Financial sector development and Investment in selected countries of the Economic Community of West African States: empirical evidence using heterogeneous panel data method

Abstract This study investigated the impact of financial sector development on domestic investment in selected countries of the Economic Community of West African States (ECOWAS) for the years 1985–2017. The study employed the augmented mean group procedure, which accounts for country-specific heterogeneity and cross-sectional dependence, and the Granger non-causality test to test for causality in the presence of cross-sectional dependence. The results show that (1) The impact of financial sector development on domestic investment depends on the measure of financial sector development utilised; (2) Domestic credit to the private sector has a positive but insignificant impact on domestic investment in ECOWAS, whereas banking intermediation efficiency (i.e., ability of the banks to transform deposits into credit) and broad money supply negatively and significant influence domestic investment; (3) Cross-country differences exist in the impact of financial sector development on domestic investment in the selected ECOWAS countries; and (4) Domestic credit to the private sector Granger causes domestic investment in ECOWAS. The study recommends careful consideration in the measure of financial development that is utilised as a policy instrument to foster domestic investment. We also highlight the importance of employing country-specific domestic investment policies to avoid blanket policy measures. Domestic credit to the private sector should be given priority when forecasting domestic investment into the future

Terrorism and investment in Africa: Exploring the role of military expenditure

The aim of this study is to investigate the inuflence of military expenditure on the relationship between terrorism and investment in twenty-four African countries for the period 2001 to 2018. The study utilizes xfied eefcts regression with Driscoll and Kraay standard error and cushions the eefct of simultaneity and reverse causality us ing the lags of the regressors as instruments. eTh empirical results reveal the negative eefct of terrorism on both domestic investment and foreign direct investment (FDI). The study further reveals a negative net eefct of military expenditure on the relation ship between terrorism and investment. Furthermore, it was discovered that a threshold of 2% to 5% of military expenditure in GDP is required for military expenditure to osfet the negative eefct of terrorism on FDI. eTh study recommends that counterterrorism initiatives be tailored more towards inclusive growth policies, increasing access to education, and improving the quality of governance

Determinants of fiscal effort in sub-Saharan African countries: Does conflict matter?

This study investigates the determinants of fiscal effort in sub-Saharan African (SSA) within the framework of fiscal reaction functions. Whereas previous studies focusing on SSA have mainly considered the economic non-debt determinants this study accounts for the role of conflict given its persistence in many SSA countries. It employs a variety of panel econometric methods that are applicable in tackling the problem of endogeneity. Specifically the study employs the instrumental variables fixed effects, the two-step generalised method of moments (GMM) and the traditional two-stage least squares techniques. Mainly the evidence shows that although SSA governments have made fiscal adjustments in response to the escalating levels of debt, conflict impacts negatively on this response in SSA. Furthermore, the results affirm the presence of fiscal fatigue in SSA’s fiscal reaction function. Recommendations based on these findings are discussed

The impact of governance quality on mortality rates in Sub Saharan Africa

Background: The study examined the impact of governance quality on infant mortality, maternal mortality and adult female mortality in sub Saharan Africa.Data Source and Methods: World Bank data covering 2002 to 2015 for 31 sub Saharan African countries were employed and analysed utilising the Driscoll and Kraay Fixed Effect Model.Results: Improvements in regulatory quality and total governance reduces infant mortality by 0.1441 and 0.0712 percentage points respectively. Improvements in the control of corruption, regulatory quality and total governance reduces maternal mortality by 0.0788, 0.1324 and 0.0654 percentage points respectively. Political stability reduces adult female mortality by 0.0485 percentage point.Conclusion: There is need for the pursuit of efficient and speedy execution of sound private sector development policies in order to reduce infant and maternal mortality. Enhancing the fight against corruption aids maternal mortality reduction. Political stable environment should be prioritised to reduce adult female mortality. An overall improvement in the quality of governance reduces mortality rates in the region