Dependency Ratio and the Economic Growth Puzzle in Sub-Saharan Africa (original) (raw)

The problem of economic growth in Sub-Saharan Africa

2020

A wide range of policy-related variables have a persistent influence on economic growth. This has consistently maintained the interest of economists on the determinants of economic growth over the years. There is consensus however that for countries to grow sustainably, a lot of stall must be placed on higher savings rate as this makes it easy for such countries to grow faster because they endogenously allocate more resources to inventive activities. Due to data difficulties in Sub-Saharan Africa (SSA) it is nearly impossible for one to consider important variables such as accumulation of knowledge and human capital when analysing growth sustainability. Studying four lower middle-income countries in SSA – Ghana, Republic of Congo, Kenya and Lesotho – this study tests the hypothesis of sustainable growth by using a Dynamic Ordinary Least Square (DOLS) model to examine the relationship between savings, investment, budget deficit and the growth variable. The results showed that savings...

Essays on economic growth diagnostic and demographics in Sub-Saharan Africa

2020

Our research shows that demographic growth and structure are significant determinants of economic growth in Sub Saharan Africa. Therefore, we suggest that the HRV framework should be augmented to include an analysis on demographic growth and structure, allowing a comprehensive approach on the binding constraints on economic growth of a given country in Sub Saharan Africa.

Determinants of Economic Growth in Sub-Saharan Africa

GVU Journal of Management and Social Sciences , 2023

This study set out to examine the factors that determine economic growth in Sub-Saharan Africa with special emphasis on the Middle Income Economies. Panel data were collected from 23 countries in SSA from 1996 to 2020. Fixed effect and random effect method of analysis were employed for the analysis. The findings revealed that GDP per-capita, Gross Fixed Capital Formation, Population growth, exchange rate and Foreign Direct Investment have positive and significant effects on the economic growth. Based on these findings, the researchers recommended that there is need for SSA countries to improve on their fixed asset as this will boost economic growth.

Economic Growth Experience of West African Region: Does Human Capital Matter?

2015

This paper empirically investigates the relevance of educational and health components of human capital to economic growth, using a panel data from sixteen West African countries over the period 1980 to 2013. GDP per capita is linked to health and education capital while accounting for population growth, physical capital, trade openness, and other growth control variables. To correct for endogeneity and other estimation problems this paper employs Diff-GMM dynamic panel technique. Empirical findings indicate that coefficients of both education and health have positive statistically significant effects on GDP per capita. The paper affirms the strong relevance of human capital to economic growth of West Africa. It is recommended that increased resources and policy initiatives to motivate and enhance access to both health and education by the population should be pursued by policy makers.

The Sources of Economic Growth in Sub-Saharan African IDB Member Countries

The economic growth in Sub-Sahara African (SSA) IDB member countries has been encouraging over the last decade; however, it is still not high enough to enable these countries to overcome the persistent poverty. There is thus a need to raise substantially real GDP growth rates on a sustained basis, both through the productivity channel and factor accumulation such as labor and capital. This study focuses on " the source of economic growth in SSA IDB member countries " with the objective of identifying the main driving factors of economic growth in the region using the growth accounting framework and extending the existing analysis both by country and time coverage. The paper is expected to be useful for the policymakers in the region to have a clear picture on the main sources of growth, and thus help them in identifying strategic reform areas of intervention in line with the most binding factors of growth. The data used in this study cover 20 Sub-Sahara African countries covering the period 1990-2012. The data set includes real GDP, labor force, and capital stock. The source of data is the various version of the World Economic Outlook, IMF. Capital stock is estimated using perpetual inventory method and the base year is 1970. In estimating growth accounting model, a translog production function is applied using panel data and random effects model. Empirical results show that the capital accumulation is the most important individual factor in GDP growth (52%) followed by workforce accumulation (39%) while total factor productivity (TFP) accounts for meagre 8%. This suggests that, on average, real GDP growth in Sub-Sahara African countries was driven primarily by factor accumulation with a low level of TFP. In addition, the elasticity of labor was lower than that of capital indicating that the labor played very little role in GDP growth most likely due to unskilled labor force or mismatch of labor skills with the production process. Furthermore, this also adversely affects both the TFP growth and the share of capital growth to the GDP growth. The results indicate that the critical constraint to the economic growth appears to be poor labor skills that lead to both low labor productivity and under-utilization of capital stock.