Comparative analysis of economic growth in Nigeria and Kenya: A fractional integration approach

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Abstract

This paper is a comparative analysis of Nigeria and Kenya, the largest economies in West and East Africa respectively, on the basis of the time series properties of their economic activities through the Gross Domestic Product (GDP) and growth rate series. It further analyses how differing policy and political economy processes contributed to the two countries' economic growth trajectories despite becoming independent republics at almost the same time. We study the two economies using a long‐memory‐fractionally integrated approach. The results show a high degree of persistence in both cases. When non‐linearities are taken into account, evidence of mean reversion is found in the GDP series in the two countries. This is indicative of how the two countries in very distinct African contexts followed broadly different but, in some ways, similar paths toward economic growth since independence.