Economics
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Item Financial System Development and Economic Growth in Sub-Saharan Africa(West African Institue of Financial Economic Managemnt, 2016) Egwaikhide, F. O.; Oyinlola, M. A.; Omisakin, O.; Adeniyi, O. A.This paper contributes to the age-old debate on the link between financial development and economic growth by examining the role of monetary policy. There is a possibility that monetary policy enhances financial system performance with attendant impact on growth. To unveil this influence, this paper employs fixed effects and System GMM on data from 28 sub-Saharan African countries over the period 1996 to 2014. Results from the baseline estimation using fixed effects indicate that financial development indicators are negatively and significantly associated with growth for two of the three measures used (LGDP and PGDP), while money growth is positively related albeit insignificantly. The results largely remain the same on interaction with money growth. The coefficients of the interactive terms though largely negative are, however, not significant. The results from System GMM presents a different outcome. First, all measures of financial development turn out positive (except BBD) and insignificant. Financial development equally turns negative but insignificant after interacting with money growth. Overall, monetary policy measures, together with their interactions with financial development indicators, show up as weak growth predictors if not dampening, suggestive of the plausible independence of the nexus on the actions of monetary authorities in these countries.Item Financial System Development and Economic Growth in Sub-Saharan Africa(West African Institue of Financial Economic Managemnt, 2016) Egwaikhide, F. O.; Oyinlola, M. A.; Omisakin, O.; Adeniyi, O. AThis paper contributes to the age-old debate on the link between financial development and economic growth by examining the role of monetary policy. There is a possibility that monetary policy enhances financial system performance with attendant impact on growth. To unveil this influence, this paper employs fixed effects and System GMM on data from 28 sub-Saharan African countries over the period 1996 to 2014. Results from the baseline estimation using fixed effects indicate that financial development indicators are negatively and significantly associated with growth for two of the three measures used (LGDP and PGDP), while money growth is positively related albeit insignificantly. The results largely remain the same on interaction with money growth. The coefficients of the interactive terms though largely negative are, however, not significant. The results from System GMM presents a different outcome. First, all measures of financial development turn out positive (except BBD) and insignificant. Financial development equally turns negative but insignificant after interacting with money growth. Overall, monetary policy measures, together with their interactions with financial development indicators, show up as weak growth predictors if not dampening, suggestive of the plausible independence of the nexus on the actions of monetary authorities in these countries.Item Foreign Capital Flows, Financial Development and Growth in Sub-Saharan Africa(Emerald Publishing Limited, 2015) Adeniyi, O. A.; Ajide, B.; Salisu, A.This paper investigated how financial development influences the relationship between foreign direct investment (FDI) and economic growth in selected Sub-Saharan Africa (SSA) countries. This study considered three alternative measures of financial development (FD) and their impacts on the FDI-growth linkage. It also explored the possibility of nonlinearities in the tripartite relationships. The results showed a positive influence of FDI on economic growth. Financial system development also had growth-promoting impact in the presence of FDI flows. Interestingly, these findings remained robust when potential endogeneity was accounted for using a well known instrumental variable (IV) estimator. Digging deeper, the findings also supported the existence of non-linearities in the role of FD in the FDI-growth association. In policy terms, these SSA countries will reap more growth benefits from foreign capital flows especially if financial reforms are sustained.Item Foreign Capital Flows, Financial Development and Growth in Sub-Saharan Africa(Emerald Publishing Limited, 2015) Adeniyi, O. A.; Ajide, B.; Salisu, A.This paper investigated how financial development influences the relationship between foreign direct investment (FDI) and economic growth in selected Sub-Saharan Africa (SSA) countries. This study considered three alternative measures of financial development (FD) and their impacts on the FDI-growth linkage. It also explored the possibility of nonlinearities in the tripartite relationships. The results showed a positive influence of FDI on economic growth. Financial system development also had growth-promoting impact in the presence of FDI flows. Interestingly, these findings remained robust when potential endogeneity was accounted for using a well known instrumental variable (IV) estimator. Digging deeper, the findings also supported the existence of non-linearities in the role of FD in the FDI-growth association. In policy terms, these SSA countries will reap more growth benefits from foreign capital flows especially if financial reforms are sustained.Item Does Governance Impact on the Foreign Direct Investment-Growth Nexus in Sub-Saharan Africa?(Economics Faculty Zagreb, 2014) Ajide, K.; Adeniyi, O. A.; Raheem, I. D.The central question this paper sought to tackle was “does the quality of institutions matter for the relationship between Foreign Direct Investment (FDI) and economic growth?” Using macroeconomic data on 27 Sub Saharan African (SSA) economies and six distinct measures of governance the findings showed that control of corruption, political stability and government effectiveness matter for the influence of FDI on economic growth in SSA. This key finding was found to be robust even in models where these three governance indicators were interacted with FDI. Furthermore, the results from threshold-type sample splitting showed that in the sample containing countries with a higher level of governance, the positive impact of FDI on growth has larger magnitude vis-à-vis the comparator group with poorer governance indicators. This significant threshold effects remained robust across specificationsItem Energy Consumption and Financial Development in Sub-Saharan Africa: A Panel Econometric Analysis(Inderscience Enterprises LTD, 2013) Ajide. K.; Bekoe, W.; Yaqub, J.; Adeniyi, O. A.This paper investigated the energy consumption-financial development linkage for Sub-Saharan Africa (SSA). Annual data for 26 countries spanning the period 1996 to 2009 was used to elicit answers on the questions of interest. This is the first attempt, as far as we are aware, at examining the linkage between shocks to and response of the energy and financial markets of SSA economies. Recent panel causality techniques are deployed to probe causal orderings both in the short- and long-run. The results suggest that regardless of the financial development measure, there is weak evidence for short-run causality. Contrariwise, there appears to be ample evidence in support of long-run causality particularly flowing from private sector credit as a share of GDP to total energy consumption. For electricity consumption, there is short-run and long-run causality from private sector credit to GDP ratio. In sum, these plausibly imply that a deeper financial system effectively allocates resources to the private sector enabling a scaling up in operations and by extension higher energy requirements.Item Efficiency of health systems in Sub-Sahara Africa: a comparative analysis of time varying stochastic frontier models(2016-06) Lawanson, A. O.; Novignon, J.The purpose of the current study was to estimate efficiency of health systems in sub-Sahara Africa (SSA) and to compare efficiency estimates from various time-varying frontier models. The study used data for 45 countries in SSA from 2005 to 2011 sourced from the Word Bank World Development Indicators. Parametric time varying stochastic frontier models were used in the analysis. Infant survival rate was used as the outcome variable, while per-capita health expenditure was used as main controllable input. The results show some variations in efficiency estimates among the various models. Estimates from the ‘true’ random effect model were however preferable after controlling for unobserved heterogeneity which was captured in the inefficiency terms of the other frontier models. The results also suggest a wide variation in the efficiency of health systems in sub-Sahara Africa. On average health system efficiency was estimated to be approximately 0.80 which implies resource wastage of about 0.20. Cape Verde, Mauritius and Tanzania were estimated to be relatively efficient while Angola, Equatorial Guinea and Sierra Leone were among the least performers in terms of health system efficiency. The findings suggest that the omission of unobserved heterogeneity may lead to bias in estimated inefficiency. The ‘true’ random effect model was identified to address the problem of unobserved heterogeneity. The findings also suggest a generally poor performance of health systems in terms of efficiency in the use of resources. While resource commitment to the health sector is critical, it is important to also ensure the efficient use of these resources. Improving the performance of institutions in the health sector may go a long way in improving the general health status of the African population.Item Health care financing in Africa: what does NHA estimates do reveal about the distribution of financial burden?(College of Medicine, University of Ibadan, and University College Hospital, Ibadan, Nigeria, 2013-04) Lawanson, A. O.This paper, utilized National Health Accounts framework to profile the health financing situation in Sub- Saharan Africa countries. While Africa accounted for less than 0.9 percent of global health spending, the region carried over 43% of global burden of communicable diseases. Thus financing of healthcare remained a core issue to most African countries. The highest burden of healthcare financing is shouldered by households, which accounted for between 72% and 99% of private sources. The public and external sources accounted for around 33% and 30% of total health expenditure, respectively. With high poverty incidence in the continent, households are easily exposed to catastrophic spending risk. Health financing reforms that emphasis pooling mechanism, especially social health insurance is therefore required. Deviance to the Alma Alta Declaration, which laid precedence on preventive healthcare, curative healthcare generally, dominated the allocation of healthcare resources. This has implication on the efficiency and effectiveness of healthcare delivery in African countries. Public facilities played a dominant role in the provision of healthcare, which is arguably supported by the need to achieve greater equity in healthcare delivery. However, with the growing wave of public-private partnership initiatives, it may be intuitively wise and efficient to increase private participation in healthcare provision.