Olusegun Ayodele Akanbi

Structural and Institutional Determinants of Poverty in Sub-Saharan African Countries

Abstract The conventional policy models designed to tackle poverty have not been able to address the peculiar socio-economic and institutional conditions of the country or region in perspective. Much of the literature focuses on the macroeconomic determinants of poverty, leaving out non-economic factors that could be more important. In this milieu, this study empirically examines the relationship between governance, physical infrastructure, and the level of poverty in sub-Saharan Africa. The estimations are based on a panel of 19 selected sub-Saharan African countries over the period 1990–2010 using the two-stage least-squares estimation techniques. The results from the estimations portray robust parameter estimates and suggest that governance and infrastructure are significant determinants of poverty in the region. Furthermore, the study tends to detect that a sustainable level of poverty could be attained at particular governance and infrastructure rating after controlling for the level of gross domestic product and other factors across the region. Therefore, countries with better governance and infrastructure ratings will achieve lower poverty levels, and poverty tends to converge as physical infrastructure improvement and better governance are pursued.

The growth, poverty and inequality nexus in South Africa: Cointegration and causality analysis

ABSTRACT This study empirically established the long-run relationship and causality effects that exist between growth, poverty and inequality. The analysis was carried out on a panel of nine South African provinces from 1995 to 2012. To capture poverty and inequality in a broader context, two measures of poverty (income and non-income) and three measures of inequality (income, education and land) were adopted for the study. The results confirm that there is a long-run relationship between growth, poverty and inequality. Notable results from the causality tests suggest that growth does not promote equal distribution of income in society but as income distribution begins to equalise, economic growth rises. This is regarded as growth–inequality disconnect. The unidirectional causality, which runs from income poverty to income inequality, suggests that a rising level of income poverty will lead to falling income inequality in the society; likewise, income inequality increases as non-income poverty declines.

Sustainability of fiscal policy in an oil-rich economy: the case of Nigeria

Purpose - – The purpose of this paper is to examine the sustainability of fiscal policy in Nigeria by disaggregating the economy into oil and non-oil segments. Design/methodology/approach - – Owing to the enormous influence of the oil revenue, the study distinguishes between the oil and non-oil fiscal balances. In addition, it abstracted from the endogenous macroeconomic environment, therefore, fiscal policy sustainability is investigated on the basis of the responses of the government primary balance to changes in deficits and debt levels. The models are estimated with time-series data from 1970 to 2011 using the Johansen estimation techniques. Findings - – The results from the estimations performed suggest that government responds more to deficit targets than debt targets. However, this differs in the non-oil segment, as the fiscal policy actions of government do not consistently respond to either deficit or debt targets. Given this, the overall economy and the oil segment have revealed a strong fiscal sustainability over the years while fiscal policy is unsustainable in the non-oil segment. Research limitations/implications - – The major limitation of this study is the unavailability of data on government expenditure resulting from oil revenue. Therefore, it would be imperative to reinvestigate the specifications adopted in this study in follow-up studies. Practical implications - – The study includes implications for policy makers, especially in Nigeria and other oil-producing countries, to detect the extent to which the economy should rely on the oil revenue stream as the main source of revenue to government. The proceeds from the oil endowment have not yet trickled down to the rest of the economy where real economic activity could be carried out which would eventually lead to more tax revenue for the government. Originality/value - – To assess the sustainability of fiscal policy in an oil-rich economy such as Nigeria, it is imperative to detect the influence of oil funds on both government revenue streams and expenditure decisions. This study has made this distinction.

Sources of unemployment in Namibia: an application of the structural VAR approach

The main purpose of the research was to establish the sources of unemployment in Namibia for the period 1980 to 2013 using the SVAR methodology. Empirical results show that persistently high unemployment is the result of a combination of various shocks as well as the hysteresis mechanism. The impulse response functions and variance decomposition functions agree that labour supply, aggregate demand, and real wages seem to be the critical factors affecting unemployment. Moreover, the price shocks affect unemployment in the long run and productivity shocks explain only a small fraction of the forecast error variance decomposition of unemployment in both the short run and long run. This finding is consistent with the controversy of uncertain effects of productivity shocks on the unemployment rate. Aggregate demand policies, deregulation policies and structural labour market reforms can be useful policy instruments to tackle unemployment in Namibia.