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Public-Private Partnership and Financial Structure Development: Cointegration Lessons for selected sub-Sahara African Economies

Author

Listed:
  • Patrick Omoruyi Eke

    (Deptartment of Banking and Finance, Covenant University)

  • Alexander Ehimare Omankhanlen

    (Deptartment of Banking and Finance, Covenant University)

Abstract

The financial system of sub-Sahara Africa provides weak support for its long-term real sector development. The bank-based finance option in these economies promotes non-competitive market mechanism, which result in high interest rate spread. The study applies an augmented Toda-Yamamoto causality technique to test the dynamic relationship between private participation in infrastructure, interest-rate spread, and institutions' regulatory quality in four sub-Saharan African economies of Kenya, Mauritius, South Africa, and Nigeria. The results provide evidence that private participation in infrastructure can induce interest-rate spread downward. The study recommends publicprivate partnership investments to deliver projects at lower marginal cost.

Suggested Citation

  • Patrick Omoruyi Eke & Alexander Ehimare Omankhanlen, 2019. "Public-Private Partnership and Financial Structure Development: Cointegration Lessons for selected sub-Sahara African Economies," Annals of Economics and Finance, Society for AEF, vol. 20(2), pages 783-802, November.
    • Handle: RePEc:cuf:journl:y:2019:v:20:i:2:ekeomankhanlen
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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