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on Africa |
| By: | David Lam (University of Michigan); Murray Leibbrandt (SALDRU, University of Cape Town) |
| Abstract: | The world is projected to add 2.5 billion people to the total population and 1.1 billion people to the working-age population between 2020 and 2100. Almost all of the additional working-age people will be added in Sub-Saharan Africa, a dramatic change from previous decades, when the growth of the working-age population was concentrated in Asia. This chapter analyzes the demography of the African labor force in the coming decades using the latest United Nations population projections. We show that by 2050 Africa will be the only region in the world with a growing working-age population and will be the only region in which the ratio of dependents to working-age population is falling. These dramatic differences are the result of Africa’s later and slower fertility decline, with fertility still high in many African countries. Being the only region with a growing working-age population may create opportunities for investment and economic growth in Africa. This growing working-age cohort and especially its females have higher years of schooling than any previous generation. But the quality of their education still lags other regions. On the demand side, Africa needs to produce 2 million jobs per month by 2040 to keep up with the growth of the working-age population. This rate of job creation is similar to that produced in Asia during the period in which its working-age population was growing at similar rates. Still, this remains a daunting challenge for Africa in the coming decades. The dominance of the informal sector in all African labor markets, with the exception of a few upper middle-income contexts, implies that formally measured unemployment rates are not likely to provide telling metrics of African success. Rather, the focus for growth and improved development outcomes has to be on formal sector job creation alongside notably stronger linkages into the informal sector than has been the case to this point. |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:ldr:wpaper:303&r= |
| By: | Maureen Were |
| Abstract: | Sub-Saharan Africa (SSA)'s public debt burden remains a challenge to development. Key drivers of public debt include large-scale financing of infrastructure development, adverse impact of multiple shocks including COVID-19 pandemic, maturity mismatches, and high vulnerability to exchange rate and interest rate volatility. The tight financial conditions following interest rate hikes in advanced economies have exacerbated the debt burden and heightened debt sustainability risks. Half of the SSA low-income countries are either in debt distress or at high risk of it. |
| Keywords: | Public debt, Debt sustainability, Sub-Saharan Africa |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2024-36&r= |
| By: | Daboh, Foday; Jackson, Emerson Abraham |
| Abstract: | This policy brief investigates Sierra Leone's interest rate volatility, a recurring concern due to its economic instability. Using the ARDL model and bolstered by the stability exhibited in CUSUM and CUSUM square tests, we explore the impact of deposit and lending interest rates on money demand. Short-term findings reveal a positive effect of deposit rates and a negative effect of lending rates on money demand. However, in the long run, these effects become insignificant. To enhance economic stability, we suggest implementing a uniform interest rate for commercial banks and vigilant monitoring of competitive lending rates as policy measures. |
| Keywords: | Sierra Leone; Interest Rate Volatility; Money Demand; ARDL Model |
| JEL: | C22 C58 E41 E43 |
| Date: | 2024–01–02 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121114&r= |
| By: | Sammy Kemboi Chepkilot |
| Abstract: | In Kenya, interest payments on external debt have been increasing from 2010 to 2015, while GDP growth experienced a slight decline over the same period. Policymakers are concerned that the rapid increase in external debt in developing countries such as Kenya has the potential to erode the country's sovereign rating, particularly if it is not supported by proportionate growth in the size of the economy. The purpose of this study was to investigate the effect of interest payments on external debt on economic growth in Kenya. The study utilized secondary data for 25 years, from 1991 to 2015, for GDP growth and interest payments on external debt. The results from the analysis of variance statistics indicate that the model was statistically significant. This implies that interest payments on external debt are good predictors of GDP growth. Regression coefficient results show that GDP growth and the logarithm of interest payments on external debt are negatively and significantly related. The study recommends that future government plans should ensure that external borrowings are taken at rates not higher than the interest rate payments. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.16193&r= |