Financial Inflows and Inclusive Development in Sub-Saharan Africa
- Amaka G. Metu
- Collins U. Udedi
- Geraldine Nzeribe
- Chinecherem Uzonwanne
- Abimbola Oladipo
- ( paper pages. 85 - 104 )
Abstract
In the last decade, sub-Saharan
Africa (SSA) has witnessed an influx of foreign cash inflow, which has played a
crucial role in financing development projects and stimulating economic growth.
However, its impact on inclusive human development in SSA remains a subject of
debate. This study investigates the impact of financial inflows on inclusive
human development in SSA using annual data from 1990 to 2023. The panel data
were analysed using the System Generalized Method of Moments (GMM) estimation
technique because of its advantage in taking care of the problem of
endogeneity. Inclusive development was captured using the inequality-adjusted
human development index to capture adjustments in inequality. The result of the
study revealed that foreign direct investments and external borrowing had
positive and significant impact on inclusive development in SSA, while
remittances and portfolio investments were not significant in explaining
inclusive development. The study concludes that foreign direct investments and
borrowing have the potential to catalyse inclusive development in SSA. For SSA
countries to enhance the developmental impact of financial inflows, the study
recommends that financial inflows should be aligned with national development
priorities by channelling them towards critical sectors such as education,
health and infrastructural investment.
Citation
Amaka G. Metu, Collins U. Udedi, Geraldine Nzeribe, Chinecherem Uzonwanne, Abimbola Oladipo.
2025.
"Financial Inflows and Inclusive Development in Sub-Saharan Africa"
The Nigerian Journal of Economic and Social Studies,
67 (1): 85 - 104.
JEL Classification
F24, F35, H63, O15
