Nonlinear Public Debt and Resource Rent Nexus in Highly Indebted Resource-Rich Sub-Saharan Economies: Evidence from Nigeria

2022 ◽  
Author(s):  
Joseph Kwaghkor Achua ◽  
Mariam Yusuf ◽  
Samuel Stephen Wakdok
Keyword(s):  
Public Debt ◽  
Resource Rent ◽  
Sub Saharan

scholarly journals Relationship between Public Debt Burden and Health Expenditure in Sub-Saharan African Countries: The Role of Institutional Quality

2020 ◽  
Vol 6 (2) ◽  
Author(s):  
Rusmawati Said ◽  
Abdullahi Sani Morai
Keyword(s):  
Public Debt ◽  
Health Expenditure ◽  
Institutional Quality ◽  
Sub Saharan Africa ◽  
African Countries ◽  
The Public ◽  
Debt Burden ◽  
Sub Saharan ◽  
The Relationship

The historically lower level of public health expenditure of sub-Saharan African (SSA) countries could be partly explained by the mounting debt burden of this region. This consumes a sizable proportion of their domestic resources to debt servicing and potentially decreases their overall budgetary allocations to various sectors in the economy and health expenditure in particular. Using the Generalized Method of Moments (GMM) approach on a sample of 43 sub-Saharan African countries, we examined the relationship between the public debt burden and health expenditure highlighting the role of institutional quality for the period 2000 – 2014. The empirical result confirms that the relationship between public debt burden and health expenditure in sub-Saharan Africa is negative. Interestingly, however, the marginal effect of the relationship between the public debt burden and health expenditure has shown that such a negative relationship turns out to be positive when the quality of the institutions is at maximum. This suggests that the relationship between the public debt burden and health expenditure in sub-Saharan Africa is a function of institutional quality.  Therefore, to minimize the negative impact of public debt on health expenditure in sub-Saharan Africa, governments should take determine stand to minimize its debt accumulation and intensify efforts toward the improvement of institutional quality in the region comprehensively.

scholarly journals Public debt in sub-Saharan Africa

2016 ◽  
Vol 44 ◽  
pp. 343-356
Author(s):  
Agnieszka Tomczak
Keyword(s):  
Public Debt ◽  
Sub Saharan Africa ◽  
Sub Saharan

scholarly journals Export Diversification in Sub-Saharan Africa: What are the Explanatory Factors in Country Groups?

2020 ◽  
pp. 27-37
Author(s):  
Ngouhouo Nji Ibrahim ◽  
Demgne Pouokam Veronique ◽  
Tchoffo Tameko Gautier
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Trade Openness ◽  
Sub Saharan Africa ◽  
Group Method ◽  
Export Diversification ◽  
Resource Rent ◽  
Explanatory Factors ◽  
Sub Saharan ◽  
Rich Countries

This study empirically analyses the determinants of export diversification, as measured by the Theil Diversification Index, which takes into account the different margins of diversification. The pooled mean group method is applied to a sample of 23 Sub-Saharan African (SSA) countries divided into three distinct groups according to their natural resource endowments. The results show that the quality of government negatively determines export diversification in all groups of countries while total resource rent negatively determines export diversification in resource-rich countries. In contrast to this result, the level of democracy and stability of government positively determines export diversification in non-oil resource-rich countries and trade openness promotes diversification in oil-exporting countries. As for foreign direct investment, it promotes export diversification in oil-exporting countries and resource poor countries. Thus, policymakers should focus on promoting industrialization in the agricultural and processing sectors by better targeting foreign direct investment or by investing resource income in productive infrastructure to improve the competitiveness and productivity of economies.

The Principal Findings and some Policy Implications

2018 ◽  
pp. 205-224
Author(s):  
Richard M. Auty ◽  
Haydn I. Furlonge
Keyword(s):  
Import Substitution ◽  
Resource Curse ◽  
The Philippines ◽  
Policy Implications ◽  
Sub Saharan Africa ◽  
Resource Rent ◽  
High Rent ◽  
Gulf States ◽  
Sub Saharan ◽  
Natural Resource Rent

The resource curse is part of a broader rent curse linked to geopolitical rent, regulatory rent, and labour rent, as well as natural resource rent. Variation in the intensity of rent curse effects reflects major shifts in policy fashion. It declined with the post-1980s dismantling of industrialization by import substitution. Previously, low rent incentivized the pursuit of policies promoting efficient economic growth under hard budget constraints in East Asia and Mauritius (and now in Bangladesh, Vietnam, and the Philippines). High rent in Latin America and sub-Saharan Africa led to staple trap trajectories associated with protracted growth collapses. However, labour surplus South Asia and the Gulf states can learn from policy errors to, respectively, pursue labour-intensive growth and merge dualistic labour markets as part of a package of sector neutral policies, macroeconomic stability, and an enabling environment.

scholarly journals The laffer curve and the debt-growth link in low-income Sub-Saharan African economies

2015 ◽  
Vol 42 (5) ◽  
pp. 878-892 ◽  
Author(s):  
Kelbesa Abdisa Megersa
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Public Debt ◽  
Sub Saharan Africa ◽  
Low Income Countries ◽  
Positive Contribution ◽  
Content Type ◽  
Laffer Curve ◽  
Negative Effect ◽  
Sub Saharan

Purpose – The study of the link between debt and growth has been full of debates, both in theory and empirics. However, there is a growing consensus that the relationship is sensitive to the level of debt. The purpose of this paper is to address the question of non-linearity in the long-term relationship between public debt and economic growth. Specifically, the author set out to test if there exists an established “laffer curve” type relationship, where debt contributes to economic growth up to a certain point (maximal threshold) and then starts to have a negative effect on growth afterwards. Design/methodology/approach – To carry out the tests, the author has used a methodology that delivers a superior test of inverse U-shapes (Lind and Mehlum, 2010), in addition to the traditional test based on a regression with a quadratic specification. Findings – The results in the paper present evidence of a bell-shaped relationship between economic growth and total public debt in a panel of low-income Sub-Saharan African economies. This supports the hypothesis that debt has some positive contribution to economic growth in low-income countries, albeit up to a point. Practical implications – The overall result supports the claim that public debt may start to be a drag on economic growth if it goes on increasing beyond the level where it would be sustainable. Originality/value – This paper leads the way by implementing a robust test of non-linearity (“inverse-U” test) to the analyses the debt-growth nexus and the laffer curve in Sub-Saharan Africa.

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