African Journal of Economic Review <p>The <em>African Journal of Economic Review</em> (AJER) is a quarterly peer-reviewed Journal that publishes high quality and scholarly manuscripts on economic topics relevant to Africa, for anyone interested in the African continent. The AJER is an applied journal that invites rigorously treated manuscripts with significant component of economic analysis. The AJER accepts manuscripts with keen interest in the following fields: Microeconomics, Macroeconomics, Monetary Economics, International Economics, Financial Economics, Public Economics, Health Economics, Educational Economics, Welfare Economics, Labour Economics, Industrial Organization, Economic History, Economic Development, Innovation, Technological Change, and Growth; Political Economy and Comparative Economic Systems, Agricultural and Natural Resource Economics, Environmental and Ecological Economics; Urban, Rural, Regional, Real Estate, and Transportation Economics; Cultural Economics, Sports Economics, Tourism Economics, History of Economic Thought and Heterodox Approaches. </p> <p>Authors are advised to observe that the introduction section of the manuscript (usually not more than three pages) needs to clearly motivate the problem, state research question succinctly, introduce the empirical method, present the estimated results, include a note on value addition to the existing body of knowledge, robustness checks, policy implications, limitations and organization of study. The AJER requires authors to submit manuscripts that clearly locate the existing gaps in the literature, discuss the relevant theory, and introduce the research hypotheses if any. Authors are also reminded to provide details on all data sources and their limitations. The methodology section needs to single out clearly why the use of a particular methodology is more preferred than alternative; and more so, giving appropriate details when recent techniques are employed. The discussion section should highlight the implications, novel contributions and the limitations of the existing study.</p> <p>The website associated with this journal: <a href=""></a>.</p> <p>The AJER is indexed in</p> <ul> <li class="show">Repec: <a href=""></a>,</li> <li class="show">EconPapers: <a href=""></a></li> <li class="show">AgEcon Search, <a href=""></a>,</li> <li class="show">EBSCO</li> </ul> en-US The copyright belongs to: African Journal of Economic Review, Centre for Economics and Community Economic Development, The Open University of Tanzania, P.O.Box 23409, Dar es salaam, Tanzania (Dr. Khatibu Kazungu) (Dr.Mwoya Byaro) Thu, 29 Feb 2024 21:18:07 +0000 OJS 60 Oil Price Shocks and Income Inequality in Nigeria: Evidence from Nonlinear ARDL Approach <p>This study examines the impact of decrease/increase oil prices on income inequality in Nigeria based on annual data covering the period from 1981 to 2018. To achieve this objective, a nonlinear autoregressive distributed lag approach (NARDL) and vector error correction modeling approaches are employed. The outcomes show that changes in oil price have an asymmetric effect on income inequality only in the short run. Negative shocks in oil prices reduce income inequality significantly, while positive shocks increase it though not significant. The income inequality’s response to negative shocks in oil prices is stronger. Moreover, GDP per capita moderates income inequality in both the short and long run. Openness reduces income inequality in the long run but hurts it in the short run. Corruption hurts income inequality in the short-run, while the misery index increases it in the long run. Hence, policies that help to reduce oil prices, promote sustainable economic growth and reduce corruption, inflation, and unemployment are needed to reduce income inequality.</p> Anthony Enisan Akinlo Copyright (c) 2024 Thu, 29 Feb 2024 00:00:00 +0000 The Link between Democracy and Development in Africa: What does Data tell us? <p>This study attempts to explore whether and to what extent the quality of democracy and development are related in Sub-Saharan Africa. Using system Generalized Methods of Moments on data from 36 countries available from various international secondary data sources for the period from 2002 to 2019, this study reveals that the single best predictor of the quality of democracy in the region is represented by the quality of democracy and that political stability is instrumental in securing the quality of democracy, while unemployment erodes the quality of the democracy. Moreover, the study shows that development has a strong, positive and statistically significant impact on the quality of democracy. Findings suggest a need for securing development to ensure that the quality of democracy is not going to be compromised. Furthermore, they suggest that democratic processes and practices need to be institutionalized to make it less dependent on development.</p> Abel Kinyondo, Mwoya Byaro Copyright (c) 2024 Thu, 29 Feb 2024 00:00:00 +0000 Determinants of Inclusive Growth in Zambia <p>Policymakers, scholars and development practitioners agree that economic growth is necessary but insufficient to achieve inclusive growth. Zambia witnessed improved GDP growth in recent decades. However, the country ranks among the poorest and wealth unequal in the world. This paper investigates the long run and short run determinants of inclusive growth in Zambia using the auto-regressive distributed lag (ARDL) and error correction model (ECM) from 1980 to 2022. The findings show that initial income, inflation, foreign direct investment and trade openness improve inclusive growth in the long run. On the contrary, gross fixed capital formation and general government education expenditure have long run negative impact on inclusive growth. However, in the short run gross fixed capital formation and government education expenditure increase inclusive growth while inflation, foreign direct investment and trade openness dampens inclusive growth in the short run. From the findings, the study recommends that policymakers promote the inflow of foreign direct investment through a conducive economic environment, stable inflation rate, and complete openness of the economy to international trade while improving the levels of gross fixed capital formation and education expenditure to achieve higher inclusive growth in the long run.</p> Lennon Jambo Habeenzu Copyright (c) 2024 Thu, 29 Feb 2024 00:00:00 +0000 Effect of Exchange Rate Volatility and its Transmission Pathways on Economic Growth in Post Exchange Rate Liberalization Ghana <p>Exchange rate volatility is a major concern for local and foreign investors. Its impact on economic growth has been widely documented in literature. In this paper, we model exchange rate volatility using GARCH (1,1) and analyze its impact on economic growth in Ghana, with a particular focus on the post exchange rate liberalization period, 1990-2019. Additionally, this paper assesses the pathways through which exchange rate volatility affects economic growth. By employing the autoregressive distributed lagged (ARDL) model, we find evidence that exchange rate volatility has a negative impact on economic growth in Ghana. In addition, inflation and interest rates are significant transmission pathways through which exchange rate volatility impact growth in post exchange rate liberalized Ghana. The paper thus suggests the implementation of policies aimed at curbing excessive and rapid fluctuations in the exchange rate. In addition, the Central Bank must embark on more inflation-targeting policies aimed at stabilizing the local currency to attract foreign direct investment.</p> Chrysantus A. Yuorkuu, Kofi Kamasa, Priscilla Forson Copyright (c) 2024 Thu, 29 Feb 2024 00:00:00 +0000 Deficit Financing and Economic Return to Public Expenditure in the CEMAC Member Countries <p>This paper examines the long-term association between the productivity of public expenditure and sources of deficit financing using panel data covering five CEMAC member countries for the period 1980 to 2018. Addressing issues of cross-sectional correlation and panel heterogeneity associated with panel data analysis alongside panel cointegration, the Fully Modified Ordinary Least Squares and Dynamic Ordinary Least Squares were employed. The findings reveal that each unit of external debt inflow increases the productivity of government recurrent spending but reduces that of government spending on investment although the effect of loans from domestic banking system is salutary. Debts raised via other sources such as special, excess reserves and privatization renders government investments productive. Thus, borrowings from domestic banking system can be more sustainable and consequently the study suggests that both external donors, policy makers and internal stakeholders, instead of dishing out more credit to CEMAC governments, should focus efforts on improving on the monitoring of such loans that are granted to ensure judicious use.</p> Johannes Tabi Atemnkeng, Ernest Ngeh Tingum, Ngeh Laura Senke Copyright (c) 2024 Thu, 29 Feb 2024 00:00:00 +0000 Determinants of Domestic Investment: Evidence from Nigeria <p>This study identified and examined key economic variables that determine domestic investment in Nigeria. The data used was obtained from Central Bank of Nigeria Statistical Bulletin and World Development Indicators for the period between 1991 to 2021. The Augmented Dickey Fuller unit root test was employed to determine the stationarity of the variables and the results revealed that the variables were stationary at levels and first difference. The ARDL model was then employed to determine the long run and short run dynamics of the variables. Findings shows that a long run relationship exists among the variables as the F statistic from the bounds test exceeds the upper bound critical value at 1% and 5% levels of significance respectively.&nbsp; Furthermore, short run dimension of the result shows that domestic savings significantly increased investment in Nigeria while trade openness, inflation and government expenditure significantly reduced domestic investment. In the long run however, the result shows that the Nigerian domestic investment dynamics only responds significantly but negatively to trade openness.&nbsp; The study recommends the need for government to formulate and implement effective trade and monetary policies that will ensure positive impact on the Nigerian investment. It also recommends that government should increase spendings on capital expenditure, this will create enabling environment for Nigerian domestic investors to succeed.</p> Elizabeth Omolola Oyedepo, Onome Jacinta Okor Copyright (c) 2024 Thu, 29 Feb 2024 00:00:00 +0000 Can Financial Development Incur Budget Deficits? An ARDL Cointegration Analysis for Cameroon <p>Previous papers investigating the structural determinants of budget deficits in panels of developing and/or developed countries either found that there exists a negative relation between financial development and fiscal balance or that the first is not a significant determinant of the later. This paper asks whether financial development is relevant to explain budget deficits within a country specific context. We use data from Cameroon between 1990 and 2021 and the ARDL bound cointegration technique. Our results show positive significant coefficients in the short-run, statistically not significant coefficients in the long-run and an ECT of – 1.48. In Cameroon, financial liberalization and financial development may lead to fiscal discipline so as to reduce budget deficits progressively. We then recommend enhancing financial development in order to improve the country’s fiscal balance management.</p> Zédou Abdala, Moumin Goudoussou, Sézard Timbi Copyright (c) 2024 Thu, 29 Feb 2024 00:00:00 +0000 Free Movement of Persons and Bilateral Trade in COMESA: Evidence from Kenya <p>The study assesses free movement of persons on bilateral trade between Kenya and its trading partners in the Common Market for Eastern and Southern Africa. The study employed the Panel Correlated Standard Error method to estimate augmented gravity model. The data used covered 17 partners between 2012 and 2021. The findings indicate that the free movement of persons stimulates Kenya's bilateral trade in the Common Market for Eastern and Southern Africa. A unit improvement in the implementation of the no-visa policy requirement stimulates the volume of Kenya's bilateral trade with the partner country by 0.25 per cent. From the findings, Kenya and other Common Market for Eastern and Southern Africa member States could consider fast-tracking the full implementation of free movement of persons efforts put forward by each State to ease the cost of trade in the region.&nbsp;&nbsp;</p> Magdalane Malinda Kikuvi Copyright (c) 2024 Fri, 01 Mar 2024 00:00:00 +0000 Fiscal Sustainability and Demographic Transition in Nigeria <p>This study investigates the impacts of demographic changes on fiscal sustainability in Nigeria. The study employed the Autoregressive Distributed Lag model with times series data from 1980-2021. It was found that old-age and young-age dependency directly impact government balance in the short-run and long-run. Health and education expenditures have negative effects on government balance. There is an increased government debt in a developing old-age and young-age economy. It was concluded that the demography transition has a comprehensive effect on fiscal sustainability; hence government needs adequate reviews of public health spending and reduces unnecessary expenses to maintain fiscal balance in Nigeria.</p> Saheed O. Olayiwola, Uche Abamba Osakede, Francis O. Adeyemi Copyright (c) 2024 Sun, 03 Mar 2024 00:00:00 +0000 Governance Quality and Remittances in Nigeria: An Empirical Investigation <p>This research delved into an examination of the impact of governance quality on remittances in Nigeria, considering both short-term and long-term dynamics. The research was grounded in the New Economics of Labour Theory, which posits that migrants are driven to seek opportunities in economically more prosperous countries. A comprehensive analysis encompassing macroeconomic and governance quality variables spanning the period from 1990 to 2022 was conducted to gain insights into this phenomenon. The study used ADF and ARDL bound tests to determine the order of integration and long-run relationship among the variables respectively. The study also employed the Error Correction Model (ECM) technique to derive regression estimates. The findings of the analysis unveiled that governance quality variables - political stability, rule of law, and government effectiveness display significance impacts on remittances in the long run. Thus, enhancing governance quality through measures like increased transparency and reduced transaction costs can foster trust and further augment remittances. By addressing these influential factors, Nigeria can harness the full potential of remittances to promote economic development and enhance overall welfare.</p> Sa’ad Babatunde Akanbi, Abdulfatai Adekunle Yusuf Copyright (c) 2024 Mon, 04 Mar 2024 00:00:00 +0000 Estimating the Environmental Factors of Gender Disparity in Child Mortality in Nigeria: What Role Does Indoor Air Pollution Play? <p>Indoor air pollution, stemming from traditional and transitional energy sources for cooking and lighting, poses a significant threat in developing countries. Particularly concerning is its impact on child morbidity and mortality, with 1 in 4 deaths of children under five attributed to environmental factors. This study, using the 2013 Demographic and Health Survey in Nigeria, explores the gender-specific environmental effects on child mortality. Contrary to the belief that girls may have higher immunity, the research employs a logit regression estimator and reveals that both male and female children face mortality risks from traditional and transitional cooking methods. Female children, in particular, exhibit higher mortality risks from traditional energy sources, while outcomes for transitional energy are mixed for both genders. Overall, females face a greater risk of mortality due to indoor air pollution from biomass cooking smoke. The multivariable analysis indicates an 81% increased risk of under-5 mortality for girls using traditional fuels, compared to a 62% increased risk for boys. To mitigate these risks, the study recommends adopting modern energy sources, such as liquefied petroleum gas, and raising awareness about the health hazards associated with traditional and transitional energies. Additionally, factors like education, wealth, breastfeeding, and postnatal check-ups are identified as mitigating factors, while a mother’s age, employment, and location amplify the risk of child mortality.</p> Toluwalope Toyin Ogunro, Olorunfemi Yasiru Alimi Copyright (c) 2024 Tue, 05 Mar 2024 00:00:00 +0000 Efficiency Performance of Electricity Distribution Companies in Nigeria <p>This paper examines the technical efficiency of electricity supply across 11 electricity distribution companies using the Data Envelopment Analysis (DEA). The analysis was performed with a recent and extended data from 2015 to 2022. The output indicator for calculating electricity supply efficiency is electricity supply proxy by energy received by each electricity distribution company. The input indicators are network losses (proxy by transmission losses) and aggregate technical commercial and collection losses (ATC&amp;C). The results show that all electricity distribution utilities are technically inefficient in electricity supply to a varying degree. Four electricity distribution companies performed above 45 percent level of technical efficiency, while two operate at less than 80 percent. Also, the efficiency performance of the 11 distribution companies worsened since the beginning of the COVID-19 pandemic era.&nbsp; Thus, privatization has not eradicated technical inefficiencies in the electricity supply. The inefficiencies in the electricity distribution sub-sector are partly due to technical constraints from network losses.</p> Iyabo Olanrele Copyright (c) 2024 Tue, 12 Mar 2024 00:00:00 +0000