Thresholds of External Flows for Inclusive Human Development in Sub-Saharan Africa

International Journal of Community Well-Being, 2(3-4), pp. 213–233 (December, 2019).

24 Pages Posted: 13 Aug 2019 Last revised: 26 Dec 2019

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Joseph I. Uduji

University of Nigeria Enugu Campus

Elda N. Okolo-Obasi

Development Strategy Centre Nigeria

Date Written: January 1, 2019

Abstract

This research investigates the incidence of enhancing external flows on inclusive human development in a panel of 48 countries in sub-Saharan Africa. It complements the literature by examining the relevance of enhancing three types of external flows, namely: development assistance, foreign investment and remittances. Ordinary Least Squares, Tobit, Fixed effects, Generalised Method of Moments and Quantile regressions are used as empirical strategies. The following main results are apparent: (i) between 60 and 150 (% of GDP) is the threshold of foreign aid; (ii) 33.333 (% of GDP) is the foreign investment threshold and (iii) 25 (% of GDP) is the critical mass of remittances. At the established critical masses or thresholds, external flows start having positive effects on inclusive human development. Countries characterized by inclusive development levels that are low need more investment in foreign aid for inclusive human development compared to their counterparts characterized by inclusive human development levels that are high.

Keywords: Foreign investment; Remittances; Foreign aid; Inclusive development; Africa

JEL Classification: F21; F24; F35; I30; O55

Suggested Citation

Asongu, Simplice and Uduji, Joseph I. and Okolo-Obasi, Elda N., Thresholds of External Flows for Inclusive Human Development in Sub-Saharan Africa (January 1, 2019). International Journal of Community Well-Being, 2(3-4), pp. 213–233 (December, 2019).. Available at SSRN: https://ssrn.com/abstract=3435733 or http://dx.doi.org/10.2139/ssrn.3435733

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Joseph I. Uduji

University of Nigeria Enugu Campus ( email )

Department of Accountancy
Box 15540, Enugu
Enugu, NC Enugu 234
Nigeria

Elda N. Okolo-Obasi

Development Strategy Centre Nigeria ( email )

84Nza Street Independence Layout Enugu
Enugu, 400001
Nigeria
08063631111 (Phone)
400001 (Fax)

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