African Economies Research Articles

Can Remittance Promote Tourism Income and Inclusive Gender Employment? Function of Migration in the South African Economy

With globalisation and international trade, remittances and migration significantly influence economic activities, yet their impact on tourism income and gender-specific employment remains under-researched. This study uses autoregressive distributed lags and Granger causality to examine the effects of remittances and migration on tourism income and employment in South Africa. Three models are established as follows: for aggregate employment, male employment, and female employment, each with equations for tourism income and employment. Key findings from this study indicate that remittances significantly drive tourism income in both the short and long run across all models. Conversely, employment negatively impacts tourism income, hinting at sectoral trade-offs. Migration positively affects tourism income in the short run for male and aggregate models but is insignificant for female employment. Remittances boost male employment in both the short and long run, whereas their impact on female employment is significant only in the long run. Causality analysis shows a bidirectional relationship among employment indicators, with unidirectional causality from remittances to migration and from migration to income. This study recommends policies to support remittance inflows and their productive use in tourism, along with targeted interventions to reduce gender disparities in employment and promote equitable economic opportunities.

Increasing access to biotech products for animal agriculture in Sub-Saharan Africa through partnerships.

Increasing access to biotech products for animal agriculture in Sub-Saharan Africa through partnerships.

Guest editorial: The new economy and employment in Africa: an introduction

Guest editorial: The new economy and employment in Africa: an introduction

Do Remittances and Financial Development Promote International Reserves in BRICS Economies?

The international reserves reflect the economy’s strength by honoring its financial liabilities. Hence, this paper analyzed the effect of remittances and financial development on international reserves in Brazil, Russia, India, China, and South Africa (BRICS) economies from 1960 to 2022. By employing econometric analysis, the paper reveals a significant and positive influence of remittances and financial development on international reserves. In addition, we reveal a positive and significant association between remittances and financial development and international reserves in the long run. Further, a short-run relationship exists between financial development and international reserves.

Payment Digitization and Industrial Activity Nexus: Comparative Evidence from Key Sub-Saharan African Economies

Payment Digitization and Industrial Activity Nexus: Comparative Evidence from Key Sub-Saharan African Economies

Mitigating the African Economic Crisis Through Financial Inclusion

This study sought to examine the challenges facing the African economy and financial inclusion. The paper undertakes a comprehensive exploration of the African economic landscape, navigating through historical intricacies, structural challenges, and global influences. Grounded in a quantitative methodology, the study adopted the survey method to systematically unravel the multifaceted dimensions of the economic crisis and financial inclusion in Africa. The study was anchored on both Monetarist and Keynesian models. A sample size of 350 participants was studied, using a purposive sampling technique. The study discovered that cultural, technological, and regulatory limits all significantly contribute to the economic crisis, which is evidenced by the high rate of currency devaluation in Africa, high rates of inflation in the price of goods, and economic downturns. Thus, the paper recommends that fin-tech companies, appropriate technology applications, and advancements in online payments could potentially save this predicament. The paper further recommends that the government should enact regulatory changes that lower entrance barriers for financial institutions, support innovation, and safeguard consumers to advance financial inclusion.

Adoption and desirable characteristics of Information and Communication Technologies for urban small-scale food producers in South Africa

Small-scale food producers can benefit significantly from the adoption and effective utilization of Information and Communication Technologies (ICTs). For example, ICTs can help improve food production and access to markets, which is particularly valuable in many Sub-Saharan African countries that both urbanize rapidly but whose food systems still rely significantly on small-scale food producers. This study examines the adoption patterns and desirable characteristics of ICTs, as well as the factors influencing them, among small-scale food producers engaged in urban agriculture in South Africa. We administered 85 in-person surveys through referrals from local producers’ network in disadvantaged areas of Cape Town (n = 21; Gugulethu, Philippi, Khayelitsha) and Johannesburg (n = 64; Central Business District, Soweto, Orange Farm). A substantial proportion of the respondents articulated the need for food-related mobile applications with functions that facilitate price comparisons, and the sharing of best practices and health advice. User-friendliness, low internet data use, and affordability were perceived as the most important characteristics for such food-related mobile applications. Redundancy analysis (RDA) reveals that the socioeconomic and demographic characteristics of respondents significantly influence the desired functionalities of food apps and their preferred activities among the respondents. Producers that are married and have more children, have higher income and education, and own larger land holdings, show very distinct patterns in terms of desirable functions and uses for food apps. Our research underscores the need for comprehensive approaches to the development and promotion of food-related ICTs when targeting small-scale food producers. The barriers and needs identified here can help ICT developers, development agencies and policy-makers design fit-for-purpose interventions and policies to facilitate ICT adoption among urban small-scale food producers in rapidly urbanizing areas.

Context-dependent responses to geopolitical risk in Middle Eastern and African stock markets: An asymmetric volatility spillover study

This paper examines the asymmetric volatility spillover impact of geopolitical risk on stock market returns across six Middle Eastern and African (MEA) economies: Egypt, Israel, Saudi Arabia, Tunisia, Turkey, and South Africa. Using the asymmetric MGARCH (Multivariate GARCH) model of BEKK (Baba, Engle, Kraft, and Kroner), the study identifies different responses to geopolitical risk (GPR) index in these markets and its division into act- and threat-related components. The results show that the susceptibility and responses to these risks are highly context-dependent, reflecting the unique economic and geopolitical structures of each market. Moreover, these economies exhibit an asymmetric response to geopolitical risk, highlighting the importance of not only the magnitude but also the direction of these risks. The study underscores the need for investors to adopt a nuanced view of geopolitical risk and its multifaceted impacts on different markets. These findings hold valuable implications for investment decisions and policy-making in these economies.

How does external debt and governance quality impact renewable energy consumption: novel policy insights from BRICS countries.

Amidst global environmental reforms, the role of energy systems is under scrutiny to promote ecological welfare through low-carbon alternatives. Amongst the solutions, the role of renewable energy as a clean source has become popular to mitigate climate change. However, the impact of debt on renewable energy consumption remains limited in the economic literature. The debt initiatives provide funding for environmental initiatives primarily, while it is also credited as a barrier to limiting the growth of clean energy programs. Within such discussion, the current study extended the dialogue by examining how external debt impacts energy transition in Brazil, Russia, India, China, and South Africa (BRICS) economies in the presence of institutional quality, education expenditures, and banking development. Using the novel CS-ARDL, AMG, and CCEMG tests, the study results showed that external debt decreases renewable energy consumption, while institutional quality, educational expenditures, banking developments, and economic growth are essential elements of green energy developments. Based on these conclusions, this study provides novel policy guidelines to align BRICS energy and economic agendas.

Editorial to the special issue “International entrepreneurial behaviors of African firms: Emerging issues, challenges and opportunities”

In recent years, the international entrepreneurial behaviors of African firms have garnered considerable attention within the global business context. As the world becomes increasingly interconnected, African firms are stepping onto the international stage with growing confidence and ambition. This trend is fueled by a combination of factors, including advancements in technology and communication, as well as evolving trade agreements. However, along with the opportunities presented by international expansion, African firms also face a myriad of challenges. Despite these challenges, African firms are demonstrating remarkable resilience and innovation in their pursuit of international entrepreneurship. In this Special Issue Editorial, we showcase and capture the emerging and diverse range of scholarly contributions to the international entrepreneurship field in Africa. The papers in this collection provide various ways to enhance the conversation on the constraints on development and the different dynamics of international entrepreneurship. We also shed light on the inherent challenges in attempting to unlock the full potential of African firms and national economies in the 21st century.

Audit committees in transition: evaluating the effectiveness of corporate governance in Libya’s banking sector

PurposeThe purpose of this research paper is to investigate the perspectives of key stakeholders on strategies to improve the effectiveness of audit committees (ACs) in African economies, with a specific focus on the Libyan banking sector.Design/methodology/approachThe study uses a mixed-methods approach, combining questionnaire surveys and semi-structured interviews. The data collection process involves gathering responses from participants through questionnaires and conducting in-depth interviews to gain deeper insights into the subject matter.FindingsThe research findings highlight several key points. Firstly, fortifying Libya’s accounting and auditing profession emerges as the most widely endorsed suggestion for enhancing AC effectiveness. Secondly, participants identified various actions that can strengthen ACs, including appointing members with financial expertise, refining the legal requirements governing AC responsibilities, securing board support, enhancing Libya’s legal and regulatory framework, adequately compensating AC members and reducing government intervention in AC practices.Originality/valueThis research contributes to the field of corporate governance by providing valuable insights into the perspectives of stakeholders on enhancing AC effectiveness in the Libyan banking sector, within the broader context of African economies. The findings offer actionable plans for regulators and policymakers seeking to improve AC effectiveness in Libya.

General Equilibrium Model for Monetary Policy Responses to Macroeconomic Instabilities in Developing Economy: A Ghanaian Perspective

The study develops a standard New Keynesian model to examine how monetary authority reacts to both domestic and external shocks as well as how its policy decision impacts the general macroeconomy in developing African economy. Using Bayesian estimation techniques and a Ghanaian dataset, the article also seeks to determine the best-suited monetary policy rule for Ghana and countries with similar characteristics. The basic finding is that a forward-looking Taylor rule—where authority reacts to one-period-ahead inflation deviation from target alongside the current output gap—is the most appropriate monetary policy rule for Ghana. Another salient finding is that variations in output are mainly driven by price markup, labour supply, monetary policy and productivity shocks across the forecast horizons. In addition, the dominant determinants of inflation are exchange rate risk premium and price markup shocks. Collectively, the article also unveils that monetary policy responses to macroeconomic shocks are broadly in line with conventional economic theory. There is also conspicuous evidence that the general equilibrium model with representative consumers is practically suitable for monetary policy analysis in Ghana, as contractionary monetary policy impulse is able to contemporaneously induce disinflation and output contraction. Given the strong evidence of a large segment of the unbanked population in Ghana, the findings in this study could be verified based on a model that allows for the co-existence of optimizing and non-optimizing consumers. JEL Classification: B41, C5, C11, D11, D21, D41, D42, E2, E12, E43, E52, E58, F31, F41

Contribution of Teachers’ Qualification Level on Employability in African Economies, through Econometric Estimation of the Generalized Method of Moments, 2016–2020 — A Secondary Publication

Both education and its quality supply are closely linked to employability and labour productivity. The present study aimed to analyze the contribution of the level of teacher qualification on the employability variable in African economies, for the period 2016–2020. Regarding the methodology, a quantitative analysis of the data was conducted through the Generalized Method of Moments in Differences, two stages and with standard error correction. Based on the results, it was possible to determine the existence of a negative, inverse and significant relationship between the degree of qualification of teachers on the unemployment rate; therefore, it could be concluded that a higher level of qualification of teachers has a direct contribution on the increase in the levels of employability for the African business sector. Through the results of Hansen’s Test (P-value = 0.540), the validity of the model’s specificity in terms of instrument utilization was tested. Based on the first (P-value = 0.009) and second order (P-value = 0.148) autocorrelation tests, the validity of the consistency of the Generalized Method of Moments econometric estimators in differences, two stages and with corrected standard errors was tested.

Effects of green policies on sustainability of local economies in Africa

This article conducts a thorough analysis of the potential impacts of environmentally friendly policies on the long-term viability of renewable energy and waste management policies on the economics of local regions within the African Continental Free Trade Area. The research examines how these policies intersect with the development of intra-African enterprise and local employment rates. The study employs a qualitative methodology, utilising an exploratory research design to investigate African economic performance metrics. It also uses qualitative data to gain a deeper understanding of the subtle implications of policies. The research evaluates the economic consequences of these policies in African contexts by utilising a range of secondary sources, such as governmental reports, peer-reviewed studies, and policy evaluations. Initial results indicate that although green policies have resulted in substantial environmental advantages, their influence on intra-African economies is intricate and diverse. The report asserts that comprehending these dynamics is crucial for policymakers, practitioners, and researchers who have an interest in fostering sustainable development and inclusive economic growth in Africa. The study suggests the adoption of environmentally friendly policies that take into account the economic conditions inside Africa and aim to achieve a local economy that is both environmentally sustainable and inclusive.

Natural resource rents and financial inclusion nexus: Evidence from Africa

A significant gap in total natural resources wealth and financial inclusion studies on the African continent stems from their impact and variation. To address these deficiencies, this study investigates the effect of total natural resource rents on financial inclusion, employing data from 27 African economies from 2004 to 2019. This study uses the most recent panel estimators, causality test and variance decomposition analysis for accuracy and reliability. Findings reveal that total natural resources wealth and economic progress significantly reduces financial inclusion, while fossil and renewable energy promote financial inclusion. Moreover, financial globalization had an insignificant outcome on financial inclusion. The causality test revealed bi-directional causation between financial inclusion in renewable energy and financial inclusion in economic progress. Again uni-directional causation from financial inclusion to fossil energy and financial inclusion to natural resources wealth. At the same time, a neutral causal effect was found from financial inclusion to financial globalization. Regarding variations, financial inclusion had the highest effect on natural resource rents. Our findings grasp new insight into financial inclusion in Africa, and policymakers are advised to support natural resources rent by directing its impact into the economy's real sector.

The State of Technology Innovation in Nigeria: Trends, Challenges and Opportunities

This writeup examines the state of technology innovation in Nigeria, focusing on emerging trends, prevalent challenges, and untapped opportunities. As Africa's largest economy and most populous country, Nigeria has shown significant potential for technological advancement and innovation. However, various factors, including infrastructure limitations, funding constraints, and regulatory barriers, have posed challenges to the growth of the technology sector. By analyzing current trends, identifying key challenges, and exploring potential opportunities, this study aims to provide insights into the landscape of technology innovation in Nigeria and offer recommendations for fostering its development.

External debt and economic growth in selected African economies: A heterogeneous dynamic panel data analysis

The nexus between external debt and economic growth of Ghana, Kenya, Morocco, Nigeria, Rwanda, Tunisia and Zimbabwe from 1981 to 2021 was examined in this study. For analysis, the Pooled Mean Group Heterogeneous Dynamic Panel Data Approach and the Toda Yamamoto Granger causality tests technique were deployed. The results indicated that external debt had a negative effect on economic growth. Moreover, debt service exerted a positive impact on economic growth. The findings of the causality tests showed that there is no causal link between external debt and economic growth. Furthermore, no causal link was established between debt service and economic growth. As a result, the study suggests that the capacity of these economies in terms of revenue generation and debt servicing should be reinforced by their governments through the channelling of external debt into long-term productive investments for the realization of positive economic growth. Moreover, the policies on debt servicing in these economies should be sustained since it is yielding the desired results. Furthermore, thoroughly assessed projects of high significance should be the only yardstick for the contraction of foreign loans in these economies. Also, the policy objectives of external debt, debt service and economic growth can be pursued separately from one another in this group of economies in Africa.

International ownership and SMEs in Middle Eastern and African economies

AbstractEmpirical evidence on the benefits of international ownership for small and medium‐sized enterprises (SMEs) financial performance is either not available for most African and Middle Eastern countries or presents mixed results. In this paper, we investigate this further by examining the effects of ownership structure on firm performance, using financial data covering SMEs in 60 African and Middle Eastern countries, for the years 2006–2015. Results from pooled ordinary least squares and random‐effects estimations indicate that international ownership is significantly positively correlated with firm performance for (most of) Africa and the Middle East. Examining the interaction of international ownership with capital resources, we find that internationally owned firms do not use capital more efficiently than locally owned firms, implying that internationally owned firms use international resources—other than capital—more efficiently.

Reviews on the Strategies Employed in Implementing the 'Push-Pull' Approach to Integrated Pest Management

Abstract: For small-holder maize farmers in Africa, the push-pull strategy is outlined as an alternate ecological management technique to traditional insecticide-based integrated pest management for the control of the spotted stem borer Chilo partellus and the autumn armyworm Spodoptera frugiperda. Push-Pull Technology (abbreviated PPT) is a unique integrated pest management method developed by the International Centre of Insect Physiology and Ecology (ICIPE) and its partners. This tactic involves influencing the behavior of natural enemies and insect pests by strategically deploying stimuli that make the resource under protection unappealing or inappropriate for the pests (the "push"). Additionally, the pests are drawn to an alluring source the pull, from which they are then eliminated

Load Shedding and Its Crippling Effect on The South African Economy: An Entrepreneurial Perspective

The country has experienced industry shutdowns, decreased productivity, educational setbacks, increased unemployment rates, and negative healthcare outcomes. Load-shedding in South Africa is primarily caused by inadequate maintenance, internal mismanagement, corruption, and a lack of skills. This issue has had a significant impact on small businesses, as they often lack the necessary resources to handle power surges, equipment damage, and the costs associated with replacing stock. This paper explores how load-shedding has impacted the South African economy from an entrepreneurial perspective. The research is qualitative and exploratory in nature, and it was found that load-shedding has had a significant impact on businesses' finances, resources, and performance. Load-shedding in South Africa has had a severe impact on the daily lives of people, causing disruptions in businesses, households, and the overall economy. Eskom, the primary supplier of energy in South Africa, has been facing significant challenges in meeting the growing demand for electrical energy, leading to job losses, decreased productivity, and a loss of billions of rands. Small businesses have been particularly affected, with an estimated 75% of them failing after being operational for less than three years due to load-shedding. To ensure small businesses have electricity to operate during load-shedding it is recommended that small businesses adopt alternative energy sources like solar power to increase the businesses’ independence and mitigate the effects of load-shedding. The South African government should also encourage and support small businesses to collaborate with successful renewable energy companies.