Financial inclusion and inclusive growth in sub-Saharan Africa

Figures & data

Figure 1. Mobile financial services and inclusive growth nexus.Source: Authors’ own illustration

Table 1. Construction of composite index of inclusive growth

Indicator	Measurement	Source	Weight
Economic growth	Growth rate of real GDP per capita.	World Development Indicators	0.40
Poverty	Poverty headcount ratio at international poverty line of $1.90 a day.	Poverty and Equity Databank	0.20
Income Inequality	GINI index	Poverty and Equity Databank	0.20
Economic Participation	Labour force participation rate, total (% of total population aged 15–64).	World Development Indicators	0.20

Source: Authors’ Compilation based on Empirical Literature

Table 2. Definition, source, justification and expected relationship of other covariates

Variable	Measurement	Source	Empirical Justification	Expected Relationship
Government Consumption	General Government Final Consumption Expenditure (% of GDP)	World Development Indicators	Asian Development Bank (2014); Mathers and Slater (2014)	Positive
Investment	Gross fixed capital formation, private sector (% of GDP)	World Development Indicators	Akobeng (2017); Bal et al. (2016); Uneze (2013)	Positive
Access to quality Infrastructure	Access to electricity (% of population)	World Development Indicators	Asian Development Bank (2012); Jahan and McCleery (2005)	Positive
Foreign Direct Investment	Net FDI inflows (% of GDP)	World Development Indicators	Umoh et al. (2012); Shaikh (2010)	Positive
Official Development Assistance (ODA)	Net Total ODA (% of GDP)	World Development Indicators	Refaei and Sameti (2015); Tezanos et al. (2013)	Positive
Human Capital Development	Average education and health expenditures (% of GDP)	World Development Indicators	Oyinlola and Adedeji (2019); Oluwadamilola et al. (2018); McKinley (2010); Anand et al. (2014); Gebrehiwot, 2014)	Positive
Trade Openness	Total Trade (% of GDP)	World Development Indicators	Huchet‐Bourdon et al. (2018)	Positive
Quality of Governance	Average Scores for the six World Bank Governance Indicators	Worldwide Governance Indicators	Dwumfour (2020); Nketiah-Amponsah and Sarpong (2019); Tebaldi and Mohan (2010)	Positive
Inflation Rate	Annual percentage change in Consumer Prices	World Development Indicators	Madurapperuma (2016); Kasidi and Mwakanemela (2013); Umaru and Zubairu (2012)	Negative

Figure 2. Financial inclusion in SSA.Source: Data from Global Financial Inclusion Databank (2018)

Figure 3. Inclusive growth outcomes across the World Bank (2018)Source: Data from Poverty and Equity Databank (2020) and World Development Indicators Databank (2020)

Figure 4. Distribution of income by quintile in SSA (2018).Source: Data from Poverty and Equity Databank (2020)

Table 3. Effects of financial inclusion on inclusive growth in SSA (2004–2018)

Variables	Random Effect	Fixed Effect	System GMM
First Lag of inclusive growth			0.466 (0.028)***
Financial Availability	0.046 (0.026)*	0.060 (0.025)**	0.015 (0.014)
Financial Usage	0.025 (0.009)***	0.027 (0.010)***	0.028 (0.010)***
Financial Knowledge	0.122 (0.077)	0.125 (0.76)	0.170 (0.224)
Government Consumption	0.098 (0.033)***	0.081 (0.033)**	0.067 (0.029)**
Investment	0.033 (0.021)	0.018 (0.020)	0.053 (0.009)***
Access to quality Infrastructure	0.124 (0.015)***	0.110 (0.015)***	0.055 (0.012)***
Foreign Direct Investment	0.002 (0.014)	0.004 (0.014)	0.005 (0.012)
Official Development Assistance	0.034 (0.013)***	0.031 (0.013)**	0.027 (0.016)*
Human Capital	0.366 (0.185)**	0.256 (0.182)	0.197 (0.022)***
Trade Openness	0.010 (0.005)**	0.003 (0.005)	0.006 (0.003)*
Quality of Governance	0.015 (0.023)*	0.019 (0.024)	0.129 (0.019)***
Inflation Rate	−0.024 (0.009)***	−0.024 (0.009)***	−0.003 (0.005)
Breusch-Pagan LM Test	CHSQ = 2891.21 P-value = 0.000
Hausman Test	CHSQ = 3.75 P-value = 0.0558
Arellano-Bond AR(1)			Z = −2.9195 P-value = 0.0035
Arellano-Bond AR(2)			Z = 0.3868 P-value = 0.6989
Sargan Test			CHSQ = 37.7264 P-value = 1.0000
Hansen Test			CHSQ = 32.50 P-value = 1.000
No. of Obs.	689	689	643

Source: Authors’ calculations using data from the outlined sources.

Standard errors are in parentheses

Note: *** p < 0.01, ** p < 0.05, * p < 0.1

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