Financial development is influenced by the dynamics of multiple factors which have remained insufficiently explored up to date. In view of this, an attempt is made in this paper to investigate the impact of internet adoption on financial development in sub‐Saharan Africa, using Nigeria and Kenya as case studies. The dynamic ordinary least squares and vector error correction mechanism methods were employed in the study which revealed that the internet, complemented by financial openness, exerted a significant positive impact on financial development in the period 2000–16. The null hypothesis which states that the internet does not encourage financial development is therefore rejected. It follows that the level of financial development in both countries, and indeed most countries in sub‐Saharan Africa, could be enhanced by adopting appropriate policies that encourage more inclusive use of the internet. The policy recommendations of this study therefore include (i) relaxing the stringent requirements for licensing internet operators in order to make more services available for financial transactions, (ii) integrating internet technology into the national infrastructure framework in order to sustain its application, (iii) fostering local skills and expertise that will be maintaining internet infrastructure and (iv) providing a legal framework that protects personal information and ensures responsible usage of internet.
In this paper, the African external debt problem with particular reference to Nigeria and Morocco is extensively analysed, and statistical indicators show that it is severe and has adverse effects on investment. The analysis also finds that fiscal expenditure, balance of payments and global interest rate are the crucial factors in explaining the accumulation of external debt in the two countries. Although the problem tends to exhibit some differences in characteristics between the two countries, the fact remains that they both belong to the same category of highly indebted countries. It is therefore necessary they embark on a rapid programme of privatization aimed at reducing fiscal expenditure, and a sustained export promotion programme to improve balance of payments. At the same time, both countries should restructure and develop their capital markets to reduce exposure to the vagaries of global interest rate. The International Monetary Fund (IMF) and the World Bank could also assist by modifying the International debt relief programme (HIPC Initiative) to accommodate both countries.Résumé: Cet article étudie en détail le problème de la dette extérieure de l'Afrique, en se centrant en particulier sur les exemples du Nigeria et du Maroc. Les indicateurs statistiques montrent que le problème est grave et a des effets négatifs sur l'investissement. L'analyse a également mis à jour le fait que les dépenses fiscales, la balance des paiements et le taux d'intérêt global sont des facteurs essentiels dans l'accumulation de la dette extérieure dans ces deux pays. Si le problème présente des caractéristiques différentes dans les deux pays, le fait n'en demeure pas moins qu'ils appartiennent tous deux à la même catégorie des pays très endettés. Il leur est donc nécessaire d'engager rapidement un programme de privatisation visant à réduire les dépenses fiscales, et un programme intensif de promotion des exportations pour améliorer la balance des paiements. Dans le même temps, les deux pays doivent restructurer et développer leurs marchés financiers pour réduire leur exposition aux caprices des taux . d'intérêt mondiaux. Le Fonds monétaire international (FMI) et la Banque mondiale pourraient également les aider en modifiant le programme international d'allégement de dette (Initiative PPTE) de manière à ce qu'ils puissent en profiter.
Purpose The purpose of this paper is to determine how macroeconomic performance work with institutional quality influences divestment of foreign direct investment (FDI) in Sub-Saharan Africa, in the short and long run. Design/methodology/approach This paper investigates divestment of FDI in Sub-Saharan Africa, within the period 1980–2020. The investigation is undertaken by first comparing the trend with what is obtained in other economic regions of the world. The factors behind the divestment are subsequently investigated, using the vector error-correction model. Findings In the comparative analysis, Sub-Saharan Africa and other regions are observed to have witnessed sustained divestment in recent years. The estimation results of the model reveal that macroeconomic performance and institutional quality are the predominant drivers behind the divestment. Research limitations/implications The findings, however, do not conform to the neoclassical theory that lays emphasis on investment return as the fundamental factor influencing investment. Long-run structural stability is also established; hence, the results may be considered suitable for predicting future divestment in the region. Practical implications In view of the empirical findings, macroeconomic performance and institutional quality need to be improved to ameliorate FDI divestment in Sub-Saharan Africa. Originality/value There is paucity of research works on divestment of FDI in Sub-Saharan Africa. Again, there is paucity of works on how macroeconomic and institutional conditions work together to influence divestment. This study provides some evidence to bridge the perceived gaps.
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