Selected Sub-Saharan African Countries Research Articles

Climate and political effects on agriculture: Empirical evidence from SSA

AbstractThe most of Sub‐Saharan African (SSA) countries have been affected by climate change and food insecurity problems due to the reduction of production and productivity of cereal crops in the continent. The purpose of this research was to examine the short‐run and long‐run effects of climate change on agricultural productivity in 24 selected SSA countries. In the study, a systematic Generalized Method of Moments (GMM) Model was used with recent data from 24 SSA countries from 2001 to 2020. The panel regression result revealed that temperature and precipitation showed positive significant effects whereas carbon dioxide emission had negatively influenced the cereal crop productivity in the region. Specifically, the empirical result indicates that a one percent increase in precipitation increases cereal crop productivity by 0.27%. The empirical result of the GMM model revealed that political stability, temperature, GDP per capita, trade openness, carbon dioxide emission, fertilizer consumption, and precipitation have both short‐run and long‐run effects, while precipitation has only a short‐run effect on agricultural productivity in the study area. A key implication of this work is the realization of the lagging effects of climate change in determining cereal crop production and productivity. This study was unable to include all SSA countries because the excluded countries did not have sufficient data on the selected variables in the study. Hence, adopting high‐temperature and drought‐resistant types of enhanced cereal crops is advised to combat the negative effects of climate change in the study area.

Gender disparity in access to education, under-5 mortality, and economic growth in sub-Saharan Africa.

This paper empirically analyses the impact of gender disparity in access to education and under 5 mortality on economic growth in selected sub-Saharan African (SSA) countries from the period 2005 - 2020. The study engaged a panel data of 17 selected SSA countries sourced from the World Development Indicators (WDI) and the United Nations Institute for Statistics (UNIS) and applied the instrumental variable generalised method of moments analytical approach. The result shows that the interaction between gender parity in access to education and primary school enrolment has a significant impact on economic growth. The study concludes that policies to promote gender parity in access to education would be of paramount importance to increase economic growth towards the actualisation of sustainable development goal related to inclusive and equitable quality education and the promotion of lifelong learning opportunities (SDG4) in SSA countries.

Corruption and external debt nexus in sub-Saharan Africa: a panel quantile regression approach

PurposeDebt sustainability and the growing level of external debt in sub-Saharan African (SSA) continue to be significant research priorities. This study aims to examine the corruption-external debt nexus in SSA economies and whether different levels of corruption better explain this relationship.Design/methodology/approachThe panel quantile regression approach was applied to account for the heterogeneous effect of the exogenous variables on external debts. The research covers 30 years of panel data from 30 selected SSA economies for the period spanning from 2000 to 2021.FindingsThe empirical findings of the regression analysis demonstrate the heterogeneous influences of the exogenous variables on external debt. While there was a positive impact of foreign direct investment (FDI) inflows on external debts, corruption established a negative relationship with external debt from the 10th to the 80th quantile. The findings showed a positive link between trade openness and external debt, while they also showed a negative relationship between gross fixed capital formation and external debt.Research limitations/implicationsIt is implied that corruption “sands the wheels” of external debts in the selected SSA countries. Therefore, the amount of external debt that flows into SSA is inversely correlated with corruption activity.Originality/valueTo the best of the authors’ knowledge, this study is one of the first to use panel quantile regression to analyze how corruption affects debt dynamics across different levels of debt, allowing for a more nuanced understanding of how corruption affects debt dynamics. Based on the findings of this study, SSA countries should create enabling environments to attract FDI inflows and to continue to drive domestic revenue mobilization and capital so as to be less dependent on external debts.

Financial Depth and Stock Returns in Sub-Saharan Africa: A Three-Country Comparative Study

This study examined the relationship between financial depth indicators and the stock returns in three selected Sub-Saharan African (SSA) countries from 1990-2019 comparatively. Specifically, the study investigated the effect of financial depth variables (ratios of market capitalization to the Gross Domestic Product (GDP); monetary/liquidity in circulation (M3) to the GDP; lending/savings rate spread, financial sector contribution to GDP; credit to private sector to GDP; Central Bank assets to GDP and commercial banks liabilities to GDP) on the stock market returns of the selected Anglophone SSA countries (Kenya, Nigeria and South Africa). The study employed descriptive statistics, correlations, Johansen co-integration, vector autoregressive (VAR) and Granger causality to analyze the data of selected countries and compare the results to identify the different natures of effects of financial depth on stock returns. Results revealed, that, to a large extent, financial depth variables promote stock market growth in Kenya but there was no evidence that the former significantly affected the latter in Nigeria. However, in South Africa, financial depth variables have significant negative effect on stock returns, at least, in the short-run. These results imply that, comparatively, there are marked differences among the three countries with respect to the effect of financial depth on stock returns. Nevertheless, there is evidence of causal relationship between the variables in the three countries. The study concluded that financial depth has significant effects on stock returns in Kenya and South Africa but not in Nigeria. It is therefore recommended that monetary authorities should develop strategies that will minimize monetary policy lags which delay the transmission of policy effects on the target in the short run. Also, governments and the Central Banks of the countries under study, especially Nigeria and South Africa should re-appraise their financial depth efforts vis-à-vis stock market development.

The exchange rate, income, trade openness and the trade balance: longitudinal panel analysis for selected SSA countries

Purpose Motivated by recent rapid exchange rate depreciations, shrank economic growth, high inflation, and persistent trade deficits, this study examines the trade balance (TB) in the face of the recent dynamics of the stated macroeconomic factors, which are also important determinants of the TB. The symmetric test of the J-curve phenomenon for the selected Sub-Saharan African (SSA) countries is revisited in this regard. The study uses panel data from 1970 to 2020 for ten of these countries for the longitudinal panel analysis with the TB as the dependent variable and the real exchange rate, foreign and domestic national incomes, and trade openness as the set of independent variables.Design/methodology/approach Because the underlying data set involves a heterogeneous panel of relatively short N and long T, the pooled mean group (PMG) and mean group (MG) heterogeneous panel models are employed based on the Hausman test for parameter consistency in heterogeneous panels.Findings The findings largely support the domestic income growth– TB worsening and the foreign income growth– TB improvement hypotheses. Trade openness is found to mostly augment the TB performance of the countries. The results also validated the J-curve effect for only 3/10 and 2/10 countries in the PMG and MG models, respectively. The divergence for most of the countries is attributed to possible import compression and institutional structure of SSA countries.Practical implications Given the favorable effects of trade openness on the TB performance of SSA countries, it is recommended that SSA countries place much emphasis on import-substitution industrialization and value addition to their natural resources as well as investment-driven growth policies to improve the competitiveness of their exports and reverse the chronic deficits in their TBs.Originality/value This paper is unique for invoking heterogeneous panel models to analyze the TB in light of recent dynamics of its determinants, as well as providing an update on the symmetric test of the J-curve phenomenon for the selected SSA countries.

Health and total factor productivity nexus in selected sub-Saharan African countries: quadratic and threshold modelling

ObjectivesThe sub-Saharan African (SSA) countries have been recording a decline in total factor productivity (TFP) growth, inadequate health funding and poor health outcomes are regarded as problems that might have...

The effects of economic growth on carbon dioxide emissions in selected Sub-Saharan African (SSA) countries

This research article concerns a study of economic growth influences on carbon dioxide emissions in 20 selected Sub Saharan African (SSA) countries. The study also intends to reexamine energy consumption, tourism sector and population effect on carbon dioxide emissions. The empirical research applies panel linear regression model for the data obtained in these 20 SSA countries throughout 2000 to 2020. The empirical estimation techniques employed in the analysis consist of pooled ordinary least square (OLS), fixed effects model (FEM), random effects model (REM) and robust fixed model, including diagnostic tests such as endogeneity, heteroscedasticity and other measurements. The empirical analysis using the robust fixed effects model has established significant associations between economic growth, energy consumption, tourism sector and population on carbon dioxide emissions in SSA countries between 2000 and 2020. This study has established that a 1% increase in economy growth increases the carbon dioxide emission level by approximately 0.02%. A study has identified that SSA countries' energy consumption, especially from oil, will only contaminate air quality. A study confirmed that international tourist arrivals are one of the factors that significantly caused air quality reduction among SSA countries. However, increasing population and future international agreements and protocols could also mean that carbon emissions can potentially cause less environmental degradation in the region.

Revisiting the impact of financial development on income inequality and poverty reduction: empirical evidence from selected sub-Saharan African countries

PurposeThis paper aims to investigate the effects of financial access, financial depth, financial efficiency and financial stability pillars on income inequality and poverty among a panel of sub-Saharan African (SSA) countries.Design/methodology/approachThis paper captures cross-sectional dependence among the income groups through the dynamic common correlated effect approach for a data set of 28 selected SSA countries from 2000 to 2017.FindingsThis study reveals that the financial development pillars exert positive and significant impacts on income inequality across the income groups. The results show that the effects of the financial development metrics on poverty are different across the income groups. The results also indicate that the pillars improve poverty reduction for low- and lower-middle-income countries. However, there is a minimal effect on poverty reduction in upper-middle-income countries. The differences among these income categories suggest the need for policymakers to account for income levels when prescribing policies that could engender financial development and poverty reduction in the region.Originality/valueThis paper examines the effects of financial development on both income inequality and poverty by using the newly developed World Bank financial development strategic metrics. It captures cross-sectional dependence in the full sample of selected SSA countries and their income categories.

How does the central bank recapitalization policy affect competition in commercial banks of Sub-Saharan Africa?

In the last two decades, central banks in Sub-Saharan African (SSA) countries have witnessed a trend of the recapitalization policy for commercial banks, and many more are bracing up to undertake the same reform. This has raised debates on whether and how it affects the competitiveness of commercial banks. Nevertheless, empirical evidence remains sparse and inclusive, especially for SSA countries. It is on this premise that this study, therefore, investigates competition in commercial banks before and after recapitalization for six selected SSA countries. The study employs the Panzar-Rosse model to analyze bank-level and macroeconomic indicators between 2000 and 2015. The results show that the H-statistic increased from –0.15, –0.28 and -0.82 before capitalization to 0.94, 0.97 and 0.7 after recapitalization for the first, second and third estimations respectively. This showed that bank competition is higher for the period after recapitalization than the period before recapitalization. The study, therefore, concludes that bank recapitalization could be necessary, especially for countries with low minimum paid-up capital. It is to the extent that banks can now be self-reliant with a higher capacity to invest, as this will significantly improve competition in commercial banks’ services. AcknowledgmentThis research study was supported by a grant from the African Economic Research Consortium, Nairobi Kenya. The findings, opinions and recommendations are those of the authors and do not necessarily reflect the views of the Consortium, its members or the AERC Secretariat.

Solar home systems adoption in Sub-Saharan African countries: Household economic and environmental benefits assessment

Household benefits of adopting solar home system (SHS) kits were investigated. The assessment considered lighting devices for Tier 0 based on scenarios A to E in comparison with kerosene lamps, candles, and torches in 11 Sub-Saharan African (SSA) countries. To assess the impact of mobile money charges on the SHS kit gross price, the SHS kit acquisition by households was examined based on the cash and pay-as-you-go approaches. The study examined the household energy expenditure for each of the Tier 0 scenarios and the respective savings recorded by acquiring a SHS kit on the two payment approaches as well as the greenhouse gases (GHG) emissions avoided by a household. The study results revealed that households across the selected SSA countries would incur an annual energy expenditure in the range of $ 63.28–106.93, with an average of $ 87.31 and record energy expenditure savings of 46.04% and 29.79% for a SHS kit on the cash and pay-as-you-go approaches, respectively. The mobile money charges result in about 0.14–4.69% increment in the kit's gross price. An annual household GHG emissions avoided in the range of 19.51–199.29 kg CO2eq by acquiring a SHS kit was recorded.

The Effect of Export Commodities Price Fluctuation on the Banking Sectors' Financial Performance of the Sub-Saharan African States

This study examines the impact of export commodity price fluctuation on the financial sector performance in some selected sub-Saharan African (SSA) countries. The objective is to determine how instability in export commodity prices transmit to banking sector performance indicators in the region. Essentially a longitudinal study is conducted by combing annual time series data (1996 – 2018) for 18 sub-Saharan Africa countries that are resource exporter sourced from United Nations Conference on Trade and Development (UNCTAD) and World Bank database. The study adopts inferential, descriptive ex-post facto research design, using panel data covering the period 1996 to 2018 sourced from eighteen major primary commodity exporting countries in the sub-Saharan African states. Z-score to evaluate the probability of banking default. Oil price volatility is estimated using a GARCH data analysis framework in terms of mild volatility and intense volatility was applied to estimate the export commodity volatility while Z-score was used to profile the banking performance. It is found that intense commodity price fluctuations exert more debilitating effects on all banking sector performance indicators among the SSA countries with strongest effect of commodity price volatility on the banking sector performance being driven due to vulnerability of the banking sector. It is therefore recommended that banks evolve more efficient resilience mechanisms and that monetary and fiscal policy authorities should seek to enhance domestic capacity of the financial system to withstand domestic export commodity shock over time.

The role of healthcare supply chain management in the wake of COVID-19 pandemic: hot off the press

PurposeThe study aims to examine the role of health-care supply chain management during the COVID-19 pandemic in a cross-section of 42 selected sub-Saharan African (SSA) countries.Design/methodology/approachThe study used cross-sectional robust least square regression for parameter estimates.FindingsThe results confirmed the N-shaped relationship between the health-care logistics performance index (HLPI) and COVID-19 cases. It implies that initially HLPI increases along with an increase in COVID-19 cases. Later down, it decreases COVID-19 cases by providing continued access to medical devices and personal protective equipment. Again, it increases due to resuming economic activities across countries.Practical implicationsThe continuing health-care supply chain is crucial to minimize COVID-19 cases. The international support from the developed world in providing health-care equipment, debt resettlement and resolving regional conflicts is deemed desirable to escape the SSA countries from the COVID-19 pandemic.Originality/valueThe importance of the health-care supply chain during the COVID-19 pandemic is evident in the forecasting estimates, which shows that from August 2021 to April 2022, increasing the health-care supply chain at their third-degree level would reduce coronavirus registered cases. The results conclude that SSA countries required more efforts to contain coronavirus cases by thrice increasing their health-care logistics supply chain.

Viability of the store-on Grid Scheme model for grid-tied rooftop solar photovoltaic systems in Sub-Saharan African countries

The viability of the store-on grid (SoG) scheme model across 13 selected Sub-Saharan African (SSA) countries was investigated. The individual country's datasets applicable to the SoG scheme and a typical industrial building as a baseline prosumer were used in the evaluation. Two SoG scheme scenarios (A and B) based on solar photovoltaic (PV) module prices were used in this analysis. The electricity tariffs under the SoG scheme were compared with the time of use rates for the selected SSA countries. The analysis results revealed that the scheme could be viable in only nine and four out of 13 countries under scenario A and scenario B, respectively, with high lending interest rate in some countries being the key hindrance. Under the SoG scheme model, solar PV systems in all the selected countries could feed about 15.65–39.25% of the generated energy to the grid. The government tax in the range of 1.95–3.38 and 2.48–4.31 c$/kWh could be collected from the energy fed to the grid under SoG scheme scenario A and scenario B, respectively. Overall, the SoG scheme exhibits greater potential as an energy business model to foster rooftop solar PV technology adoption in developing countries.

Banking technology and cashless economy in selected Sub-Saharan African countries: does education matter?

PurposeThis study aims to analyze the effect of banking technology [automated teller machine (ATM) and mobile cellular devices (MOBs)] and other traditional factors on the level of currency in circulation for a sample of 21 selected sub-Saharan African (SSA) countries. It also assessed the mitigating effect of education on the relationship between banking technology and the cashless economy.Design/methodology/approachThe study used a panel data approach to design a cashless economy model with banking technology – ATM and MOBs – as well as their interaction with education as regressors.FindingsThis study finds that MOB is significant for promoting a cashless economy, whereas ATM is insignificant in sample SSA countries. The level of education and the number of bank branches were also found to be significant in promoting a cashless economy. The interaction between education and ATM was insignificant but negatively signed, whereas that between education and MOB was significant but had a positive sign.Research limitations/implicationsNon-availability of data restricted this work to a panel study of selected SSA countries. Subsequent studies should consider single-country case studies.Practical implicationsFindings from the study imply that for banking technology to drive a cashless economy effectively, education has to be improved.Originality/valueThe ratio of cash in circulation to total money supply was used as a measure of the cashless economy. The study also evaluated the moderating effect of education on banking technology.

The asymmetric effects of currency devaluation in selected sub-Saharan Africa

Economic activities in many sub-Saharan African (SSA) countries have weakened markedly in the last few years, with deterioration in trade balances, increasing foreign reserve depletion, and exchange rate depreciation. This situation has led to a call by the International Monetary Fund for more flexible exchange rate adjustment and even currency devaluation to reverse the economic downturn. This call for devaluation has generated controversy among economists and policymakers in these countries and has revived the need to study the effects of devaluation on economic output in SSA countries. This study therefore examines the asymmetric effects of currency devaluation as a policy shift on economic output between 1980 and 2019 in six selected SSA countries, namely Ghana, Kenya, Tanzania, Mozambique, Nigeria, and Malawi. The study employs the smooth transition regression (STR) model to determine the relative asymmetric responses of economic output to devaluation and nondevaluation regimes. The results of STR are mixed, as devaluation asymmetrically impacts positively and significantly on economic output in Ghana, Kenya, Tanzania, and Mozambique, but is insignificant in the case of Nigeria and Malawi. This mixed result suggests that the impact of currency devaluation on economic output differs across countries depending on the structure and size of the economy, the nature of goods produced, and the supportive policies in place, among other things. The policy implication of the findings is that policymakers in various countries should understand the peculiarity of core macroeconomic variables in order to design and implement robust policies.

Patterns and determinants of short and long birth intervals among women in selected sub-Saharan African countries.

Optimal birth spacing (defined as a birth spacing of 24-59 months) is incontrovertibly linked to better health outcomes for both mothers and babies. Using the most recent available Demographic and Health Survey data, we examined the patterns and determinants of short and long birth intervals among women in selected sub-Saharan African (SSA) countries.Reproductive health and sociodemographic data of 98,934 women from 8 SSA countries were analyzed. Unadjusted and adjusted multinomial logistic regression models were used to examine the net relationship between all the independent variables and short and long birth intervals.Overall, the majority of women in all the countries optimally spaced births. However, a significant proportion of women had short birth intervals in Chad (30.2%) and the Democratic Republic of Congo (Congo DRC) (27.1%). Long birth spacing was more common in Eastern and Southern African countries, with Zimbabwe having the highest rate of long term birth interval (27.0%). Women who were aged 35 years and above in Uganda (RRR = 0.72, CI = 0.60-0.87), Tanzania (RRR = 0.62, CI = 0.49-0.77), Zimbabwe (RRR = 0.52, CI = 0.31-0.85), Nigeria (RRR = 0.82, CI = 0.72-0.94) and Togo (RRR = 0.67, CI = 0.46-0.96) had significantly lower odds of having short birth intervals compared to women aged 15-24 years. Older women (above 34 years) had increased odds for long birth intervals in all countries studied (Chad (RRR = 1.44, CI = 1.18-1.76), Congo DRC (RRR = 1.73, CI = 1.33-2.15), Malawi (RRR = 1.54, CI = 1.23-1.94) Zimbabwe (RRR = 1.95, CI = 1.26-3.02), Nigeria (RRR = 1.85 CI = 1.56-2.20), Togo (RRR = 2.12, CI = 1.46-3.07), Uganda (RRR = 1.48, CI = 1.15-1.91), Tanzania RRR = 2.12, CI = 1.53-2.93).The analysis suggested that the determinants of long and birth intervals differ and varies from country to country. The pattern of birth spacing found in this study appears to mirror the contraceptive use and fertility rate in the selected SSA countries. Birth intervals intervention addressing short birth intervals should target younger women in SSA, especially in Chad and Congo DRC, while intervention for long birth spacing should prioritize older, educated and wealthy women.

On the relation between crude oil prices and exchange rates in sub-saharan African countries: A nonlinear ARDL approach

ABSTRACTThis article examines the effect oil price fluctuations have on exchange rates in selected sub-Saharan African (SSA) countries. To investigate the subject thoroughly, unlike previous studies we take specific account of the asymmetric effects of oil price changes in our modeling process, using the nonlinear autoregressive distributed lag (NARDL) model proposed by Shin et al. [2014. “Modelling Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Framework.” In Festschrift in Honor of Peter Schmidt: Econometric Methods and Applications, edited by R. Sickels, and W. Horrace, 281–314. New York: Springer.] The results provide strong evidence that changes in oil prices have the asymmetric effects on the real exchange rates in the long-run; that is, the movements in the real exchange rates in selected SSA countries appear to respond mostly more to oil price increases than to decreases. In the short-run, on the other hand, the asymmetry of oil price changes is not observed.

Drivers of Stock Market Returns in Sub-Saharan Africa: Evidence from Selected Countries

This study investigates the drivers of stock market returns in selected Sub-Saharan African (SSA) economies. Secondary monthly data from January 2000 to December 2016 were collected and analyzed using the dynamic ordinary least square methods (DOLS) and fully modified ordinary least squares (FM-OLS) models to identify endogeneity and serial correlation and check for robustness. In accordance with a priori expectations, this study has proved the key driver of stock market returns across the selected countries is its lag. Although considerable literature exists on the principal determinants of stock market returns in SSA, there is an absence of empirical comparative studies of SSA countries that examine other salient internal and external variables. This study recommends that stockbrokers do not underestimate the importance of previous market performance, as it can potentially inform stock market predictions.

Influence of Foreign Direct Investment on Exchange Rate and Domestic Investment in Pre- and Post- IFRS Adoption Periods of Selected Sub-Saharan African Countries (1999-2015)

The study examined the influence of Foreign Direct Investment (FDI) on Exchange Rate (EI) and Domestic Investment (DI) in pre- and post-IFRS adoption periods of selected Sub Saharan African countries (Nigeria, Ghana and South Africa). Ex-post facto research design was adopted for the study. Secondary data were collected and analyzed using dummy Variable Regression technique. Findings revealed negative but insignificant influence of FDI on exchange rates of Nigeria and Ghana but South Africa was positive. FDI was also found to have had positive but insignificant effect on DI of Nigeria, Ghana and South Africa. However, there were no significant differences in the influence of FDI on the variables in pre- and post- IFRS adoption periods. The research recommends, amongst others, that government of these countries should ensure FDI inflows in areas where they do not have existing industries to avoid crowding influence of FDI. This could be in areas like value chain agro-allied industries. The study concludes that adoption of IFRS alone is not sufficient to attract significant FDI inflow to a nation.

Accounting for the Effect of Foreign Direct Investment on Economic Growth, Post IFRS Adoption in Selected Sub-Saharan African Countries (1999-2015)

This study analysed the effect of Foreign Direct Investment (FDI) on economic growth of selected Sub Saharan African countries (Nigeria, Ghana and South Africa) after their adoption of International Financial Reporting Standard (IFRS). The effect of FDI on macro-economic variables-Gross Domestic Product (GDP) and External Reserves were analysed. Ex-post Facto research design was adopted for the study. Secondary data were collected from United Nations Conference on Trade and Development (UNCTAD), World Investment Reports, (2016); United Nations Statistics, national accounts main aggregate data base (2015) and Index Mundi, (2015) and were presented in tables and graphs. Models were formulated while data were analysed using Dummy Variable Regression model. Findings revealed that FDI had positive effect of GDP of Nigeria and Ghana but of negative effect on that of South Africa. However, in post IFRS adoption Nigeria had significant reduction in the effect of FDI on GDP while Ghana and South Africa had no significant difference in the effect of FDI on GDP in those periods. Equally discovered were that FDI inflows had significant effect on external reserve of Ghana but of no significant effect on that of Nigeria. Its effect on External Reserve of South Africa was negative but insignificant. There were no significant difference in the effect of FDI on external reserve of Nigeria, Ghana and South Africa in the pre and post-IFRS adoption era. It was recommended amongst others that nations should look inwards into other factors that would support FDI and economic growth like institutional factors and infrastructure but not relying on IFRS adoption alone, as IFRS alone cannot attract FDI and bring development.