Financing Sustainable Development in Africa

456 Pages·2018·6.3 MB·English

by  Uchenna R. Efobi

Edited by
Uchenna R. Efobi &
Simplice Asongu
Financing Sustainable Development
in Africa
Uchenna R. Efobi · Simplice Asongu
Editors
Financing Sustainable
Development in Africa
Editors
Uchenna R. Efobi Simplice Asongu
Covenant University African Governance and Development
Ota, Nigeria Institute
Yaoundé, Cameroon
ISBN 978-3-319-78842-5 ISBN 978-3-319-78843-2 (eBook)
https://doi.org/10.1007/978-3-319-78843-2
Library of Congress Control Number: 2018937869
© The Editor(s) (if applicable) and The Author(s) 2018
This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights
of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction
on microfilms or in any other physical way, and transmission or information storage and
retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology
now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are
exempt from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and
information in this book are believed to be true and accurate at the date of publication.
Neither the publisher nor the authors or the editors give a warranty, express or implied,
with respect to the material contained herein or for any errors or omissions that may have
been made. The publisher remains neutral with regard to jurisdictional claims in published
maps and institutional affiliations.
Cover image: © Chris Minihane/Gety Images
Cover design by Akihiro Nakayama
Printed on acid-free paper
This Palgrave Macmillan imprint is published by the registered company Springer
International Publishing AG part of Springer Nature
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
A
cknowledgements
The research materials on which this book is based have been through
well thought out incarnations by the array of talented contributors and
their research assistants, all of whom have in some way enhanced the
content and quality of this book. The editors specifically would like to
thank and acknowledge the contributions and substantive input of each
of the contributors who have co-worked on this edition. Other impor-
tant input to the finalization of this book was received from Kathleen
G. Beegle and the UNCTAD Virtual Institute Secretariat for the quality
publicizing of the call for wider contribution from African scholars. We
are also grateful for comments from our peer reviewers for this edition.
We gratefully acknowledge the support and enthusiasm for this pro-
ject from Sarah Lawrence and Allison Neuburger, who helped in craft-
ing the initial conceptualization of the ideas of this book. The Palgrave
reviewers are also acknowledged for their suggestions that further shaped
this book.
Through the efforts of all that are acknowledged, we were able to
learn step by step the best content to include in the book for both pol-
icy and academic audience to learn about sustainable finance options for
African development. We hope this book reflects this idea.
v
c
ontents
Introduction 1
Simplice Asongu
Part I Financing in Africa for Sustainable Development
Financing Mechanisms African Governments Should Pursue
in Financing Sustainable Development in the Next 20 Years 13
Nomahlubi Nkume
Financial Inclusion and Foreign Market Participation
of Firms: A Quasi-experiment from Nigeria 39
Uchenna R. Efobi, Emmanuel Orkoh and Scholastica Atata
Business Regulations and Foreign Direct Investment
in Sub-Saharan Africa: Implications for Regulatory Reform 63
Ben Katoka and Huck-ju Kwon
Broadening Financial Intermediation in Sub-Saharan Africa 93
Murat A. Yülek and Vivien Yeda
vii
viii CONTENTS
Institutions, Fiscal Performance, and Development
Trajectories in ECOWAS: Implications for Sustainability 121
Ibukun Beecroft, Evans Osabuohien and Isaiah Olurinola
Part II Domestic or Foreign Investment for
African Development
Capital Flows and Economic Growth: Does the Role of State
Fragility Really Matter for Sustainability? 145
Temitope Joseph Laniran
Changing Patterns of the Official Development Assistance
to Sub-Saharan Africa 175
Emmanuel Maliti
Financing Sustainable Energy Access with Oil Revenues
in Sub-Saharan Africa: Trends and Strategies 197
Ishmael Ackah
Maximizing the Gains from Natural Resources 231
Seedwell Hove and Gladys Gamariel
Part III Human Development in Africa for Sustainability
Does the Implementation of Social Safety Net Intervention
Affect Indigenous Social Capital Systems for Coping with
Livelihood Shocks? Ethnographic Evidence of Agro-pastoral
Communities in Eastern Ethiopia 269
Getachew Shambel Endris, Paul Kibwika, Bernard B. Obaa
and Jemal Yousuf Hassan
Issues in Sustainable Development: The
Environment–Income Relationship 317
Oluwabunmi O. Adejumo
CONTENTS ix
Microcredit, Child Education, and Health Outcomes:
A Case Study from Ghana 339
James Atta Peprah
Part IV Industrial Development in Africa for Sustainability
Financial Inclusion and Growth of Non-farm Enterprises in
Ghana 369
Isaac Koomson and Muazu Ibrahim
The Role of Cooperative Organizations in Tanzania’s
Industrialization 397
Mangasini Katundu
Textile and Clothing Sector, and the Industrialization of
Sub-Saharan Africa 421
Murat A. Yülek and Mete Han Yağmur
Index 451
l f
ist of igures
Financing Mechanisms African Governments Should Pursue
in Financing Sustainable Development in the Next 20 Years
Fig. 1 ODA recipients by region (Source OECD DAC 2016) 17
Fig. 2 Global private finance mobilised for climate change
in 2012–2015, USD billion (Source OECD 2017) 18
Fig. 3 Summary matrix of financing for sustainable development 28
Fig. 4 The model 31
Financial Inclusion and Foreign Market Participation of Firms:
A Quasi-experiment from Nigeria
Fig. 1 Financial access and foreign market participation of firms 44
Fig. 2 Histogram of propensity score 54
Business Regulations and Foreign Direct Investment in Sub-Saharan
Africa: Implications for Regulatory Reform
Fig. 1 FDI inflows (in $ million) to SSA 2000–2014 (Source UNCTAD
2016, http://unctadstat.unctad.org) 67
Fig. 2 FDI inflows to SSA by sub-region, 2005–2014
(Millions of dollars) (Source UNCTAD 2016, http://unctadstat.
unctad.org) 67
Changing Patterns of the Official Development Assistance
to Sub-Saharan Africa
Fig. 1 Net ODA to SSA countries (US$ billion) (Source OECD 2015d) 178
Fig. 2 Net ODA from non-DAC to SSA (US$ billion)
(Source OECD 2015d) 181
xi
xii LIST OF FIGURES
Fig. 3 ODA as a percentage of SSA’s Gross National Income (GNI)
(Source GDP (IMF-WEO 2015) and ODA (OECD 2015d)) 185
Fig. 4 ODA from DAC countries as percentage of SSA’s GNI
(Source IMFWEO (2015) for the GNI data and ODA data
(OECD 2015d)) 186
Fig. 5 Declining role of tax revenue in SSA (Tax revenue
as percentage of GDP) (Source IMF-WEO 2015) 187
Fig. 6 Declining share of ODA to the social sectors
(Source OECD 2015d) 188
Fig. 7 Rising share of ODA to the economic sectors
(Source OECD 2015d) 188
Fig. 8 The rising share of ODA to the production sector
(Source OECD 2015d) 188
Financing Sustainable Energy Access with Oil Revenues
in Sub-Saharan Africa: Trends and Strategies
Fig. 1 Energy access in sub-Saharan Africa (Source WDI 2017) 201
Fig. 2 Oil production in Africa (Source World Development
Indicators 2015) 204
Fig. 3 Proved oil reserves in Africa (Source Outlook BP Energy 2016) 205
Fig. 4 Primary energy production and consumption in Africa
(Source WDI 2015) 206
Fig. 5 Foreign Direct Investment inflows to the energy sector
(Source Bhattacharya 2013) 211
Fig. 6 ODF inflows to the energy sector of LDC and other
non-OECD (Source Bazilian et al. 2011) 212
Fig. 7 Sources of financial support for off-grid electricity solution
(Source Ortiz et al. 2007) 216
Fig. 8 Oil rents as a percentage of GDP in sub-Saharan Africa
(Source WDI 2017) 220
Fig. 9 Selected petroleum revenue management frameworks
in sub-Saharan Africa (Source Developed by author based
on designs from NRGI’s Summer School, 2015 in Accra) 222
Maximizing the Gains from Natural Resources
Fig. 1 Nonrenewable resource exports for resource-rich countries
in Africa (% total exports) (Note The values in the figure are
the averages for the period 1995–2015. The countries in the
figure are the resource-rich countries that have nonrenewable
natural resources exports that consist of at least 25% of total
exports. Source UNCTAD 2016 Database. Classification: Fuels
(SITC 3), Ores and Metals (SITC 27 + 28 + 68 + 667 + 971)) 239