Financial development and Economic performance in Sub Saharan African Nations

International Journal of Research and Scientific Innovation (IJRSI) | Volume VII, Issue IX, November 2020 | ISSN 2321–2705

Financial development and Economic performance in Sub Saharan African Nations 
Nura Sani Yahaya¹, Hassan Abdullahi², Hafsat Garba Abdullahi³ and Gambo Zakari^4
1,4Kano State College of Education and Preliminary studies, Nigeria
^2,3RMK College of advanced and remedial studies, Tudun Wada. Kano state, Nigeria

Abstract: This study examines the link among financial progress, energy consumption, FDI, trade and economic performance in 8 selected economies of Sub Saharan African nations (SSA) from 2000 – 2014 using FMOLS technique. The outcome from the cointegration test confirm the long run linkage among the variables. The estimates reveal that financial progress, energy utilization, FDI are positively related with economic performance, while trade openness decelerates on economic progress. However, trade balance is not significant in explaining the variation in GDP in the selected SSA nations. The study suggests that policymakers should formulate advanced financial reform policies for more effective economic growth performance and development in these nations through enhancing credit allocation especially to the rural settings. It is also need for stakeholders to emphasize on the enlightenment campaigns on the proper management of credit for viable investment.
Keywords: Economic growth, financial development, energy use, FDI and FMOLS
I. INTRODUCTION
The global economic outlook in the last decade shows a positive performance with increased investments and productivity in 2016 and the projected annual growth performance of 3.7 percent in 2020 (World Bank, 2016). In advance economies, such as United State, Europe and Asia the economy grew at 2.1 percent annual rate. However, the emerging market and developing countries had 4.7 annual growth in 2018 (IMF, 2018). In recent years, Sub Saharan African economies (SSA) experienced rapid economic growth. For instance, in all the SSA countries Gross domestic product (GDP) rises from 2000 to 2014 expect Swaziland and South Africa whose GDP decline by $ 0.26 billion and $ 28.75 billion, respectively. Nigeria had the heights record of GDP with total value of $ 514.97 billion, South Africa $ 367.59 billion and Angola $ 124.91 billion, while Togo and Liberia recorded the lowest GDP value of $ 4.08 billion and 1.95 billion respectively (WDI, 2017).

Read More