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- PublicationWill Improved Financial and Digital Increase Financial Inclusion For All? Evidence From Sub-Saharan Africa.(AERC, 2026) Jacob Nunoo; Chei Bukari; Michael CoffieDespite rapid growth in digital financial services (DFS) supply, adoption across sub-Saharan Africa (SSA) remains low and unequal by gender and location. While existing research predominantly attributes this to demographic and socioeconomic factors, this paper proposes a complementary explanation: that deficits in digital literacy (DL) and financial literacy (FL) represent independent and underappreciated barriers to digital financial inclusion (DFI). Using data from the Financial Inclusion Insights (FII) Survey across Kenya, Nigeria, Tanzania, and Uganda, and employing two-stage least squares regression, dominance analysis, interaction analysis, and Blinder-Oaxaca decomposition, the study tests whether DL and FL independently drive DFI, whether their effects are complementary, and whether these effects extend beyond already-advantaged groups to women and rural dwellers. Three findings emerge. First, both DL and FL causally drive DFI beyond economic circumstances. DL’s effect is five times larger than FL’s (4.2 percentage points vs 22 percentage points), accounting for over 80 percent of explained DFI variance, with their joint effect exceeding individual contributions. Second, literacy effects are not concentrated among urban males: DL benefits women more than men (23.5 vs 21.4 percentage points), with the strongest joint effects among rural and female populations. Third, equalising DL endowments by gender would close 77 percent of the DFI gender gap; equalising by location would close 63 percent exceeding any other single factor. These findings reframe the policy debate: digital skills investment targeting women and rural communities is the most direct lever for inclusive DFI expansion in SSA.
- PublicationThe Effects of Remittances on Poverty in Nigeria(AERC, 2026) Babajide Fowowe; Mohammed ShuaibuThis study conducts an empirical investigation of the effects of remittances on poverty in Nigeria. We rely on a computable general equilibrium (CGE) model where policy scenarios that reflect changes in remittances are simulated, thereby making it possible to identify the impact of remittances on poverty. The results revealed that a negative remittance shock occasioned by the launching of the $300 million diaspora bonds by the Federal Government led to an increase in the level of poverty. Also, our results showed that the impact of a positive remittance shock through the reduction of remittance transaction costs led to a reduction in poverty. The effect was primarily transmitted through the income and consumption channels. The results underscore the crucial role of remittances in helping to smooth consumption and ameliorating poverty in Nigeria. Design appropriate policies that seek to facilitate the flow of remittances more reliably and at the lowest cost, develop remittances-related products (i.e., savings, insurance contributing to social protection for households), and foster access to financial and business services, thus stimulating the local economies. Thus, a set of key features that lead to cost-related inefficiencies, such as weak infrastructure, low competition, and financial regulation constraints, needs to be addressed. The study concludes that remittances cannot be exclusively relied upon for ameliorating poverty, rather it should be used to complement other programmes.
- PublicationTO WHAT EXTENT DOES THE FINANCIAL SECTOR DRIVE INDUSTRIALISATION IN SUB-SAHARAN AFRICA?(AERC, 2026) Amy KaThis paper examines the effect of financial development on industrialisation in a panel of 43 sub-Saharan African countries over the period 2000–2021. Using a dynamic panel model estimated using the System GMM method, the results show a positive and significant effect of financial development on industrialisation. The multidimensional analysis indicates that financial depth is the main driver, followed by accessibility and efficiency. A mediation analysis reveals that this effect is partly mediated through private investment and total factor productivity. The robustness of the results is confirmed using alternative fixed-effects estimates with instrumental variables (FE-2SLS). Overall, these results highlight the key role of financial institutions in supporting structural transformation and industrial development in sub-Saharan Africa.
- PublicationATTRACTIVITÉ LOGISTIQUE ET PERFORMANCES COMMERCIALES DES ENTREPRISES EN AFRIQUE(AERC, 2026) Alioune Badara SeckLa contribution des entreprises africaines au commerce mondial reste marginale malgré les efforts déployés pour améliorer l'environnement des affaires. Cette étude examine l'effet du cadre logistique sur les performances à l'exportation des entreprises, en distinguant les marges commerciales extensives et intensives. L'analyse s'appuie sur un nouvel ensemble de données issues d'enquêtes de la Banque mondiale couvrant environ 21 000 entreprises dans 44 pays africains sur la période 2020-2025. Les résultats, obtenus à l’aide d’un modèle de sélection de Heckman, complété par des estimations de régression fractionnaire et une approche bayésienne, montrent qu’une attractivité logistique améliorée — en termes de réduction des délais de dédouanement et de diminution des obstacles liés aux réglementations commerciales et douanières — favorise de manière significative la participation des entreprises aux marchés internationaux ainsi que l’intensité de leurs exportations. Toutefois, ces effets varient en fonction des caractéristiques des entreprises, notamment le secteur d’activité, la taille, le sexe du dirigeant et l’exposition à la corruption. Ces résultats soulignent l’importance des politiques de facilitation des échanges et suggèrent la nécessité de concevoir des politiques commerciales mieux ciblées, compte tenu de l’hétérogénéité des entreprises africaines.
- PublicationEvolution of the Interbank Market Network Structure: The Case of Kenya(AERC, 2026) Tiriongo Samuel; Kamau Anne; Ndirangu LydiaThis study characterizes the evolution of the interbank market network structure in Kenya, as a case study of a developing money market using a network-based approach, employing overnight trading data spanning 2013 to 2020. The study extracts and describes the evolution of well-known complex network measures, including degree distribution, network density, and centrality of the players, their clustering behaviour, and clique formations, to characterize the topology of the interbank market. Study findings show that the interconnectedness among banks in the market varied over the analysis period, with large banks being the most connected as debtors and small banks exhibiting the least funding diversification. On the lending side, small banks are just as diversified as their larger counterparts, particularly before 2016. Thereafter, as counterparty risk assessments tightened, large banks dominated the market. Other microstructure market characteristics reveal several insights about the interbank market, including: an incomplete structure, with only about 1.5 percent of banks having connections with almost all other banks; a highly vulnerable structure to a few hub banks; and a varying assortativeness structure depending on the nature of the shock presented. These findings carry useful insights for understanding interbank market counterparty risk profiling and the identification of critical players in the market, which have implications for the banking sector liquidity management strategies and financial stability. Understanding the fragility of the market and the existing anchors to market stability also facilitates the monetary authority to minimize the risk of contagion and enhance the resilience of the system in the event of a shock. Overall, the interbank market is largely fragile, and thus may not be sufficiently developed to be relied on for pricing of liquidity and effective transmission of monetary policy signals.