nep-afr New Economics Papers
on Africa
Issue of 2021‒06‒14
five papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Foreign Direct Investment, Governance and Inclusive Growth in Sub-Saharan Africa By Ofori, Isaac K.; Asongu, Simplice A.
  2. Financial deepening, Stock market, Inequality and Poverty: Some African Evidence By Jelson Serafim
  3. Does Economic Growth, International Trade and Urbanization uphold Environmental Sustainability in sub-Saharan Africa? Insights from Quantile and Causality Procedures By Chimere O. Iheonu; Ogochukwu C. Anyanwu; Obinna K. Odo; Solomon Prince Nathaniel
  4. Financial system regulation in a pandemic: Evidence from Nigeria By Uddin, Godwin
  5. Influence of attitude on mobile banking acceptance and factors determining attitude of end-users in Ethiopia By Kejela, A. B.; Porath, Daniel

  1. By: Ofori, Isaac K.; Asongu, Simplice A.
    Abstract: Motivated by the projected rebound of foreign direct investment (FDI) inflow to sub-Saharan Africa (SSA) following the implementation of the AfCFTA and the finalization of the Africa Investment Protocol, we examine how FDI modulates the effects of various governance dynamics on inclusive growth in SSA. We do this by testing two hypotheses– first, whether unconditionally FDI and various governance indicators (rule of law, control of corruption, regulatory quality, governance effectiveness, political stability, and voice and accountability) foster inclusive growth in SSA; and second, whether these governance dynamics engender positive synergy with FDI on inclusive growth in SSA. Using data from the World Bank’s World Governance Indicators and the World Development Indicators for the period 1990–2020, we employ several fixed effects, random effects, and the system GMM estimators for the analysis. First, we find that FDI and all our governance dynamics are significant inclusive growth enhancers in SSA. Second, though FDI amplifies the effects of all our governance dynamics on inclusive growth in SSA, governance effectiveness, voice and accountability, and political stability are keys. Policy recommendations are provided.
    Keywords: AfCFTA,Economic Integration,FDI,Governance,Inclusive Growth,Africa
    JEL: F6 F15 O43 O55 R58
    Date: 2021
  2. By: Jelson Serafim
    Abstract: This study provides evidence for the relationship between private credit, stock market indicators, income inequality, and poverty. Using the annual data that ranges from 1992 to 2018 on 9 African economies. We had applied the estimation method of the Autoregressive Distributed Lag Model (ARDL) to model the long-run effect. Besides, we use Dumitrescu and Hurlin Panel causality to test for checking the direction of causality. The results of long-run estimates indicate that the stock market indicators have a significant positive impact on income inequalities, but have a negative and significant impact on poverty. Further, our findings show that private credit adversely reduces income inequalities. Our results also establish significant short-run causalities among stock market indicators, private credit, income inequalities, and Poverty.
    Keywords: Private Credit, Stock market, income inequality, poverty.
    JEL: G10 G20 I30
    Date: 2021–05
  3. By: Chimere O. Iheonu (Abuja, Nigeria); Ogochukwu C. Anyanwu (Nsukka, Nigeria); Obinna K. Odo (Nsukka, Nigeria); Solomon Prince Nathaniel (University of Lagos, Akoka, Nigeria.)
    Abstract: International trade and urbanization are increasing at an unprecedented rate in sub-Saharan Africa (SSA). The region has also witnessed a fair share of economic growth, with minimal investment and consumption of renewables. Therefore, this study investigates the influence of economic growth, international trade, and urbanization on CO2 emissions in SSA. The current study enriches the existing literature by employing the panel quantile regression analysis to account for existing levels of CO2 emissions in the region. Empirical findings reveal that GDP increases CO2 emissions across quantiles, especially in countries where the existing level of CO2 emissions is low. International trade improves environmental sustainability in countries where the existing levels of CO2 emissions are at their lowest and highest levels but exacts a reversed impact on CO2 emissions at the median. Further findings suggest that urbanization increases CO2 emissions across the observed quantiles with a more pronounced effect in countries where the existing levels of CO2 emissions are at its lowest level. The study also reveals a bi-directional causality between economic growth, international trade, urbanization, and the emissions of CO2. The limitations of the study and possible direction for future research have been highlighted. Policy directions are discussed.
    Keywords: Economic Growth, International Trade, Urbanization, CO2 Emission, sub-Saharan Africa, Quantile Regression
    Date: 2021–01
  4. By: Uddin, Godwin
    Abstract: Financial system soundness in world economies remains germane, but in the same vein, the COVID-19 outbreak had made governments scampering for any and every solution as experience has shown the need to incentivize businesses to enable economy-wide recovery. In this perspective, consideration of the Nigerian case is made, to re-echo possible collaboration by the Central Bank of Nigeria (CBN) and an operationally-associated agency - the Asset Management Corporation of Nigeria (AMCON). This viewpoint shows the role that AMCON could play to recoup extended facilities, in view to ensure financial system soundness, amidst others. Thus, efforts to leverage on this collaboration could aid going forward a fruitful operational effectiveness of so established policy responses.
    Keywords: COVID-19 pandemic; Central Bank of Nigeria; economic stimulus packages; Nigeria; financial system soundness; recession
    JEL: E5 E52 E58 G28
    Date: 2021–05–17
  5. By: Kejela, A. B.; Porath, Daniel
    Abstract: As observed in many countries, mobile banking can revolutionize the practice of payment transactions. This is especially true for developing countries, where mobile banking has the potential to open non-cash banking services to the unbanked. However, unlike in countries like Kenya and Ghana, in Ethiopia, people still seem to be reluctant to use mobile banking, despite existing platforms availed by Ethiopian commercial banks like Dashen Bank and United Bank. In this paper, we explore the reasons for such reluctance with the help of the technology acceptance model (TAM) and modifications proposed by the literature that are particularly adequate for developing countries and mobile banking: the theory of trying (TT) and the concept of attitude strengths. In our sample of 394 mobile banking subscribers of Dashen Bank and United Bank, we find that a person's attitude is key for the acceptance of mobile banking and that attitude can be best explained by combining the elements of TT with the TAM. As a consequence, to foster mobile banking in Ethiopia, banks are advised to improve potential users' attitude, especially, taking into account the users' learning process and the systems' ease of use.
    Keywords: Mobile banking,Technology acceptance model,User acceptance,Theory of trying,Attitude strength,Ethiopia,Structural equation model
    Date: 2021

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