SSRG International Journal of Economics and Management Studies, 2020
This study evaluates the exchange rate passthrough to unemployment in Africa using evidence from ... more This study evaluates the exchange rate passthrough to unemployment in Africa using evidence from Nigeria and South Africa. The pass-through was analyzed using two different transmission channels: first, through exports to unemployment, and second, through imports to unemployment. Panel Structural Vector Auto-Regressive (SVAR) was employed to analyze the impact of the transmission on the unemployment rate using quarterly data spanning the period of 2007-2018. The findings of the study revealed that the exchange rate does not exert the desired impact on unemployment in Sub-Saharan Africa through the export and import channels, implying that depreciation in the exchange rate exacerbates the problem of unemployment in SSA. The study concludes that the pass-through channels of export and import possess the potentials to lower unemployment in Nigeria and South Africa; however, the latent effect through other intermediate variables is contrary, thereby inhibiting the pass-through. The study recommends amongst others that, first, export revenues should be channeled into more remunerative alternatives (such as power and transport networks) to drive investment in Sub-Saharan Africa; second, imports expenditure should not be discouraged. However, consumer goods should be substituted for capital goods in order to provide key inputs for the growing industrial sector in Sub-Saharan Africa.
SSRG International Journal of Economics and Management Studies, 2020
This study evaluates the exchange rate passthrough to unemployment in Africa using evidence from ... more This study evaluates the exchange rate passthrough to unemployment in Africa using evidence from Nigeria and South Africa. The pass-through was analyzed using two different transmission channels: first, through exports to unemployment, and second, through imports to unemployment. Panel Structural Vector Auto-Regressive (SVAR) was employed to analyze the impact of the transmission on the unemployment rate using quarterly data spanning the period of 2007-2018. The findings of the study revealed that the exchange rate does not exert the desired impact on unemployment in Sub-Saharan Africa through the export and import channels, implying that depreciation in the exchange rate exacerbates the problem of unemployment in SSA. The study concludes that the pass-through channels of export and import possess the potentials to lower unemployment in Nigeria and South Africa; however, the latent effect through other intermediate variables is contrary, thereby inhibiting the pass-through. The study recommends amongst others that, first, export revenues should be channeled into more remunerative alternatives (such as power and transport networks) to drive investment in Sub-Saharan Africa; second, imports expenditure should not be discouraged. However, consumer goods should be substituted for capital goods in order to provide key inputs for the growing industrial sector in Sub-Saharan Africa.
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