Does Governance Influence Economic Growth in Sub-Saharan Africa?

Abstract

Poor governance in Sub-Saharan Africa has been a major hindrance to economic growth of the region compared to other regions in the rest of the world. To examine the influence of governance on economic growth of Sub-Saharan Africa, panel data on growth rate of Gross Domestic Product, governance indicators and other indicators of the three selected Sub-Saharan Africa countries namely Nigeria, South-Africa and Ghana for the period of 1996-2015 were sourced from World Development Indicators of the World Bank and World Governance Indicators. The data were analyzed using Descriptive statistics, Principal Component Analysis, Ordinary Least Square Regression and Generalized Method of Moments. The result revealed that South Africa and Ghana enjoyed better governance than Nigeria. It was also found that governance impacts positively on the economic growth of South Africa and Ghana however a negative impact was experienced by Nigeria. The disaggregated governance indicators regression showed that political stability and control of corruption increase economic growth in South-Africa and Ghana while voice and accountability as well as control of corruption had negative influence on economic growth of Nigeria. The study thus recommends freedom of speech to citizens, accountability of leaders, political stability as well as control of corruption to enhance effective governance and economic growth in the region.