Financial development and income inequality in Africa

Okafor, Victoria and OLURINOLA, Isaiah Oluranti and Bowale, Ebenezer I.K and Bowale, Romanus (2023) Financial development and income inequality in Africa. Humanities and Social Sciences Communications, 10 (305). ISSN 2662-9992 (online)

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Abstract

Across the globe, a rise in income inequality has been experienced for the last two decades, particularly in developing countries. This problem of income inequality poses a challenge to Africa’s ability to attain the United Nations (UN) Sustainment Development Goals (SDGs) of reduced inequalities (SDG- 10). Against this backdrop, there is a need to harness the potential of financial development to reduce income inequality in Africa. Therefore, this study empirically examines how financial development affects income inequality in Africa. Financial development dimensions, access, depth, efficiency, and stability were considered to achieve the study’s objective. The study applied the system generalized method of moments (SGMM) to analyse data and the findings showed that each dimension of financial development had a varying impact on income inequality. Access, stability and efficiency components of financial development reduce income inequality, while the depth dimension of financial development exacerbates income inequality in Africa. Therefore, the study recommends that policymakers should not neglect other dimensions of finance in facilitating economic development.

Item Type:	Article
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HG Finance H Social Sciences > HN Social history and conditions. Social problems. Social reform
Divisions:	Faculty of Law, Arts and Social Sciences > School of Humanities
Depositing User:	nwokealisi
Date Deposited:	06 Mar 2024 13:45
Last Modified:	06 Mar 2024 13:45
URI:	http://eprints.covenantuniversity.edu.ng/id/eprint/17836

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