Education and Economic Growth in Sub-Saharan African Countries: The Moderating Role of Education Expenditure
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Date
2024-09-04
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A.A.U
Abstract
Even though education has been highlighted in several empirical literature, as a factor that
could spur up economic growth, the level of education in sub-Saharan Africa is not effectively
channeled into desired levels of economic growth. However, there is an indication in the
literature that education will be more relevant to the economic growth of sub-Saharan African
economies that maintain strong and effective education spending.
This study investigates the relationship between education and economic growth, with a
particular focus on the moderating role of education expenditure. Utilizing a dynamic panel data
model, the analysis covers annual data from 41 sub-Saharan African countries between 2001
and 2022. Employing the system Generalized Method of Moments (GMM) estimation technique,
the results indicate that education expenditure moderates the effect of education on economic
growth in these economies.
The study’s findings also shows that GDP per capita growth rate is positively correlated with
primary education, secondary education, tertiary education, export, consumption and gross
domestic saving while it is negatively correlated with labor force, gross fixed capital formation,
education expenditure, import and inflation. The study concluded that education with the support
of effective education spending will boost productivity and this resulted in increasing the level of
economic growth.
It is therefore recommended that sub-Saharan African economies should apply appropriate
measures to boost their education spending so that gains from the education sector can
effectively be channeled into economic growth