Towards shared prosperity in sub‐Saharan Africa: How does the effect of economic integration compare to social equity policies?

Abstract

This study extends the inclusive growth literature on sub-Saharan Africa (SSA) by addressing two conspicuous gaps. First, the study examines the effects of social equity policies and economic integration on inclusive growth. Second, the study investigates the joint effects of economic integration and resource allocation on inclusive growth. Using data on 43 SSA countries for the period 1980-2019, we provide robust evidence from the GMM estimator to show that relative to economic integration, social equity policies are rather remarkable in enhancing inclusive growth. The results further reveal that, although economic integration induces inclusive growth, the effect is pronounced in the presence of productive resource allocation. Policy recommendations are provided in line with the African Continental Free Trade Area (AfCFTA) agreement and the reversals of welfare gains due to the coronavirus pandemic.

Inclusive growth in Sub-Saharan Africa: Exploring the interaction between ICT diffusion, and financial development

“…Alternatively, we check the robustness of our estimates using the Palma ratio 17 and GDP per capita. The choice of these two inclusive growth indicators for robustness checks follows the absolute and relative lenses through which propoor growth is measured (see, Ofori et al 2022aOfori et al , 2022bIMF 2011;Berg and Ostry 2011;Ravallion and Chen 2004). On the variables of interest-ICT diffusion, financial development and access, we capture the former by three indicators (access, usage and skills), and the latter by the IMF's financial development index (Svirydzenka 2016).…”

“…Further, informed by policy and the structure of the SSA, we use inflation to capture macroeconomic in (stability); and economic globalisation to capture the impacts of trade, capital flows, and foreign direct investment on inclusive growth. We also control for social protection, population growth, and vulnerable employment to capture the effect of redistribution, and the structure of the region's real sector on inclusive growth (Ofori et al 2022a;Asongu 2021a, 2021b). Save for the data on economic globalisation, which is sourced from the Konjunkturforschungsstelle (KOF) index of globalisation Ofori and Asongu (2022; have employed the same approach in their empirical works 17 The Palma ratio denotes the growth in the incomes of the richest 10% of the population relative to the bottom 40%.…”

Towards Inclusive Green Growth in Africa: Critical Energy Efficiency Synergies and Governance Thresholds

“…This means that economic development could contribute to reductions in inequality within and between households, even at the initial stages of development. As Ofori et al (2022a) argue, this could be attributed to the fact that the study period coincided with the same time African leaders intensified efforts in the form of social protection coverage towards the achievement of SDG 10. 13 Further, the results show that trade openness and foreign aid are not statistically significant for reducing inequalities among rich and poor households.…”

“…Clearly, although prior studies have examined the role of EE and governance across the EVS and SES dimensions of IGG, there is an empirical research gap with respect to whether EE and governance matter for IGG. A few studies have examined the moderating role of governance for inclusive growth or environmental degradation (see e.g., Ofori et al, 2022a;Wawrzyniak & Doryń, 2020;Sarkodie et al, 2020), but have not addressed this pertinent issue.…”

“…First, we consider financial deepening due to its power in supporting environmental sustainability through green finance, innovation, and low greenhouse gas emissions while promoting socioeconomic sustainability through the provision of resources to address poverty, inequality, and precarity (Ofori et al 2022d;Bekhet et al, 2017;Weber, 2014;Shahbaz et al, 2013). Our choice of economic integration strategy follows the implementation of the AfCFTA, which as Ofori et al (2022a) and Adeleye et al (2019) reckoned, could prove crucial in addressing Africa's conundrums of poverty, inequality, high informality, and human resource wastage. On the environmental front, while economic integration can trigger innovation and the manufacturing of environmentally-friendly goods to fight climate change (see Opoku & Boachie, 2020), it can also hamper environmental quality of life through pollution/depletion of natural asset bases, especially in the developing world where lapses in environmental regulation are glaring (see Dauda et al, 2021;Nathanael & Iheonu, 2019;Sarkodie & Strezov, 2019).…”