Research Outputs

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http://hdl.handle.net/20.500.11837/3272

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Now showing 1 - 5 of 5
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    Digital financial inclusion and economic growth in Sub-Saharan Africa: the role of institutions and governance
    (Emerald, 2024) Chinoda, Tough; Kapingura, Forget Mingiri
    Purpose – This study examines the role of institutions and governance on the digital financial inclusion and economic growth nexus in Sub-Saharan Africa (SSA) from 2014 to 2020. Design/methodology/approach – This study adopts the generalised method of moments technique which controls for endogeneity. The authors employed four main variables namely, index of digital financial inclusion, gross domestic product per capita growth, institutions and governance. Findings – The results suggest a significant positive effect of institutional quality and governance on the digital financial inclusion-economic growth nexus in SSA. Furthermore, the authors find that effect of trade and population growth on economic growth was significantly positive while inflation reduces economic growth in the region. Research limitations/implications – This study also ignored the effect of digital financial inclusion on environmental quality. Future researches should focus on addressing these drawbacks and replicating the study in Africa as a whole and other developing countries across the world that are experiencing digital financial inclusion and economic growth challenges. The results from the study imply that a positive relationship between digital financial inclusion and economic growth. It is important to note that the study was carried out on the premise that institutions play a pivotal role in enhancing economic growth in SSA. Practical implications – The results confirm the significance of policies that enhances institutional quality and governance which are other avenues the authorities can pursue to enhance economic growth in SSA. Social implications – The paper documents the importance of institutions in boosting economic growth which impacts on social life rather than digital financial inclusion only. Originality/value – The paper makes a contribution through analysing the role of institutions and governance on the digital financial inclusion-economic growth nexus rather than the traditional financial inclusion–economic growth nexus which is common to the majority of the available empirical studies.
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    Informality and poverty in Africa: Which comes first?
    (Wiley, 2023) Bolarinwa, Segun Thompson; Simatele, Municinga
    Existing empirical work has investigated the relationship between informality and poverty. However, most of this work has neglected the feedback effect. This empirical paper explores the bi-directional causality between poverty and informality within the SGMM-PVAR framework among 40 selected high-income and low-income Sub-Saharan countries between 1991 and 2018. Our results support the heterogeneity argument, suggesting that sub-Saharan African informality is demand and supplyled. The income level of the country mediates the direction of effect. Bi-direction causality is observed for low-income countries. Causality in middle-income countries runs from poverty to informality. The results suggest that a certain level of informality may be desirable, especially in low-income countries.
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    Informality and the climate change-poverty nexus: empirical evidence from African countries
    (Routledge, 2023-04-20) Bolarinwa, Segun Thompson; Simatele, Municinga
    The present paper introduces informality into the climate change-poverty nexus using 40 Sub-Saharan African countries selected from high-, middle and low-income countries between 1990 and 2019. The empirical results show that informality is an important variable that can mitigate the impact of climate change on poverty. The moderation of the poverty climate change nexus is nonlinear in income. Informality reduces the negative effect of climate change on poverty in middle income countries while exacerbating its effect in low-income countries. Possible channels of influence are identified. Policy makers need to rethink the role of informality in an environment where informality is mainly seen as a nuisance, to see it as an ally that can achieve key results for the fight against environmental degradation and extreme poverty.
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    The Impact of Digital Financial Inclusion and Bank Competition on Bank Stability in Sub-Saharan Africa
    (MDPI, 2023-01-05) Chinoda, Tough; Kapingura, Forget Mingiri; Roman, A. (ed)
    The last few years have witnessed a rapid development in digital finance that may threaten the manner in which traditional financial services are being used. It opens up new opportunities for low-income groups and small businesses that have limited or no access to formal financial services. Thus, digital financial inclusion plays a vital role in boosting a country’s financial inclusion, fulfilling some sustainable development goals and achieving higher economic growth. This study builds on a new measure of digital financial inclusion to examine the impact of digital financial inclusion and bank competition on bank stability in Sub-Saharan Africa for the period 2014 to 2020 using the two-step System Generalised Method of Moments. An index of digital financial inclusion, z-score, Herfindahl–Hirschman Index (HHI), and non-performing loans were used as data variables. The study findings reveal that digital financial inclusion has a significant positive relationship with bank stability (z-score) and a negative relationship with non-performing loans. The study also found a significant negative effect of bank competition (HHI) on bank stability in line with the competition-fragility view. Policymakers should ensure digital financial literacy for all since it feeds into bank stability and also reduces bank insolvency. They should also find ways of enhancing bank competition which reduces non-performing loans and bank insolvency. On practical implications, the study calls for strategic measures to preserve bank stability, such as complementing digital financial inclusion with financial literacy and enhancing bank competition.
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    What levels of informality tackle poverty in Africa? Evidence from dynamic panel threshold analysis
    (Emerald, 2023-04-26) Bolarinwa, Segun Thompson; Simatele, Municinga
    Purpose – The paper validates the threshold argument in the informality–poverty nexus. Recent literature and policy have argued the existence of a threshold in the relationship. Design/methodology/approach – The study adopts dynamic panel threshold analysis, estimated within the framework of system Generalized Method of Moments (SGMM) to control for endogeneity and simultaneity. Data from 40 selected sub-Saharan African countries between 1991 and 2018 are used for the study. Findings – Empirical results confirm the existence of an average threshold of 31% share of informality in GDP. Also, the paper finds that threshold of informality that addresses mild and severe poverty varies between 24.32 and 36.75%.