Financial liberalization, financial fragility and economic growth in Sub-Saharan Africa

Misati, Roseline Nyakerario; Nyamongo, Esman Morekwa

doi:10.1016/j.jfs.2011.02.001

Cited by 52 publications

(44 citation statements)

References 55 publications

(46 reference statements)

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“…According to Alawode and Ikhide (1997), poor sequencing financial reform can ultimately affect financial stability. The positive relationship between financial reform and growth in middle-income countries is consistent with findings in the studies of Bekaert, Harvey, and Lundblad (2006), Ndebbio (2004) and Misati and Nyamongo (2012).…”

Section: Empirical Analysissupporting

confidence: 89%

“…Following the literature of Daumont et al (2004), Honohan and Klingebiel (2000), Arestis and Sawyer (2005), Misati and Nyamongo (2012), we estimated the following dynamic panels model:…”

Section: Econometric Modelingmentioning

confidence: 99%

“…These challenges include, amongst others: banking crises, shallow and unstable exchange rates, a widening spread between lending and deposit rates and a drastic decline or stagnation of the domestic credit to financial depth. A number of studies (Brownbridge, 1998;Daumont, Le Gall, & Leroux, 2004;Fowowe, 2013;Ikhide, 2015;Misati & Nyamongo, 2012) show that systemic banking crises occurred in many SSA countries [for example, Cameroon (1988[for example, Cameroon ( -1991, Nigeria (1991Nigeria ( -1995, Ghana (1982Ghana ( -1989 and Kenya (1993Kenya ( -1995] immediately after they had implemented financial liberalization policies. Misati and Nyamongo (2012) believe that financial liberalization policies are still one of the most controversial policies because of its negative impact on the relationship between financial development and economic growth.…”

Section: Introductionmentioning

confidence: 99%

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The impact of financial liberalization on economic growth in sub-Saharan Africa

Akinsola

Odhiambo

2017

Cogent Economics & Finance

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This study examines the impact of financial liberalization on economic growth, given the discrepancy and the gap in the literature, using a sample of 30 sub-Saharan African (SSA) countries. The study applies a dynamic panel estimation to examine the special role of financial liberalization and banking crises on economic growth in SSA. The linear generalized method of moments is estimated according to the Arellano and Bover approach. We also examine whether differences in income levels across countries in sub-Saharan Africa will affect the relative impact of financial liberalization in SSA. Our findings indicate that the coefficient of the financial liberalization variable is positive and significant for SSA. However, the financial liberalization dummy sign changed to negative for low-income countries, even though it was statistically insignificant. The results also show that there is a negative relationship between a banking crisis and economic growth, showing that the period of a banking crisis can drastically affect economic growth in sub-Saharan Africa. Considering the crucial role played by most financial intermediaries in developing countries, the results have some implications for different African countries, especially countries whose economies are still undergoing financial reforms.

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Section: Empirical Analysissupporting

confidence: 89%

“…Following the literature of Daumont et al (2004), Honohan and Klingebiel (2000), Arestis and Sawyer (2005), Misati and Nyamongo (2012), we estimated the following dynamic panels model:…”

Section: Econometric Modelingmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The impact of financial liberalization on economic growth in sub-Saharan Africa

Akinsola

Odhiambo

2017

Cogent Economics & Finance

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“…The Barro growth model has also been used by other authors such as Misati et al (2012) and in a modified form.…”

Section: Methodological Strategymentioning

confidence: 99%

Finance – Growth Nexus in Nigeria: Fragility and Development Effects

Ajogbeje

2016

ESJ

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The study investigates the effects of financial fragility and financial development on economic growth in Nigeria between 1982 and 2012. The augumented dickey fuller (ADF) unit root test and the Johanson cointegration tests were respectively used to establish the stationarity and long run properties of the variables. The results show that financial development, proxy by credit to private sector as a percentage of GDP has a positive significant effects on output, as expected. As regards the fragility effects, the result revealed that the effect of financial volatility on economic growth is negative. Financial fragility was refined in the contexts of unsound banking system and unstable financial market, which were proxy by interest rate volatility and exchange rate volatility respectively, thus have negative significant effects on output. It is thus recommended that policy maker's efforts aimed at increasing growth should work more on developing the financial sector and dampening the volatile nature of financial series. The pairwise granger causality result also reveals that there is a unidirectional causality running from financial fragility to gross capital formation.

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“…The process initiated by the De Kock Commission's recommendations in the 1980s (Calitz, 2002;Misati & Nyamongo, 2011) gained momentum in the 1990s particularly after the first democratic elections in 1994. McKinnon (1973) and Shaw (1973) published their seminal works diagnosing the prevalence of what they termed financial repression in developing countries and went on to argue the case for financial liberalization.…”

Section: Financial Liberalization and Innovationmentioning

confidence: 99%

The threshold effects of household indebtedness on multidimensional poverty

Ntsalaze

Ikhide

2017

IJSE

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DeclarationBy submitting this dissertation electronically, I declare that the entirety of the work contained therein is my own, original work, that I am the sole author thereof (save to the extent explicitly otherwise stated), that reproduction and publication thereof by Stellenbosch University will not infringe any third party rights and that I have not previously in its entirety or in part submitted it for obtaining any qualification.This dissertation includes two published and one accepted but not yet published original papers in peer-reviewed international journals. The fourth paper representing chapter eight is ready for submission for peer review. The development and writing of the papers (published and unpublished) were the principal responsibility of myself and, for each of the cases where this is not the case, a declaration is included in the dissertation indicating the nature and extent of the contributions of co-authors. AbstractGlobal household indebtedness has reached unprecedented levels over the past few decades.The household sector has had to cope with significant losses in income and wealth as well as the burden of debt service since the beginning of the financial crisis. Research focus on this phenomenon, together with its social implications, has grown. This study uses the National Income Dynamics Study (NIDS) data to empirically investigate the effects of household debt on multidimensional poverty. This was achieved through four independent research papers meant to address different angles of the subject. Chapter 5 provides a snapshot of the prevalence of over-indebtedness, using various international indicators and the National Credit Regulator (NCR) indicator, and describes which households are over-indebted. A total of eight percent of South African households are overindebted, and 61.4 percent of those households are found in the lowest income category (R0 -R2 000), spending more than 45 percent of their household income on debt repayments, which is beyond levels that are considered sustainable. The alarming revelation is that, according to the unsecured debt indicator, 15.2 percent of households are over-indebted, while 11 percent of households are driven below the relative income poverty line after making debt repayments. Stellenbosch University https://scholar.sun.ac.za 3The racial distribution indicates that households headed by Africans are overrepresented (79%).Most over-indebted households are found amongst those who own their places of residence (78.6%), do not receive government grants (71.7%), are male (53.8%), and have an unemployed household head (53.5%).Chapter 6 examines the presence of thresholds in the debt-poverty nexus at micro level, i.e. the tipping point above which debt is associated with more multidimensional poverty. By applying the Generalised Additive Model (GAM) using regression splines, the study finds the existence of critical tipping points between household debt service-to-income ratio and multidimensional poverty along with other explanatory variables (age...

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Financial liberalization, financial fragility and economic growth in Sub-Saharan Africa

Cited by 52 publications

References 55 publications

The impact of financial liberalization on economic growth in sub-Saharan Africa

The impact of financial liberalization on economic growth in sub-Saharan Africa

Finance – Growth Nexus in Nigeria: Fragility and Development Effects

The threshold effects of household indebtedness on multidimensional poverty

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