FINANCIAL INTERMEDIATION AND HUMAN CAPITAL DEVELOPMENT FOR SUSTAINABLE DEVELOPMENT: EVIDENCE FROM SUB-SAHARAN AFRICAN COUNTRIES
Abstract
Economic development must be sustainable, improving and dynamic in order to achieve the critical goal of poverty alleviation. A review of extant literature indicates that studies in this area of finance have focused on the impact of finance on economic growth arising more from developed economies. Recommendations from these works may obviously have favoured these economies to the detriment of the developing ones. It is therefore, against the need to explore the role of finance in tackling developmental issues in developing economies with bias to sub-Saharan African countries that this study examined the impact of financial intermediation on human capital development of sub Saharan African countries from 1980 to 2012 utilizing panel data set from the World Bank and applying the Ordinary Least Square (OLS) regression in analysis. Results reveal that financial intermediation did not have positive and significant impact on human development in sub Saharan Africa within the period of this study. This trend must be reversed as it probably might have contributed to their underdevelopment. It is recommended that policy makers should pay more attention to the quality of growth so as to support all round human development. Countries may consider establishing banks of infrastructure or even go further to have banks of development. These will further assist in addressing critical areas such as life expectancy, adult literacy and school enrolment, amongst others beyond just economic growth.
JEL: N27, E24, J24
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DOI: http://dx.doi.org/10.46827/ejefr.v0i0.246
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