Technology Diffusion and Economic Progress in Africa: Challenges and Opportunities

Application of appropriate technology has been noted as one of the distinguishing factors in growth disparities across countries. Thus, this study investigates the role of technological diffusion in economic progress in Africa. This was achieved using descriptive and empirical analyses based on imitator-innovator theoretical framework. The study established that the sub-regions in Africa with higher values in technological diffusion indicators experienced higher economic progress, which is a good indication of a significant positive relationship between economic progress and technological diffusion. Thus, the study concludes that if Africa must make contribution to the global knowledge economy and move on the path of economic progress, the issue of technological diffusion through adequate investment on R&D, functional education, among others, needs to be addressed with all serious efforts

Foreign Aid, IFRS Adoption and Foreign Direct Investment

The attraction of Foreign Direct Investment (FDI) is arguably of particular importance to countries’ foreign policy, where competing factors determine the choice of location of these investors. IFRS adoption, being one of the cardinal frameworks that portray the quality of a countries information environment, is seen as having a significant influence on the choice of FDI location. Noting that foreign aid (a form of foreign finance) may compete directly with, or complement FDI, this paper investigates the extent to which IFRS adoption is able to at-tract FDI in the presence of this form of finance. The main idea being that the effect of IFRS adoption on FDI may be adjustable depending on the presence of, and the kind of foreign aid flow in the country. Using a panel data of 92 countries for the period 2003-2012, we indeed find that IFRS adoption attracts more FDI, conditioned on foreign aid; however, when dis-aggregating foreign aid, the effect of bilateral aid was contradictory, while multilateral aid flow was positive. This result remained consistent despite the battery of checks.This is a working paper and comments are welcomed

Trade Outcomes in Africa’s Regional Economic Communities and Institutional Quality: Some Policy Prescriptions

The global economic crisis of 2007/2008 that threatened the economic/financial fabrics of most countries has brought again the essence of strong institutional quality to the fore. This is particularly interesting as it impacted on trade outcomes in many countries including those in Africa. For instance, merchandize exports as a percentage of GDP for SSA reduced by 17.9% in 2007. Thus, this paper examines the effectiveness of RECs in Africa with respect to trade outcomes using some indicators, which was achieved using data from African Development Indicators, inter alia (1996-2008). Analyzing the data with descriptive and statistical techniques established, among others, that the respective indicators of trade outcomes, institutional quality were rather low and differed markedly across RECs in Africa. The study recommends that improvement of institutional quality in tandem with enhanced infrastructural facilities will play crucial roles in promoting trade outcomes in Africa’s RECs

The Reconstruction of the Border Roads and Household Welfare in Nigeria: A Gender Study

This study provides an ex-ante analysis of the welfare effect from the improvement of border road infrastructure in Nigeria. It starts by describing the income distribution in the Nigerian states contained in the sample. It then analyses the relationship between income, household food expenditures, and household expenditures on imported rice. it is aimed at assessing how changes in the price of food commodities induced by border road improvements would affect different types of households. Finally, it investigates how simulated changes in local transportation costs stemming from road improvements would affect local prices of imported rice taking into consideration the simulated price changes effect on household welfare across household head gender and household area (rural and urban households). Results indicate that policies aiming to improve border roads and thereby lower transportation costs, and subsequently the price of imported rice, would be more beneficial for rural than urban households. Such policies would likely produce larger welfare gains for poorer households than richer households, and would be more beneficial for the poorest female-headed households than their male counterparts

INTERNATIONAL FINANCIAL REPORTING STANDARD, TRADE AND FOREIGN DIRECT INVESTMENT IN SUB-SAHARA AFRICAN COUNTRIES

Since the promulgation of IFRS as a result of the metamorphosis of the International Accounting Standard Board from the International Accounting Standard Committee in 2001, improved global capital flow and trade were identified as some of the outcomes from using IFRS for global financial reporting practice. Due to the fact that IFRS includes more realistic measure of accounting numbers and promotes better disclosure of accounting transactions, it is adjudged as a better form of financial reporting practice. Thus it reduces information asymmetry between preparers and users of financial information and promotes better disclosure and lowers cost of monitoring of subsidiaries and information barriers to cross border investments and trade. The rising global campaign for developing countries, including those in Africa, to adopt IFRS, still requires further examination as to its impact. More so, Africa is confronted by poor institutional framework and accounting infrastructure, and based on this, the consequent effect of IFRS adoption on trade and investment require empirical clarification. In essence, three important questions were asked: (i) to what extent has IFRS adoption enhanced trade flow of selected African countries? (ii) How has IFRS adoption impacted on the volume of FDI inflow to selected African countries? (iii) to what extent has the development of the accounting infrastructure in the selected African countries’ affected the influence of the adoption of IFRS on trade and FDI inflow. In answering the research questions, a panel data, consisting of 48 African countries were gathered and for the period 2002 – 2014. The econometric model were sourced from different database including the World Bank’s World Development Indicator, the United Nations Conference on Trade and Development Statistics and the Price Water House Coopers data on the extent of IFRS adoption around the world. The data were estimated using three approaches: the Ordinary Least Square regression, the Random Effect approach and the system GMM. The three estimation methods are deemed important considering their merits and weaknesses; thus, a multiplicity of methods will help for sensitivity checks. The key results from the study include that African countries will benefit more from IFRS by improving their institutional framework and more so through the development of accounting infrastructure