Financial Management Technology, Federal University of Technology Owerr, Imo Sate, Nigeria
Nwezeaku, N.C., Financial Management Technology, Federal University of Technology Owerr, Imo Sate, Nigeria
The economies of sub-Saharan Africa have been bedeviled by sustained underdevelopment evidenced by poor human development indices including, poor income distribution, low life expectancy rate, poverty, unemployment, debt burden and poor standard of living in spite of governments' effort to mitigate it. Against this background, this study sets out to investigate the relationship between Public Sector Financial Management (PSFM) and economic development with special reference to Nigeria and Ghana. The OLS procedure against annual data from 1980 through 2006 for the countries was employed to evaluate the general impact on the economies while the log-log model was employed to examine the incremental growth of the economies. Use is also made of the Gini index theory as a measure of the degree of inequality of income distribution. The global statistics indicate overall high explanatory powers of the model. The relative statistical results indicate a highly significant causality between (PSFM) and persistent economic underdevelopment. Management of inflation, government revenue, government expenditure and investment appear to have the greatest negative effects on the efforts of these governments especially that of Nigeria. It was suggested that sub-Saharan African economies should pay particular attention to the management of these variables to reverse the trend. © EuroJournals Publishing, Inc. 2010.