Financial Development

This study examined the effect of financial development and carbon financing on carbon emission in Sub-Sahara Africa. The study adopted stratified sampling technique. The population of the study is the Sub-Sahara African Countries, while the sample of the study was made up of seven (7) Sub-Saharan African Countries. The study employed secondary data collected from World Bank Development Indicators (WBDI) and the International Monetary Fund (IMF) Financial Structure Database. In order to present a robust outcome in the relationships, the pooled mean group (PMG) technique which is an autoregressive distributed lags (ARDL) approach to panel data estimation was adopted for the empirical analysis. However, the presence of cross-sectional dependence in the panel data ensured that the panel correlated standard errors (PCSE) technique was used for robustness tests. Data used for the study is annual panel data for seven SSA countries with developing capital markets covering the period of 2000 to 2023. The findings from the study revealed that financial development exerts divergent effects on carbon emissions in Sub-Sahara African Countries. In particular, the study found that the level of financial liquidity supports sustainability by significantly reducing carbon emissions in SSA, private credit allocation still favours high-emission activities in the region. Thus, it shown that increased credit penetration significantly increases carbon emission. The economic implication is that, financial deepening mitigates climate degradation in SSA economies while the standard of credit and formal funds allocation is highly inefficient in addressing the climate crisis in SSA. The study recommends that, financial flows in SSA countries should be directed toward sustainable sectors while disincentivising carbon-intensive financing either through regulations or explicit incentive measure.

In this study, the effect of financial development on insurance penetration in Nigeria sector for the period 1995 – 2022 was investigated using ordinary least square (OLS) technique. Financial development indicators utilized in the study includes broad money supply and credit to private sector while insurance sector penetration rate was the dependent variable. We estimated a regression model and the result reveals that broad money supply has negative and insignificant impact on insurance penetration in Nigeria while credit to private sector was positively and significantly related to insurance penetration. The study recommends that regulatory authorities charged with the sole responsibility of ensuring the macroeconomic stability of Nigeria should ensure that more credit should be extended to the private sector in other to further deepen insurance penetration rate in Nigeria. Also, the negative and insignificant effect of broad money supply on insurance penetration in Nigeria calls for the strict reevaluation of the present monetary policy tools as regard the volume of money in circulation to ensure that it contribute significantly to insurance penetration rate in Nigeria.

This study examines the relative effects of financial development and economic growth on environmental degradation in selected Sub-Saharan African (SSA) countries that includes Cote d’ivoire, Ghana, Kenya, Mauritius, Namibia, Nigeria and South Africa. Specifically, the study considered the roles of different financial system development factors on the environment, while also examining the impacts of economic growth on the environment using the environmental Kuznets curve (EKC) formulation. The study also examined the possible direction of causality between environment degradation and both economic growth and financial development among the countries, as well as the influence of financial development on the relationship between economic growth and environmental degradation. Environmental degradation is measured by the tonnes of carbon emission per country and the rate of ecological footprint which was further divided into per capita footprint on cropland and per capital footprint on built land. Financial system development is measured using both the
money and capital markets variables which include credit to the private sector, liquidity in the economy, market capitalization, and stock market turnover. A panel data of seven (7) selected SSA nations for the period of 1990 to 2021 is employed in the analysis, while the Mean Group (MG) and the Pooled Mean Group (PMG) techniques are employed to estimate the long-run and short-run relationship amongst the variables for the panel analysis.