Gradual Economic Growth in Africa: What are the Underpinning Factors? An Empirical Analysis

Abstract

We inquire about the forces underpinning the recent gradual economic growth in Africa. Our study covered 41 countries in Africa, cutting across the Western, Eastern, Central, Southern and Northern parts. Our study adopted the fixed effect, feasible generalized least squares (FGLS) and One Step System GMM to estimate the determinants of upsurge in the economic growth in Africa. Our results divulge that aid has no effectiveness on the economic growth of Africa. Further, the study suggests that China’s FDI to Africa and trade with Africa has helped in the economic growth of Africa. Our study also suggest that the recent improvement in the institution of Africa has contributed to the growth of Africa. Overall, the result of this study helps in recompensing the imbalance in the extant literature.

Keywords: economic growth, aid, foreign direct investment, trade, institutions, Africa

DOI: 10.7176/EJBM/12-22-09

Publication date:August 31^st 2020