Governance, institutional quality and economic complexity in Selected African countries

African has relatively low levels of economic complexity as the continent is centred on the production and exporting of natural agricultural goods, non-renewable natural resources, minerals, and crude oil, additionally the agricultural sector continues to be the prevalent employer. The purpose of this study is to examine the relationship between governance, institutional quality, with economic complexity in Africa. Panel data for the period 1996 - 2019 is employed and the generalised method of moments (GMM) technique was selected due to the number of countries (36 countries) being more than the time periods (22 years). The Granger non-causality test of Juodis, Karavias, and Sarafidis (2021) is used to figure out the direction of causality between the variables used in the study. The GMM results indicate that governance and institutional quality have a positive effect on economic complexity. The Granger causality test suggests that there is one directional causality from governance to economic complexity and from institutional quality to economic complexity. It is recommended that African countries improve governance through electing selfless leaders whose goal is improve the lives of its individuals. With regards to institutions, Africa needs to adopt strategies that support institutional quality which in turn will promote economic complexity. Policy makers should also create an environment or policies that are conducing for domestic and foreign investments, which in turn would improve the continent’s economic complexity.Thesis (MA) -- Faculty of Business and Economic science, 202