Export Diversification and Government Intervention in Sub-Saharan Africa

Authors

Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria

Abstract

The call for restructuring among economies characterized by mono-export practice becomes an alternative engine for driving a sustainable economy owing to potential indicators associated with diversification. This study assesses the intertemporal relationship between export diversification and government intervention among 14 Sub-Saharan African countries (SSA) between 1980 and 2019. Export diversification and government intervention are measures using the Theil indicator and stochastic frontier analysis, respectively, while system generalized methods of moments are used as the estimation technique. Findings from the study suggest the potency of government efficiency and effectiveness in addressing burgeon export diversification. Furthermore, the results validate the role of government expenditure, capital formation, and health expenditure in expatiating human development. The frontier result shows that larger SSA countries' government input factors for accentuating human development are accounted for by technical inefficiency. The result indicates that export concentration influenced the quality of government intervention among SSA countries. The study concludes with the need for reform that will power the diversification of the African economy to have an effective trade agreement. Hence, the study recommends efficient government intervention through policies and reforms to achieve export diversification in SSA economies.

Keywords

Iranian Economic Review

Articles in Press, Accepted Manuscript
Available Online from 29 August 2022

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