, Haibo, Chen, Manu, Emmanuel Kwaku, Somuah, Mary

This paper examined finance-growth nexus in the finance industry and the influencing factors of economic indicators which deliberate on the performance of the Solow Growth model to prove the actuality of financial development (FD) inside the economic growth (EG) model, based on the regional data from 1980 to 2017 in Africa. We applied the econometric method of GMM style panel vector autoregressive (PVAR) and panel quantile regression (PQR). With the optimal finance-growth outcome, the review shows that the economic indicators influence the finance-growth nexus. The quantile results show that high economic indicators help to strengthen the finance-growth nexus, whereas low economic indicators hinder it. The GMM style PVAR results present a mixed effect in terms of the connection and marginal significance, indicating that FD has a varied impact on economic growth. Last, the granger causality results show a two-way causal association amid finance-growth in Western, Central, Eastern, and Southern African economies and a unidirectional causal link of finance-growth in Northern Africa. The policy conclusion is that to gain the long-term economic benefits of FD, African countries should strive for low and steady economic stability. To attain the required economic stability, it may be important to use suitable fiscal and monetary policies.

2020-12-03, Manu, Emmanuel K, Xuezhou, Wen, Paintsil, Isaac O, Gyedu, Samuel, Ntarmah, Albert H

In contemporary years, African economies have experienced a period of rapid economic change to the sustainable growth of economic development. Although the existing literature has confirmed that investment and foreign business are two central growth engines of African's economy, examinations on the impacts of financial development (FD)-economic growth (EG) nexus using a comprehensive structure are still unusual. This paper examines the dynamic nexus between financial development-Economic growths using a country data set covering the period 1980 to 2017 by using panel vector autoregressive and the panel quantile regression technique. The empirical results confirm that significant cointegration relationships among FD-EG exist, no matter in the sub-sample for the countries. At the same time the granger causality test, report that foreign direct investment (FDI) and trade granger cause per capita gross domestic product. The motivation of the empirical investigation lies in reviewing the broad effect of financial development-economic growth nexus and providing precise recommendations to policymakers. Also, to make the conclusion more relevant, we discussed the results for the subsamples for the developing African countries (Western, Southern, Northern, Central, and Eastern). Distinctive indicators for financial development are applied to affirm the stability and robustness of the estimation outcomes. Further restructuring the financial system and accelerating the change of the economic structure are dynamic for African's sustainable economic growth.

2023, Chen, George S, Manu, Emmanuel Kwaku, Asante, Dennis

We investigate the causal impact of the development of financial institutions on environmental sustainability in Africa. Drawing on a distinctive panel data set encompassing 34 countries from 1980 to 2017, with carbon emissions serving as an indicator of environmental sustainability, we discover that enhanced development of financial institutions leads to increased carbon emissions, especially in relation to the depth of these institutions. Furthermore, our study reveals support for the environmental Kuznets curve, heterogenous slopes, and shifts over time in the finance–emissions nexus. Our results remain robust to different model specifications. The conclusions we reach indicate that the development of financial institutions and the implementation of pro-growth policies are essential for attaining environmental sustainability on the African continent.

, Haibo, Chen, Manu, Emmanuel Kwaku

To better understand Africa’s banks and the environment, this study investigates the impact of financial performance on environmental performance in Africa. We examined financial performance, environmental performance, and some control indicators dated from 2000 to 2016 by applying panel quantile regression and panel vector autoregressive techniques. Our results indicate that (i) in North African countries, carbon emission had a significant negative impact on financial performance on the 25th quantile and (ii) in the South, carbon emission had a statistically positive impact on financial performance on the 25th and 50th quantiles with the marginal effect increases from the lower quantile to the highest quantile. Also, bank deposits statistically negatively impacted financial performance on the 25th and 50th quantiles for both North and South economies. The dynamic panel quantile results show dissimilar effects at different quantiles. Also, the panel vector autoregressive results show that in North Africa carbon emission had a positive impact. Our results validate the stability test of the panel vector autoregressive model. The granger causality results in the North show a bilateral causal link between carbon emission and bank credit, carbon emission, and bank deposit. Since sustainability has become one of our era’s most thorny issues, this paper provides extensive policy directives to assist African nations in boosting a greener future.

2022-06, Manu, Emmanuel Kwaku, Chen, George S, Asante, Dennis

We critically evaluate the absorptive capacity of renewable energy deployment in Africa. Using data for the 1980-2017 period and dividing the 20 countries into West Africa and East Africa, we find significant regional heterogeneities in the absorptive capacity of renewable energy deployment. Specially, we show that West Africa has a stronger capacity to embrace the adaptation of renewable energy than East Africa. Moreover, we find that renewable energy deployment exhibits path dependency in both regions. In general, our findings suggest that there are significant potentials for both regions to benefit from renewable energy deployment. However, without the financial backing by policymakers, renewable energy deployment is likely to be delayed in implementation, exposing these regions to economic and environmental vulnerabilities in the long run.

2022-04-01, Xuezhou, Wen, Manu, Emmanuel Kwaku, Akowuah, Isaac Newton

The Sub-Saharan African region is considered to be the most susceptible to the effects of climate change. The region's climate is influenced by several factors, the most notable of which is increased variation in development. The conglomerate between the financial sector and environmental quality (EQ) has been a priority for policymakers and analysts. This study looked at the complex relationships between financial development (FD) and environmental quality, as well as the position of economic growth (EG), from the perceptions of the five sub-national economies, from 1980 to 2017. The study tested the EKC hypothesis across the sub-regions. We employed the panel vector autoregressive (PVAR) model in a generalized method of moment framework to investigate the topic. The PVAR result showed that (i) financial development had a negative impact on CO₂ in four geographical regions (Western, Southern, Northern, and Central). As a result, FD in these countries minimizes carbon emissions and enhances the atmosphere. (ii) Also, FD had a positive impact on carbon emissions in Western Africa. As a result, FD in these countries increases CO₂ rather than improving environmental quality. The EKC hypothesis was validated in the Western African sub-region but was rejected in Central and Eastern (u-shape relationship) African sub-regional economies indicating variations in growth and environmental outcomes among the sub-regional economies. The Granger causality results in the West and Central African republics was a two-way causal connection between EG and CO₂ . The results demonstrate how "EG and CO₂ " and "CO₂ and EG" are intertwined in Western and Central, while most of the relationships were unidirectional. Detailed sub-regional policy recommendations are deliberated.