ANALYSIS OF EFFECT OF MACROECONOMIC VARIABLES ON NON-PERFORMING LOANS IN SUBSAHARAN AFRICA

著者

  • Ernest Njiru Mwaniki Department of Economics, Maasai Mara University, Narok, Kenya orcid.org/0009-0005-9153-7210
  • Benedict Troon Lecturer, PhD, Department of Economics, Maasai Mara University, Narok, Kenya orcid.org/0000-0002-3226-7821
  • Christopher Maokomba MPhil. Economics, Lecturer, Department of Economics, Maasai Mara University, Narok, Kenya orcid.org/0009-0004-3150-6386

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https://doi.org/10.46827/ke28bf96

要旨

The average non-performing loans (NPLs) ratio in Sub-Saharan Africa (SSA) is more than 10%, almost double the prudential benchmark limit of 5%. Sustainable Development Goal 8.10 is under threat, and the current situation is jeopardizing bank solvency and access to credit. But the ratios of non-performing loans vary greatly across economies. Existing evidence mainly consists of single-country studies, pooled estimators that apply common slopes, and models that overlook the fiscal channel. This study examines the long-term effects of inflation, the bank lending rate, and tax revenue (as a percentage of GDP) on NPLs in Angola, Botswana, Kenya, and Nigeria, while also comparing the specific adjustment dynamics of each country. A panel autoregressive distributed lag error-correction model is used to analyse 56 observations of annual World Bank data from 2010 to 2023. Panel unit-root tests classify NPLs, the lending rate and tax revenue as I(1) and inflation as I(0). The Hausman test (χ² = 2.042, p = .564) does not reject long-run homogeneity, favoring the pooled mean group (PMG) estimator over the mean group estimator. Groupwise heteroskedasticity in the baseline PMG model is corrected by feasible generalized least squares re-estimation, after which all diagnostic tests are satisfied. In the final model, a one-percentage-point rise in the lending rate is associated with a 1.565-point rise in NPLs (p = .005) and in inflation with a 0.362-point rise (p = .046), whereas a one-point increase in tax revenue to GDP is associated with a 1.268-point fall (p = .035). Adjustment speeds differ markedly: Angola (−0.847) and Nigeria (−0.642) correct disequilibria rapidly, while adjustment in Kenya (−0.037) and Botswana (0.000) is negligible. The Central banks and financial institutions in these countries should strengthen inflation-targeting frameworks and increase foreign exchange reserve buffers; banks should increase forward-looking loan-loss provisions, stress-test loan portfolios, and expand fixed-rate and hybrid-rate lending products; and finance ministries should prioritize broadening the domestic tax base and diversifying government revenue away from oil-related revenue.

 

JEL: G21, E31, E43, H20, C23, O55

 

Keywords: non-performing loans, inflation, lending interest rates, tax revenue, Sub-Saharan Africa, macroeconomic variables, Pooled Mean Group (PMG)

著者略歴

  • Ernest Njiru Mwaniki、 Department of Economics, Maasai Mara University, Narok, Kenya orcid.org/0009-0005-9153-7210

    I am Ernest Njiru Mwaniki, a Research and Product Development professional and credit analyst with ten years of experience in banking, finance, marketing, credit analysis and management. I am a graduating MSc student in Economic Policy Analysis and Management at Maasai Mara University, Kenya. My research interests are financial economics, economic development, macroeconomics, economic policy, and innovative financial product development. My research focuses on the effect of macroeconomic variables on non-performing loans in Sub-Saharan Africa. Through my research and professional practice, I seek to contribute to knowledge on evidence-based credit and macroeconomic policies that improve loan quality, strengthen financial institutions and widen access to finance.

    ORCID: https://orcid.org/0009-0005-9153-7210

  • Benedict Troon、 Lecturer, PhD, Department of Economics, Maasai Mara University, Narok, Kenya orcid.org/0000-0002-3226-7821

    Dr. Benedict Troon is a Lecturer in the Department of Economics at Maasai Mara University, Kenya. He joined the university in 2019 as a Part-Time Lecturer in the Department of Economics and Business, served as a Tutorial Fellow in Economics from 2021 to 2024, and has been a Lecturer in the Department of Economics since May 2024. His research interests include statistical applications, econometric modelling, economic analysis, and statistical theory and design. His expertise spans statistics, research, data analysis and data management, and he is committed to accuracy, professionalism and collaboration in his work.

    ORCID: https://orcid.org/0000-0002-3226-7821

    ResearchGate: https://www.researchgate.net/profile/Benedict-Troon-3

    Google Scholar: https://scholar.google.com/citations?user=6IgPaMQAAAAJ&hl=en

  • Christopher Maokomba、 MPhil. Economics, Lecturer, Department of Economics, Maasai Mara University, Narok, Kenya orcid.org/0009-0004-3150-6386

    Christopher Ochieng Maokomba is a Lecturer in Economics at Maasai Mara University, Kenya, where he has taught since 2013. He holds a Master of Philosophy in Economics from Moi University (2010). His work spans teaching, economic analysis and research, with interests in public finance and fiscal policy, monetary economics, and macroeconomic trends. His academic background and professional experience give him a foundation for examining economic policy and financial sector performance, particularly in developing economies.

    ORCID: https://orcid.org/0009-0004-3150-6386

    ResearchGate: https://www.researchgate.net/profile/Christopher-Maokomba

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発行日

2026-10-29

巻号

巻 10 号 7 (2026)

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