Revue Economie, Gestion et Société, Vol. 1, No 39 (2023)

EFFECTS OF GOVERNMENT SPENDING ON PRODUCTIVE CAPACITY

Ebenezer Sylvain SCHOUAME, Jules OKOBALEMBA, Isaac TAMBA

Résumé


This paper assesses the effect of government spending on productive capacity in Sub-Saharan Africa. Using a sample of 35 sub-Saharan African countries, we estimate a panel data model using the methods of feasible generalized least squares (FGLS) and system generalized moments (GMM-System) over the period 2000-2018. This analysis shows that government spending has a positive and significant effect on the productive capacity of sub-Saharan African countries. This shows that an increase in spending contributes to an increase in productive capacity. Furthermore, our analysis shows that the level of public spending has a positive effect on the economic complexity of sub-Saharan African countries. Indeed, an increase in government spending improves the level of production, and subsequently promotes the diversification of sub-Saharan African economies.