Aid, Aid Volatility and Sectoral Growth in Sub-Saharan Africa: Does Finance Matter?

Aid, Aid Volatility and Sectoral Growth in Sub-Saharan Africa: Does Finance Matter?

Author: 
Kumi, Emmanuel
Place: 
Oxon
Publisher: 
Taylor & Francis Group
Date published: 
2017
Record type: 
Region: 
Responsibility: 
Ibrahim, Muazu, jt. author
Yeboah, Thomas, jt. author
Journal Title: 
Journal of African Business
Source: 
Journal of African Business, Vol 18, No. 4, October-December 2017, pp. 435-456
Abstract: 

This article examines the impact of aid and its volatility on sectoral growth by relying on panel dataset of 37 sub-Saharan African (SSA) countries for the period 1983-2014. Findings from the system-generalized methods of moments show that, while foreign aid significantly drives sectoral growth, aid volatility deteriorates sectoral value additions impacting heavily on non-tradable sectors with no apparent effect on the agricultural sector. The deleterious effect of aid volatility on sectoral value additions in SSA is weakened by a well-developed financial system with significant impact on the tradable sector. Evidently, development of domestic financial markets enhances aid effectiveness.

Language: 

CITATION: Kumi, Emmanuel. Aid, Aid Volatility and Sectoral Growth in Sub-Saharan Africa: Does Finance Matter? . Oxon : Taylor & Francis Group , 2017. Journal of African Business, Vol 18, No. 4, October-December 2017, pp. 435-456 - Available at: http://library.au.int/aid-aid-volatility-and-sectoral-growth-sub-saharan-africa-does-finance-matter