nep-afr New Economics Papers
on Africa
Issue of 2019‒02‒25
four papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Does Stock Market impact on the Growth of Nigerian Economy using 3SLS Analysis? By Oseni, Isiaq; Akpa, Emeka; Aberu, Felix
  2. Structural transformation in Africa: New technologies, resurgent entrepreneurship and the revival of manufacturing By Naude, Wim
  3. China’s Energy Policy & Investments and their Impact on the Sub-Saharan African Region By Valentin Grimoux
  4. Implications of macroeconomic controls in Ghana By Takumah, Wisdom

  1. By: Oseni, Isiaq; Akpa, Emeka; Aberu, Felix
    Abstract: The paper investigated the impact of stock market on economic growth in Nigeria from 1981 to 2016 using a three-equation simultaneous-equations model in a Three Stage Least Square (3SLS) estimation technique. The paper found that stock market positively spurs economic growth in Nigeria indicating that increase in stock market participations would enhance growth in Nigerian economy. The paper therefore concluded that there is positive and significant effect between stock market and economic growth. The paper recommended that policy makers should encourage more participation in the stock market by making it easier for business owners and foreign investors have easy access business registration and float on the stock market.
    Keywords: Stock Market, Economic Growth, 3SLS, Emerging Economies, Fiscal Policy
    JEL: C3 C32 E22
    Date: 2018–06–01
  2. By: Naude, Wim (UNU-MERIT, and Maastricht University)
    Abstract: In this paper I argue that manufacturing is still important for structural transformation in Africa. Despite failing to industrialize in the past, there may be a new window of opportunity. This is due to the convergence of new technologies of the Fourth Industrial Revolution (4IR) and a resurgence of start-up entrepreneurship. In this light I (i) show why manufacturing is vital for African economies, (ii) critically analyze the nature and impact, both in terms of opportunities and risks, of the new technologies associated with the 4IR for Africa; (iii) describe the resurgence of tech start-up entrepreneurship in Africa and (iv) call for policy support in the form of complimentary investments and regulations to allow entrepreneurs to utilize opportunities and to minimize threats. The paper show that a new narrative for African structural transformation is possible.
    Keywords: Technology, industry 4.0, entrepreneurship, development, Africa
    JEL: O33 O14 O55 L52 L26
    Date: 2018–11–30
  3. By: Valentin Grimoux (Johns Hopkins University)
    Abstract: This research provides a grasp of China’s energy needs and their implications for SSA countries in order to give a balanced and better understanding of its role on the continent. More specifically, the aim is to understand why and how China is involved in the SSA energy sector and what are the benefits and the costs of its engagement. On the one hand, a clearer knowledge of how the Chinese investment system works will help to assess the scope of the Chinese strategy and the role of the government for the set of actors that are committed in Africa. On the other hand, by digging deeper into Chinese energy projects in Africa, one will be able to appreciate to what extent this relationship can be considered a win-win, whereby each party is equally benefitting from cooperation by ensuring the smooth development of the African and Chinese economies.
    Keywords: Economic Development, Energy Security, International Cooperation, Investments
    JEL: O13 Q4
    Date: 2018–08
  4. By: Takumah, Wisdom
    Abstract: ABSTRACT Ghana’s desire to achieve sustainable economic growth with relatively stable price level pursue both monetary and fiscal policies that could lead to macroeconomic. This study examines the effects of fiscal and monetary policy on economic growth and determine the level of convergence of growth for Ghana by applying structural equation modeling (SEM) using time series data from 2008 to 2017. Both short run and long-run results revealed that the ratio of government spending to private investment was statistically significant and it exerted a positive impact on economic growth, an indication that government expenditure is a key channel through which economic growth can be achieved. It was also revealed that real interest rate which is a monetary policy tool have a negative effect on economic growth in Ghana. The study also revealed that government spending shocks decreases private investment in Ghana, which results in crowding out in the economy. It was recommended that to achieve higher and sustainable economic growth, government must embark on expansionary fiscal policies through investment in infrastructure development to create jobs and generate income tax to finance other developmental projects. Also, the Bank of Ghana must reduce its lending rates to encourage private sector development to enhance growth and development of the economy.
    Keywords: Fiscal Policy, Monetary policy, Interest rate, Sustainable economic growth, Structural equation modeling, Impulse response, Government spending, Private investment
    JEL: E4 E6
    Date: 2019–01–30

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