Human Development In Africa Research Articles

Fintech, human development and energy poverty in sub-Saharan Africa

Studies have highlighted the important role of financial technology (fintech) in enhancing socio-economic conditions of nations. However, despite the efforts of governments to improve the latter, the rating of African countries still remains manifestly inadequate. Given that access to electricity is imperative for fintech, and fundamental to improving socioeconomic conditions, we provide novel evidence by investigating the degree to which the prevailing energy poverty in Africa mediates the relationship between the duo. Our baseline results confirm that fintech has a significant positive impact on socioeconomic conditions, proxied by human development, and the impact becomes increasingly significant in the face of constant energy supply. However, when we split our sample based on regions and income classification proposed by the World Bank, our results show that the impact of fintech on human development, in the absence of access to electricity, is notably limited to some African regions. Considering the current state of human development in Africa, our study advocates for more investment in energy infrastructure for the rapid realization of the gains of fintech.

Does the Validity of the Environmental Kuznets Curve Postulation Empirically Depend on the Level of Human Development in Africa?

Purpose: The interconnectedness between human development and environmental degradation is a complex issue that warrants investigation in Africa. Although there are a few studies on the economic growth and environmental degradation nexus for African countries, there is a huge scarcity of empirical research that explores the Environmental Kuznets Curve (EKC) postulation in the context of human development and environmental degradation in Africa. The study therefore empirically explored the relationship between Human Development and Environmental Degradation within the framework of the EKC using 50 African countries subdivided into High Human Development Index Countries (HHDICs), Medium Human Development Index Countries (MHDICs) and Low Human Development Index Countries (LHDICs) from 2000 to 2019. Data for the study were obtained from the World Bank’s development indicators and the Human Development Reports of the United Nations Development Programme (UNDP-HDR).
 Methodology: The study made use of the Panel Corrected Standard Error (PCSE) model and the Feasible Generalised Least Squares Regression model (FGLS) which are econometrically suitable to handle N > T and T > N panels respectively, and are both robust to cross sectional dependence, contemporaneous correlation, group wise heteroscedasticity and slope heterogeneity. Other econometric techniques such as Descriptive Statistics, Correlation Analysis, Variance Inflation Factor test (Multicollinearity), second generation unit root tests (CADF and CIPS), Durbin Watson, Breusch Godfrey tests (Serial Correlation) and the White Test (Heteroscedasticity) were also employed in the study.
 Findings: The empirical results produced evidence that the data is integrated of order one I(1) and exhibits cross sectional dependence, slope heterogeneity and cointegration. The data was also found to be serially correlated and heteroscedastic. However, multicollinearity was absent. The panel estimates of the PCSE and the FGLS estimators showed that Human Development is a key driver of Environmental Degradation in Africa, with the greatest proportion of the impact on HHDICs, followed by MHDICs and then finally LHDICs. The results also revealed the validity of the EKC postulation only in the HHDICs, evidenced by the presence of an inverted U-shaped relationship between Environmental Degradation and Human Development. In The LHDICs and MHDICs on the other hand, U-shaped relationships between Environmental Degradation and Human Development were found, signalling the invalidity of the EKC. There was significant evidence for the support of the feedback hypothesis between Human Development and Environmental Degradation in HHDICs, MHDICs, LHDICs and all the 50 African countries at large. Based on the findings, Policymakers were given recommendations that took into consideration the uniqueness of the economic situations in HHDICs, MHDICs, LHDICs and Africa as a whole.
 Recommendations: The study shows that the degree of environmental degradation is proportional to the level of human development in Africa and indicates that the validity of the EKC postulation in the context of human development) is exclusive to only the HHDICs in Africa. This provides an incentive for policy makers in the MHDICs and LHDICs of Africa to make human development a priority through industrialisation and other profitable economic activities. This is likely to help them afford innovations and technological developments that protect the environment through the greater use of cleaner energy than the naturally abundant fossil fuel as well as the institutionalisation of policies that protect the environment as human development appreciates.

Natural resource dependence, policy and institutions for environmental sustainability and African welfare

AbstractIn developing countries, particularly in Africa, dependence on natural resources poses a threat to development, leading to poor health, reduced productivity, and increased poverty among nations. This raises significant concerns for the prospects and welfare of Africa, given the rising environmental pollution. However, the literature on the mitigating effect of policies and institutions for environmental sustainability (PIES) on resource‐dependent countries in Africa is scarce. As a result, this study explores the effects of natural resource dependence and the mediating effect of PIES on under‐five mortality and human development in Africa. This novel hypothesis may contribute to the divergent differences in African welfare. Using a panel of 30 resource‐dependent countries spanning 2005 to 2021 and employing the two‐step dynamic generalized method of moments, the study provides evidence in support of the novel hypothesis. The findings show that dependence on natural resources can be either a blessing or a curse for African countries, depending on the degree to which environmental sustainability is embraced. Furthermore, a heterogeneous analysis demonstrates significant support for countries with high policies and institutions for environmental sustainability in mitigating the negative impacts of natural resource dependence on welfare. The study concludes that dependence on natural resources without environmental sustainability cannot guarantee a balance between the well‐being of the economy and the environment. Therefore, environmental management should not be politically motivated so as to sustainably improve human well‐ being in Africa.

Does technology affect human development? Examining some important moderating factors

Nowadays ICTs are fully integrated with human life. This may be why there is an increasing interest in understanding the role that ICTs development plays in societal transformations, especially in response to the challenges posed by human development in Africa. However, not much is known about the channels through which ICTs are likely to affect human development, allowing us to investigate other transmission channels of the ICTs-Human development nexus. For this purpose, we used data collected in the 2000–2017 period for 27 African countries and employed the system Generalized Method of Moments (GMM) for empirical estimations. Our findings indicate that ICTs, captured by mobile phone and internet penetration rates, significantly improve human development. The study also found that trade openness, financial development, electricity consumption and democracy are the main channels through which ICTs positively improve human development. In light of these empirical findings, we suggest fresh insights that can convince policymakers to care so much about trade openness, financial development, electricity consumption and democracy if ICTs are to be used as economic tools for human development improvement.

Correlates of human development in Africa: Evidence across gender and income group

Gender inequality is high in Africa compared to other regions of the world. This disparity jeopardises the efforts targeted at improving human development and economic growth in the continent. This study provides empirical evidence on the drivers of human development in Africa across gender and country income groups, covering 54 countries over the period 1990 to 2019. It employed the Mean Group estimator for analysis to accommodate slope heterogeneity and cross-sectional dependence. The paper used Human Development Index (HDI) to proxy human development, while HDI across gender was employed to capture gender differences in human development. Country income grouping followed the World Bank country classification into low, lower-middle and upper-middle-income economies. The findings showed more determinants of HDI when disaggregated across gender than otherwise. The drivers of HDI are similar across gender for each country income group, with infrastructure, particularly ICT shown to have a positive effect in the long run for all country groups. For lower-middle and upper-middle income countries, fertility rate induced a significant negative effect on HDI and gender human development but only in the long run. However, the effect was insignificant for male and female HDI in low-income countries. Moreover, an increase in real Gross Domestic Product (GDP) promotes human development regardless of a country's income classification. A larger positive effect of GDP was observed on the HDI for low-income countries. Therefore, in the bid to improve human development in Africa, efforts should continually be intensified towards promoting GDP growth regardless of the level of growth in macroeconomic income. Policies targeted at reducing fertility rates and increasing ICT are also encouraged as these will improve HDI and close the gap in HDI across gender.

Improving human development through urbanization, demographic dividend and biomass energy consumption

AbstractThe policy debate on the effects of urbanization, demographic dividend and biomass energy consumption on human development in Africa has long suffered from a scarcity of empirical evidence. This study, therefore, explores the relationship between urbanization, demographic dividend, biomass energy consumption and human development (measured by the human development index, human capital, life expectancy and infant mortality) in 33 African countries between 1990 and 2019. We employ Driscoll‐Kraay, instrumental variable and the panel quantile regression methods. We find that an increase in urbanization, demographic dividend and biomass energy consumption leads to a higher level of human development. Accounting for different facets of human development such as education (human capital) and health (life expectancy and infant mortality), the results show that urbanization and biomass energy consumption improve education and health. The results also show that while demographic dividend improves education and infant mortality, its effect on life expectancy is negative and significant. These findings are robust for reliable and consistent policy directives.

Financial Inclusion as a Gateway to Human Development in Africa

In this paper, we investigate the relationship between financial inclusion and human development in Africa using annual data from 45 African countries covering the period 2000-2020. In analyzing the data, the generalized method of moments (GMM) technique is adopted. The results show that financial inclusion positively and significantly influences human development in Africa, implying enhancing financial inclusion engenders human development. The findings also reveal that financial development and economic growth have a positive significant effect on human development while trade openness and human development are negatively related. Following from the findings it is recommended that national governments and connected stakeholders should step up efforts to deepen financial inclusion as a critical pathway to enhancing human development.

Monterrey Consensus Two Decades After: Rethinking Foreign Aid Architecture and the Future of Human Development in Africa

Changing scenarios in the second decade of the new millennium make revisiting the questions around aid effectiveness quite critical for understanding current human development challenges in Africa, considering that 2022 marks two decades since the Monterrey Consensus and the adoption of its resultant Declaration. Flowing from this original multilateral endeavour at crystallising a paradigm shift among role actors on the need for new approaches to foreign aid and development planning as well as the concerted efforts at standardising development assistance practices over the past two decades, critical questions emerge: (i) Beyond merely pronouncing new pathways of responses for dealing with the critical issues around aid, has the ‘new’ understanding impacted Africa in any different way? (ii) Could there be more than mere political explanation for the intrigues and divergence surrounding the ever-evolving principles on new aid architecture as propounded by various multilateral actors? (iii) In light of the noticeable contradictions in the approaches of donors and recipient governments to new aid architecture, what implications do these distinctions portend for aid effectiveness in Africa such that will promote human development in real terms? (iv) If development aid is particularly key for the very survival of poor people in Africa, should we not begin to identify more radical designs that will strategically counter-balance the shortfalls of the dominant approach to foreign aid and development planning? This article is an attempt to respond to this plethora of questions, advocating an approach that could transform the landscape of aid architecture and development agenda for Africa.

HUMAN DEVELOPMENT AND GOVERNANCE IN AFRICA

This study examines the nexus between governance and human development in Africa. It uses data for the period 2010–2019 and takes into account the existence of spatial dependence and controls for the endogeneity problem through a Generalized Spatial Two Stage Least Squares (2SLS) technique. The exploratory spatial data analysis reveals the existence of spatial dependence on human development and governance quality. Our empirical findings support that in Africa, “good fences make good neighbors,” or proximity matters in the distribution of human development. Implications are discussed. This study complements the extant literature by using more updated data and employing an alternative and more robust estimation approach.

Drivers of unemployment intensity in sub-Saharan Africa: do government intervention and natural resources matter?

PurposeAfrican countries are endowed with both human and natural resources. These resources constitute integral components for any economic development due to the long-lasting relationship with all sectors in an economy, yet there is an obvious disagreement between growing economy and employment generation in Africa. Though there has been a growing pattern of economic size, particularly the gross domestic product (GDP) among African countries, most of these economies are low in human development. The disagreement between economic growth and employment generation in Africa despite abundant natural resources located on the continent calls for public discourse among scholars. Therefore, the purpose of the study is to examine the peculiar drivers of unemployment intensity in a region characterized by endowed resources.Design/methodology/approachThe paper adopts two approaches; the authors employed the pooled mean group (PMG) estimator and utilised stochastic frontier analysis (SFA) to generate a government efficiency index between the period 1991 and 2017 among sub-Saharan Africa (SSA) countries.FindingsThe empirical results through the single output-multiple inputs framework indicate that on average, there is a low level of government efficiency towards increasing the objective of human development in Africa. However, in the long run, natural resource endowment has a positive and significant relationship with employment generation for SSA. Hence, the study established that a low level of government efficiency has a long-lasting effect on low human development experienced in Africa.Social implicationsThe need to improve the level of government efficiency towards economic development by making both human and physical capital more effective will spur the exploration of natural resources.Originality/valueThe paper provides an empirical study of the effectiveness and efficiency of government through PMG and SFA in establishing the relationship between government approaches and employment level in selected SSA countries.

Comparative Analysis of the Interlinks between Globalization, Governance and Development in African Economic Communities

This paper examines the complex causal relationship between globalization, governance and development in African countries using a comparative approach. The sample comprises 51 countries in five groups over the period 1996–2018. The cointegration analysis shows that there is a long-run relationship between globalization, governance and human development in Africa as a whole sample. However, at regional level, such a relationship does not exist in the Economic Community of Central African States (ECCAS) bloc. In the long run, globalization and governance affect positively human development in all samples. The findings indicate also that there was unidirectional causality from globalization and governance to development at the continental level. At the regional level, there is unidirectional causality from globalization to development in East African Community (EAC) and Southern African Development Community (SADC). In these regions, there is also a bidirectional causality between governance and development. In the ECCAS, the causality runs from governance to development and from development to globalization in the Economic Community of West African States (ECOWAS). The results support no evidence of causality between the variables in North Africa (Arab Maghreb Union, AMU). Finally, the overall globalization index does not Granger-cause governance. The main implication of our study is that improving governance and development is a very challenging issue, and the impact of globalization should not be neglected.

Rethinking John S. Mbiti’s Metaphysical Trajectory of Time in Africa

Purpose: To reawaken the consciousness of all Africans to the implications of the metaphysical trajectory of time in Africa, which John S. Mbiti presents, in relation to personal and collective human development in Africa.
 Methodology: This work is expository, critical, and evaluative in its methodology.
 Findings: In Western thought, there is mathematical and linear time, as dominant ideas. Dominant because some philosophers, in particular Bergson, have their notion of time as mainly inclined to be lived, organic. It is linear time in the sense that, it is an imagined line through which the distant past, present and infinite future is figured. Linear time as such does not exist, but it is a metaphysical notion existing in our minds. Linear time is unidirectional and mathematical. In Africa, African Philosophy is still fledgling. That is, it is not fully developed and documented. Consequently, even the field of “time” lacks a robust written commentary.
 Unique Contribution to theory, practice and policy (recommendation): Within the traditional African milieu, according to Mbiti, time is a two dimensional phenomenon, with a long past, a present and virtually no future. This is contrary to the linear time concept in western thought, with an indefinite past, present and future. This work is expository, analytical and critical in its methodology. The first part of the discussion is concerned with the nature of time (and its constituent elements) as a metaphysical concept. The second part focuses on the ordering of time as found among the Africans. Finally, the third part discusses some of the different activities (in customs and traditions), which point to the future. These include the meaning of life, rites of passage, painting and divination, etc. In the conclusion, a fundamental question is raised regarding, whether or not, the present organization of time, in Africa, as presented by John S. Mbiti, be perpetuated or changed, taking into account the pros and cons it bears.

Assessing Africa’s Agricultural TFP for Food Security and Effects on Human Development: Evidence from 35 Countries

Population growth, food shortages, and low levels of human development have been longstanding issues confronting many African countries. Agricultural productivity remains a critical goal for mitigating these challenges and ensuring overall economic development. Total factor productivity (TFP) is a crucial metric for determining a sector’s overall growth. However, due to a lack of comprehensive assessments of the trends and determinants of TFP growth in African agriculture, there are disagreements. Within the context of inclusive human development, the impact of agricultural productivity is frequently misrepresented in the current literature. This paper estimated TFP growth and assessed its impact on human development in Africa. Due to technological improvement, TFP increased moderately at a 5.4% growth rate across African countries over the period (2001–2019). Empirical evidence indicates that TFP growth enhances human development in the long run, but the effect varies according to levels of human development (HDI) and the nature of growth over time. For instance, higher levels of human development tend to mitigate the impact of TFP. Further analysis revealed that technical efficiency improvement is critical for enhancing food safety and human development. Policy recommendations for improving TFP for food security and human development in Africa are provided. Further investigation into agricultural TFP’s impact beyond the poverty measure in Africa is encouraged.

Linear and non‐linear effects of infrastructures on inclusive human development in Africa

AbstractThe objectives of this paper are to verify the linear and the non‐linear effects of infrastructural development on inclusive human development in Africa. The results of the system generalized method of moments (system GMM) estimations show a positive effect of infrastructural development on inclusive development across all the infrastructural development indexes employed, except the information and communication technology (ICT) infrastructural composite index, which presents an insignificant negative effect. Besides, a non‐linear effect of infrastructures on inclusive development is established across all the infrastructure indicators except for the ICT indicator. Negative thresholds for complementary policies are established for the African Infrastructure Development Index (AIDI) and the transport index whereas positive thresholds are apparent for the electricity index and the water and sanitation infrastructure index (WSS). Accordingly, in order to sustain the positive incidence of the AIDI and transport index on human development, complementary policies should be engaged to avoid an overall negative effect on human development when the indexes are, respectively, 31.12 and 25.56. In the same vein, the electricity index and WSSI should exceed critical levels of, respectively, 49.79 and 41.92, to engender an overall positive effect on inclusive human development.

Effective monetary policy, banks' pricing behaviour and human development in Africa

This paper empirically examines the effect of monetary policy effectiveness on human development in Africa. We employ both micro-bank level and macro-country level data. Bank level data are taken from the bank scope database maintained by Fitch/IBCA/Bureau Van Dijk. Series are yearly, covering a sample of 320 banks across 29 African countries. Panel fixed effects, random effects and IV regressions were estimated for the period 2002 to 2013. For our IV estimation, the paper explores an instrumental variable based on the fact that effective monetary policy is conditional on the independence of the central bank. The regression results that ensued suggest that; first, effective monetary policy translates to high banks' loan and deposit prices. Building on these results and employing various specifications of banks' pricing strategy, the second test suggests that, high banks' pricing induced by effective monetary policy tends to increase human development. Results of the net effects eventually suggest that effective monetary policy, overall, does not improve human development.

Effective monetary policy, banks' pricing behaviour and human development in Africa

Effective monetary policy, banks' pricing behaviour and human development in Africa

Financial Technology and Human Development in Africa: The Moderating Impact of Energy Poverty

Financial Technology and Human Development in Africa: The Moderating Impact of Energy Poverty

Assessing the determinants of government spending efficiency in Africa

Government spending is one of the vital ways for the provision of public goods and services with a view of improving citizens' well-being. African countries have been identified by international bodies as naturally endowed with resources that serve as major financiers for many African governments yet, most countries in Africa are ranked low in human development. Though the nature of many governments is hinged on the quality of life, however, the reverse is the case for many African countries. Low development indicators as against huge African governments spending indicates low efficiency in spending. Hence, this study assesses the efficiency of government spending in Africa and examines the drivers of government spending efficiency. Adopts SFA to assess government spending efficiency while TFE model was used to examine the relationship between government spending efficiency and its drivers. Owing to macrodata adopted in the study, it accounts for the second-generation panel unit root and uses panel corrected standard error to correct for cross-sectional dependence among 40 African countries between 2000 and 2020. The frontier result revalidates government spending as an input factor to achieve growing human development in Africa. The result shows that the level of government spending efficiency depends on the size of the economy and other factors. Natural resources could be used to address the burgeon government spending efficiency when effectively utilized. The result shows that colonial legacy has a long-lasting impact on government spending efficiency. These results suggest the need for efficiency of government spending owing burgeon drivers available among African economies. We recommend the need to improve the efficiency of government spending in order to situate framework for Africa development. Effective resources utilization and a strong institutional framework are potential drivers of spending efficiency in African economies. The paper provides an empirical study on the relationship between natural resources, colonial legacy, and government spending efficiency through true fixed effect among African countries.

The role of finance in inclusive human development in Africa revisited

PurposeThis study aims to investigate the direct and indirect linkages between financial development and inclusive human development in African countries.Design/methodology/approachThe study employs a battery of estimation techniques, notably: two-stage least squares, fixed effects, generalized method of moments and Tobit regressions. The dependent variable is the inequality adjusted human development index. All dimensions of the Financial Development and Structure Database of the World Bank are considered.FindingsThe main finding is that financial dynamics of depth, activity and size improve inclusive human development, whereas the inability of banks to transform mobilized deposits into credit for financial access negatively affects inclusive human development.Practical implicationsPolicies should be tailored to improve mechanisms by which credit facilities can be provided to both households and business operators. Surplus liquidity issues resulting from the inability of banks to transform mobilized deposits into credit can be resolved by enhancing the introduction of information sharing offices (like public credit registries and private credit bureaus) that would reduce information asymmetry between lenders and borrowers.Originality/valueThis study complements the extant literature by assessing the nexus between financial development and inclusive human development in Africa.

Human development and governance in Africa: do good fences make good neighbours?

In this paper, we revisit the relationship between governance and human development in Africa during the period 2010-2019 taking into account the existence of spatial dependence and controlling the endogeneity problem through a Generalized Spatial Two Stage Least Squares (2SLS). The exploratory spatial data analysis reveals the existence of spatial dependence of human development and governance quality. Our empirical findings support that in Africa, “good fences make good neighbours” or proximity matters in the distribution of human development. Implications are discussed.