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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.
International Journal of Economics and Finance
Islamic Development Bank, Foreign Aid and Economic Growth in Africa: A Simultaneous Equations Model Approach2012 •
Chapter 8 in Jose de Arimateia da Cruz and Eduardo R Gomez (eds.), Latin America in the New International System: Challenges and Opportunity (Boston: Pearson Custom Publishers, 2005), p. 174-232
Historically, aid flows from the developed to developing countries have been economically justified for reducing poverty either through directly targeting the poor or indirectly via economic growth. This present study investigates whether or not aid has produced the anticipated results in 12 selected SADC countries using panel data analysis covering a period of nine years (2005-2013). The variable of choice for measuring aid effectiveness in reducing poverty in this present study is the human development index (HDI), a non-monetary poverty measure. Overally, the study finds that aid has a negative and no significant impact on poverty reduction, supporting the works of the public choice hypothesis. The negative and insignificant results could be explained by aid misallocation, misuse and lack of absorptive capacity by recipient countries. Secondly for the analysis of how aid can be made more effective in reducing poverty, empirical evidence suggests that institutional quality, control of corruption and trade openness are vital for aid effectiveness. Economic growth and trade openness have been found to be necessary conditions for poverty reduction.
West African Journal of Monetary and Economic Integration
WHAT DRIVES HUMAN DEVELOPMENT IN NIGERIA: DO OUTPUT SIZE, FINANCIAL DEVELOPMENTAND RESOURCE DEPENDENCE MATTER?The study examines the drivers of human development in Nigeria using time-series data from 1981 to 2014 in an error correction modeling framework. Our empirical result shows that output size and private credit have positive and significant effect on human development in Nigeria, whereas natural resource dependence exerts a negative effect on human development, though not significantly. In addition, the Granger causality test revealed that causality runs from real income per capita to human development, human development appears to be natural resource dependence, and surprisingly, there was no clear flow of causation existing between private credit and human development in Nigeria. Other results show that monetary policy (interest) rate and government education financing spur human development, while exchange depreciation has detrimental effects. In all, this study unveils the importance of economic factors in stimulating human development in Nigeria, and thus intensifies the need to broaden output size, financial development and efficient use of natural resources to engender a non-declining trend in human development trajectory in Nigeria.
PIC, Impact Investing South Africa & GSGII
Africa Impact ReportThe African Impact Report 2019 is a catalyst for collaborative coordination amongst global stakeholders to fast track sustainable and scalable solutions for Africa’s prioritized impact needs. This working paper presents a summary of impact investment-related information, research and recommendations from a range of government and private sector sources. It presents a baseline of the progress pertaining to the United Nations (UN) Sustainable Development Goals and the African Union (AU) Agenda 2063, macroeconomic growth prospects, capital availability and sector opportunities. It further outlines gaps which require a collaborative effort to address in order to ensure the much needed outcomes for the African continent is achieved. Further work will be done to identify solutions to these gaps to ensure Impact Investors into Africa can appropriately benchmark their return, risk and impact requirements.
Socio-economic Planning Sciences
A framework to measure the relative socio-economic performance of developing countries2010 •
Based on the economic success story of Mauritius during its first phase of emergence, this paper aims at providing noteworthy insights that could serve as policy lessons to many other African countries. From the legacy of a mono-crop agrarian economy at the time of independence to a diversified services-based Upper Middle Economy, Mauritius boasts itself today as one of the strongest economies in the sub-Saharan region. However, to ensure a robust growth inclusive sustainable path, while transiting to a second phase of emergence, there is much to be done to address the rather daunting socio-economic challenges which the country is currently facing. The paper actually encompasses a review of economic, social, political and institutional drivers as underpinnings of this success story and the new challenges. At present, Mauritius is viewed as a stagnating middle-income economy with a poor rating in its struggle against poverty and income inequality. The new phase of emergence can be described as the move towards a high income economy characterized by an inclusive social and economic transformation (ISET). In this vein, the paper also proposes an ISET indicator from a basic framework to track and evaluate Mauritius’s performance as far as the social and economic transformation is concerned. This indicator tries to counter balance the poor performance of socio-economic indicators, namely; poverty, income inequality and unemployment against the HDI index (which already captures per capita income and human progress in education and health sectors). In addition, an evaluation is made of the proposed reforms currently being adopted to attain a high income growth-inclusive economy. Specific policy lessons and their relevance to other African economies are highlighted. A special feature of the paper is the evaluation of entrepreneurship development and job creation, based on an analysis of Small and Medium Enterprises (SMEs), amongst others, which could serve as an engine to promote the ISET.
The study extends the implications of Piketty’s celebrated literature from developed countries to the nexus between developed nations and African countries by building on responses from Rogoff (2014) & Stiglitz (2014), post Washington Consensus paradigms and underpinnings from Solow-Swan & Boyce-Fofack-Ndikumana. The central argument presented is that the inequality problem is at the heart of rational asymmetric development between rich and poor countries. Piketty has shown that inequality increases when the return of capital is higher than the growth rate, because the poor cannot catch-up with the rich. We argue that, when the return of political economy (or capitalism-fuelled illicit capital flight) is higher than the growth rate in African countries, inequality in development increases and African may not catch-up with the developed world. As an ideal solution, Piketty has proposed progressive income taxation based on automatic exchange of bank information. The ideal analogy proposed in tackling the spirit of African poverty is a holistic commitment to fighting illicit capital flight based on automatic exchange of bank information. Hence, contrary to theoretical underpinnings of exogenous growth models, catch-up may not be so apparent. Implications for the corresponding upward bias in endogenous development and catch-up literature are discussed.
AE-FUNAI JOURNAL OF ACCOUNTING, BUSINESS AND FINANCE(FJABAF)
EFFECT OF FOREIGN AID ON ECONOMIC DEVELOPMENT IN NIGERIA2018 •
2006 •
2010 •
Open Access Publishing Group