Title:
Dynamics of inflation and its impact on economic growth in selected East African Countries: Ethiopia, Sudan and Kenya
Authors:
Abdelkreem Youse
St Mary's University, Ethiopia
&
Sisay Debebe
Addis Ababa University, Ethiopia
Published:
Journal of African Studies and Development, 31 January 2021
Abstract:
Despite Ethiopia's, Sudan's, and Kenya's fastest-growing economies' performance over the last two decades, the overall average inflation rate remains double digits. It subsequently incorporates a detrimental impact to support economic growth in an extended period. This study aims to assess the dynamics of inflation and its impacts on economic growth Ethiopia, Kenya, and Sudan using time-series macroeconomic data collected from the African Development Bank. The research used the Autoregressive Distributed Lag (ARDL) econometrics model and investigated the presence of cointegration and long-term relationships between macroeconomic factors. The result indicates that the exchange rate and the supply of the long-run economic growth rate influence Ethiopia's money supply. Inflation rates and foreign direct investments have impacted economic growth rates in Kenya and Sudan. The economic growth rate in all counties is generally influenced by both the availability of money and the exchange rate—also, real per capita GDP affecting the economic growth rate of Sudan and Ethiopia. Policies on introducing new technologies, building capacities in public and private sectors, youth and gender parity, mobilizing domestic resources, and public participation are recommended for Ethiopia, Kenya, and Sudan.