This paper deals with the analysis of the GDP growth in the CEMAC countries, which are Chad, the
Central African Republic, Congo, Gabon and Cameroon and Equatorial Guinea. We use time series techniques
based on the concept of fractional integration and cointegration. The univariate analysis based on fractional
integration aims to determine whether the series are I(1) or alternatively I(d) with d<1, which would imply
mean reversion.
Peru's economic freedom score is 68.6, making its economy the 41st freest globally. This is an improvement of 1 point from the previous year. Peru ranks 5th out of 29 countries in South and Central America, with a score above regional and world averages. Despite challenges, Peru has achieved around 7% annual growth over 5 years through business reforms and trade agreements. Weaknesses include inadequate protection of property rights and corruption.
Mr Speaker Sir, I move that leave be granted to present a
Statement of the Estimated Revenues and Expenditures of
the Republic of Zimbabwe for the 2019 Financial Year and
to make Provisions for matters ancillary and incidental to this
purpose.
The document discusses updates to Cuba's economic model, including a GDP growth rate of 3.1% in 2013, lower than planned. It outlines national budget priorities like education, health, and culture. It also discusses challenges like the US blockade, declining tourism from Europe, and high import costs. The updates aim to boost agricultural cooperatives and small businesses, decentralize state enterprises, reform prices, credits and fiscal policies, and encourage exports and import substitution. The goal is to continue socialist planning while improving productivity and living standards.
Strategies needed to brazil facing current economic crisisFernando Alcoforado
The document outlines strategies needed for Brazil to address its current economic, social, and environmental crises. It identifies key problems such as regional inequality, slowing economic growth, high taxes, and corruption. Proposed strategies include decentralizing investment, reducing the tax burden, improving infrastructure, and adopting anti-corruption reforms. The strategies aim to strengthen Brazil's economy, overcome social issues like income inequality, and address environmental challenges through sustainable development.
16.8289277 Journal of xian shiyou university Opue et al.pdfJobOpue1
This work provides an answer to the possibility of creating a second West African monetary union in West Africa. The business cycles in the West African Monetary Zone (WAMZ) using real GDP growth within 1980-2022, detrended by Hodrick–Prescott filters were analyzed. This work also examined the effect of the level of symmetry in macroeconomic policies and the level of symmetry in trade flows on the level of synchronization of business cycles between pairs of countries in WAMZ, the seemingly unrelated regression estimation was computed on Autoregressive Distributed Lag models. The cusum of squares test indicated the absence of structural breaks in the models while the system Portmanteau test for autocorrelation indicated the absence of serial correlations up to the 10th order lag. The empirical results provide clear support for Ghana, Guinea and Nigeria to proceed in the creation of the second West African monetary union with their various currencies tied to the WAMZ-eco while also creating an enabling environment for other countries within WAMZ to join in due course. The cyclical thrift scheme for ECOWAS countries to boost industrialization and trade protection/restriction was also recommended
TRADE FLOWS, OPTIMAL MACROECONOMIC POLICY AND BUSINESS CYCLES SYNCHRONIZATION...JobOpue1
This work provides an answer to the possibility of creating a second West African monetary union in West Africa. The business cycles in the West African Monetary Zone (WAMZ) using real GDP growth within 1980-2022, detrended by Hodrick–Prescott filters were analyzed. This work also examined the effect of the level of symmetry in macroeconomic policies and the level of symmetry in trade flows on the level of synchronization of business cycles between pairs of countries in WAMZ, the seemingly unrelated regression estimation was computed on Autoregressive Distributed Lag models. The cusum of squares test indicated the absence of structural breaks in the models while the system Portmanteau test for autocorrelation indicated the absence of serial correlations up to the 10th order lag. The empirical results provide clear support for Ghana, Guinea and Nigeria to proceed in the creation of the second West African monetary union with their various currencies tied to the WAMZ-eco while also creating an enabling environment for other countries within WAMZ to join in due course. The cyclical thrift scheme for ECOWAS countries to boost industrialization and trade protection/restriction was also recommended.
Zambia expects its maize production to increase this year, pushing stocks into a surplus and reversing earlier warnings of an import need due to drought. Higher crop yields are projected to boost production to 2.87 million metric tonnes from 2.62 million tonnes last year, despite less cultivated land area. This projected surplus of 635,000 tonnes exceeds domestic consumption needs for the 2016-17 marketing season. The agriculture minister provided the updated production outlook to legislators, in contrast to concerns raised as recently as March about a shrinking harvest due to erratic rains.
This document provides background information on Ghana's Structural Adjustment Program (SAP) implemented in 1983. It discusses Ghana's deteriorating economic situation following independence that led successive governments to seek assistance from international lenders. Ghana was compelled to accept the SAP promoted by the IMF and World Bank to receive loans. The SAP required Ghana to implement free market reforms like privatization, trade liberalization, currency devaluation and cuts to social spending. The document examines the origins and requirements of the SAP as well as its impacts on Ghana's development.
Peru's economic freedom score is 68.6, making its economy the 41st freest globally. This is an improvement of 1 point from the previous year. Peru ranks 5th out of 29 countries in South and Central America, with a score above regional and world averages. Despite challenges, Peru has achieved around 7% annual growth over 5 years through business reforms and trade agreements. Weaknesses include inadequate protection of property rights and corruption.
Mr Speaker Sir, I move that leave be granted to present a
Statement of the Estimated Revenues and Expenditures of
the Republic of Zimbabwe for the 2019 Financial Year and
to make Provisions for matters ancillary and incidental to this
purpose.
The document discusses updates to Cuba's economic model, including a GDP growth rate of 3.1% in 2013, lower than planned. It outlines national budget priorities like education, health, and culture. It also discusses challenges like the US blockade, declining tourism from Europe, and high import costs. The updates aim to boost agricultural cooperatives and small businesses, decentralize state enterprises, reform prices, credits and fiscal policies, and encourage exports and import substitution. The goal is to continue socialist planning while improving productivity and living standards.
Strategies needed to brazil facing current economic crisisFernando Alcoforado
The document outlines strategies needed for Brazil to address its current economic, social, and environmental crises. It identifies key problems such as regional inequality, slowing economic growth, high taxes, and corruption. Proposed strategies include decentralizing investment, reducing the tax burden, improving infrastructure, and adopting anti-corruption reforms. The strategies aim to strengthen Brazil's economy, overcome social issues like income inequality, and address environmental challenges through sustainable development.
16.8289277 Journal of xian shiyou university Opue et al.pdfJobOpue1
This work provides an answer to the possibility of creating a second West African monetary union in West Africa. The business cycles in the West African Monetary Zone (WAMZ) using real GDP growth within 1980-2022, detrended by Hodrick–Prescott filters were analyzed. This work also examined the effect of the level of symmetry in macroeconomic policies and the level of symmetry in trade flows on the level of synchronization of business cycles between pairs of countries in WAMZ, the seemingly unrelated regression estimation was computed on Autoregressive Distributed Lag models. The cusum of squares test indicated the absence of structural breaks in the models while the system Portmanteau test for autocorrelation indicated the absence of serial correlations up to the 10th order lag. The empirical results provide clear support for Ghana, Guinea and Nigeria to proceed in the creation of the second West African monetary union with their various currencies tied to the WAMZ-eco while also creating an enabling environment for other countries within WAMZ to join in due course. The cyclical thrift scheme for ECOWAS countries to boost industrialization and trade protection/restriction was also recommended
TRADE FLOWS, OPTIMAL MACROECONOMIC POLICY AND BUSINESS CYCLES SYNCHRONIZATION...JobOpue1
This work provides an answer to the possibility of creating a second West African monetary union in West Africa. The business cycles in the West African Monetary Zone (WAMZ) using real GDP growth within 1980-2022, detrended by Hodrick–Prescott filters were analyzed. This work also examined the effect of the level of symmetry in macroeconomic policies and the level of symmetry in trade flows on the level of synchronization of business cycles between pairs of countries in WAMZ, the seemingly unrelated regression estimation was computed on Autoregressive Distributed Lag models. The cusum of squares test indicated the absence of structural breaks in the models while the system Portmanteau test for autocorrelation indicated the absence of serial correlations up to the 10th order lag. The empirical results provide clear support for Ghana, Guinea and Nigeria to proceed in the creation of the second West African monetary union with their various currencies tied to the WAMZ-eco while also creating an enabling environment for other countries within WAMZ to join in due course. The cyclical thrift scheme for ECOWAS countries to boost industrialization and trade protection/restriction was also recommended.
Zambia expects its maize production to increase this year, pushing stocks into a surplus and reversing earlier warnings of an import need due to drought. Higher crop yields are projected to boost production to 2.87 million metric tonnes from 2.62 million tonnes last year, despite less cultivated land area. This projected surplus of 635,000 tonnes exceeds domestic consumption needs for the 2016-17 marketing season. The agriculture minister provided the updated production outlook to legislators, in contrast to concerns raised as recently as March about a shrinking harvest due to erratic rains.
This document provides background information on Ghana's Structural Adjustment Program (SAP) implemented in 1983. It discusses Ghana's deteriorating economic situation following independence that led successive governments to seek assistance from international lenders. Ghana was compelled to accept the SAP promoted by the IMF and World Bank to receive loans. The SAP required Ghana to implement free market reforms like privatization, trade liberalization, currency devaluation and cuts to social spending. The document examines the origins and requirements of the SAP as well as its impacts on Ghana's development.
The document discusses opportunities for growing business in West Africa. It summarizes the socio-economic context of ECOWAS, highlighting Ivory Coast and Nigeria as influential countries. Ivory Coast is described as a pilot country due to its large port in Abidjan, influential consumer patterns, role in WAEMU, and many regional offices of multinational companies. Nigeria is also important due to its large population and economy. The document argues that to succeed in West Africa, companies must understand these regional dynamics and think globally but act locally through regional deployment.
THE EFFECT OF MONETARY POLICY ON HOUSEHOLD CONSUPTION IN CAMEROONFuh George Cheo
This document summarizes a study investigating the effect of monetary policy on household consumption in Cameroon from 1980 to 2010. It uses an economic model to examine the relationship between household consumption expenditure and several monetary policy variables, including money and quasi money growth, real interest rates, total reserves, and gross national income per capita. The results indicate that total reserves and GNI per capita positively and significantly affect household consumption, while money and quasi money growth has a negative impact. It recommends that monetary policy tools be used to influence household consumption by encouraging total reserves and GNI per capita.
The Pacific Alliance is an economic integration agreement between Chile, Colombia, Mexico, and Peru aimed at promoting regional economic growth and development through free trade. Key objectives include establishing free movement of goods, services, capital and people. As a bloc, the four countries have a population of over 209 million people and combined GDP of over $1 trillion USD, accounting for 35% of Latin America's total GDP. The agreement seeks to create an open market to attract trade and investment, especially from Asia-Pacific countries.
The mutual review of development in africa promise & performance 2011Dr Lendy Spires
This document provides a summary of the 2011 Mutual Review of Development Effectiveness in Africa report produced jointly by the UN Economic Commission for Africa and the Organisation for Economic Co-operation and Development. The summary finds that while Africa experienced strong economic growth in 2010 following the global recession, development challenges remain. Progress has been made towards some Millennium Development Goals but the pace of progress is still inadequate. There have also been positive developments in governance but long-standing conflicts persist and election quality needs improvement. Domestic revenue rebounded in 2010 but tax collection varies significantly between countries. Official development assistance increased in 2010 but earlier commitments have not been fully met. Overall, the report identifies priorities for African countries and their partners in order to sustain
The East African Community (EAC) was established in 2000 between Kenya, Uganda and Tanzania with the aim of increasing trade and economic cooperation in the region. It has since expanded to include Rwanda and Burundi. The EAC seeks to create a large common market to attract investment and increase competitiveness. With a population of over 137 million currently that is projected to exceed 150 million by 2015, the EAC represents a sizable consumer market in Africa second only to Nigeria. Member states have also experienced strong GDP growth averaging around 8-9% annually in recent years. While challenges remain, the EAC's political and economic integration has progressed further than its previous iteration and its development is expected to significantly impact business opportunities in East
Illicit financial flows main report englishZELA_infor
This Report reflects the work that the High Level Panel on Illicit Financial Flows
has carried out since it was established in February 2012, particularly to:
> Develop a realistic and accurate assessment of the volumes and
sources of these outflows;
> Gain concrete understanding of how these outflows occur in Africa,
based on case studies of a sample of African countries and;
> Ensure that they make specific recommendations of practical, realistic,
short- to medium-term actions that should be taken both by Africa and
by the rest of the world to effectively confront what is in fact a global
challenge.
This Report reflects the work that the High Level Panel on Illicit Financial Flows
has carried out since it was established in February 2012, particularly to:
> Develop a realistic and accurate assessment of the volumes and
sources of these outflows;
> Gain concrete understanding of how these outflows occur in Africa,
based on case studies of a sample of African countries and;
> Ensure that they make specific recommendations of practical, realistic,
short- to medium-term actions that should be taken both by Africa and
by the rest of the world to effectively confront what is in fact a global
challenge.
The document is a report from the High Level Panel on Illicit Financial Flows from Africa that was commissioned by the AU/ECA Conference of Ministers of Finance, Planning and Economic Development. It finds that Africa loses over $50 billion annually through illicit financial outflows, which hampers development goals. The panel's report analyzes the scale and sources of these outflows, provides case studies of African countries, and makes recommendations to curb outflows through actions by both Africa and other countries. The panel thanks all who supported its work, including governments, organizations, and staff who provided expertise and support.
This document discusses the challenges facing integration efforts of the African Union (AU) and the Economic Community of West African States (ECOWAS). It outlines the historical evolution of both organizations and their objectives. Some of the main hurdles to integration in Africa mentioned include economic weaknesses in African countries, a lack of commitment to agreements, inadequate private sector involvement, and lengthy customs procedures. Other challenges are lack of intra-African trade due to similar industries and high transport costs, as well as problems with secretariat management and policy harmonization. Bad governance and instability in many African nations pose additional barriers to successful regional integration.
The paper discusses the new paradign shift when it comes to addressing issues of development. Economic growth must not be the obly variable to be taken in consideration to address poverty, inequality and backwardness.
This work shows the various stages the economy of Cameroon went through since independence. It is an analytical eye and element to learn more about this state
(1) The document discusses economic development challenges in Cameroon since independence from France and Britain in 1960-1961. (2) It analyzes Cameroon's economic policies and five-year development plans from 1961-1990 and the impacts of structural adjustment programs in the 1980s. (3) The document applies Fandjio's Deceptive Power Theory to explain how political elites in Cameroon have manipulated situations like an avian flu outbreak to deceive farmers and pursue their own economic interests over those of citizens.
Active with Latin America and the CaribbeanOECDglobal
The OECD and the Latin America and the Caribbean (LAC) region have a growing and dynamic relationship. In January 2016, OECD members decided to strengthen co-operation with the region through the creation of an OECD LAC Regional Programme, launched on 1 June 2016 at the OECD’s Ministerial Council Meeting, with Chile and Peru selected as the Programme’s co-chairs for 2016-2018.
This brochure provides an overview of the breadth and scope of the work carried out within the framework of this co-operation.
Uneca af db-auc statistics for good economic governance, regional intergratio...Dr Lendy Spires
This document presents a project to improve economic statistics in Africa by assisting countries to implement the 2008 System of National Accounts (SNA). It notes that while Africa has experienced rapid economic growth, the quality of economic data is limited, hampering effective policymaking. The 2008 SNA implementation would help produce timely, accurate GDP and related indicators according to international standards.
The project is developed by the African Group on National Accounts (AGNA) under the African Union's Statistical Commission for Africa. It aims to build statistical capacity in African countries over five years through training, technical support, and advocacy. The first phase focuses on capacity building activities and has a budget of $4.9 million. The document outlines governance structures, implementation strategies
The document discusses international trade and regional economic integration in Africa. It provides details on several major regional economic communities in Africa, including COMESA and the East African Community (EAC). COMESA aims to promote economic development and trade by removing barriers between countries in Eastern and Southern Africa. The EAC seeks similar goals among East African countries by establishing a customs union and common market to boost trade and investment. Both organizations aim to advance economic and political integration among their member states in multiple stages, from free trade areas to possible future monetary unions and political federations.
The document discusses international trade and regional economic integration in Africa. It provides details on several major regional economic communities in Africa, including COMESA and the East African Community (EAC). COMESA aims to promote economic development and trade by removing barriers between member states. Its goals include establishing a free trade area and eventually a common market and monetary union. The EAC also seeks to deepen economic and political integration between its members through cooperation in areas like trade, infrastructure, and security. Both organizations aim to boost intra-regional trade and investment through gradual economic harmonization and coordination between states.
The document discusses international trade and regional economic integration in Africa. It provides details on several major regional economic communities in Africa, including COMESA and the East African Community (EAC). COMESA aims to promote economic development and trade by removing barriers between countries in Eastern and Southern Africa. The EAC seeks similar goals among East African countries by establishing a customs union and common market to boost trade and investment. Both organizations aim to advance economic and political integration among their member states in multiple stages, from free trade areas to possible future monetary unions and political federations.
International Monetary System: The International Financial System - Reform of International Monetary Affairs
- The Bretton Wood System and the International Monetary Fund, Controversy over Regulation of International
Finance, Developing Countries' Concerns, Exchange Rate Policy of Developing Economies.
The East African Community (EAC) is an intergovernmental organization composed of Kenya, Rwanda, Tanzania, Uganda, and Burundi. The EAC aims to strengthen economic, political, and social cooperation among member states. It establishes a single market to facilitate business and trade within the region. The EAC also provides a platform for collective bargaining on international trade agreements and addresses common issues like security threats. While the EAC has benefits, challenges remain such as varying customs procedures between members and differences in economic development levels.
This annual report summarizes the activities of the Southern African Customs Union (SACU) for the 2011/2012 financial year. Some key highlights include:
- Substantial progress was made in implementing the Trade Facilitation Programme, including adopting a regional customs policy and strategy to address illicit tobacco trade.
- A SACU statistical database was developed to serve as a central repository for economic data from member states.
- The review of the SACU revenue sharing arrangement continued, with a task team identifying key policy issues to consider in the review.
- SACU continued negotiations with key trading partners like India, the US, and the EU, as well as negotiations for a Tri
Many countries have seen the importance of financial education by making financial
education a national strategy. In Vietnam, although the National Strategies for Inclusive Financial
Education has been proposed since 2017 and officially included in the National Financial Inclusion
Strategy in 2020, however, financial education is still quite new, and many people are not aware of
the necessity of financial l
Today, in the rapidly emerging globalization process, increasing the competitiveness of enterprises
depends on increasing of their firm performance. Although there are many methods and techniques affecting
firm performance, Information technology (IT) capabilities has become one of the most widely used method,
especially in dealing with supply chain matters of a firm. The aim of our study is to express whether innovation
and organization learning is effective as intermediate variable to the effects of IT capabilities at firm’s
performance. The opinion which claim
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The document discusses opportunities for growing business in West Africa. It summarizes the socio-economic context of ECOWAS, highlighting Ivory Coast and Nigeria as influential countries. Ivory Coast is described as a pilot country due to its large port in Abidjan, influential consumer patterns, role in WAEMU, and many regional offices of multinational companies. Nigeria is also important due to its large population and economy. The document argues that to succeed in West Africa, companies must understand these regional dynamics and think globally but act locally through regional deployment.
THE EFFECT OF MONETARY POLICY ON HOUSEHOLD CONSUPTION IN CAMEROONFuh George Cheo
This document summarizes a study investigating the effect of monetary policy on household consumption in Cameroon from 1980 to 2010. It uses an economic model to examine the relationship between household consumption expenditure and several monetary policy variables, including money and quasi money growth, real interest rates, total reserves, and gross national income per capita. The results indicate that total reserves and GNI per capita positively and significantly affect household consumption, while money and quasi money growth has a negative impact. It recommends that monetary policy tools be used to influence household consumption by encouraging total reserves and GNI per capita.
The Pacific Alliance is an economic integration agreement between Chile, Colombia, Mexico, and Peru aimed at promoting regional economic growth and development through free trade. Key objectives include establishing free movement of goods, services, capital and people. As a bloc, the four countries have a population of over 209 million people and combined GDP of over $1 trillion USD, accounting for 35% of Latin America's total GDP. The agreement seeks to create an open market to attract trade and investment, especially from Asia-Pacific countries.
The mutual review of development in africa promise & performance 2011Dr Lendy Spires
This document provides a summary of the 2011 Mutual Review of Development Effectiveness in Africa report produced jointly by the UN Economic Commission for Africa and the Organisation for Economic Co-operation and Development. The summary finds that while Africa experienced strong economic growth in 2010 following the global recession, development challenges remain. Progress has been made towards some Millennium Development Goals but the pace of progress is still inadequate. There have also been positive developments in governance but long-standing conflicts persist and election quality needs improvement. Domestic revenue rebounded in 2010 but tax collection varies significantly between countries. Official development assistance increased in 2010 but earlier commitments have not been fully met. Overall, the report identifies priorities for African countries and their partners in order to sustain
The East African Community (EAC) was established in 2000 between Kenya, Uganda and Tanzania with the aim of increasing trade and economic cooperation in the region. It has since expanded to include Rwanda and Burundi. The EAC seeks to create a large common market to attract investment and increase competitiveness. With a population of over 137 million currently that is projected to exceed 150 million by 2015, the EAC represents a sizable consumer market in Africa second only to Nigeria. Member states have also experienced strong GDP growth averaging around 8-9% annually in recent years. While challenges remain, the EAC's political and economic integration has progressed further than its previous iteration and its development is expected to significantly impact business opportunities in East
Illicit financial flows main report englishZELA_infor
This Report reflects the work that the High Level Panel on Illicit Financial Flows
has carried out since it was established in February 2012, particularly to:
> Develop a realistic and accurate assessment of the volumes and
sources of these outflows;
> Gain concrete understanding of how these outflows occur in Africa,
based on case studies of a sample of African countries and;
> Ensure that they make specific recommendations of practical, realistic,
short- to medium-term actions that should be taken both by Africa and
by the rest of the world to effectively confront what is in fact a global
challenge.
This Report reflects the work that the High Level Panel on Illicit Financial Flows
has carried out since it was established in February 2012, particularly to:
> Develop a realistic and accurate assessment of the volumes and
sources of these outflows;
> Gain concrete understanding of how these outflows occur in Africa,
based on case studies of a sample of African countries and;
> Ensure that they make specific recommendations of practical, realistic,
short- to medium-term actions that should be taken both by Africa and
by the rest of the world to effectively confront what is in fact a global
challenge.
The document is a report from the High Level Panel on Illicit Financial Flows from Africa that was commissioned by the AU/ECA Conference of Ministers of Finance, Planning and Economic Development. It finds that Africa loses over $50 billion annually through illicit financial outflows, which hampers development goals. The panel's report analyzes the scale and sources of these outflows, provides case studies of African countries, and makes recommendations to curb outflows through actions by both Africa and other countries. The panel thanks all who supported its work, including governments, organizations, and staff who provided expertise and support.
This document discusses the challenges facing integration efforts of the African Union (AU) and the Economic Community of West African States (ECOWAS). It outlines the historical evolution of both organizations and their objectives. Some of the main hurdles to integration in Africa mentioned include economic weaknesses in African countries, a lack of commitment to agreements, inadequate private sector involvement, and lengthy customs procedures. Other challenges are lack of intra-African trade due to similar industries and high transport costs, as well as problems with secretariat management and policy harmonization. Bad governance and instability in many African nations pose additional barriers to successful regional integration.
The paper discusses the new paradign shift when it comes to addressing issues of development. Economic growth must not be the obly variable to be taken in consideration to address poverty, inequality and backwardness.
This work shows the various stages the economy of Cameroon went through since independence. It is an analytical eye and element to learn more about this state
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This brochure provides an overview of the breadth and scope of the work carried out within the framework of this co-operation.
Uneca af db-auc statistics for good economic governance, regional intergratio...Dr Lendy Spires
This document presents a project to improve economic statistics in Africa by assisting countries to implement the 2008 System of National Accounts (SNA). It notes that while Africa has experienced rapid economic growth, the quality of economic data is limited, hampering effective policymaking. The 2008 SNA implementation would help produce timely, accurate GDP and related indicators according to international standards.
The project is developed by the African Group on National Accounts (AGNA) under the African Union's Statistical Commission for Africa. It aims to build statistical capacity in African countries over five years through training, technical support, and advocacy. The first phase focuses on capacity building activities and has a budget of $4.9 million. The document outlines governance structures, implementation strategies
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The document discusses international trade and regional economic integration in Africa. It provides details on several major regional economic communities in Africa, including COMESA and the East African Community (EAC). COMESA aims to promote economic development and trade by removing barriers between member states. Its goals include establishing a free trade area and eventually a common market and monetary union. The EAC also seeks to deepen economic and political integration between its members through cooperation in areas like trade, infrastructure, and security. Both organizations aim to boost intra-regional trade and investment through gradual economic harmonization and coordination between states.
The document discusses international trade and regional economic integration in Africa. It provides details on several major regional economic communities in Africa, including COMESA and the East African Community (EAC). COMESA aims to promote economic development and trade by removing barriers between countries in Eastern and Southern Africa. The EAC seeks similar goals among East African countries by establishing a customs union and common market to boost trade and investment. Both organizations aim to advance economic and political integration among their member states in multiple stages, from free trade areas to possible future monetary unions and political federations.
International Monetary System: The International Financial System - Reform of International Monetary Affairs
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Finance, Developing Countries' Concerns, Exchange Rate Policy of Developing Economies.
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This annual report summarizes the activities of the Southern African Customs Union (SACU) for the 2011/2012 financial year. Some key highlights include:
- Substantial progress was made in implementing the Trade Facilitation Programme, including adopting a regional customs policy and strategy to address illicit tobacco trade.
- A SACU statistical database was developed to serve as a central repository for economic data from member states.
- The review of the SACU revenue sharing arrangement continued, with a task team identifying key policy issues to consider in the review.
- SACU continued negotiations with key trading partners like India, the US, and the EU, as well as negotiations for a Tri
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Many countries have seen the importance of financial education by making financial
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Today, in the rapidly emerging globalization process, increasing the competitiveness of enterprises
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and organization learning is effective as intermediate variable to the effects of IT capabilities at firm’s
performance. The opinion which claim
Globally, the number of startup companies has rapidly expanded during the last 5-8 years. Offering
products and/or services that greatly enhance the lives of its clients is a major focus for these firms. In India,
local and federal government initiatives have provided new enterprises and entrepreneurs with much
momentum and assistance, helping India become the world's top startup location. The Government of India
(GOI) launched the "Startup India" campaign in 2015 to promote entrepreneurship and support businesses to
achieve this goal (Babu, S., Sridevi, K.,2019). An IBM Center for Business Value and Oxford Economics study
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Behaviour finance is the study of how psychological phenomena affect financial behaviour. This
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perception, and percieved ease of use on impulsive buying behaviour. This research is based on Decision Affect
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Improving the business environment is one of the key strategies to promote local and regional
economic development. However, which factors affect the business environment of the provinces is still
controversial. Using survey data from 400 investors and managers and a multivariate regression analysis
method, this study has identified the factors affecting the business environment of Hai Phong province. The
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services, labor training and legal institutions. In
The effect of work attitude and innovation ability on employee innovation performance is of great
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of employees in manufacturing enterprises affects innovation performance and the mediating mechanism of
innovation ability. Based on data from Chinese manufacturing enterprises, empirical analysis was conducted
using SEM models. Resear
The concept of organizational resilience continues to grow in focus and importance, but there
has yet to be an agreed upon measure of organizational resilience. Organizational resilience can be seen as a
corporation’s ability to adapt to change and maintain flexibility within their supply chain. Resilience and
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Economic Growth in the Cemac Countries: Fractional Integration, Mean Reversion and Gdp Convergence
1. International Journal of Business Marketing and Management (IJBMM)
Volume 5 Issue 01 January 2020, P.P. 31-42
ISSN: 2456-4559
www.ijbmm.com
International Journal of Business Marketing and Management (IJBMM) Page 31
Economic Growth in the Cemac Countries: Fractional
Integration, Mean Reversion and Gdp Convergence
Robinson Hugues Toguem1
, Prof. Luis A. Gil-Alana 2
1
African School of Economics (ASE), Cotonou, Benin
2
University of Navarra, Faculty of Economics and ICS-NDID 31009 Pamplona,Spain
Abstract: This paper deals with the analysis of the GDP growth in the CEMAC countries, which are Chad, the
Central African Republic, Congo, Gabon and Cameroon and Equatorial Guinea. We use time series techniques
based on the concept of fractional integration and cointegration. The univariate analysis based on fractional
integration aims to determine whether the series are I(1) or alternatively I(d) with d<1, which would imply
mean reversion. We examine the nature of the shocks in the real GDP series in these countries along with the
hypothesis of convergence in relation with the US. Starting with the univariate results, the results indicate
strong evidence of persistence, with the orders of integration being around the I(1) case. Testing the hypothesis
of convergence, by means of looking at the order of integration of the difference between the log real GDP (and
real GDP per capita) or each country minus the one corresponding to the US, we obtain further evidence to
support the unit roots, rejecting thus any possibility of long run relationships between these African countries
and the US.
Keywords: real GDP; real GDP per capita; long memory; persistence; fractional integration; long-range
dependence; fractional cointegration.
I. Introduction
The African continent is not homogeneous. The fifty-four countries do not have the same history
regarding colonization and furthermore their natural, economic, social and political environments are very
different. These countries are grouped into eight regional communities (not necessarily disjointed from each
other) and there are three monetary unions: The Economic and Monetary Community of Central Africa
(EMCCA or CEMAC in French), the West African Economic and Monetary Union (WAEMU), and the South
African Common Monetary Area (CMA).
When it comes to EMCCA, some of the countries have set certain goals, with the ultimate objective
of evolving into emerging economies. In this regard, five of the six CEMAC countries have already quantified
their stated targets. Among these countries, Cameroon has formally expressed its ambitions and declared its
intention to be emerging by 2035, Chad by 2030, Congo and Gabon by 2025, and Equatorial Guinea by 2020.
Only the Central African Republic, faced with political instability and struggling to cope with the negative
effects of the recent civil war, has not yet officially expressed an objective to become an emerging economy in
the near future.
As expected, the member countries of the CEMAC want to follow a path that leads to becoming an
emerging economy. To achieve this, they must achieve an acceptable level of economic growth, sustainable
over time because only a sustainable rate of economic growth can lead them to the stage of becoming emerging
economies in relation to the timeframe they have assigned. However, in order to achieve these levels of
economic growth accompanied by appropriate social indicators and the well-being of their citizens, they require
precise knowledge of their real GDP and real GDP per capita in order to implement relevant economic and
social policies. This will enable their economies to emerge securely. Indeed, the CEMAC, which has abundant
natural resources, seeks to transform these assets into wealth that will benefit its citizens. The identification of
the GDP and GDP per capita as key variables is therefore crucial for choosing the type of economic and social
policies to be applied in order to reach the stage of an emergent economy.
That is why this study examines the convergence hypothesis in a group of six countries that belong to
the Economic and Monetary Community of Central Africa (CEMAC), these being Chad, Central African
Republic, Congo, Gabon, Cameroon and Equatorial Guinea, using their real GDP and real GDP per capita data.
We conduct a long memory and fractional integration modelling framework. Additionally, we also conduct a
cointegration analysis of the real GDP and real GDP per capita of each of the countries belonging to the
communities. We examine the nature of the shocks in the real GDP series in these countries along with the
hypothesis of convergence in the long run.
2. Economic Growth In The Cemac Countries: Fractional Integration, Mean Reversion And Gdp
International Journal of Business Marketing and Management (IJBMM) Page 32
There are several contributions in this work. Firstly, the use of long memory and fractional integration
techniques, which have not been very much employed in the analysis of GDP data. Secondly, the focus on the
CEMAC countries, which have not been so far investigated with these techniques, and finally the hypothesis of
real convergence by using fractional integration and cointegration methods is another important contribution of
this work.
The main motivation for this work is to analyze the economic advancement of several countries in the
CEMAC which have shared the same monetary policy, almost comparable in term institutions and currency, yet
which have performed and developed in different ways during the last decades, and we test the real convergence
hypothesis in Cameroon, Chad, Congo, Gabon, Equatorial Guinea and Central African Republic, with respect to
the Unites States.
II. Contextual setting
The EMCCA which stands for Economic and Monetary Community of Central Africa (more
commonly referred to as CEMAC from its name in French, Communauté Économique et Monétaire de l'Afrique
Centrale) is an organization of six Central African states. Currently CEMAC is composed of five former French
colonies in Central Africa: Chad, the Central African Republic, Congo, Gabon and Cameroon and Equatorial
Guinea, a former Spanish colony. Those countries are also members of the Economic Community of Central
African States (ECCAS) that was created in 1983 and which comprises 11 member countries: Angola, Burundi,
Cameroon, Congo, Gabon, Equatorial Guinea, Central Africa, the Democratic Republic of Congo, Rwanda, Sao
Tome and Principe and Chad. In July 2004, members approved the creation of a free trade area (FTA) to be in
place by January 1, 2008).
CEMAC was established to promote intra-community trade and industrial cooperation, the institution
of a true common market, and a strong solidarity between the people of this community. In general terms, it was
set up to promote the comprehensive process of sub-regional integration through the forming of a monetary
union, with the Central African CFA franc as a common currency as part of the policy of ‘Coopération
financière en Afrique centrale’ (Financial Cooperation in Central Africa).
The treaty that detailed the legal and institutional arrangements of CEMAC set up the bodies of the
Central African Economic Union (Union Economique de l’Afrique Central – UEAC) with an Executive
Secretariat based in Bangui, the Central African Republic and the Monetary Union of Central Africa (Union
Monétaire de l’Afrique Centrale), which set out the responsibilities of the Central Bank, The Bank of Central
African States (Banque des Etatsd’Afrique Centrale-BEAC) and the Central African Banking Commission
(Commission Bancaire de l'Afrique Centrale-COBAC). BEAC is a single central bank for the region and there is
a single currency (CFA franc) and defined criteria for macroeconomic convergence. BEAC regulates the sector
through its regional Banking Commission, COBAC, which shares liability with the national Ministries of
Finance of all of the six countries for licensing new banks and regulating microfinance institutions. There is also
a budgetary agreement between the French Treasury (Ministry of Finance) and BEAC with fixed convertibility
of the CFA franc and control with veto powers held by the French Treasury.
The countries of Central Africa very soon realized the value of economic cooperation and regional
integration as factors that could contribute to accelerating their growth and development. Indeed, before
independence, the Central African Republic, the Congo, Gabon and Chad constituted an integrated economic
entity under the name of French Equatorial Africa (AEF from its name in French, Afrique Equatoriale
Francaise). On June 29, 1959, these countries created the Equatorial Customs Union (UDE from its name in
French, Union Douanière Equatoriale). Having become autonomous and then independent in 1960, they opted
for the consolidation of the ties woven under the colonial regime and for the strengthening of their customs
union. (Source: UDEAC-CEMAC - Février 1999).
In 1962, Cameroon joined the UDE, and on December 8, 1964 the Chairmen of the five countries
signed the treaty establishing Customs and Economic Union of Central Africa (UDEAC from its name in
French, Union Douanière et Economique de l'Afrique Centrale) in Brazzaville (Republic of Congo) confirming
thus a process of regrouping begun during the colonial period. This treaty came into force on January 1st
, 1966.
The republic of Equatorial Guinea accedes to UDEAC in January 1985. The union operated continuously until
February 1998. The Economic and Monetary Community of Central Africa (or CEMAC from its name is
French, Communauté Économique et Monétaire de l'Afrique Centrale) created in March 16, 1994 by a treaty at
N’Djamena, Chad took over from UDEAC to deepen and reinvigorate the process initiated between the six
States and those who would become members of the Community. (Source : UDEAC-CEMAC - Février 1999)
The region has an economic space of 3 million km2
and represents a market of about 44.1 million
people, an average population growth rate of 2.8 percent, a real GDP growth rate (real GDP) of 4.6% and a
growth rate GDP per capita of 1.8%. Cameroon is the largest economy in the region with about half of the
region’s financial assets (which generate 28.6% of regional GDP). Crude oil and agriculture have been the
mainstay of most of the economies in the region. The mining industry is expanding with new exploration and
3. Economic Growth In The Cemac Countries: Fractional Integration, Mean Reversion And Gdp
International Journal of Business Marketing and Management (IJBMM) Page 33
mining activities in Cameroon. The region is blessed with minerals such as diamond, gold, gas, manganese,
uranium, aluminum-crude and derivatives, oil products and bauxite. The countries in the region are about 50
percent urbanized. Gabon has the highest level of urbanization at 86 percent, with a third of the country’s
population living in the capital Libreville. The main objectives of the CEMAC are to promote a harmonious
development of member states within the framework of the establishment of a true common market, to achieve
convergence of macro-economic policies and indicators and to create greater economic competitiveness through
open markets.
This study examines the time series behavior of two variables (real GDP and real GDP per capita) in
the six countries that belong to the CEMAC, being this the only available data that we could work with. We use
fractional integration techniques because they are useful to test the convergence hypothesis in each of CEMAC
countries since they are more general than the standard methods that use integer degrees of differentiation.
Additional, (fractionally) cointegration techniques are also employed.
The outline of the study is as follows: Section 3 briefly describes the literature review, focusing on the
convergence process and fractional integration techniques on macro data in Africa. Section 4 is devoted to the
methodology; Section 5 presents the data; Section 6 analyzes the data and the main empirical results, while
Section 7 deals with the conclusions and discussion and implications for policy.
III. Literature Review
The study of the convergence process of African countries has generated relatively few empirical
studies. Savvides (1995), analyzing the determinants of growth in Africa, was one of the precursors. In
particular, its fixed-effects panel estimates from 28 countries African countries over the period 1960-1987
corroborated the conditional convergence hypothesis. However, this transversal approach was subject to
numerous criticisms. For instance, Quah (1993) showed that the transversal approach tends to accept the
hypothesis of convergence even when the distribution of income between countries does not change all the time.
Thus, Bernard and Durlauf (1996) explained that the transversal approach tends to favor the rejection of the
hypothesis of no convergence when countries are characterized by different stationary conditions. McCoskey
(2002) used a larger sample of 42 Sub-Saharan countries on which he conducted unit root tests and cointegration
in a panel over the period 1960-1989. These results show a lack of convergence between sub-Saharan African
countries, not only across similar countries but also across those belonging to the same regional community such
as the CDAU. The results in Joubert et al (2013) also lead to the lack of convergence between 46 countries in
sub-Saharan Africa over the period 1985-2005 using the methodology proposed in Evans and Karras (1996)
from the generalized method of moments. On the other hand, they found convergence clubs set up by
ECOWAS, UEMOA, CEMAC and CDAU. With the evolution of unit root tests towards taking into account
trend breaks, and based on the criticisms of Perron (1989), Cuñado and Perez de Gracia (2006) worked on the
convergence of the per capita incomes of 43 African countries related to the average of the per capita income of
these countries, and also with respect to that in the United States over the period 1950-1999. Their results
suggested that most African countries experienced events that introduced trend breaks in their relative per capita
income and these essentially took place between the end of the 1970s and the early 1980s. Then, taking into
account the breakdown in the trend they showed in their analysis a process of catching up with per capita
income in the United States for Cape Verde, Egypt, Mauritius, Seychelles and Tunisia. The results of most of
the studies on the convergence of African countries are mitigated. Also, there is no unanimity on the
convergence clubs. While McCoskey (2002) does not highlight any convergence club, Joubert et al (2013) argue
that convergence clubs exist for ECOWAS, UEMOA, CEMAC and the CDAU.
When it comes to long memory fractional integration, several papers have been conducted on
macroeconomic issues in African countries. For instance, focusing on the exchange rates, some results show that
except for South Africa none on the SADC (Southern African Development Community) real exchange rates are
fractionally integrated (Mokoena et al., 2009). Fractional integration has also been used to analyse the stock
market structure (Anouro and Gil-Alana, 2010), inflation (Gil-Alana and Barros, 2013) and global financial
crisis (Gil-Alana et al., 2015). Nevertheless, investigating GDP on CEMAC there are no papers focusing on this
approach.
On the other hand, cointegration techniques have been examined in various papers. For instance,
Chowdbury and Mallik (2011) proved that there exists evidence of a long-run positive relationship between
GDP growth rate and inflation for four South Asian countries (Bangladesh, India, Pakistan and Sri Lanka),
obtaining significant feedback between inflation and economic growth. In another context, to determine which
European Union countries would form a successful Economic and Monetary Union (EMU), based on long-run
behavior of the nominal convergence criteria laid down in the Maastricht treaty, cointegration techniques were
also used. The results in Haug et al. (1999) suggested that not all of the twelve original countries of the
European Union could possibly form a successful EMU over time, unless several countries made significant
adjustments. Focusing on Africa, Agboulaje and Olaleye (2013) propose an error correction model of GDP and
4. Economic Growth In The Cemac Countries: Fractional Integration, Mean Reversion And Gdp
International Journal of Business Marketing and Management (IJBMM) Page 34
inflation based on a long-run equilibrium relationship for the Nigerian economy. They conclude that nominal
GDP is positively correlated with both GDP per capita and inflation rates. All these paper, however, focus on
standard cointegration, in the sense that consider the individual series to be I(1) and the cointegrating errors I(0),
not allowing for fractional degrees of differentiation.
IV. Methodology
As earlier mentioned we use techniques based on fractional integration and cointegration. A handy
review of these methods and their applications in economics and finance can be found in Gil-Alana and Hualde
(2009).
Given a zero-mean covariance stationary process { , t = 0, ±1, …} with autocovariance function
[( )( )] , in the time domain, long memory is defined such that:
∑ | | (1)
Now, assuming that has an absolutely continuous spectral distribution function, with a spectral density
function given by:
( ) ∑ (2)
according to the frequency domain definition of long memory the spectral density function is unbounded at
some frequency in the interval [0, π], i.e.,
( ) [ ] (3)
(see McLeod and Hipel, 1978). Most of the empirical literature has focused on the case when the singularity or
pole in the spectrum occurs at the zero frequency ( ), i.e.,
( ) (4)
A very convenient model satisfying the above long memory property is the one based on the concept of
fractional integration. We say that a process { , t = 0, ±1, …} is integrated of order d, and denoted as I(d) if it
can be represented as:
,...,1,0t,ux)B1( tt
d
(5)
where B is the backshift operator ( ), d can be any integer or fractional value and ut is supposed to be
I(0) defined for our purposes as a covariance stationary process where the infinite sum of the autocovariances is
finite. Examples of I(0) processes are the white noise case and stationary AutoRegressive Moving Average
(ARMA) processes.1
Thus, this is a quite general specification since it includes the classical ARMA and
ARIMA models as particular cases of interest if d = 0 and 1 respectively. The polynomial ( ) in equation
(5) can be expressed in terms of its Binomial expansion, such that, for all real d,
( ) ∑ ( ) ( )
( )
and thus,
( )
( )
implying that equation (5) can be expressed as
( )
.
The above process can also admit an infinite moving average (MA) representation such that ∑ ,
where
( )
( ) ( )
and ( ) represent the Gamma function. Moreover, the differencing parameter d is
quite relevant from different perspectives. Thus, if d = 0, xt is short memory or I(0), while d > 0 implies long
memory behavior, so-named because of the strong degree of association between the observations. From a
statistical viewpoint, 0.5 is another relevant value: if d < 0.5, xt is covariance stationary, while d ≥ 0.5 implies
nonstationarity (in the sense that the variance of the partial sums increases in magnitude with d); finally, from an
economic viewpoint d = 1 is also relevant: d < 1 indicates mean reversion, with shocks disappearing in the long
run, while d ≥1 shows lack of mean reversion with shocks persisting forever. In view of all the above, the
parameter d is crucial to determine the degree of persistence in the data, and higher the value of d is, the higher
the degree of persistence is, or alternatively, the lower the value of d is, the faster is the convergence process of
a series to its original level after a shock.
In the empirical section we test alternative values for d in the set-up given by:
,txt10ty (6)
and (5), where yt is the observed time series, and β0 and β1 are coefficients corresponding to an intercept and a
time trend respectively. We use Whittle estimates of d in the frequency domain (Dahlhaus, 1989) along with a
testing procedure proposed by Robinson (1994) that tests the null hypothesis:
1
If ut in (5) is ARMA, xt is said to be Fractionally Integrated ARMA (FIARMA or ARFIMA) process.
5. Economic Growth In The Cemac Countries: Fractional Integration, Mean Reversion And Gdp
International Journal of Business Marketing and Management (IJBMM) Page 35
oo ddH : , (7)
in the model given by (5) and (6) for any real value do. This method has several advantages compared with other
approaches, the most important one is that it is valid for any real value do, thus including values in the stationary
region (do < 0.5) but also in the nonstationary one (do ≥ 0.5); also, its limit distribution is standard normal, and
this limit behavior holds independently of the inclusion or not of deterministic terms such as those given in (6).
Finally, this method is the most efficient one in the Pitman sense against local departures from the null.2
V. Data
The data sources used in this framework are mainly obtained from the World Development Indicators
(WDI 2017). The panel constituted may be considered an annually cylinder Panel data covering the period from
1960 to 2015, for virtually all countries of the world. From these data sources, we have built times series
comprising six countries, namely all CEMAC member states. The variables were further disintegrated into
obtaining the real GDP (constant LCU) and real GDP per capita (constant LCU) for six CEMAC countries.
CEMAC countries include: Cameroon, Chad, Central African Republic, Congo and Gabon and Equatorial
Guinea. This study uses the log of real GDP and log of real GDP per capita because the log function is concave
and non-decreasing. It further transforms observational values to linearity. In addition, due to the fact that we
want to study the convergence of CEMAC countries with respect to the United States, this country respective
real GDP and real GDP per capita variables were also extracted. Similar to that of the six CEMAC countries, the
logs of these latter country (USA) were obtained. The choice of this period is justified by the availability of data
and the relative stability of the latter. Some people might argue that the sample size is too small to conduct a
long memory analysis; nevertheless, several Monte Carlo experiments conducted in Robinson (1994) showed
that his method performs well in finite samples, and various empirical applications based on this approach were
conducted with even fewer observations.3
[Insert Figures 1 - 2 about here]
Figure 1 displays the time series plots for the six African countries, while Figure 2 refers to the real
GDP and real GDP per capita in the US. Starting with Figure 1 we can distinguish two different patterns across
the countries. On the one hand we have one country displaying a relatively constant increase across the sample:
Gabon. On the other hand, the remaining countries (Cameroon, Chad, Congo, Equatorial Guinea and Central
African Republic) are characterized by an oscillating pattern with a substantial decrease during a certain period,
and a posterior increase during the final years in the sample. In Figure 2 we observe that the real GDP and real
GDP per capita in the US are both increasing over time.
[Insert Table 1 about here]
Table 1 presents some descriptive statistics. On average, the production of goods and services during
the period from 1960 to 2015 is the highest in Cameroon (29.17827) over the rest of the CEMAC countries:
Gabon (28.54989), Republic of Congo (27.09226), Republic of Chad (28.02501), Central African Republic
(27.04327) and Equatorial Guinea (27.2419). It should be noted that during this period (1960-2015), Central
African Republic is the country with the lowest production of goods and services, unlike Cameroon, which, on
the other hand, has a strong production output. Moreover, the real GDP of United States exceed that of
Cameroon at 0.53871 despite the position of Cameroon in the sub-region. On the other hand, the average real
per capita income in Gabon is highest not only among the CEMAC countries but also higher than that of United
States. These statistics confirm that a country can have strong growth with wide inequalities at the population
level.
VI. Data Analysis
We start this section by estimating d in the model given by the equations (5) and (6). Tables 2 and 3 displays
respectively for real GDP and real GDP per capita, the estimates of d along with the 95% confidence bands for
the non-rejection values of d using Robinson’s (1994) approach. We present the results for the three cases of no
deterministic terms (i.e., β0 = β1 = 0 in (5)), an intercept (β0 = 0 and β1 estimated) and an intercept with a linear
time trend (both β0 and β1 estimated). In the lower part of the tables we display the estimated coefficients once
we have selected the appropriate model for the deterministic terms.
Starting with the GDP data (in Table 2) we observe that the time trend is only required in the case of
Equatorial Guinea, while an intercept is sufficient for the description of the deterministic terms in the rest of the
2
For more details, see Robinson (1994) or, more specifically, Gil-Alana and Robinson (1997) which focusses
on the model given by (5) and (6).
3
When using the critical values computed in Gil-Alana (2000) for finite samples, the results were almost
identical to those reported here based on the asymptotic values.
6. Economic Growth In The Cemac Countries: Fractional Integration, Mean Reversion And Gdp
International Journal of Business Marketing and Management (IJBMM) Page 36
cases, including the US. Focusing on the estimated values of d, we observe that the lowest value corresponds to
Equatorial Guinea (0.34) while the highest one in the CEMAC refers to Central African Republic (1.26).
However, the confidence intervals are so wide that the unit root null hypothesis (i.e., d = 1) cannot be rejected in
any single case. For the US, the estimate of d is even higher, 1.62, and the unit root null is now rejected in
favour of d > 1.
[Insert Tables 2 – 3 about here]
Table 3 focuses on the real GDP per capita series. Here, the time trend is required in a number of cases,
in particular, for Central African Republic, Cameroon and Congo Republic, while only an intercept is required
in the rest of the cases. For the CEMAC, the estimated values of d are slightly above 1 in all cases, ranging from
1.08 (Chad) to 1.27 (Equatorial Guinea), and the unit root null hypothesis, i.e., d = 1, cannot be rejected in the
cases of Central African Republic, Chad, Gabon and Congo Republic, while this hypothesis is rejected in favour
of higher degrees of integration in the cases of Cameroon and Equatorial Guinea. As with the real GDP data, the
estimate of d for the US is very high, 1.61, and the unit root null is once more rejected in favour of higher
degrees of differentiation.
Two conclusions can be drawn from the above results. Firstly, there is no evidence of mean reversion
(i.e., d < 1) in any single case, so we strongly reject the hypothesis of transitory shocks in the series; secondly,
the order of integration for the US case is much higher than that for the CEMAC countries, invalidating any
analysis of cointegration in a vis-à-vis relationship of the series with respect to the US.4
Thus, in what follows,
we test the hypothesis of real convergence by investigating the order of integration in the differenced series log
GDPcemac – log GDPusa to see if mean reversion holds (d < 1) and the hypothesis of real convergence is satisfied.
In other words, we test now for cointegration but imposing the vector (0, -1) as the contegrating vector.
Moreover, in doing so, we work with the observed data rather than with the estimated values.
Table 4 displays the results of convergence for both the real GDP and the real GDP per capita series.
We see that the time trend is only found to be statistically significant in the case of the differences with respect
to Equatorial Guinea in the case of the GDP data. In this case, the estimated value of d is equal to 0.38, which
may suggest some degree of convergence. However, if we look at the confidence interval, we observe that it is
extremely wide. In fact, the two standard hypotheses of I(0) and I(1) behaviour cannot be rejected here since the
two values (0 and 1) are included in the interval. For the rest of the cases (with the real GDP data) the values are
higher than 1, and the unit root null cannot be rejected for the differences of the US with respect to the Central
African Republic, Chad, Gabon and Congo Republic, and this hypothesis is rejected in favour of an order of
integration higher than 1 for Cameroon. Thus, no evidence of convergence is found in these data. If we focus
now on the real GDP per capita data (Panel ii) in Table 4) the same results hold, and no evidence of
convergence (d < 1) is found in any single case. Thus, according to these results we do not find evidence of real
convergence between the CEMAC countries and the US, neither for real GDP nor for the real GDP per capita
series. Within the CEMAC countries (which might share the same degree of integration) we also computed the
FCVAR approach developed by Johansen and Nielsen (2010, 2012), and we do not find any evidence of
fractional cointegration; using standard cointegration methods (Johansen, 1992, 1995, 1996) the results also
reject the hypothesis of convergence. The results presented above indicate that within the CEMAC real GDP
and real GDP per capita might be both I(1) though we do not find any evidence supporting any long run
equilibrium relationship between the countries.
VII. Conclusions
In this article we have examined the statistical properties of the real GDP and real GDP per capita
series in the CEMAC countries (Cameroon, Chad, Congo, Gabon, Equatorial Guinea and Central African
Republic) as well as testing the convergence hypothesis of the GDP in these countries in relation to the US.
Starting with the series for the CEMAC countries, the results indicate strong evidence of persistence,
with the orders of integration being around the I(1) case or with an order of integration slightly above 1. Thus,
the first thing we observe is a lack of mean reverting behavior implying the permanency of the shocks. Thus, in
the event of an exogenous shock affecting real GDP in these countries, if the shock is negative, strong policy
measures should be adopted since the series will not return to their original level in the future. Similar evidence,
or even stronger, is obtained with the US data, where the orders of integration are found to be significantly
above 1 in the two series (real GDP and real GDP per capita). Testing the hypothesis of convergence, by means
of looking at the order of integration of the difference between the log real GDP (and real GDP per capita) of
each country minus the one corresponding to the US, we once more obtain evidence supporting the unit roots,
rejecting thus any possibility of long run relationships between the African countries and the US. Using other
4
Note that a necessary condition for cointegration in a bivariate case is that the parent series must display
identical orders of integration.
7. Economic Growth In The Cemac Countries: Fractional Integration, Mean Reversion And Gdp
International Journal of Business Marketing and Management (IJBMM) Page 37
approaches based on FCVAR or classical CVAR, the results reject the hypothesis of cointegration between the
variables and the same evidence against cointegration is found when using only the CEMAC countries.
Nevertheless, this might be a consequence of the wide confidence bands obtained due to the reduced number of
observations used in the application, which is a clear limitation we face with Sub-Saharan African macro data.
The CEMAC countries do not converge with respect to the USA. This widely discussed economic
literature may be otherwise known as the catch-up effect. The catch-up effect of the CEMAC countries towards
the USA is said to be negative. The previously established notion that poorer countries such as the CEMAC
countries will replicate production methods, technologies and institutions of developed countries over time is
seen to be null. Our results show this from an empirical viewpoint. This work is limited by the small sample size
of the annual time series data employed. In the future, one might consider applying artificially generated
quarterly series to extend the dataset and exploit the information provided by the data more thoroughly. The
analysis of the convergence with respect to other countries like China that has rapidly increased its ties with the
continent in recent years will also be examined in future works.
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Figure 1: Time series plots for the CEMAC countries
Real GDP (current US$) Real GDP per capita (current US$)
Central African Republic Central African Republic
Cameroon Cameroon
Chad Chad
Gabon Gabon
26,5
26,75
27
27,25
27,5
27,75
1960 2017
11,4
11,65
11,9
12,15
12,4
1960 2017
27
27,75
28,5
29,25
30
30,75
1960 2017
12
12,4
12,8
13,2
13,6
1960 2017
26,5
27
27,5
28
28,5
29
29,5
1960 2017
11,8
12
12,2
12,4
12,6
12,8
13
1960 2017
9. Economic Growth In The Cemac Countries: Fractional Integration, Mean Reversion And Gdp
International Journal of Business Marketing and Management (IJBMM) Page 39
Congo Republic Congo Republic
Equatorial Guinea Equatorial Guinea
Figure 2: Time series plots for the US
Real GDP (current US$) Real GDP per capita (current US$)
24
25
26
27
28
1960 2017
13,5
14
14,5
15
15,5
16
1960 2017
26,8
27,2
27,6
28
28,4
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 12,3
12,4
12,5
12,6
12,7
12,8
12,9
1960 2017
23
24
25
26
27
28
¡
1980 2017
6
8
10
12
14
16
18
1980 2017
27,5
28
28,5
29
29,5
30
30,5
31
1960 2017
8,8
9,2
9,6
10
10,4
10,8
11,2
1967 2017
10. Economic Growth In The Cemac Countries: Fractional Integration, Mean Reversion And Gdp
International Journal of Business Marketing and Management (IJBMM) Page 40
Table 1: Descriptive statistics for the log of real GDP
i) Log of real GDP
Series Mean Std. Dev. Minimum Maximum Normality(Prob>chi2)
CENTRAL AF. REP. 27.04327 .221257 26.65493 27.51378 0.7768
CAMEROON 29.17827 .5679108 28.22266 30.09877 0.0031
CHAD 28.02501 .6037707 27.37274 29.34851 0.0212
GABON 28.54989 .5775898 27.17004 29.30885 0.0223
EQU. GUINEA 27.2419 1.939635 24.92577 29.66278 0.0000
CONGO REPUBLIC 27.09226 .6784027 25.86315 28.15098 0.0106
U.S.A. 29.71698 .5034382 28.75532 30.44027 0.0075
i) Log of real GDP per capita
Series Mean Std. Dev. Minimum Maximum Normality(Prob>chi2)
CENTRAL AF. REP. 12.22065 .1926151 11.68182 12.47026 0.0216
CAMEROON 12.95297 .1910808 12.63262 13.38246 0.2921
CHAD 12.43174 .2318796 12.03917 12.90604 0.1346
GABON 14.8406 .2975274 14.0493 15.5429 0.0636
EQU. GUINEA 14.16992 1.589091 12.31469 16.1609 0.0000
CONGO REPUBLIC 12.49204 .2565367 12.03415 12.86597 0.0107
U.S.A. 10.39946 .3342764 9.743136 10.85201 0.0151
Table 2: Estimates of d and 95% confidence bands for (log) real GDP
No regressors An intercept A linear time trend
CENTRAL AFRICAN R. 0.88 (0.66, 1.20) 1.26 (0.89, 1.57) 1.26 (0.98, 1.56)
CAMEROON 0.93 (0.75, 1.19) 1.19 (1.04, 1.43) 1.18 (1.03, 1.42)
CHAD 0.88 (0.64, 1.22) 1.09 (0.84, 1.57) 1.09 (0.82, 1.57)
GABON 0.94 (0.77, 1.18) 1.15 (0.97, 1.41) 1.15 (0.96, 1.40)
CONGO REPUBLIC 0.88 (0.63, 1.23) 1.10 (0.82, 1.54) 1.09 (0.85, 1.52)
EQUATORIAL GUINEA 0.87 (0.61, 1.22) 0.46 (0.17, 1.16) 0.34 (0.18, 1.16)
USA 0.94 (0.77, 1.18) 1.63 (1.39, 2.02) 1.62 (1.39, 2.01)
d Intercept Time trend
CENTRAL AFRICAN R. 1.26 (0.89, 1.57) 23.383 (232.26) ---
CAMEROON 1.19 (1.04, 1.43) 26.327 (448.01) ---
CHAD 1.09 (0.84, 1.57) 23.944 (227.61) ---
11. Economic Growth In The Cemac Countries: Fractional Integration, Mean Reversion And Gdp
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GABON 1.15 (0.97, 1.41) 12.011 (118.81) ---
CONGO REPUBLIC 1.10 (0.82, 1.54) 23.894 (287.20) ---
EQUATORIAL GUINEA 0.34 (0.18, 1.16) 21.745 (80.03) 0.032 (2-23)
USA 1.62 (1.39, 2.01) 26.138 (1061.34) ---
The values in bold in the upper panel refers to the significant cases in relation with the deterministic terms.
The values in parenthesis are the 95% confidence bands of the non-rejection values of d. In the lower panel,
the values in parenthesis in the third and four columns are the corresponding t-values.
Table 3: Estimates of d and 95% confidence bands for (log) real GDP per capita
No regressors An intercept A linear time trend
CENTRAL AFRICAN R. 0.85 (0.62, 1.17) 1.28 (0.91, 1.59) 1.27 (0.99, 1.56)
CAMEROON 0.94 (0.77, 1.20) 1.23 (1.07, 1.37) 1.20 (1.05, 1.45)
CHAD 0.88 (0.65, 1.20) 1.08 (0.80, 1.55) 1.08 (0.81, 1.55)
GABON 0.95 (0.79, 1.18) 1.16 (0.99, 1.41) 1.16 (0.98, 1.41)
CONGO REPUBLIC 0.88 (0.64, 1.22) 1.10 (0.80, 1.56) 1.09 (0.84, 1.52)
EQUATORIAL GUINEA 0.81 (0.42, 1.19) 1.27 (1.03, 1.69) 1.27 (1.02, 1.69)
USA 0.95 (0.79, 1.19) 1.61 (1.38, 2.00) 1.61 (1.38, 2.00)
d Intercept Time trend
CENTRAL AFRICAN R. 1.27 (0.99, 1.56) 8.800 (85.37) -0.074 (-1,81)
CAMEROON 1.20 (1.05, 1.45) 10.685 (170.98) -0.044 (-2.54)
CHAD 1.08 (0.80, 1.55) 8.560 (81.74) ---
GABON 1.16 (0.99, 1.41) 12.011 (119.04) ---
CONGO REPUBLIC 1.09 (0.84, 1.52) 9.383 (110.75) -0.043 (-2.16)
EQUATORIAL GUINEA 1.27 (1.03, 1.69) 8.849 (46.73) ---
USA 1.61 (1.38, 2.00) 7.134 (288.89) ---
The values in bold in the upper panel refers to the significant cases in relation with the deterministic terms.
The values in parenthesis are the 95% confidence bands of the non-rejection values of d. In the lower panel,
the values in parenthesis in the third and four columns are the corresponding t-values.
Table 4: Estimates of d and 95% confidence bands for the differenced series w.r.t. USA
i) REAL GDP
No regressors An intercept A linear time trend
C. AF. REP. – USA 1.03 (0.82, 1.33) 1.23 (0.80, 1.55) 1.23 (0.92, 1.55)
CAMEROON –USA 1.19 (1.01, 1.47) 1.21 (1.03, 1.50) 1.21 (1.03, 1.50)
CHAD – USA 1.00 (0.73, 1.42) 1.14 (0.88, 1.61) 1.14 (0.86, 1.62)
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GABON – USA 0.93 (0.74, 1.20) 1.07 (0.83, 1.53) 1.07 (0.83, 1.53)
CONGO REP. - USA 0.91 (0.61, 1.34) 1.14 (0.86, 1.60) 1.14 (0.87, 1.58)
GUINEA EQ. - USA 0.82 (0.56, 1.26) 0.46 (0.18, 1.15) 0.38 (-0.14, 1.14)
ii) REAL GDP PER CAPITA
C. AF. REP. – USA 0.75 (0.52, 1.09) 1.25 (0.84, 1.57) 1.24 (0.93, 1.56)
CAMEROON –USA 0.97 (0.81, 1.23) 1.21 (1.04, 1.50) 1.21 (1.03, 1.50)
CHAD – USA 0.84 (0.64, 1.12) 1.11 (0.84, 1.60) 1.11 (0.84, 1.60)
GABON – USA 0.95 (0.79, 1.18) 1.09 (0.87, 1.43) 1.09 (0.85, 1.43)
CONGO REP. - USA 0.87 (0.61, 1.19) 1.13 (0.80, 1.60) 1.13 (0.85, 1.58)
GUINEA EQ. - USA 0.62 (0.41, 1.14) 1.23 (1.01, 1.65) 1.24 (0.98, 1.66)
The values in bold in the panel refers to the significant cases in relation with the deterministic terms.
The values in parenthesis are the 95% confidence bands of the non-rejection values of d.