded between 0 and 100, and using both numerical and graphical methods, the findings show that the use of the Bayesian method is more appropriate in characterizing the data than the classical OLS framework, as the former better accounts for randomness via the use of posterior distributions. Finally, the study further employed both threshold and Bayesian pooled panel kink regressions, with mixed results. The Bai–Perron test confirmed that the economic freedom index has a single threshold value of 56.70. Whereas the threshold estimates show a negative impact of economic freedom on growth in both low and high regimes, the Bayesian estimates reveal that economic freedom has a negative impact on growth in a low regime but a positive impact in a high regime. Our novel findings show that there exists a nonlinear impact of economic freedom on growth. This provides some guidance and caution in charting policy paths that seek to achieve economic growth.

On the Link Between FDI, Political Risk and Economic Growth in Sub-Saharan Africa: A Panel VAR Approach

This study looks at how foreign direct investment from other countries helps grow economies in Sub-Saharan Africa. But it not just about Foreign direct investment; the quality of institution in those countries also play a big role. We're exploring how foreign direct investment, political risks, and economic growth all connect. Using a Panel Vector Auto-Regressive (PVAR) approach with a sample of 28 sub-Saharan African countries over the period 1996–2016, the empirical results reveal that FDI positively relates to internal conflicts and political stability in Sub-Saharan African countries. However, the effects of economic growth and external conflicts are negative and significant. In addition, FDI and internal and external conflicts affect positively and significantly economic growth. However, the effect of political stability on economic growth is negative and significant. On the other hand, the interaction between foreign direct investment and political stability is negative and insignificant. Finally, the internal and external conflicts are negatively affected by foreign direct investment, yet they are positively influenced by political stability. These findings have important policy implications. If Sub-Saharan Africa is to realize its economic growth agenda, policymakers should promote FDI inflows to sub-Saharan African countries by improving their institutional quality by boosting political stability and reducing internal and external conflicts.

Creativity, innovation and employment growth in sub-Saharan Africa

PurposeAlthough employees' creativity is vital for firm innovation and overall performance, little is done to examine the potential association between creativity and employment. This paper investigates the contribution of employees' creativity, process and product innovations to firm-level employment growth.Design/methodology/approachThe authors use data from World Bank Enterprise Survey and Innovation Follow-up Survey on 9503 firms covering the period 2012–2015 in 11 countries from sub-Saharan Africa and Heckman's two-stage estimation model.FindingsThis study's results indicate a positive role of creativity on firm-level employment growth. In addition, the authors find evidence for a complementary effect arising from the combination of creativity with managerial experience, staff level of education and their associated skills, in contrast, combining creativity with internal or external R&D results in a substitution effect. Interestingly, these synergy effects are pronounced for SMEs but absent for large firms.Practical implicationsPolicy makers in developing economies of sub-Saharan Africa should stimulate company management to use free time offered to employees to be creative in the workplace as one of their key strategies to stimulate employment growth. This strategy is expected to be particularly fruitful among SMEs having some managerial experience and skilled stuff.Originality/valueIn contribution to innovative work practices and workforce creativity, the authors demonstrate that providing employees with free time could be an alternative way to enhance the focal firms' performance.

Towards a green future for Sub-Saharan Africa: do electricity access and public debt drive environmental progress?

The combination of rising debt levels, poor electricity access, and environmental deterioration could threaten the attainment of the sustainable development goals (SDGs). Hence, this inquiry examined the implications of public borrowing and access to electricity on environmental sustainability (proxied by ecological footprint (ECOL) and carbon dioxide (CO2) emissions) in Sub-Saharan Africa (SSA), largely overlooked in the literature. In addition to pre-estimation, diagnostic, and robustness checks utilized in the study, the instrumental variable generalized method of moment (IV-GMM) approach is employed to examine annual data from 39 SSA economies between 2005 and 2018. The key findings indicate that public debt negatively influences environmental sustainability in the region at a certain level of threshold, while access to electricity has the potential to trigger environmental sustainability but remain below the expected threshold to mitigate environmental damage in SSA. The study provides recommendations for SSA policymakers to significantly reduce pollution and protect the environment which is vital for sustainable development.

Harnessing the Benefits of Remittances via a Health Account

Remittances remain a vital financial inflow into the economies of Sub-Saharan Africa (SSA). Many studies have outlined its role in indicators such as health, education, poverty reduction, economic growth, financial development, among others. This stimulates the need to harness the benefits associated with this financial inflow. The study proposes an idea to utilize remittances in Sub-Saharan Africa and advances recommendations to augment existing initiatives. A descriptive approach was used. The study recommends the creation of a health account to encourage savings purposely for the healthcare financing of remittance recipients in SSA. It further outlines processes via which such an account could work and the prospective benefits be reaped.

Ticking time bombs: The MENA and SSA regions' geopolitical risks

One of the major global challenges that most affect the world economies are geopolitical risks triggered by tensions arising from exploiting natural resources. This paper attempts to study the influences of global governance indicators (voice and accountability, political stability and absence of violence/terrorism, the rule of law, government effectiveness, regulatory quality, and control of corruption) on natural resource rents in Sub-Saharan Africa (SSA) and Middle East & North Africa (MENA). We apply a new panel quantile estimation technique to panel data from 62 countries from 1996 to 2021. The results show, in general, in both MENA and SSA economies, there is a negative perception of the quality of governance. This is due to several factors, such as the absence of popular participation and transparency in decision-making, political instability, violence and terrorism, low government efficacy, low-quality regulation, lack of the rule of law, and high corruption in these regions. Thus, governance quality could be the driver of geopolitical risks in resource-rich economies. This study adds to the literature on geopolitical risk by assessing the impact of the perceived quality of governance on natural resource income in the MENA and SSA regions. Furthermore, it is the first study to compare two regions, with many countries, regarding the effects of global governance indicators on natural resource rents. In addition, it has been empirically demonstrated that the deterioration of the quality of government is associated with increased revenues from the exploitation of natural resources, which increases the likelihood of geopolitical tensions. Higher quality and more effective governance require less complex, more transparent, and less contradictory regulations, reducing the likelihood of geopolitical tensions. Practical and policy implications are drawn from the findings to help the MENA and SSA economies overcome geopolitical risks.

A Small-Scale Farming Intervention Plan for Inclusive Economic Development in Rural South Africa

Small-scale commercial farming firms play a critical role in achieving the objectives of the African Union’s Agenda 2063, and the United Nations Sustainable Development Goals (SDGs) in the rural economies of Sub-Saharan Africa. South Africa has a sizeable number of households engaged in small-scale agriculture to supply rural market demand. Small scale commercial agriculture has become a key source of revenue, employment, and food security for communities in rural areas. As such, the South African government has been assisting small-scale farmers financially via the Micro-Agriculture Finance Institutions of South Africa and the Department of Agriculture, Forestry, and Fisheries. This support aims to alleviate poverty, create jobs, and improve food security by promoting small-scale commercial farming, primarily in rural areas. Despite this assistance, there is no clear strategy for achieving significant and evidence-based development. This study outlines a four-step intervention strategy for promoting small-scale commercial farming as a strategy for rural economic development in South Africa. These steps include defining a small-scale farming development strategy, and delineating production, performance, policy, and control measures.

Innovation and Development in Sub-Sahara Africa: The Role of Institutional Development and Inter Alia

Science, Technology and Innovation (STI) is gradually seen by countries in Sub-Sahara African as the engine for economic growth and general uplifting of the standard of living. As a result, Innovation is embraced but institutional weaknesses hinder the required outcome. This paper's aim is to examine the connection between innovation and development in sub-Saharan Africa while considering the function of institutes and other elements. This is in light of the fact that institutions act as the lubricant for progress. The Middle East and North Africa are not included in the scope of the paper, which largely focuses on sub-Saharan African nations. Some western nations and developing economies are, nonetheless, occasionally used as comparison points. We analyze data from reputable organizations like the World Bank, Polity IV, and considering a gauge of innovation and GDP per capita, the quantity of scientific publications published as a proxy for development, the Economic Freedom of the World Project will evaluate a panel of 22 economies in sub-Saharan Africa (EFW). Our results from the POLS and GMM IV regression show, among other things, that innovation has a favorable impact on the development of Africa, even though the impact looks insignificant. Although the majority of the nations in the county have established institutional frameworks for science, technology, and innovation (STI), evidence suggests that the slow rate at which innovation contributes to national development is due to obstacles in the design and implementation of STI policies. The outcome highlights the region's little advancement in the technology-capability indicators. To establish and execute STI policies in the region, a lot more has to be done in the area of collaboration between public entities and parastatals.