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Determinants of economic resilience response in sub-Saharan Africa to a common exogenous shock: roles of demographic differences, exchange rate regimes and institutional quality

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Abstract

The objective of this paper is to investigate the determinants of economic resilience in sub-Saharan African (SSA) countries. The analyses focus on the roles played by demographic structures, exchange rate regimes and institutional quality. We use the panel data technique for 22 SSA countries during the period 1996–2018 via the system GMM method of estimation. The results of the analyses indicate that sectoral diversity, industrialisation, trade openness, human capital and population growth rate are determinants of economic resilience. Moreover, demographic trends, institutional quality and exchange rate regimes, when considered, greatly explain resilience in SSA countries. Policy implications are discussed.

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Notes

  1. See Kaufmann et al. (2010). These variables are: rule of law, corruption control, regulation quality, government effectiveness, voice and accountability, and political stability.

  2. This period ends in 2016 when the ERRs are considered because the data of Ilzetzki et al. (2017) end in 2016.

  3. These countries are Angola, Botswana, Burkina Faso, Burundi, Cameroon, Gabon, Guinea, Guinea-Bissau, Kenya, Madagascar, Malawi, Mali, Mozambique, Namibia, Niger, Nigeria, Senegal, Sierra-Leone, South Africa, Tanzania, Togo and Zambia.

  4. The results of this test are not reported here because of the good value of both Hansen and Sargan obtained in most of the regressions. The values of the DHT were however one of our decision criteria.

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Acknowledgements

The authors are grateful to the anonymous reviewers and the handling editor for constructive comments that helped in refining the quality of the initial draft of this manuscript.

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  1. University of Dschang, Dschang, Cameroon

    Tii N. Nchofoung & Ibrahim Ngouhouo

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  1. Tii N. Nchofoung
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Appendices

Appendix 1

See Table 11.

Table 11 Coarse classification of exchange rates. Source: Ilzetzki et al. (2017)
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Appendix 2

See Table 12.

Table 12 Definition of variables
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Appendix 3

See Table 13.

Table 13 Robustness on alternative dimensions of resilience
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Nchofoung, T.N., Ngouhouo, I. Determinants of economic resilience response in sub-Saharan Africa to a common exogenous shock: roles of demographic differences, exchange rate regimes and institutional quality. J. Soc. Econ. Dev. 26, 186–213 (2024). https://doi.org/10.1007/s40847-023-00258-9

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