Growth In West Africa Research Articles

The impact of foreign direct investment inflows on unemployment and economic growth in West Africa

Purpose: This study explores the short- and long-run effects of foreign direct investment inflows (FDI) on both the unemployment rate and economic growth in West Africa utilizing a panel dataset spanning from 1991 to 2022. The precise impact of FDI on these variables and the underlying factors shaping this relationship in West Africa has not been definitively delineated. Previous literature has not exclusively delved into the impact of FDI on the unemployment rate in this region. Consequently, our paper endeavors to address this particular gap in knowledge concentrating on the individual countries within West Africa. Design/Methodology/Approach: We employ Pooled Mean Group (PMG) estimators and fixed effects models for our analyses. Findings: Our findings based on the PMG models unveil that FDI exhibits an insignificant positive long-term effect and a highly significant negative short-term impact on economic growth in West Africa. Similarly, we observe that the impact of FDI on the unemployment rate is negative both in the long- and short-term. Conclusion: Our findings demonstrate that various factors contribute to how FDI influences the unemployment rate and economic growth rate in West Africa. Research Limitation: The results of these models analyses are subject to the considered economic variables. Other economic variables could give different results. Practical Implication: The research findings imply that FDI cannot be relied upon as a comprehensive strategy to either stimulate economic growth or alleviate unemployment in the Western Africa region.

Building Resilience for Transformational Recovery: An Analysis of Monetary Policy and Economic Growth in West Africa before and Following the COVID-19 Periods

This study investigates the effectiveness of monetary policy in the pre and post COVID-19 periods in West Africa. The panel fully modified ordinary least squares (FMOLS) was used. Before the estimation, the correlation analysis and summary statistics were done. Unit root test was carried out to ascertain whether the data series are stationary or not and the panel cointegration test was used to determine the existence of long run relationship among the variables. The findings indicate that monetary policy has 12.3% negative and significant effects on economic growth in the periods before COVID-19, while it has insignificant effect after the pandemic. Furthermore, monetary policy has 21.01% negative and significance effects on inflation in the pre COVID-19 era, while it has 52.5% negative and significant effect on inflation after the pandemic. This indicates that the effectiveness of the central bank’s efforts to affect and control inflation has declined after COVID-19. Causes for this could include the pandemic’s effect on supply chains, demand, and the weaker economic environment. On this basis, the monetary authority should create an economic environment that will play a crucial role in determining the effectiveness of monetary policy in the post-COVID-19 periods to foster economic recovery.

Drivers of healthcare expenditure growth in West Africa: A panel data investigation.

Per capita health expenditure in West African countries appears to have assumed a growing trend over the years. This may not be unconnected with the critical role played by health in economic growth, sustainable development and human capital formation. This study analysed drivers of healthcare expenditure in West Africa, using panel data analysis. Random Effects estimating technique was preferred to pooled Ordinary Least Squares and Fixed Effects techniques based on Hausman and Breusch-Pagan Lagrangian multiplier tests. Data employed were sourced from World Bank's world development indicators. The findings indicated that number of people using at least basic sanitation services, incidence of tuberculosis, malaria incidence, and per capita GDP, significantly increased healthcare expenditure in West Africa within the study period. Infant and under-five mortality (UFM) rates raised healthcare expenditure but insignificantly in the sub-region. The study recommends the need to reduce malaria and tuberculosis incidences as well as UFM rate in West Africa through appropriate policy enactment. Such policies should include adequate investment in education, increased per capita income, development of malaria vaccines, maintenance of hygienic environment and free treatment of tuberculosis patients.

Human capital, capital goods import and economic growth in West Africa

Human capital, capital goods import and economic growth in West Africa

Powering sustainable growth in West Africa: exploring the role of environmental tax, economic development, and financial development in shaping renewable energy consumption patterns.

Over time, the economy's growth, financial development, and environmental taxes have become vital tools in countering ecological degradation and promoting clean energy. However, there needs to be a research gap in assessing these policies' collective impact on renewable energy adoption, especially in developing West African countries. This study addresses this gap by evaluating the effectiveness of these policies from 1990 to 2020, using the Generalized Method of Moments (GMM), fixed effect, and pooled Ordinary Least Squares (OLS) models. The Dumitrescu-Hurlin panel causality test reveals bidirectional causality between economic growth and renewable energy consumption, as well as between financial development and renewable energy use. Unidirectional causality is found from environmental tax to renewable energy consumption. GMM results highlight the positive influences of economic growth and environmental taxes on renewable energy consumption, while financial development negatively affects it. These outcomes are consistent with fixed effect and pooled OLS models. Sectorial heterogeneity analysis indicates better results for countries with strong institutions, advanced technology, and strict regulations. In conclusion, this study's insights can guide policies for sustainability in West Africa, leveraging economic growth, environmental taxes, and technology for effective renewable energy integration.

Effect Of Monetary Policy Regimes On Output Growth In West Africa

This paper examines the effect of monetary policy regimes on output growth in West Africa. This was undertaken given that countries in the region require output growth, but are pursuing different monetary policy regimes and are yet to witness adequate output growth. So this set the objective of the study. The study made use of a longitudinal research design that obtained cross-section data from the secondary sources of the Central Banks of the selected countries, the World Bank Development Indicator, the International Monetary Fund as well as the International Financial Statistics database for the period from 2000 to 2021. The data analysis method involved using both descriptive and inferential statistics. The Panel Autoregressive Distributed Lag (ARDL) using a Pooled Mean Group (PMG) regression was used for the estimation. The results obtained indicate that the monetary policy rate was only effective in the short run to exert a significant effect on output growth, while the money supply was significant in both the short run and long run. So, the study makes the following recommendations; money supply is an effective tool for achieving output growth and this should be effectively managed to curb inflationary trends that may arise as a result of increased money supply in order not to reverse economic growth. Monetary authorities should promote activities in all sectors of the economy, particularly in the high-growth sectors. There should be cooperation between the monetary and fiscal authorities in West Africa to ensure smooth coordination and consistency in monetary and fiscal pursuits.

Exploring the moderating role of foreign direct investment in the renewable energy and economic growth nexus: Evidence from West Africa

This study contributes to the renewable energy consumption and economic growth discourse by examining how foreign direct investment moderates this relationship for a panel of 15 West African countries from 1990 to 2021. Applying the Panel-Corrected Standard Errors and the Feasible Generalized Least Squares techniques, the study shows that renewable energy consumption hinders economic growth in West Africa. In addition, foreign direct investment is found to have a positive impact on economic growth. The findings further reveal that the interaction between renewable energy consumption and foreign direct investment has a positive impact on economic growth. Thus, foreign direct investment boosts renewable energy consumption to positively impact economic growth in West Africa.

Spatiotemporal Evolution of West Africa’s Urban Landscape Characteristics Applying Harmonized DMSP-OLS and NPP-VIIRS Nighttime Light (NTL) Data

Investigating urban expansion patterns aids in the management of urbanization and in ameliorating the socioeconomic and environmental issues associated with economic transformation and sustainable development. Applying Harmonized Defense Meteorological Satellite Program-Operational Line-scan System (DMSP-OLS) and the Suomi National Polar-Orbiting Partnership-Visible Infrared Imagery Radiometer Suite (NPP-VIIRS) Nighttime Light (NTL) data, this paper investigated the characteristics of urban landscape in West Africa. Using the harmonized NTL data, spatial comparison and empirical threshold methods were employed to detect urban changes from 1993 to 2018. We examined the rate of urban change and calculated the direction of the urban expansion of West Africa using the center-of-gravity method for urban areas. In addition, we used the landscape expansion index method to assess the processes and stages of urban growth in West Africa. The accuracy of urban area extraction based on NTL data were R 2 = 0.8314 in 2000, R 2 = 0.8809 in 2006, R 2 = 0.9051 in 2012 for the DMSP-OLS and the simulated NPP-VIIRS was R 2 = 0.8426 in 2018, by using Google Earth images as validation. The results indicated that there was a high rate and acceleration of urban landscapes in West Africa, with rates of 0.016 0, 0.017 3, 0.018 9, and 0.068 6, and accelerations of 0.31, 0.42, 0.54, and 0.90 for the periods of 1998-2003, 2003-2008, 2008-2013, and 2013-2018, respectively. The expansion direction of urban agglomeration in West Africa during 1993-2018 was mainly from the coast to inland. However, cities located in the Sahel Region of Africa and in the middle zone expanded from north to south. Finally, the results showed that the urban landscape of West Africa was mainly in a scattered and disordered 'diffusion' process, whereas only a few cities located in coastal areas experiencing the process of 'coalescence' according to urban growth phase theory. This study provides urban planners with relevant insights for the urban expansion characteristics of West Africa.

Simultaneous Determination of the Relationship between Economic Growth, Energy Consumption, Trade and the Environment in West Africa

Energy plays important roles in human lives and economic growth. Energy use however, have its environmental impacts. Economic growth may also be
 achieved through international trade and this can also impact the environment
 by increasing energy consumption and consequently, pollution. To this end, this study examined the interrelatedness of energy consumption, environmental
 pollution, international trade and the economic growth in nine of the West
 African countries from 1990 to 2018 using the method of two stage least squares (2SLS). The study found contrary to expectation, that economic growth and international trade have no significant impact on carbon dioxide emissions in West Africa. Foreign Direct Investment (FDI) and Financial Development (FD) have no significant impact on carbon dioxide emission in West Africa. Trade openness significantly increased emission in the West African countries. Energy consumption, in conformity with economic theory has positively contributed significantly to the rise in carbon emission in West African states. Trade openness significantly increases economic growth. Other results indicate that economic growth bears no significant influence on energy consumption. This is a benefit rather than a problem as de-linking energy consumption from economic growth is a good objective of any government. Urbanization significantly increased energy consumption in West Africa. Lastly, foreign direct investment, significantly contributed positively to trade growth in West Africa. This study recommends a switch to more renewable and clean sources of energy as opposed to the fossil-based energy sources in order to de-link energy demand from emissions in their countries. Governments can also encourage the development and use of energy efficient technology or enact energy conservation policies so as to reduce fossil - fuels use among others.

Globalization and Economic Growth in West Africa (1990 - 2019)

This study investigated the impact of overall and economic globalizations on economic growth in West Africa between 1990 and 2019.Data were sourced secondarily from the World Development Indicators (WDI) and Konjunkturforshungsstelle (KOF) data base.The study employed Pooled Ordinary Least Suare (OLS) and Fixed effect OLS for data analysis.The result obtained from sPooled OLS revealed that overall globalization had significant and positive impact on economic growth in West Africa while the result from Fixed effect showed otherwise.Further,the result from Pooled OLS also showed positive and significant effect of economic globalization on economic growth while the result from the Fixed effect showed no impact of economic globalization on economic growth in West Africa.Therefore, the study recommended that Government policy should adopt overall globalization as a major factor of economic growth.Also, Government should formulate policy to encourage trade openness,Foreign Direct Investment (FDI) and capital inflows which are the major platform upon which economic globalization rested.

The Effect of Natural Resources on Economic Growth in West Africa: The Mediating Role of Human Capital Disaggregation

The purpose of this paper is to examine the conditional impacts of natural resources on economic growth through human capital development. This study employs Dynamic Ordinary Least Squares (DOLS) and Vector Error Correction Model (VECM) methodologies in a panel dynamic analysis. The research demonstrates that natural resources and trade openness are the key contributors to lower economic growth. On the other hand, labour force, physical capital, and human capital development measures are effective in boosting growth. Furthermore, the estimates are much higher in the model of tertiary school enrolment (TSE) than in the model of secondary school enrolment (SSE). This means that TSE performs better than SSE in terms of augmenting natural resources to improve growth. From a policy aspect, governments in such nations should devise policies that will improve human capital. The emphasis must be on improving tertiary education quality.

Investment-growth nexus in West Africa: An assessment of whether fragility matter

This study examines the nexus between investment and growth in West Africa and further assesses whether fragility matters using a sample of 14 countries from 1986 to 2018. The study reveals that fragility, domestic investment, and foreign direct investment granger cause economic growth using the Granger non-causality test. Pooled Mean Group (PMG) estimator was utilised and the results show that fragility has a significant negative influence on the growth of West African countries. The study further reveals that fragility exerts a positive and significant influence on foreign direct investment unlike its effect on domestic investment in the long run. However, the findings reveal mixed effects of fragility on domestic investment in the short-run which connotes the “wait and see” attitude of investors in uncertain situations. The interactive effect of fragility and domestic investment retards the growth of West African countries unlike the interactive effect of fragility and foreign direct investment. The study recommends deliberate efforts by West African governments and the region's Commission body towards improving the growth trajectory by enhancing the institutional and human capacities, strengthening each of the nation's functional capacity to provide basic security within its territory, improving the transparency and accountability in governance, improving inclusive societal goals and societal development, and enhancing domestic investment.

The Nexus among Energy Consumption, Economic Growth and Trade Openness: Evidence from West Africa

The West African region has experienced high economic development. With the increasing energy consumption and emissions, how to coordinate the relationship among energy consumption, trade opening, and economic growth, and how to develop a low-carbon development pattern are becoming the most important issues in West Africa. This paper uses the tri-variable Toda-Yamamoto model to investigate the dynamic interactions among energy consumption, economic growth, and trade in West Africa. The findings indicate that, first, the positive impact of energy consumption on economic growth in West Africa has shown a significant lag effect, and energy consumption has a strong trade-dependent relationship to economic promotion. Trade opening and economic growth in West Africa are mutually reinforcing in the long run. Next, the role of foreign trade in boosting economic growth is more significant in countries with lower levels of economic development. Finally, when replacing the energy consumption indicator with CO2 emissions, the results remain robust. Considering the regional development differences, grouping countries by GDP per capita reveals that there exists a bilateral causal relationship between energy consumption and trade openness in the higher economic development group. The impact of trade openness on economic growth is more remarkable in countries with lower levels of economic development in West Africa. The findings have important implications for policymakers in understanding the economic development pattern of West Africa. It is necessary for West African countries to develop an integrated energy and trade policy in order to maintain long-term sustainable economic growth.

The relationship between globalisation and economic growth in West Africa

Economic integration among countries, as a result of globalisation, could be beneficial to trading partners if properly handled through appropriate regulation of production, distribution, and consumption. However, it appears developing countries often do not benefit from their economic relations with other countries at advanced stages of developed. It is in view of this that this research was conducted with concentration on West Africa. In this study Panel Cointegration Techniques including Fully Modified Ordinary Least Squares, Dynamic Ordinary Least Squares and Dumitrescu-Hurlin Panel Causality Test were applied using time series on Gross Domestic Product, Exports, Imports and Foreign Direct Investment of eight West African countries from 1960–2019. While a positive and significant long run causal relationship was found between Exports, Imports as aspects of globalisation and Gross Domestic Product, there was an observed negative long run relationship between Foreign Direct Investment and Gross Domestic Product. Export promotion, hight import tariffs, the local content initiative, liberal migration policies and strong regulatory machinery were recommended.

Pro-poor and inclusive growth in West Africa

PurposeThis paper focuses on three key metrics of poverty, income distribution and employment to ascertain the pro-poor and inclusive-growth position of the western African region. The roles of governance structures and their interactive effects are also accommodated to capture the peculiarity of the region.Design/methodology/approachThe paper employs fixed and dynamic models.FindingsEvidence suggests that growth is pro-poor, although virtually all governance indicators are sterile in stimulating poverty reduction. The authors observe that health and education spending coupled with trade-openness stimulate pro-poor growth potentials, whereas conflicts culminate the pervasiveness of poverty in the region. By empirically answering the question of how inclusive is economic growth through the lens of income-distribution and employment, the authors show that growth has been exclusive as per-capita-GDP growth rather dampens income shared by the poorest 20%. Also, it is observed that growth has not been inclusive as the jobless-growth argument remains valid while high inequality further exacerbates unemployment in the region. It is further shown that governance has been generally weak in propelling inclusive growth except where the institutional-component of governance stimulates inclusive growth through improvement in equality and labor employability.Originality/valueThe study jointly examines the metrics of poverty, income distribution and employment to ascertain growth pro-poorness and inclusivity which are key for the achievement of African-union (AU) agenda 2063. The study captures cross-sectional dependence among selected countries which previous studies ignored.

The effects of the COVID-19 pandemic on economic growth in West Africa: the case of ECOWAS

Resume Parallelement aux preoccupations relatives aux couts sanitaires, l'impact que COVID-19 pourrait avoir sur les aspects socio-economiques est une preoccupation mondiale. Les pays de l’Afrique de l’Ouest, comme le reste des pays d'Afrique subsaharienne peuvent etre particulierement vulnerables aux chocs externes associes a la pandemie. L’objectif principal de cet article est de mettre en lumiere les repercussions economiques de la pandemie COVID19 sur les economies de la zone CEDEAO et ce a travers une analyse descriptive des indicateurs Macroeconomiques des cinq puissances economiques membres de l’espace CEDEAO. Nous avons choisi le Nigeria, le Ghana, la Cote d’Ivoire, le Senegal et le Burkina Faso. Ces cinq pays assurent 89,54 % du Produit Interieur Brute de la communaute economique Ouest Africaine. Les resultats de la presente etude montrent que la covid-19 a influence negativement sur la croissance economique de l’espace CEDEAO. Au cours de cet article, nous avons presente, dans un premier temps, un cadre general sur la propagation de la Covid-19 et son impact sur l’economie mondiale, ce qui nous a permis, dans un deuxieme temps, de ressentir l’ampleur de l’impact de la pandemie sur les cinq puissances economiques, locomotives de developpement dans la zone CEDEAO. Mots cles : COVID-19, CEDEAO, Nigeria, Ghana, Cote d’Ivoire, Senegal, Burkina Faso Abstract In addition to concerns about health costs, the impact that COVID-19 may have on socioeconomic aspects is a global concern. West African countries, like the rest of subSaharan Africa, may be particularly vulnerable to external shocks associated with the pandemic. The main objective of this paper is to highlight the economic impact of the COVID19 pandemic on the economies of the ECOWAS zone through a descriptive analysis of the macroeconomic indicators of five member economies of the ECOWAS zone. We chose Nigeria, Ghana, Cote d'Ivoire, Senegal and Burkina Faso. These five countries account for 89.54% of the Gross Domestic Product of the West African Economic Community. The results of this study show that the pandemic has had a negative impact on economic growth in the ECOWAS region. In the course of this article, we first presented a general framework on the spread of Covid-19 and its impact on the world economy, which allowed us, in a second step, to feel the magnitude of the impact of the pandemic on the five economic powers, locomotives of development in the ECOWAS zone. Keywords: COVID-19, ECOWAS, Nigeria, Ghana, Ivory Coast, Senegal, Burkina Faso

Tourism, Trade and Self-employment Growth in West Africa: Evidence from Ghana, Nigeria and Cote d'Ivoire

This study attempts to evaluate the relationship between tourism and trade and self-employment growth in Ghana, Nigeria and Cote d'Ivoire using a time series data spanning the period 1991-2019. In this study, an applied GMM approach was employed. Results show that export and import trade, development assistance and personal remittance flows significantly spur self-employment during the study period while indicators of tourism activities represented by the number of tourist arrivals retard growth of self-employment but increase export trade in these countries. On this basis, the business atmosphere and infrastructural facilities should be improved to sufficiently boost the relationship between trade and tourism and hence spur self-employment growth in these countries.

Natural Resources and the Economic Growth of West Africa Economies

In this study, we employed the pooled mean group (PMG) regression to examine the effect of natural resources economic rent (coal rent, gas rent, oil rent, forest rent, minerals rent) and foreign direct investment (FDI) on economic growth in West Africa for the period 1996 to 2017. We found strong evidence of a positive relationship between FDI, total natural resources (TNR), total natural gas (TNG), and economic growth in the long-run. However, the study recorded a negative relationship between mineral resources rent, oil rent and gas rent, and economic growth in the long run. The rent from coal also exhibited neutrality on economic growth. While all the short-run coefficients are not statistically significant, the error correction term (ECT) is significant and a negative value of -0.889, signifying cointegration at a 1% significance level. This also implies that the short-run estimates converge towards the long-run estimates to achieve equilibrium at the speed of 89% per annum. Our findings highlight the significance of FDI and total rent from natural resources in stimulating West African economies' growth in the industrialization drive and general welfare. In contrast, this study also highlights the need for policy direction to redesign and realign ownership in the oil and gas sector from multinational co-operations (MNCs) to the locals and the domestic economy to benefit directly from the prevailing environment.

The Effect of Gender Inequality on Economic Growth in West Africa

Using panel data, this study examined how gender inequality affects economic growth in West Africa. The paper used data from 1997 to 2017 on GDP growth and three gender indicators. Nine countries in West Africa made up the study. The generalized method of moment (GMM) was the estimator used in estimating dependent variable and independent variables of the study. The dependent variable was GDP growth acting as a proxy for economic growth. The independent variables comprised of gender parity of primary school enrollment between female and male, labour participation ratio of female to male and gender inequality index (GII). The result of the study showed that at 1% level of significant, labour participation rate of female to male, gender parity in school enrollment and gender inequality statistically affect economic growth in West Africa. However, the outcome showed that whereas gender inequality adversely affects economic growth, increase in both participation rate of female and gender parity of school enrollment positively influence growth in West African economy. Population growth which was one of the controlled variables also showed a significant effect on economic growth. The study recommends that further studies should be conducted in area of job segregation and labour differences. Keywords : Gender Inequality Index (GII), Labour, femal, male, Economic DOI: 10.7176/JEP/11-24-08 Publication date: December 31 st 2020

Accelerating land cover change in West Africa over four decades as population pressure increased

Rapid population growth in West Africa has exerted increasing pressures on land resources, leading to observable changes in the land cover and land use. However, spatially explicit and thematically detailed quantitative analyses of land cover change over long time periods and at regional scale have been lacking. Here we present a change intensity analysis of a Landsat-based, visually interpreted, multi-date (1975, 2000, 2013) land cover dataset of West Africa, stratified into five bioclimatic sub-regions. Change intensities accelerated over time and increased from the arid to the sub-humid sub-regions, as did population densities. The area occupied by human-dominated land cover categories more than doubled from 493,000 km2 in 1975 to 1,121,000 km2 in 2013. Land cover change intensities within 10 km of new settlement locations exceeded the region-wide average by up to a factor of three, substantiating the significant role of population pressure as a force of change. The spatial patterns of the human footprint in West Africa, however, suggest that not only population pressure but also changing socioeconomic conditions and policies shape the complexity of land cover outcomes.