FACULTY OF THE SOCIAL SCIENCES
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Item Savings-Investment Gap in Sub Saharan Africa: Does the Interaction of Financial Sector Development and Migrant Remittances Matter?(Statistics, Department of the Central Bank of Nigeria:, 2022) Adeniyi, O. A.; Afolabi, J.; Adekunle, W.; Babatunde, M.; Omiwale, E.This study analyzes the interactive effects of migrant remittances and financial development on savings-investment gap for a panel of 18 Sub-Saharan Africa (SSA) countries from 1990-2017. Results from a panel ARDL model show that migrant remittances reduce savings-investment gap in the long run. The gap is further reduced when the individual effect of financial development, and the interactive effects of migrant remittances and financial development are taken into consideration. Further analysis reveals evidence of widening effects of rising real GDP growth and bank deposits over a long-term horizon, while higher private sector credit widened the savings-investment gap only in the short-run. The study suggests the need for a policy to reduce migrant remittance transfer costs and encourage beneficiaries to prioritize investment over consumption.Item Natural Resource Dependence and Tax Effort in Sub Saharan Africa(Economic Research Institute of Chung-Ang University in South Korea, 2022) Adeniyi, O. A.; Kumeka, T.; Alagbada, O.The study investigated the empirical relationship between natural resource dependence and tax effort in 28 Sub-Saharan African countries, with data for the period 1996-2016. The findings indicated that in economies with oil rents, less efforts is invested on other non-oil-resource revenues. In these countries, trade openness deteriorates tax revenue efforts, consequently the bulk of government revenue come from the sale of crude oil. In contrast, economies without oil rents seem to channel more efforts towards non-oil-tax revenue. In these economies, our result showed that trade openness is an important improvement to tax revenues. We recommend that for economies with oil rents, proper tax record keeping and documentation of separate revenue sources be maintained. Conversely, other resources rent economies are also recommended to depend less on natural resources rents and grants from foreign donors; and maintain a policy of no non-tariff barriers to trade, except for health, social and security reasons.Item Intergovernmental Grant Transfers from Central to Local Levels in Ghana: Does Formula Allocation Prevent Political Influences?(Scholink, 2022) Fumey, A.; Egwaikhide, F. O.; Adeniyi, O. A.Item Is Stock Market in Sub Saharan Africa Resilient to Health Shocks?(Emerald Publishing Limited, 2022) Kumeka, T.; Ajayi, P.; Adeniyi, O. A.Purpose - This paper aims to examine the impact of health and other exogenous shocks on stock markets in Africa. Particularly, the authors examined the resilience of the major stock markets in 12 African economies during the recent global pandemic. Design/methodology/approach - This paper uses the recent panel vector autoregressive model, which enables us to capture the response of stock markets to shocks in COVID-19, commodity markets and exchange rate. For robustness, the authors also analysed the panel Granger causality test. Data was obtained for the period ranging from 2 January 2020 to 31 December 2020. Findings - The results show that the growth in COVID-19 cases and deaths do not have any substantial impact on the stock market returns of these economies. In terms of commodity markets, the authors find that gold price has a negative contemporaneous effect on stock returns, but the effect fizzles out around the fifth day while crude oil price, on the other hand, has a significant positive simultaneous impact on stock returns and also converges around the fifth day. The authors further find that the exchange rate has a contemporaneous and nonlinear effect on stock returns and seems to be more dramatic when compared with the other variables. Overall, the results show that stock markets in Africa appear to be flexible and resilient against the COVID-19 outbreak but are affected by other exogenous shocks such as volatile commodity prices and the foreign exchange market. The effect is, however, short-lived-between one to five days. Practical implications - Following the study's findings, policies should be put in place to support financial markets by way of hedging against commodity instability and securing domestic currency financing. Policymakers are also recommended to concentrate on managing the uncertainties around their exchange rate markets and develop robust and efficient domestic financial markets to encourage local and foreign investors. Originality/value - Several studies have been carried out on the effects of disasters (such as the COVID-19 pandemic) on stock markets, but only a few studies have examined the resilience of stock markets to health and other exogenous shocks. This study's attempt is not only to examine the impact of COVID-19 health shocks on stock markets but also to analyse the resilience of the sampled stock markets. The authors also analyse the resilience of stock markets to commodity markets and exchange rates shocks.Item COVID-19 Pandemic and Sectoral Stock Performance in Nigeria: A Quantile Regression Approach(Allied Business Academies, 2021) Kumeka, T.; Raifu, I. A.; Adeniyi, O. A.This study examines the effects of COVID-19 pandemic (cases and deaths) and government policy responses on the sectoral stock returns in Nigerian using daily data from January 2nd, 2020 to November 24th, 2020. The stock returns of five sectors are considered which include consumer goods, banking, oil and gas, food/beverages and insurance. Employing OLS and quantile regression methods, our results establish that COVID-19 cases, deaths, and government stringency, and containment and health policy have strong impacts on sectoral stock returns. However, the impact appears to be stronger from COVID-19 confirmed cases, and containment and health policy than from its deaths and government stringency policy. Structure of dependence is predominantly stronger in the bearish markets and is significantly negative at the extreme lower and intermediate quantiles. COVID-19 cases and stringency and containment and health policies move in opposite direction to these sectors’ stock returns. As Coronavirus cases surge, stock prices decline.Item Effects of COVID-19 on Trade, Industrialisation and Globalisation in Africa.(Centre for Sustainable Development, University of Ibadan, Nigeria, 2021) Shinyekwa, I. M. B.; Kumeka, T.; Adedeji, A.; Adeniyi, O. A.This paper examined the potential effects of the global Corona Virus (COVID-19) pandemic on the paths of international trade, industrial development and economic globalization on the African continent. Deploying a purely descriptive analytical approach, a number of submissions are made. One, the pandemic significantly disrupted African trade -on both import and export sides - particularly owing to the closures of ports and other external trade infrastructure in China which is the largest trading partner for most African countries. Two, and somewhat related to the first point, the manufacturing sector that is meant to propel industrialization on the continent was also hard hit especially due to the huge shock to the supply chains of intermediate inputs. Third, since globalizations -on both the economic and cultural fronts- has led to greater interconnectedness, spillovers of the negative shock from China to other parts of the world including Africa is more palpable than otherwise. On the basis of the foregoing, some propositions on the key efforts that should be pursued and intensified are highlighted.Item Domestic Resource Mobilization and Human Capital Development in Sub-Saharan Africa(University of National and World Economy (UNWE), 2021) Adeniyi, O. A.; Oyinlola, M. A.; Adedeji A.This study investigates the nexus between domestic resource mobilization using aggregated and disaggregated taxes, and human capital accumulation as measured❘ by the index of human capital and total factor productivity. The study explores panel Autoregressive Distributed Lag. We further explore the linear and nonlinear effects of taxes on human capital accumulation. The results from the scatterplots show that taxes at aggregate and disaggregated levels positively correlated with the two measures of human capital. On the linear analysis, the impact of aggregated and disaggregated taxes is largely negative under the index of human capital but largely positive under the second measure in the short-run. However, the long-run results indicate that aggregate and disaggregated taxes significantly amplify human capital accumulation. On nonlinearity, there is no presence of human capital laffer curve (HCLC) in the short-run under the two measures of human capital. However, there is presence of HCLC in the long-run. The net effects results show that some taxes (such as indirect taxes, taxes on goods and services) are distortionary in improving the level of human capital development while some taxes (such as total tax, direct tax, taxes on income, profit, and gains) can distort human capital development in the SSA region.Item Education and Inclusive Growth in West Africa(Emerald Publishing, 2021) Adeniyi, O. A.; Ajayi, P. I.; Adedeji, A.Purpose - Many West African countries face the challenge of growth inclusiveness. The region is also facing challenges of equipping its teeming population with high-quality skills despite many reforms and initiatives introduced in the past. This study, thus, identifies education as a crucial contributory factor to growth inclusiveness in the region. It, therefore, examined the role of education in growth inclusiveness in West Africa between 1990 and 2017. Design/methodology/approach - The study utilised different proxies to capture quantity and quality dimensions of education. The unit root and ARDL ""Bounds"" tests were employed at a preliminary stage. Based on the preliminary tests, the study explored autoregressive distributed lags modelling technique to capture the short-run and long-run dynamic effects. Findings - The empirical results reveal a positive impact of school enrolment measures in most of the countries in both short-run and long-run. Education quality measure exerts positive impact and significant in few countries under consideration. Practical implications - These countries should give adequate attention to quality when designing education policy to foster their inclusive growth. Originality/value - This study highlights the critical role of education in the inclusive growth pursuit. Education quantity is important to growth inclusiveness but the quality of education is more fundamental. The quality of education possessed determine to a large extent, what individual can contribute to the productive activities within the economy and accessibility to benefits from economic prosperity."Item Infrastructure-Structural Transformation Nexus in Africa: The Role of Financial Sector Development. Journal of African Development(Penn State University Press, 2021) Raifu, I. A.; Nnadozie, O. O.; Adeniyi, O. A.This study investigates the link between infrastructure and structural transformation in Africa as well as the mediating role of financial development on the nexus. We employ data from 24 African countries for the period 2003 to 2019 and adopt the system Generalized Method of Moments (sGMM) estimation technique. Our empirical results suggest that infrastructure and financial development foster structural transformation. However, our results show varying effects of ICT, electricity, and transport on sectoral value-added. Specifically, ICT infrastructure spurs the agricultural and manufacturing sectors value-added, electricity infrastructure aids all sectoral value-added, and transport infrastructure is important to the development of the manufacturing and services subsectors. Also, the agricultural and manufacturing sectors benefit more than the services sectors from financial-sector development. Overall, we find that infrastructure stimulates structural transformation. The net effect of the interaction of financial development and infrastructure on structural transformation appears to be zero, suggesting that financial development does not augment the nexus between infra- structure and structural transformation in Africa.Item Non-Linear Relation Between External Debt and Economic Growth in Nigeria: Does the Investment Channel Matter?(Faculty of Economics, University of Tehran., 2021) Adekunle, W.; Adeniyi, O. A.; Orekoya, S. O.Large external debt stock has been identified as one of the most important factors which have restricted the development of many poor countries. The consensus in the literature remains that external debt promotes growth to the extent that a country does not exceed its debt carrying capacity. Otherwise, additional debt accumulation would serve as a tax on future investment returns capable of creating disincentive to invest in the highly indebted countries. In the light of these arguments, this study investigates the possible role of domestic investment in the non-linear relation between external debt and economic growth in Nigeria over the period from 1981 to 2015. Based on the results of threshold regression analysis employed in this study, the overall findings showed that the impact of external debt on economic growth is sensitive to both measures of external debt used, and whether or not the role of domestic investment is accounted for. Specifically, this study confirmed the existence of the debt Laffer curve associated with the debt overhang theory arising from excessive external debt accumulation. Similarly, empirical support was obtained for the crowding-out effect of excessive external debt servicing. Also, accounting for the role of domestic investment in the non-linear relation between external debt and economic growth reduces the optimal debt carrying capacity of the country. It is therefore suggested that the Nigerian government internalizes a maximum ceiling of 6.81% as the share of external debt stock in gross national income (GNI) so as to enjoy the resulting growth benefits. External debt financing sources that are free of interest charge could also be explored so as to circumvent the burden imposed by excessive external debt servicing.