Trade Openness, Institutions and Economic Growth in sub-Saharan Africa (SSA)

A major discourse in literature is that one of the causes of the limited growth effects of trade liberalization is the weakness of institutions. The main objective of this study is to investigate the impact of trade openness and institutions on economic growth in sub-Saharan Africa (SSA). Institutions are crafted by man to create a peaceful habitation and reduce uncertainty in the exchange of values; and they play key roles in the management of economies in recent years. The study is significant considering the fact that trade and institutions have been found to exert some measure of influence on the growth of countries. However, evidence has shown that not much has been done in relating institutions to trade in SSA. The study employed econometric analyses involving the Panel Unit Root, Least Square Dummy Variables (LSDV) and the Generalized Method of Moments (GMM) techniques for the period 1985-2012 on thirty selected SSA countries. Secondary data were used for the estimations. The major findings of the study revealed that institutions had a significant positive impact on economic growth but trade openness only had a little significance on growth in the selected SSA countries. Therefore, the study recommended that the SSA countries should ensure that funds be channeled appropriately to projects of economic importance so as to further develop their institutions to have meaningful impact on economic growth. These SSA countries should also create conducive economic and political environments that will engender free international trade between them and other countries of the world. Keywords: Institutions, Trade Openness and Economic Growth

Patronage Pattern of Idanre Hills as Eco-Tourism Centre

This study examines the development and management of Idanre hills tourist centre in Ondo state. It also assesses the existing tourism potentials and infrastructural facilities in the tourist centre, trend of patronage and the tourist’ level of satisfaction with tourism attractions, facilities and services in the centre; and impacts of the centre on the host community. Forty-six questionnaires were administered on the tourists who were randomly selected in the tourist centre. To examine the impact of the centre on the host community, systematic sampling technique was used to select one hundred and thirty (130) residents. Three indices were developed to measure the perception of respondents on various aspect of the investigation. These include; 'Infrastructural Facilities Index' (IFI), 'Potential Level Index' (PLI), and 'Tourism Effect Index' (TEI). Regression analysis was used to investigate the relationship between year and number of patrons.Level of 'security' was perceived to be satisfactory in the area (IFI=4.22). The 'hills' is a major potential in the area (PLI=4.85). The centre has significant effect on 'employment' in the area (TEI=4.26). The study identifies a significant, positive linear relationship between year and number of patrons in Idanre hill tourist centre (r = .864, P value = 0.001), which indicates an increase in the level of patronage over the period used (2014-2050). The study revealed that the centre has socio-economic impact on the area in terms of income generation, job creation, and infrastructural development. Though, there are challenges facing tourism in the area, the study suggests provision of basic social amenities to enhance development in the area, government-private partnership, and community involvement to give a sense of belonging in bringing development to the area. Keywords: Ecotourism, Patronage, Impact of Tourism, Tourism Development, Satisfaction, Idanre Hills

The Disappointing Performance of Foreign Direct Investment in Industrial Development in Sub-Saharan African Countries

The Sub-Saharan African region compared to other developing regions has been the most vulnerable as regards foreign capital inflow. The flow of FDI is expected to result into advanced managerial and  technological capacities and acceleration of  industrial development. The study examined how the flow of FDI to the sub-Saharan African region has impacted the industrial development of the region, using the proxy of industry value added growth. The study made use of pooled data from thirty three sub-Saharan African countries within the period 1993 and 2012.The method of analysis utilized for the study was the fixed effect least-square dummy variable model, employed to estimate the impact of foreign direct investment on industrial development for the selected host countries. The study finds that foreign direct investment is statistically significant in relation to industrial development for host Sub-Saharan African countries; but it is disappointing that the expected desired features of industrial development, like increased manufacturing outputs, reduction in high level of import and manufactured goods; etc, have not been realized. It is therefore recommended that the governments of host countries should put policies in place to encourage development of industries domestically, to enhance sustained industrial development, such that dependence on external financial assistance and borrowing could be reduced, resulting in sustained increases in non-oil export earnings, domestic income, savings, investment, technology, and hence improved living standard. Keywords: Foreign Direct Investment; Industrial Development; Sub-Saharan African Countries JEL Classifications: F21, O1

Fragility of FDI flows in sub-Saharan Africa region: does the paradox persist?

Abstract The circumstances of the SSA region regarding the inflow of foreign direct investment (FDI) present a puzzle. In spite of the high rate of return on investment, the inflow of foreign investments keeps eluding the region, and the COVID-19 pandemic even perplexes the flow fragility the more. What factors then determine FDI flows aside from return on investment? Could there be more persuasive relative cost complexes? The study aimed at testing the effects of determining factors that influence FDI flows and their impact on economic development, considering the COVID-19 period. The study used cross-country pooled data from 30 SSA countries collected between 2001 and 2020. The study utilized five panel estimation techniques, namely Pooled Regression, Fixed Effect (FE), Random Effect (RE), Panel Two-Stage Least Square and Differenced Generalized Moments of Method (DGMM). The study found that the inflow of FDI has significant positive impact on economic development in the sub-Saharan African region. It is also ascertained that the outflow of FDI, and political stability has an inverse relationship with economic development. The study recommends that governments of host economies should hence ensure an enabling framework for their economies, so as to improve infrastructure, political stability, and institutional quality, in order to sufficiently encourage the inflow of FDI into the SSA region and make the environment inviting, sustainable, and beneficial for foreign investors and host economies alike

Foreign direct investment, dual gap model and economic development in sub-Saharan Africa

Africa like other developing continents has the representation of limiting gaps of foreign exchange, investment and human capital skills. Sustainable development emphasizes that for the limits of both foreign exchange and savings to be reduced, there is need for Foreign Direct Investment (FDI) to flow inclusive of, foreign skills and technology diffusion for economic development. The objective of the research is to determine how the gaps of foreign exchange, investment and human capital skills has been reduced through the influx of foreign investment for the African economies. Pooled panel data between 2000 and 2018 was utilized for 39 African countries, and analysed with the fixed effect regression model. The results indicate that the influx of FDI has not brought about sufficient decline in the gaps for the selected African economies. The study recommends that government of developing countries need to select with care industries that foreign capital flows into in order to ensure tangible effect on investment domestically as well as deter crowding-out of capital. Furthermore, strategies on protection of domestic investors, enhanced export of production through industrial development as well as lesser consumption proportion, should be implemented, thereby, improving the balance of payment situation. These consequently would result into a gradual decline of the investment and the foreign exchange limits. Thus, resulting into a rise in domestic investment in addition to the much anticipated sustainable development goals of poverty reduction, total well-being and economic development in the continent