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

Patrick Eke () and Alexander Omankhanlen ()
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Patrick Eke: Deptartment of Banking and Finance, Covenant University
Alexander Omankhanlen: Deptartment of Banking and Finance, Covenant University

Annals of Economics and Finance, 2019, vol. 20, issue 2, 783-802

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.

Keywords: Co-integration; Financial structure development; Public-Private partnership (search for similar items in EconPapers)
JEL-codes: C30 G23 H83 (search for similar items in EconPapers)
Date: 2019
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