Edited by Uchenna R Efobi & Simplice Asongu Financing Sustainable Development in Africa Uchenna R. Efobi · Simplice Asongu Editors Financing Sustainable Development in Africa Editors Uchenna R Efobi Covenant University Ota, Nigeria Simplice Asongu African Governance and Development Institute Yaoundé, Cameroon ISBN 978-3-319-78842-5 ISBN 978-3-319-78843-2 (eBook) https://doi.org/10.1007/978-3-319-78843-2 Library of Congress Control Number: 2018937869 © The Editor(s) (if applicable) and The Author(s) 2018 This work is subject to copyright All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations Cover image: © Chris Minihane/Gety Images Cover design by Akihiro Nakayama Printed on acid-free paper This Palgrave Macmillan imprint is published by the registered company Springer International Publishing AG part of Springer Nature The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Acknowledgements The research materials on which this book is based have been through well thought out incarnations by the array of talented contributors and their research assistants, all of whom have in some way enhanced the content and quality of this book The editors specifically would like to thank and acknowledge the contributions and substantive input of each of the contributors who have co-worked on this edition Other important input to the finalization of this book was received from Kathleen G Beegle and the UNCTAD Virtual Institute Secretariat for the quality publicizing of the call for wider contribution from African scholars We are also grateful for comments from our peer reviewers for this edition We gratefully acknowledge the support and enthusiasm for this project from Sarah Lawrence and Allison Neuburger, who helped in crafting the initial conceptualization of the ideas of this book The Palgrave reviewers are also acknowledged for their suggestions that further shaped this book Through the efforts of all that are acknowledged, we were able to learn step by step the best content to include in the book for both policy and academic audience to learn about sustainable finance options for African development We hope this book reflects this idea v Contents Introduction Simplice Asongu Part I Financing in Africa for Sustainable Development Financing Mechanisms African Governments Should Pursue in Financing Sustainable Development in the Next 20 Years 13 Nomahlubi Nkume Financial Inclusion and Foreign Market Participation of Firms: A Quasi-experiment from Nigeria 39 Uchenna R Efobi, Emmanuel Orkoh and Scholastica Atata Business Regulations and Foreign Direct Investment in Sub-Saharan Africa: Implications for Regulatory Reform 63 Ben Katoka and Huck-ju Kwon Broadening Financial Intermediation in Sub-Saharan Africa 93 Murat A Yülek and Vivien Yeda vii viii Contents Institutions, Fiscal Performance, and Development Trajectories in ECOWAS: Implications for Sustainability 121 Ibukun Beecroft, Evans Osabuohien and Isaiah Olurinola Part II Domestic or Foreign Investment for African Development Capital Flows and Economic Growth: Does the Role of State Fragility Really Matter for Sustainability? 145 Temitope Joseph Laniran Changing Patterns of the Official Development Assistance to Sub-Saharan Africa 175 Emmanuel Maliti Financing Sustainable Energy Access with Oil Revenues in Sub-Saharan Africa: Trends and Strategies 197 Ishmael Ackah Maximizing the Gains from Natural Resources 231 Seedwell Hove and Gladys Gamariel Part III Human Development in Africa for Sustainability Does the Implementation of Social Safety Net Intervention Affect Indigenous Social Capital Systems for Coping with Livelihood Shocks? Ethnographic Evidence of Agro-pastoral Communities in Eastern Ethiopia 269 Getachew Shambel Endris, Paul Kibwika, Bernard B Obaa and Jemal Yousuf Hassan Issues in Sustainable Development: The Environment–Income Relationship 317 Oluwabunmi O Adejumo Contents ix Microcredit, Child Education, and Health Outcomes: A Case Study from Ghana 339 James Atta Peprah Part IV Industrial Development in Africa for Sustainability Financial Inclusion and Growth of Non-farm Enterprises in Ghana 369 Isaac Koomson and Muazu Ibrahim The Role of Cooperative Organizations in Tanzania’s Industrialization 397 Mangasini Katundu Textile and Clothing Sector, and the Industrialization of Sub-Saharan Africa 421 Murat A Yülek and Mete Han Yağmur Index 451 List of Figures Financing Mechanisms African Governments Should Pursue in Financing Sustainable Development in the Next 20 Years Fig. 1 ODA recipients by region (Source OECD DAC 2016) 17 Fig. 2 Global private finance mobilised for climate change in 2012–2015, USD billion (Source OECD 2017) 18 Fig. 3 Summary matrix of financing for sustainable development 28 Fig. 4 The model 31 Financial Inclusion and Foreign Market Participation of Firms: A Quasi-experiment from Nigeria Fig. 1 Financial access and foreign market participation of firms 44 Fig. 2 Histogram of propensity score 54 Business Regulations and Foreign Direct Investment in Sub-Saharan Africa: Implications for Regulatory Reform Fig. 1 FDI inflows (in $ million) to SSA 2000–2014 (Source UNCTAD 2016, http://unctadstat.unctad.org) 67 Fig. 2 FDI inflows to SSA by sub-region, 2005–2014 (Millions of dollars) (Source UNCTAD 2016, http://unctadstat unctad.org) 67 Changing Patterns of the Official Development Assistance to Sub-Saharan Africa Fig. 1 Net ODA to SSA countries (US$ billion) (Source OECD 2015d) 178 Fig. 2 Net ODA from non-DAC to SSA (US$ billion) (Source OECD 2015d) 181 xi xii List of Figures Fig. 3 ODA as a percentage of SSA’s Gross National Income (GNI) (Source GDP (IMF-WEO 2015) and ODA (OECD 2015d)) Fig. 4 ODA from DAC countries as percentage of SSA’s GNI (Source IMFWEO (2015) for the GNI data and ODA data (OECD 2015d)) Fig. 5 Declining role of tax revenue in SSA (Tax revenue as percentage of GDP) (Source IMF-WEO 2015) Fig. 6 Declining share of ODA to the social sectors (Source OECD 2015d) Fig. 7 Rising share of ODA to the economic sectors (Source OECD 2015d) Fig. 8 The rising share of ODA to the production sector (Source OECD 2015d) 185 186 187 188 188 188 Financing Sustainable Energy Access with Oil Revenues in Sub-Saharan Africa: Trends and Strategies Fig. 1 Energy access in sub-Saharan Africa (Source WDI 2017) 201 Fig. 2 Oil production in Africa (Source World Development Indicators 2015) 204 Fig. 3 Proved oil reserves in Africa (Source Outlook BP Energy 2016) 205 Fig. 4 Primary energy production and consumption in Africa (Source WDI 2015) 206 Fig. 5 Foreign Direct Investment inflows to the energy sector (Source Bhattacharya 2013) 211 Fig. 6 ODF inflows to the energy sector of LDC and other non-OECD (Source Bazilian et al 2011) 212 Fig. 7 Sources of financial support for off-grid electricity solution (Source Ortiz et al 2007) 216 Fig. 8 Oil rents as a percentage of GDP in sub-Saharan Africa (Source WDI 2017) 220 Fig. 9 Selected petroleum revenue management frameworks in sub-Saharan Africa (Source Developed by author based on designs from NRGI’s Summer School, 2015 in Accra) 222 Maximizing the Gains from Natural Resources Fig. 1 Nonrenewable resource exports for resource-rich countries in Africa (% total exports) (Note The values in the figure are the averages for the period 1995–2015 The countries in the figure are the resource-rich countries that have nonrenewable natural resources exports that consist of at least 25% of total exports Source UNCTAD 2016 Database Classification: Fuels (SITC 3), Ores and Metals (SITC 27 + 28 + 68 + 667 + 971)) 239 440 M A YÜLEK AND M H YAĞMUR export from mostly primary goods to industrial production However, despite the fact that Africa produces significant amount of inputs for the TC sector (cotton and oil for synthetic materials), there is not any African country that appears among the top exporter of textiles and clothing The top exporters include China, European Union, USA, Bangladesh, Vietnam, Turkey, South Korea, India, Pakistan, and Cambodia Moreover, Africa imports significant amounts of textiles and clothing from countries such as China SSA has a number of characteristics, which suggests that an export-oriented TC sector can be developed Firstly, a large number of young and growing populations can provide workforce to this sector at a globally competitive costs Cost competitiveness is the key point especially for the labor-intensive clothing sector As mentioned before, TC sector is a relatively easier entry point for both the white- and blue-collar industrial workforce and industrial entrepreneurs Secondly, language abilities in Africa (English and French) can facilitate exports Thirdly, being integrated to the inputs is still a major factor in textiles and clothing The USA, the largest economy of the world and whose wages are among the highest in the world, is currently a major producer and fourth largest exporter of textiles in 2016 However, its once very large clothing sector has disappeared due to cost pressures from international low-cost competitors Africa is a major producer of cotton, and cotton is one of the primary inputs to TC (the others are synthetic fibers and to a less significant extent wool) Thus, from a production integration point of view, an integrated agriculture-textile-clothing sector can make the continent highly competitive and scale-efficient Fourthly, African coasts allow sea shipment of export products to high-income markets Especially for West African countries that are located at an advantageous location for exports to America and Europe would expedite prompt delivery demands of the “fast fashion” industry Further development of strategic harbors, such as Durban in South Africa, Lagos in Nigeria and Mombasa in Kenya, by increased textile and clothing export would also contribute regional development by increasing merchandize activities However, SSA countries also have some competitive disadvantages for the development of industry in general for the following reasons First, the continent’s financial system is inadequate in mobilizing long-term funds for industrial development Second, small nation states deter the development of large-scale industries Third, political, and economic instability have played a negative role in the risk appetite of industrial TEXTILE AND CLOTHING SECTOR, AND THE INDUSTRIALIZATION … 441 investors These are factors that are exogenous to the TC sector, and industrial entrepreneurs in general Therefore, a focus on developing the TC industry will be advantageous for industrial development in SSA countries, despite the challenges in their business environment 5.1 Textile and Clothing Sector in Selected African Countries Africa has a long history of engaging in textile and clothing However, so far it has derived almost no benefit from the global textile and clothing market Industrial textiles and clothing in Africa is still in its infancy Nevertheless, some SSA countries had successful experiences, while others had unsuccessful experience in this sector despite the inherent advantages that they have in this sector This section reviews the cases of several SSA countries in terms of the development and current state of the TC sector, with a view to assess the possibilities of establishing an export-oriented TC sector 5.1.1 Mauritius Mauritius is a small island state, located off the coast of Southeast Africa In late 1960s, Mauritius planned to diversify its economy and provide jobs to its unskilled, but educated labor, by developing the TC sector (Joomun 2006) In order to attract foreign direct investment, the country also established export-processing zones (EPZ) The first EPZ was built in 1971 in the capital city of Port Louis As the country provides an investor friendly environment for foreign investors, the TC sector was established in cooperation with manufacturers from South Korea and Hong Kong (Kim et al 2006) Accordingly, the clothing sector in Mauritius became a source of employment, engine of growth and hard-currency earner with its export-oriented structure While the country does not have an advanced textile sector, the clothing sector in Mauritius is one of the most developed in SSA Textile companies basically provide yarn and fabrics to local clothing producers in Mauritius, where bigger clothing producers are vertically integrated and produce their own yarn and fabrics (Joomun 2006) The sector has encountered some difficulties since it was established, but managed to overcome these challenges For instance, as the country moved from being a low-income to a middle-income economy, ensuing wage rises in 1990s hindered competitive power of Mauritius in the 442 M A YÜLEK AND M H YAĞMUR export markets In response, the TC manufacturers started employing workers from China and India as they work for longer hours for the same wage (Joomun 2006) Some big manufacturers also moved part of their production to neighboring Madagascar, where there is ample supply of labor (Kim et al 2006) As was the case in many other smaller countries, the TC exporters in Mauritius were severely affected by the withdrawal of export quota measures on the textile and clothing products in 2005 with the termination of Multi-Fibre Arrangement (MFA) Not all the companies could compete with producers in big countries like China and Pakistan, and many textile and clothing manufacturers were shut down Nevertheless, the stiff competition drove Mauritian clothing sector to transform into a more innovative, efficient, and quality oriented sector (Callychurn et al 2014) Today Mauritius is known to be the most innovative country in SSA (Sourcing Journal 2017) The global financial crisis of 2007/2008 also inversely affected the export based Mauritian TC sector In return, the Mauritian government launched a support program that helped the textile and clothing manufacturers to increase competitiveness by technical modernization and market diversification (AfDB/OECD/UNDP 2012) 5.1.2 South Africa Historically, South Africa (SA) is considered to be one of the biggest TC producers in Africa Some researchers note that the textile industry in SA dates back to 1875 in the form of wool washing and blanket manufacturing (McDowell 2000) However, the true TC industry in SA started developing from 1950 onwards from the import substitution policies that was implemented during the period (Biacuana 2009) In late 1950s, 50,000 workers were estimated to be working in the clothing sector Due to high tariffs in clothing in 1960s, local retailers sourced fabrics and sourced-out clothing to some smaller local cut, make-up, and trim (CMT) manufacturers Hence, despite the inefficiencies encountered in import substitution policies, some competitive large and small firms came into being in the TC sector (Skinner and Valodia 2002) South Africa started pursuing trade liberalization policies after it became a member of the World Trade Organization (WTO) in 1994 Subsequently, the forces of international competition reshaped the structure of the TC sector Tariffs in the clothing sector gradually fell from 84% in 1995 to 40% in 2002 (Skinner and Valodia 2002) Initially, TEXTILE AND CLOTHING SECTOR, AND THE INDUSTRIALIZATION … 443 some government incentive programs that support the TC sector, and the depreciation of the SA currency (Rand) from 2000 to 2002 helped sustain the competitiveness of the clothing sector (Vlok 2006) Due to depreciation in Rand, some clothing manufacturers even left production for local producers and engaged in more profitable export contracts In return, local retailers started developing business relations with clothing manufacturers in low-cost countries, particularly in China Nevertheless, when Rand started appreciating in 2003, SA’s exports collapsed and imports increased The situation for the textile and clothing sector became even more distressing when SA introduced the first national minimum wage agreement in 2003 This regulation considerably increased nominal and real wages particularly in low-wage, non-metropolitan areas (Skinner and Valodia 2002) Hence the textile and clothing sector was dragged into a serious crisis; many companies were closed down and from 2003 to 2012 employment in the TC sector had almost been halved (Nattrass and Seeking 2012) Heavily labor-intensive clothing companies that make production for the mass market survived the stiff competition with lowwage countries by moving their production to lower-wage regions or by paying below minimum wages Some companies relocated their production to Lesotho, where labor costs are much lower (Nattrass and Seeking 2013) In recent times, local clothing producers are trying to recover their market shares by developing “fast fashion” as a business model, where producers can react quickly to changing trends as well as taking the advantage of emerging “buy local” trend among SA consumers To this end, SA has started organizing The Source Africa Trade Show, which aims at bringing together African textile, apparel, and footwear manufacturers with retailers and to assist developing new business relationships among them The fifth edition of the trade event was held in May 2017 Nevertheless, the retail market in SA is dominated by Chinese manufacturers; and this fact does not seem to change soon due to the low number of big local suppliers left in SA market and cost efficiencies of Asian producers over African producers (Ronan 2015) 5.1.3 Nigeria Textile and clothing sector in Nigeria also has a long history Onyeiwu (1997) notes that the traditional textile sector developed in northern Nigeria by the spread of Islam in the region; and by 1850s, textile 444 M A YÜLEK AND M H YAĞMUR industry in Kano (northern Nigeria) was so widespread that the region was considered to be the Manchester of West Africa Cotton production in Nigeria might be another reason for the development of the textile sector Nigeria was once the largest cotton producer in SSA, and it still accounts for 12% of cotton production in SSA (U.S International Trade Commission 2009) Hence, when the country was formally colonized in 1900, there was already a market for textile in Nigeria However, the colonial policies impaired textile production and only low-quality textile production by hand spinning and weaving was upheld in Nigeria until 1950s The first large-scale modern textile mill in Nigeria, Kaduna Textile Mills, was established in 1956 As the first mill proved to be successful and profitable, several other mills were established in the following years and the number of mills reached 68 by the end of the 1960s Due to lack of capital in the private sector, textile companies in this period were joint ventures of foreign investors and the Nigerian government (Onyeiwu 1997) With the discovery of first commercially available oil field in 1956 and subsequent exploration of oil fields, Nigerian economy was flourishing, and the investment in textile sector increased in early 1970s The number of textile mills reached 125 in 1973 and in early 1970s Nigeria had become the largest producer of cotton cloth in West Africa, accounting for about the half of the region’s output (Onyeiwu 1997) Despite the unfolded textile sector and its large population (most populous in Africa, with almost 186 million inhabitants), there is virtually no clothing production in Nigeria The textile sector had annual growth rates of 67% between 1985 and 1991 In 1991, the number of textile mills reached 180 and the sector employed over 350,000, who made up 25% of workers in the man ufacturing sector (Aibueku 2016) However, the TC sector in Nigeria could not maintain its share in manufacturing due to over-dependence on the oil sector Since 1996, the sector has shown a significant decline (Makinde et al 2015) For the decline of the TC sector, Aibueku (2016) blames high production costs due to insufficient infrastructure and outdated manufacturing techniques used in the sector Nigeria is a big oil and cotton producer; and readily available production of these two raw materials could provide an advantage to textile production However, oil based textile materials, such as polymer, dyes, and other synthetic materials are either not available or are low quality, in Nigeria The quality of cotton TEXTILE AND CLOTHING SECTOR, AND THE INDUSTRIALIZATION … 445 produced in Nigeria is also low due to poor growing and harvesting practices (Makinde et al 2015; U.S International Trade Commission 2009) In order to revive the TC sector, Nigerian government introduced restrictions on imported fabrics in 2010 In addition, the government introduced a 100 billion Nigerian Naira (approximately USD318 million, based on 2017 exchange rate) worth of intervention fund to the cotton, textile, and garment industry These government supports contributed to capacity utilization in the TC sector Capacity utilization increased from 29.1% in 2010 to 49.7% in 2011, and slightly above 50% in 2017 (Uzoho 2017) As stated above, Nigeria has virtually no clothing sector Director of Nigerian Export Promotion Council (NEPC) notes that, while Nigeria has internationally competitive designers, wide gap between production and finishing prevents Nigeria to compete in the international markets In order to support clothing manufacturing, NEPC has established a fashion training facility, and the Human Capital Development Centre (HCDC) in 2006 Nigeria is also supporting capacity building in clothing manufacturing to enable Nigerian designers to compete at international markets (Uzoho 2017) 6 Conclusion Sub-Saharan Africa generates inadequate export revenues and remains an exporter of primary goods with very little value addition An important reason of these is that SSA has failed in its efforts to industrialize and started a process of premature de-industrialization This failure further constrains SSA’s prospects for a sustained growth in the long-run, and for generation of employment and export revenues in the short run The Textile and Clothing sector has been a pioneering industry that triggers overall industrialization and economic development in different countries since the industrial revolution Today, its large global market continues to make TC a critical export sector for developing countries SSA has not been able to use this opportunity to capitalize on TC as a pioneering export sector This paper argued that SSA countries could have, and still can, focus on improving the value addition from the TC sector This is because a number of factors in SSA provides a convenient business environment for the TC sector to thrive: low wages, the integration with Africa’s cotton sector (and thus increasing 446 M A YÜLEK AND M H YAĞMUR the value-added generated from the continents’ cotton production), logistical advantages, and large international export market We have also reviewed the mixed success that was experienced by some selected African countries with the TC sector In their pursuit of industrialization, only a few SSA countries could develop export based TC sector While Mauritius is the biggest clothing exporter, South Africa is the major textile exporter in SSA (Kim et al 2006) Nigeria, on the other hand, has a long history in textile production, but the country has virtually no clothing sector While these countries are aiming at developing an internationally competitive clothing sector with the emerging interest in African fashion, a more comprehensive approach to the textile and clothing sector would facilitate overall industrialization of SSA Note 1. 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(2018) Industrial Policy and Sustainable Growth Singapore: Springer 450 M A YÜLEK AND M H YAĞMUR Yülek, M., & Han, H (2017) Science Technology, Innovation and Industrial Policies in Korea and Japan Frankfurt: Peter Lang Yülek, M A., Natsuda, K., Yağmur, M H., & Akkemik, K A (2015) The Textile and Clothing Cycle and Industrialization Cycle EconAnadolu 2015 Conference Paper Index A Africa, 1–6, 8, 13–27, 30, 33–35, 40, 64, 66–68, 70–73, 77, 84, 87, 94–97, 99–105, 108–110, 112, 114–116, 122, 124–127, 138, 145, 146, 148, 164, 178, 179, 181, 182, 186, 191, 197–213, 217, 220–222, 224, 231–233, 237–239, 241–246, 249, 252, 257, 259–262, 399, 403, 415, 421, 422, 424–426, 431–434, 439–446 B Banking sector, 96, 101, 102, 105, 108, 109, 114–116 C Capital flows, 5, 16, 65, 66, 84, 147, 154, 155, 159, 160, 163–166 Capital markets, 26, 43, 95, 97, 103, 107–109, 111–113, 116 Child education, 7, 340, 341, 343, 344, 347, 350, 351, 355 Child health, 340, 341, 345–347, 350, 351, 357–360, 362 Clients and non-clients, 342, 348, 351, 355, 357, 361 Cooperatives, 4, 7, 96, 277, 400, 401, 403, 404, 406–410, 412, 415, 417, 418 D Development, 1–8, 13–19, 21, 22, 24–31, 33–35, 40, 47, 63, 64, 78, 86, 94, 95, 97, 98, 105, 108, 110, 112–116, 121, 125, 126, 128–130, 134, 136, 137, 146– 148, 151, 152, 155, 160, 162, 165, 169, 175–177, 180–183, 189–192, 198–201, 203–205, 208, 210, 212, 213, 215, 224, 232–238, 241, 243–247, 249–259, 271–273, 279, © The Editor(s) (if applicable) and The Author(s) 2018 U R Efobi and S Asongu (eds.), Financing Sustainable Development in Africa, https://doi.org/10.1007/978-3-319-78843-2 451 452 Index 280, 285, 286, 300, 317, 319, 322, 324, 328, 339–343, 345, 362, 370–372, 397–401, 404, 406–408, 410–414, 418, 424, 426–429, 431, 436, 438–441, 444, 445 Development banks, 4, 15, 25, 28, 107–110, 116 Development Finance, 17, 25, 108, 110, 148, 164 Distance-to-frontier, 68–72, 75, 77, 80, 82–84, 87, 88 Doing Business, 4, 19, 26, 27, 30, 64, 65, 68–80, 82, 84–88, 251, 256, 257 E Economic development, 3, 6, 86, 94, 95, 101, 108, 110, 112, 115, 191, 199, 200, 209, 213–215, 232, 233, 235–238, 246, 251–253, 258–260, 398, 423, 425, 427, 428, 432, 445 Economic growth, 5, 13, 16, 19, 20, 26, 86, 94, 97, 101, 102, 105, 108, 112, 115, 116, 129, 136, 145–147, 151–155, 159, 160, 163–165, 178, 191, 200, 203, 207, 208, 217, 232, 235–238, 241, 243, 252, 257, 317–326, 332, 333, 398, 421, 422, 424, 426–428 EKC, 5, 318–326, 329, 331–334 Energy Access, 5, 197–203, 212, 213, 217, 220–223 Energy Financing, 212 Energy Policy, 201, 202, 207 Environmental Pollution, 319, 322, 323, 335 Ethnography, 6, 283, 285, 286, 289, 303 F Finance, 2–5, 14, 15, 17–19, 22, 27, 28, 30, 32, 33, 35, 39–41, 45, 47, 52, 54, 57, 58, 64, 94–96, 98, 102, 103, 109–114, 116, 121, 164, 199, 212, 213, 215, 221, 236, 245, 246, 252, 257–259, 319, 335, 339, 344, 373, 388, 399, 409, 410 Financial development, 45, 94, 101, 103, 104, 116, 151 Financial inclusion, 4, 7, 39–42, 45, 46, 49, 54, 55, 57, 58, 101, 102, 107, 371–382, 384, 387–390 Financial intermediation, 8, 101, 103, 105, 108, 109, 112–116 Financial regulation, 58 Financing sustainable development, 3, 5, 13, 15, 22, 23, 30, 124, 148, 164, 390 Firm(s), 4, 7, 39–58, 72–74, 77, 88, 94, 96, 98, 103, 104, 106, 108, 110, 112, 164, 215, 223, 235, 248, 251, 258, 322, 360, 370–372, 374–376, 378, 379, 381, 382, 384, 387–390, 400, 403, 407, 411, 413, 415, 426, 430, 431, 442 Fiscal deficits, 122 Fiscal policies, 122, 124–126, 134, 135, 137, 247, 259 Foreign Capital, 2, 65, 151, 152 Foreign direct investment, 2, 6, 63, 76, 78, 80, 86, 129, 136, 146, 151, 152, 160, 185, 190, 211, 256, 441 G Ghana, 7, 23, 40, 67, 68, 70–72, 98, 122, 129, 131, 138, 163, 185, 199, 204–206, 209, 210, 220, Index 221, 223, 231, 240, 249, 251, 261, 340, 341, 346, 347, 352, 356, 360, 369, 370, 372, 373, 378, 380, 382, 389, 390 Growth, 2, 3, 7, 16, 19–21, 26, 31, 33, 40, 44, 58, 64, 72, 73, 77, 84, 85, 93–97, 101, 104–106, 110, 112, 114, 115, 122, 125, 145–154, 160–163, 165–168, 178–180, 182, 183, 185, 186, 189, 191, 198, 203, 207–209, 213–215, 220, 232, 234–237, 240, 242– 244, 246, 251, 257, 258, 278, 291, 318, 320, 322, 323, 325, 333, 335, 346, 357, 360, 371, 372, 374–376, 378–382, 384, 387–390, 397–400, 411–414, 422, 423, 425–427, 429–432, 439, 441, 444, 445 I Income, 4, 6, 7, 16, 17, 22, 24, 29, 74, 75, 77, 80–82, 84, 86, 93, 94, 101–103, 121, 126, 146–148, 150, 162, 179, 180, 183–185, 198, 208, 223, 232, 235–238, 244, 245, 247, 248, 253, 255, 274, 275, 278, 293, 301, 308, 318–330, 332–335, 339, 341–345, 347, 349, 350, 353, 355, 357, 359, 360, 362, 369–371, 375, 376, 378–380, 382, 384, 388, 390, 397, 400, 401, 404, 410, 413, 414, 421–424, 427, 428, 430–432, 436, 440, 441 Industrial development, 247, 251, 399–401, 411, 413, 427, 428, 440, 441, 446 Industrialization, 3, 4, 7, 39–42, 246, 324, 333, 398–400, 403, 404, 408–410, 412, 414, 415, 453 417, 423–428, 430–432, 434, 436–439, 445, 446 Institutions, 4–7, 20, 27–29, 31, 32, 35, 39–42, 51, 52, 54, 56–58, 77, 84, 87, 94–96, 102–110, 112–116, 121, 123–130, 133, 135–138, 148, 151, 190–192, 200, 216, 220, 223, 233, 234, 236–238, 243, 245–247, 258–260, 275, 277, 322, 370, 374, 376, 389, 390, 404, 405, 409–415, 425 International Trade, 22, 40, 73, 85, 87, 444, 445 L Life cycle, 64, 68 M Micro-credit, 7, 339, 341–346, 348, 350, 351, 353–355, 357–362 Microfinance, 7, 96, 104, 105, 107–109, 113, 114, 116, 339–345, 347, 349, 354, 356, 361, 362, 374 N Natural resources, 4, 6, 24, 73, 77–80, 82–87, 176, 179, 213–215, 217, 231–241, 243–249, 251, 252, 254, 258–260, 274, 332, 421, 425 Non-farm enterprise, 374, 378–380, 382, 387, 389 O Official Development Assistance, 5, 15, 169, 175, 211 Oil Revenue Management, 220 454 Index P Panel data, 46, 64, 73–76, 129, 162, 320, 321 R Renewable energy, 199–203, 206–210, 214, 223, 224, 231 Resilience, 146, 162, 163, 165, 243, 257, 270–273, 276, 280, 282, 283, 291, 300, 307–310, 333, 334 Resource rents, 233, 235–237, 241–250, 258–261 Role of institutions, 126, 398 Rural development, 397, 407, 410, 412, 426 S Safety net, 6, 270–276, 278–290, 292–294, 298–311 Shocks, 6, 24, 43, 81, 84, 253, 269–280, 283–285, 287–289, 291–298, 300–302, 305, 307, 309, 310, 341, 344 Social Capital, 6, 234, 270, 271, 274–277, 280, 283, 286, 290, 295, 298, 300, 301, 307, 309 Spillovers, 334, 347, 436 State Fragility, 5, 145–148, 152–155, 159–166 Sub-Saharan Africa, 5, 63–68, 70–72, 74, 77, 81, 84–88, 93, 95–97, 99, 138, 146, 148, 162, 175, 198–200, 207, 211, 212, 217, 220, 222, 224, 421, 422, 425–427, 445 Sustainability, 1, 2, 4, 5, 7, 33, 34, 110, 122–128, 134, 137, 213–215, 308, 319, 324, 334, 335 Sustainable development, 2–7, 13–16, 19, 21–23, 25–35, 39, 40, 84–86, 105, 106, 124, 136, 137, 148, 151, 164, 165, 177, 198, 200, 201, 207, 210, 213, 214, 220, 232–234, 241, 245, 247, 256, 259, 319, 335, 341, 371, 372, 439 Sustainable development in Africa, 4, 13–15, 22, 23, 28, 30, 95, 97, 105, 124 Sustainable economic development, 94, 101, 105, 232–234, 259 T Tanzania, 23, 67, 68, 70–72, 99, 138, 175, 204, 231, 239, 250, 263, 346, 397–406, 409–412, 414, 415, 417, 418 Textile and clothing sector, 8, 434, 439, 441, 443, 445, 446 W West Africa, 122–124, 129, 130, 133, 135, 137, 199, 444 ... Financing in Africa for Sustainable Development Financing Mechanisms African Governments Should Pursue in Financing Sustainable Development in the Next 20 Years 13 Nomahlubi Nkume Financial Inclusion... modes of financing face I then present three mechanisms for financing sustainable development Finally, I present a financing model and the role of local government in financing development in Africa. .. Pursue in Financing Sustainable Development in the Next 20 Years Nomahlubi Nkume 1 Introduction This paper begins by providing a definition for sustainable development in Africa In doing this,