John C. Anyanwu

Bio: John C. Anyanwu is an academic researcher from African Development Bank. The author has contributed to research in topics: Poverty & Gross domestic product. The author has an hindex of 29, co-authored 61 publications receiving 2707 citations.

Why Does Foreign Direct Investment Go Where It Goes?: New Evidence From African Countries

Abstract: The central concern of this paper is to respond to the question: why do FDI inflows go where they do in African countries? An understanding of such factors will assist African policymakers to formulate and execute policies for attracting FDI. Our estimation results from cross-country regressions for the period 1996-2008 indicate that: (i) there is a positive relationship between market size and FDI inflows; (ii) openness to trade has a positive impact on FDI flows; (iii) higher financial development has negative effect on FDI inflows; (iv) the prevalence of the rule of law increases FDI inflows; (v) higher FDI goes where foreign aid also goes; (vi) agglomeration has a strong positive impact on FDI inflows; (vi) natural resource endowment and exploitation (such as oil) attracts huge FDI; (vii) East and Southern African sub-regions appear positively disposed to obtain higher levels of inward FDI. The key policy implications are discussed.

Health Expenditures and Health Outcomes in Africa

Abstract: This paper provides econometric evidence linking African countries’ per capita total as well as government health expenditures and per capita income to two health outcomes: infant mortality and under-five mortality. This relationship is examined using data from 47 African countries between 1999 and 2004. Health expenditures have a statistically significant negative effect on infant and under-five mortality rates. The magnitude of our elasticity estimates are in consonance to those reported in the literature. For African countries, our results imply that total health expenditures (as well as the public component) are certainly important contributors to health outcomes. In addition, we find that both infant and under-five mortality are positively and significantly associated with sub-Saharan Africa. The reverse is true for North Africa. While ethnolinguistic fractionalization and HIV prevalence positively and significantly affect the health outcomes, higher numbers of physicians and female literacy significantly reduce these health outcomes. These results have important implications for attaining the targets envisioned by the Millennium Development Goals. The data implications are also discussed.

Do International Remittances Affect Poverty in Africa

Abstract: International remittances flowing into developing countries are attracting increasing attention because of their rising volume and their impact on recipient countries. This paper uses a panel data set on poverty and international remittances for African countries to examine the impact of international remittances on poverty reduction in 33 African countries over the period 1990–2005. We find that international remittances—defined as the share of remittances in country GDP—reduce the level, depth, and severity of poverty in Africa. But the size of the poverty reduction depends on how poverty is being measured. After instrumenting for the possible endogeneity of international remittances, we find that a 10 percent increase in official international remittances as a share of GDP leads to a 2.9 percent decline in the poverty headcount or the share of people living in poverty. Also, the more sensitive poverty measures—the poverty gap (poverty depth) and squared poverty gap (poverty severity)—suggest that international remittances will have a similar impact on poverty reduction. The point estimates for the poverty gap and squared poverty gap suggest that a 10 percent increase in the share of international remittances will lead to a 2.9 percent and 2.8 percent decline, respectively, in the depth and severity of poverty in African countries. Regardless of the measure of poverty used as the dependent variable, income inequality (Gini index) has a positive and significant coefficient, indicating that greater inequality is associated with higher poverty in African countries, much in conformity with the literature. Similar results were obtained for trade openness. In the same vein, per capita income has a negative and significant effect on each measure of poverty used in the study. Our results also show that inflation rates positively and significantly affect poverty incidence, depth and severity in Africa. In all three poverty measures, the dummy variable for sub-Saharan Africa is strongly positive, and strongly negative for North Africa. The policy implications of these results are discussed.

Factors affecting economic growth in Africa: are there any lessons from China?

Abstract: Since generating sustained economic growth in Africa remains one of the most pressing challenges to development, it is imperative that Africa-specific determinants of economic growth are investigated. At the same time, in spite of recent slight slowdown, China's economic growth and its capacity to move in thirty years from underdevelopment and extreme poverty to an emerging global economic power had attracted the attention of many developing countries, including those in Africa. Some key questions arise: Can China serve as a growth model for Africa? And what lessons can we draw from the Chinese experience of soaring economic growth? We therefore investigate the determinants of economic growth in Africa (North and sub-Saharan Africa), using an Africa-only sample with five non-overlapping three-year averages of cross-sectional data between 1996 and 2010. We also do the same for China for the period, 1980 to 2010, while discussing recent trade, investment and aid/debt relations between Africa and China. Our results suggest that domestic investment, net ODA inflows, education, government effectiveness, urban population, and metal prices positively and significantly affect Africa's economic growth. For China, the key factors driving its economic growth are domestic investment, trade openness, initial income, and rural share of the population. Factors driving down China's growth include inflation rate, domestic credit to the private sector, net ODA inflows, population growth, telephone density, and oil and agricultural/raw materials prices. One key finding is that while Africa is almost twice as open as China, openness does not positively and significantly affect Africa's growth, unlike in China. A principal source is that Africa imports (mainly consumer goods) more than it exports while the reverse is true for China. Moreover, the structure of Africa's exports is biased towards traditional primary commodity exports unlike China that has rapidly shifted towards manufactures. In addition, Chinese domestic investment is about double that of Africa. The key lessons for Africa from the soaring Dragon's experience are discussed.

Working Paper 195 - Inequality Economic Growth and Poverty in the Middle East and North Africa (MENA)

Abstract: In this paper, we have presented the patterns of inequality, growth and income inequality in the MENA region. Using a cross-sectional time series data of MENA countries for the period 1985-2009, we have also investigated the effect of income inequality on key societal development, namely economic growth and poverty, in the region. Our empirical results show that income inequality reduces economic growth and increases poverty in the region. Other factors having significant negative effect on economic growth in the MENA region include previous growth rate, exchange rate, government consumption expenditure or government burden, initial per capita GDP, inflation, and primary education. On the other hand, variables positively and significantly associated with MENA’s economic growth are domestic investment rate, urbanization, infrastructure development, and mineral rent as a percentage of GDP. In addition, apart from income inequality, other factors increasing poverty in the region are foreign direct investment, population growth, inflation rate, and the attainment of only primary education. Poverty-reducing variables in the region include domestic investment, trade openness, exchange rate, income per capita, and oil rents as a percentage of GDP. The policy implications of these results are discussed.

Economic growth and income inequality

Abstract: We investigate whether income inequality affects subsequent growth in a cross-country sample for 1965-90, using the models of Barro (1997), Bleaney and Nishiyama (2002) and Sachs and Warner (1997), with negative results. We then investigate the evolution of income inequality over the same period and its correlation with growth. The dominating feature is inequality convergence across countries. This convergence has been significantly faster amongst developed countries. Growth does not appear to influence the evolution of inequality over time. Outline

Rising Tide: Gender Equality and Cultural Change Around the World

Abstract: Rising Tide: Gender Equality and Cultural Change Around the World.