Fiscal policy, sustainable development and economic growth in Sub-Saharan Africa

In developing countries, the most challenges faced is to be sustainable and stabilize macroeconomic variables such as inflation, exchange rate, interest rate, unemployment and economic growth and development. Many economic experts have shared their take and tried to find out ways to sustain economic development in these developing countries. The concept of development in the lay man’s view is the advancement in the standard of livings in a country through improving human and environment conditions. Sustainable development however, has been described as such development that meets the needs of the present without compromising the availability of the future generation to meet their needs but sustainable economic development is that economically sustainable system that is able to produce goods and services on a continuing basis, to maintain manageable levels of government and external debt and to avoid extreme sectoral in-balances which change agricultural and industrial production. The economic perspective of sustainability from neoclassical economic theory is the maximization of welfare overtime. The impacts of sustainable economic development are felt when government structures and policies are in existence (Adefaso, 2015). The development of Sub-Saharan Africa countries at a crucial stage, considering the rapid population growth being experienced, especially in urban areas and the greater youthful labour. Some countries in the Sub-Saharan Africa are having rapid economic growth whose benefits are inappropriately disbursed. According to the international monetary fund (IMF) fiscal policy is the use of government spending and taxation to influence the economy. Fiscal policy is normally used to strengthen sustainable growth and improve the standard of living of citizens. The use of fiscal policy has become a critical issue to handle during these economic crisis period. Governments have stepped in to support financial systems facilitate growth and try to reduce the impact of the crisis on vulnerable groups. Governments have played a significant role in the economy by actively setting fiscal policies. According to William (1993), when governments want to influence the economy, they have two options. Policy makers can use monetary policy or fiscal policy. Central banks try to target money supply through adjustment to interest rates, bank reserves requirements and the purchase and sale of government securities. On the other side, government influence the economy by changing the levels and types of taxes, the structure and composition of spending and the rate and size of public debt. Through this process the result expected will be dependent on the fiscal space a government has for new spending initiatives or tax reduction. This is where we analyse whether additional financing is necessary, or government could reorder existing expenditure. However, the macroeconomic objectives of fiscal and economic policies are the same is true of monetary policy. In other words, controlling the trend of inflation, improving unemployment, poverty reduction, and the international wage balance Increase revenue and drive economic growth. If the government wants Increasing the number of economic activities in the country can stimulate consumption. They need to spend more through tax cuts and increased government spending (Havi & Enu, 2014). Fiscal policy is how governments can control and regulate the level of spending. Affect the economy of the country. Fiscal policy is generally understood to be related to growth. More precisely, it presupposes that the correct tax measures are taken under 3 certain conditions. Stimulate economic growth and development (Khosravi & Karimi, 2010). Government supporter Interventions in economic activity argue that such interventions can promote long-term Growth. You mentioned the role of government in maintaining the efficiency of resource allocation, regulating markets, stabilizing the economy and reconciling social conflicts Some of the way’s states can boost economic growth. As part of endogenous the role of the state in stimulating growth, knowledge accumulation and research and development Spirit, productive public investment, human capital development, law and order Short-term and long-term growth ( (Osuala & Jones, 2014). At the end of the paper, we will be able to understand how governments impact economies and the outcome of such decisions on the development of the country.

Fiscal policy and sustainable growth (Khosravi & Karimi, 2010) empiricism too shows that effective monetary and fiscal policies can bring stability to the financial world. Fiscal policy can help to maintain the balance of payments, curb inflation, accelerate the process of unemployment and ultimately economic growth and development. Tax authorities should focus on adopting prudent tax policies, it is a reliable stabilization tool available to policy makers, ensuring stability and stability. Still productive finances consistent with sustainable economic prosperity. These include managing infrastructure development, increasing budget deficits, create jobs and create an enabling environment for work and capital-Intensive projects in the SADC economy are successful. Empirical literature on the effects of fiscal policy is particularly relevant to developing countries and countries in transition are much sparser than those focused on the west nation. (Hemming, et al., 2002)provides a useful summary of the experimental results includes the most recent work in the field. (Gupta, et al., 2022) reports the results a study on the impact of budget adjustments and spending structures on short-term growth using data from 39 developing countries. He thinks so • Deficit-to-GDP ratio decreased by 1 percentage point leading to average increase • real growth per capita in the short term from 0.25% to 0.5%; • Consolidation based on reduction in current spending has larger impact on growth then those based on increased income and decreased capital expenditure; • The adjustment resulted in a decrease in domestic financial resources by about 1.5 times the impact on growth than the effect on reduction domestic funding; • The typical Keynesian effects of fiscal policy are dominant. Fiscal policies contribute positively to the economic development of BRICS-T economies. This is because increased government spending leads to positive changes in economic development in the long run. However, monetary policy does not have a significant long-term impact on economic development in Pandemic, as the results show that the coefficient estimates of interest rates are not statistically significant. (Junfeng, et al., 2022) (Mengistu, 2022), showed fiscal policy instruments are highly relevant in the discussion of Ethiopia’s economic performance. overall research finding evidence strongly 21 supporting endogenous growth model predictions, economic growth is positively affected by productive spending. indicates that governments are more likely to meet deficit targets than debt targets. However, according to (Akanbi, 2015) the situation is different in the non-oil segment, as government fiscal measures have not consistently met deficit or debt targets. Against this backdrop, while the broader economy and oil segment have shown strong fiscal sustainability over the years, non-oil segment fiscal policies are unsustainable. (Nuru & Gereziher, 2022), The negative effects of changes in government spending on economic growth outweigh the positive effects of changes in government spending. The real effective exchange rate has been found to have a large positive impact on economic growth in both the short and long term. Inflation, on the other hand, has a negative impact on economic growth in the short and long term. According to (Arestis & Sawyer, 2010), Instead of focusing on gross debt, you should consider your net balance sheet position. Budget deficits are often said to put upward pressure on interest rates. In the context of using “functional funding,” we argue that the deficit itself can be financed, thus removing potential upward pressure on interest rates. (Ćorić, et al., 2015) in attempt to compare monetary policy and fiscal policy effects on sustainable development using Croatia in context Suggests Only Coordinated Monetary and Fiscal Expansion Can Provide Stimulus Croatia’s economic growth without compromising exchange rate stability. Policies have a positive impact on economic activity, but the impact on economic activity is Nominal exchange rates are in the opposite direction. These results are in line with the theoretical framework of the Mundell-Fleming model, where coordinated expansion of monetary and fiscal policy leads to the increase of national income, while keeping interest rate 22 and thus exchange rate stable. Although these results can be encouraging in the recessionary conditions, there are important limitations to such coordinated action. As for the fiscal policy, it should be noted that the Croatian fiscal situation can be described as unstable given the size of the deficit, public debt, credit risk and interest expenditures so any expansionary measures would lead to increased fiscal uncertainty and instability, thus putting additional pressure on financing costs and government credibility. Moreover, Croatia is the first EU country that entered the Excessive Deficit Procedure in the first year of the membership so the fiscal consolidation is a condition sin aqua non for absorption of EU funds which are seen as the most important source of public investments financing in following years So, in current conditions, fiscal policy is seriously limited but our results can be seen as a call for policymakers to implement more prudent fiscal policy in the expansionary phase of the business cycle so they could stimulate growth in future economic slowdowns. In the monetary policy context, the monetary transmission mechanism in Croatia is specific and, in current institutional framework, the national bank cannot directly stimulate economic growth. Also, many indicators show that previous monetary policy measures (reduction and suspension of various reserve requirements) resulted with abundant liquidity in banking sector, but credit growth is still negative, which implies that Croatian firms and households are still in the phase of deleveraging and bank surveys show that the credit growth is still subdued by low demand. So, we can conclude that the manoeuvring space of Croatian national bank is also limited, and we expect the monetary policymakers to mostly focus on its active role on the foreign exchange market and manage exchange rate fluctuations, especially after the Croatian entry to ERM II mechanism. Thus, with pronounced fiscal instability and limited scope of monetary policy, Croatian policymakers should put more effort on the structural reforms front, as many indicators show that business climate, product and labour market rigidities and institutional (administrational) quality are one of the main constraints to economic growth in Croatia. Also, structural reforms could mitigate negative effects of necessary fiscal consolidation and induce stronger demand for bank loans in the private sector, thus enabling monetary sector to indirectly stimulate economic growth. Empirical results showed that growth responded asymmetrically to changes in recurring spending in the long and short run. Economic growth has responded symmetrically to changes in petroleum business income taxes, tariffs and excise taxes, which are important in both the long and short term. Fluctuations in domestic and external debt have uneven effects on economic growth in the long run and are balanced in the short run. Fiscal improvements broaden the revenue base through efficient tax administration and collection systems, increase spending on critical infrastructure, eliminate unnecessary deficit spending, and invest productively in government debt to free private investment. and used to stimulate inclusive growth (Yusuf & Mohd, 2021) (Bedhiye & Singh, 2022), showed that fiscal policy measures have multiple implications for private investment. Government tax reform and import tariffs have been shut out, and capital spending, current spending and budget deficits have been shut out. They suggested that the state should rethink capital and current expenditures in a way that positively contributes to the development of private investment. Institutional quality and sustainable growth (Ahmed, et al., 2022) examine the impact of institutional quality on long-term development in ten Arab countries from 1995 to 2019. The deterioration of institutional environment indicators remains the most significant impediment to achieving development goals, limiting the effectiveness of economic reforms. The empirical study revealed that capital per capita, oil rents, per capita, and trade openness have a positive significant effect on sustainable development (expressed as adjusted net saving), whereas gross national income and total natural resource rents have a negative significant effect. Using data from 1991 to 2019, the (Kamalu & Ibrahim, 2022) examined the impact of institutional quality on human development in 14 developing countries.

They used the Dynamic Common Correlated Effect method, which accounts for panel data heterogeneity and cross-sectional dependency due to unobserved common factors. The findings showed that institutional quality has a positive and statistically significant long-run effect on human development. Furthermore, financial development was found to promote human development, whereas higher military expenditure had a negative long-term impact. The findings indicate that institutional quality promotes long-term human development. Policymakers should foster and develop high-quality institutions, such as those that combat corruption, improve quality regulation, and uphold the rule of law. However, the institutional indexes have a positive and insignificant impact, indicating that Arab societies have a weak political structure and lack political awareness. In addition, (Asghar, et al., 2020) used the Panel ARDL to examine the impact of institutional quality on economic growth in Asian developing economies 25 from 1990 to 2013. Their findings demonstrated that institutional quality has a positive influence on economic growth, as well as a causal relationship between institutional qualities and economic growth. Again, (Grabowski & Self, 2020)investigated the impact of various factors on the quality of governance institutions in 11 developing Asian countries from 1996 to 2015. They contended that institutional change is frequently a slow, piecemeal process, and that policy can play an important role. Many developing countries have weak states, and the strength or weakness of the ruling elite varies dramatically by geography. Thus, policy direction can change the incentives that bureaucrats and economic actors face, resulting in small changes in the formal and informal rules (institutions) that govern economic activities. (Alam, et al., 2017) examined the impact of government effectiveness on economic growth in a panel of 81 countries using the system GMM method. The study discovered that government effectiveness has a significant impact on economic outcomes. The study’s policy recommendation was to focus on good governance for better economic outcomes. The study, however, fails to demonstrate the impact of other indicators of good governance. Using Generalized Methods of Moment (GMM), Fixed Effects (FE), and Random Effects (RE) models, Epaphra and Kombe (2018) investigated the effect of institutions on economic growth in Africa from 1996 to 2016. Their findings revealed that institutional quality indicators and political stability appeared to be the most important factors in explaining African real GDP per capita growth. Furthermore, (Bolen & Sobel, 2020) used GMM system methodology to investigate the balance between areas of Institutional Quality and its impact on economic growth. They recommended that broad reforms that lift all areas slightly will generally produce more growth than a large reform to only one area, even if the overall average score changes the same. Even if they have the same impact on the overall average score, improving the weakest areas will contribute more to growth than improving already strong areas. In a similar study (Alonso, et al., 2020) used the GMM method to investigate the determinants of institutional quality and discovered that income per capita (growth) and tax revenue appear to be reliable predictors of institutional quality. Development makes it easier to build good institutions, and because the opposite appears to be true, a virtuous circle of growth and institutional quality emerges. A strong fiscal covenant, on the other hand, promotes institutional quality. In terms of inequality, redistribution (rather than simple inequality) appears to be an important determinant of institutional quality, as it captures the state’s active role in this regard. Yang et al. (2014) also investigated the impact of institutional quality on actual savings in 189 countries from 1980 to 2010. The variables were the Kauffman average governance index, the WGI index, the ICRG International Country Risk Guide Indicator, a database of political systems, a World Bank institutional database, corruption perceptions index, per capita share of GDP, population density, draining energy, religion, eventual life at birth, and the school enrolment rate. They concluded that institutional quality indicators (each governance and corruption perceptions index, as well as the type of political systems) have a significant and positive influence on the rate of actual savings, whereas constitutional constraints (proportional representation in parliament and pluralism) do not. Global uncertainty and sustainable growth (Nguyen, et al., 2022)examined the effects of global uncertainty indicators volatility on domestic socioeconomic and environmental vulnerability in a sample of 54 developing countries. To deal with autoregression and endogeneity in their dynamic panel data, they use the two-step system generalized method of moments estimator. Seven different global uncertainty indicators (US trade uncertainty, global trade uncertainty, economic policy uncertainty, global commodities and oil prices, the geopolitical risk index, and the world uncertainty index) have been mobilized and compared for their empirical impact on nations’ economic (growth and GDP), social (misery index and income inequality), and environmental (CO2 emissions) vulnerabilities. Their empirical estimates indicate that the socioeconomic and environmental vulnerabilities cannot be addressed in the same way: any reduction in one aspect will inevitably come at a cost and have an opposite effect on at least one of the other aspects of the nation’s vulnerability. (Asafo-Adjei, et al., 2021) the study aimed to shed new light on the lead-lag relationships between the financial sector and economic growth for developing economies in the face of global economic policy uncertainty. In the medium and long term, the impact of global uncertainty on financial sector and economic growth is the worst for South Africa in four cases. South Africa’s financial markets and economic growth are thus vulnerable to global uncertainty. However, in the pre-COVID analysis conducted with the WMCC, the impetus for global uncertainty to drive movements between the financial sector and economic activity was less pronounced. Both the supply-leading and demand-following hypotheses are supported by the findings. Their findings also highlight the importance of policymakers, investors, and academics constantly 28 monitoring the dynamics of finance and growth over time and space, while also considering adverse shocks from global economic policy uncertainty. In an alternative study (Chen, et al., 2019), the researchers investigated the links between oil price shocks, global economic policy uncertainty (GEPU), and China’s industrial economic growth. Based on monthly data from 2000 to 2017, they find that GEPU and world oil prices jointly cause China’s industrial economic growth; world oil prices have a positive effect, while GEPU has a negative effect. Further studies investigate the asymmetry effect of oil prices and discover that the negative component has a greater impact on China’s industrial economic growth. The findings are robust to various oil price and EPU proxies. Despite the weaker global economic environment, Sub-Saharan Africa continues to experience strong economic growth. Regional output increased by 5% in 2011, with growth expected to pick up slightly in 2012, aided by still-high commodity prices, new resource exploitation, and improved domestic conditions that have supported several years of solid trend growth in the region’s low-income countries. However, performance varies across the region, with output in middle-income countries closely tracking the global slowdown and some sub-regions adversely affected, at least temporarily, by drought. The risk of intensified financial stresses in the eurozone spilling over into a further slowing of the global economy, as well as the possibility of an oil price surge triggered by rising geopolitical tensions, are both threats to the outlook Dept., I.A. (2012). In addition, (Balfoussia & Louzis, 2021) provided estimates of global economic uncertainty and inflation uncertainty for the Greek economy, and their time-varying impact on the corresponding macroeconomic variables is considered. Its impact on the 29 underlying variable varies and is statistically significant and negative during the global financial crisis, the Greek sovereign debt crisis, and the COVID-19 pandemic. As a result, uncertainty weighs on the economy’s fundamentals during these periods. Our findings have several policy implications, including that the extraordinary policy measures implemented to mitigate the economic impact of the COVID-19 pandemic should be phased out gradually and cautiously, as any increase in uncertainty may have a negative impact on economic activity and a deflationary impact on prices. Fiscal policy and sustainable development in Sub-Saharan Africa and impact the article by (Gupta, et al., 2022) investigates the determinants of tax buoyancy in sub-Saharan African countries, finding that institutional quality, trade openness, and economic diversification are significant factors affecting the responsiveness of tax revenues to economic growth. The study highlights the need for policy reforms to strengthen tax systems and enhance revenue mobilization. (Berg, et al., 2009) examine the fiscal policy responses of sub-Saharan African countries to the global financial crisis, emphasizing the importance of timely and well-targeted measures to mitigate the impact of external shocks on economic growth and poverty.

The authors recommend fiscal stimulus packages, including infrastructure investment and social safety nets, while also cautioning against excessive debt accumulation and inflationary pressures. (Kind & Koethenbuerger, 2018) examine the taxation of digital media markets and argue that policymakers need to adjust their tax systems to account for the increasing digitalization of the economy. They highlight the challenges of taxing digital goods and services, which often do not have a physical presence, making them difficult to track and tax. The authors suggest that policymakers should consider new approaches to 30 taxations that account for the unique characteristics of digital markets. This research is relevant to SSA, as the region is experiencing a rapid increase in digitalization, with many people using digital platforms for both formal and informal economic activities. (Kitsios, et al., 2019) explore the role of digitalization in reducing tax evasion from cross-border fraud. The authors argue that digitalization can help prevent tax evasion by increasing transparency and enabling tax authorities to monitor and track cross-border transactions more effectively. The study focuses on the European Union (EU) and finds that digitalization has a positive impact on reducing tax evasion. Although the study is not specific to SSA, it provides insights into the potential of digitalization to improve tax compliance and reduce tax evasion, which could be relevant for policymakers in SSA. (Lakemann & Lay, 2019) examine the impact of digital platforms on informal work in Africa, using the case of Uber. The authors argue that digital platforms can help to formalize informal work by providing a platform for workers to access customers and build a reputation. However, they also highlight the challenges of regulating digital platforms and ensuring that workers are protected. The study is relevant to SSA, where many people work in the informal sector, and digital platforms are increasingly being used to access customers. (Lledó & POPLAWSKI-RIBEIRO, 2013) focus on the challenges of fiscal policy implementation in sub-Saharan Africa, emphasizing the importance of political commitment, institutional capacity, and stakeholder engagement in ensuring effective policy outcomes. The authors argue that successful fiscal policy requires a comprehensive and integrated approach, including revenue mobilization, expenditure management, and debt sustainability. (Diallo, 2009) analyses the difficulties of implementing countercyclical fiscal policy in democratized sub-Saharan African countries, identifying political constraints, weak institutional capacity, and limited fiscal space as major obstacles. The author recommends strengthening democratic institutions, improving public financial management, and enhancing regional cooperation to overcome these challenges. (Dele’chat, et al., 2018), the authors emphasize the importance of fiscal policies and institutions in promoting economic stability and resilience in fragile sub-Saharan African countries. They argue that sound fiscal management, including effective revenue mobilization, expenditure prioritization, and debt sustainability, is essential for promoting sustainable development and reducing vulnerability to external shocks. The study highlights the need for policy reforms to enhance fiscal management in the region, including improving tax administration, reducing tax exemptions, and prioritizing spending on social services and infrastructure. (Drummond, et al., 2012) investigate the determinants of revenue mobilization in sub-Saharan African countries, finding that institutional quality, economic structure, and political stability are significant factors affecting the effectiveness of tax systems. The study emphasizes the importance of policy reforms to enhance revenue collection, including improving tax administration, expanding the tax base, and reducing tax exemptions. (Ouedraogo & Sourouema, 2018) focus on the pro-cyclicality of fiscal policy in sub-Saharan African countries, highlighting the role of export concentration in exacerbating the impact of external shocks on government revenue and expenditure. The authors suggest that diversifying the export base, strengthening social safety nets, and improving public financial management can help mitigate the impact of pro-cyclical fiscal policies on economic growth and poverty reduction. (Afful & Asiedu, 2014) examine the role of business regulations, governance, and fiscal policy in stock market development in sub-Saharan Africa. The study finds that sound fiscal management, including effective tax policies and debt management, is essential for promoting sustainable economic growth and attracting foreign investment.

The authors suggest that improving business regulations and governance can enhance the effectiveness of fiscal policy in supporting stock market development and economic growth. (Ndulu, et al., 2021) focus on the digital transformation in sub-Saharan Africa, emphasizing the role of fiscal regimes in promoting innovation and sustainable development. The authors argue that sound fiscal management, including effective tax policies and public investment in digital infrastructure, is essential for unlocking the potential of digital technologies to promote economic growth and reduce poverty in the region. The study highlights the need for policy reforms to enhance fiscal management and promote digital transformation in sub-Saharan Africa. (Ndambiri, et al., 2012) investigate the determinants of economic growth in sub-Saharan Africa, finding that institutional quality, human capital development, and macroeconomic stability are significant factors affecting the effectiveness of fiscal policies in promoting sustainable development. The study emphasizes the importance of policy reforms to enhance fiscal management, including improving tax administration, reducing tax exemptions, and prioritizing spending on social services and infrastructure. The (Pathways for Prosperity Commission, 2018) notes that digital technology can help governments to improve revenue mobilization, reduce corruption, and enhance public service delivery. (Rukundo, 2020) highlights the challenges that African countries face in taxing the digital economy and suggests that there is a need for greater cooperation between African countries to address the issue. (Onyima & Ojiagu, 2017) examine the impact of digital technology on the formalization of informal businesses in sub-Saharan Africa, using the case of traditional spiritualists. The authors argue that digital technology can facilitate the formalization of informal businesses by enhancing trust, promoting transparency, and facilitating transactions. (Sarkar, et al., 2015) note that the digital divide in sub-Saharan Africa remains a significant obstacle to the region’s development. The authors argue that policies that promote greater access to digital technologies, particularly in rural areas, can help to bridge the divide and promote sustainable development. (Rappoport, et al., 2003) examine household demand for wireless telephony in sub-Saharan Africa and find that factors such as income, education, and urbanization are significant determinants of demand. The authors suggest that policies that promote greater access to wireless telephony can help to bridge the digital divide and enhance economic development. (Rohatgi, 2005) examines the principles of international taxation and highlights the importance of effective tax policies in promoting sustainable development. The author argues that tax policies that promote investment, innovation, and entrepreneurship can help to stimulate economic growth and reduce poverty. (Ndulu, et al., 2021) examine the impact of fiscal regimes on digital transformation in sub-Saharan Africa. The authors argue that effective fiscal policies can help to promote digital transformation by providing incentives for investment in digital infrastructure, promoting innovation, and enhancing access to finance. The article by (Afful & Asiedu, 2014) explores the impact of business regulations, governance, and fiscal policy on the development of stock markets in SSA. The authors argue that a sound regulatory environment, transparent governance, and effective fiscal policies are crucial for developing robust stock markets that can promote sustainable economic growth. However, the study did not specifically discuss the role of digital technology in promoting fiscal policy and sustainable development in SSA. In contrast, (Ndulu, et al., 2021) examine the impact of fiscal regimes on digital transformation in SSA. The authors argue that digital technology has the potential to transform the SSA economy by increasing productivity, creating new jobs, and boosting economic growth. However, they note that effective fiscal regimes are required to promote investment in digital infrastructure and support the growth of digital businesses. Therefore, fiscal policies that encourage investment in digital infrastructure and businesses can promote sustainable development in SSA. The report by (Pathways for Prosperity Commission, 2018) emphasizes the importance of digital technology in promoting inclusive growth in SSA. The report notes that digital technology can increase access to essential services, create new jobs, and improve economic productivity. However, the report also highlights the challenges faced by many SSA countries in adopting digital technology and promoting inclusive growth.

Therefore, fiscal policies that address the barriers to digital adoption can help promote sustainable development in SSA. (Rukundo, 2020) focuses specifically on the challenges of taxing the digital economy in SSA. The author notes that the digital economy poses unique challenges for tax 35 authorities in SSA, including difficulties in identifying taxable income, enforcing compliance, and determining the value of digital transactions. Therefore, Rukundo argues that effective fiscal policies are required to address these challenges and ensure that digital businesses contribute their fair share of taxes to support sustainable development in SSA. Finally, the reports by the (OECD, 2016) (OECD, 2018) discuss the challenges of measuring GDP and taxing digital businesses in the digital economy. The reports note that digital businesses can operate across multiple jurisdictions, making it difficult to determine their taxable income and value creation. The reports suggest that international cooperation and coordinated fiscal policies are required to ensure that digital businesses pay their fair share of taxes and contribute to sustainable development in SSA and other regions. Digital technology has become an essential factor in driving sustainable development in SSA. (Ndulu, et al., 2021) provide insights into the digital divide in South Africa and its impact on sustainable development. The authors argue that digitalization could be a crucial driver of inclusive growth and poverty reduction. Additionally, (Onyima & Ojiagu, 2017) demonstrate how digital technology can facilitate the formalization of informal businesses, promoting sustainable economic growth. However, the adoption and use of digital technology require a conducive policy environment, particularly in the areas of taxation and regulation. Taxation is another critical policy instrument that could impact sustainable development in SSA. (Matheson & Petit, 2021) examine the taxation of telecommunications in developing countries, and they argue that it could contribute to increasing revenues and achieving sustainable development. The authors note that taxes on telecommunications could help to bridge the digital divide and expand access to 36 communication services. However, the effectiveness of taxation policies depends on various factors, including the level of tax compliance, the tax administration capacity, and taxpayer education. Taxpayer education could be an essential determinant of fiscal policy effectiveness and its impact on sustainable development in SSA. (Mascagni & Santoro, 2018) examine the role of taxpayer education in Africa, and they argue that it could contribute to increasing voluntary tax compliance and improving the quality of public services. The authors note that taxpayer education could help to create a more informed and engaged citizenry, which is essential for promoting good governance and sustainable development. Similarly, (Ndung’u, 2017) and (Ndung’u, 2019) examine the use of mobile phone transactions in taxation and highlight the importance of taxpayer education in promoting voluntary compliance and enhancing revenue collection. Taxation policies in the digital economy have also become increasingly relevant in SSA. (Olbert & Spengel, 2019) examine recent policy developments in taxation in the digital economy, and they argue that the question of value creation has become central to tax policy debates. The authors note that digital technologies have transformed the ways in which economic value is created and exchanged, requiring new tax policy approaches. (Okunogbe & Pouliquen, 2018) examine the introduction of electronic tax filing and highlight its potential for promoting transparency, reducing corruption, and improving tax compliance. In conclusion, the literature reviewed in this study suggests that digital technology has the potential to promote sustainable development in SSA by increasing productivity, creating new jobs, and improving access to essential services. However, effective fiscal policies are required to address the unique challenges posed by the digital economy, 37 including difficulties in measuring value creation and enforcing compliance. Therefore, fiscal policies that promote investment in digital infrastructure, address the barriers to digital adoption, and ensure that digital businesses pay their fair share of taxes can help promote sustainable development in SSA.

The first objective of this study is to investigate the effect of fiscal policy macroeconomic variables on economic growth. Analysing fiscal policy macroeconomic variables on economic growth have received considerable attention in the literature. The results from the study showed that there is a significant negative relationship between fiscal policy macroeconomic variables on economic growth. it also showed that that apart from external debt, the other macroeconomic variables have a negative relationship with economic growth. This may be cause when government’s spending is not targeted towards productive investments or if the increased borrowing to finance the spending leads to higher interest rates and inflation. The second objective is to assess the effects of world uncertainties on sustainable development and economic growth in sub-Saharan Africa. The first hypotheses that was develop for this objective is to assess the effects of world uncertainty on sustainable development.

The results showed that there is significant negative relationship between world uncertainty on sustainable development. Its negative impact is by hindering the ability of governments and businesses to plan and make long-term investments. It also leads to a decreased in foreign aid and investment in sub-Saharan Africa, which can limit the ability of governments to invest in sustainable development projects. The second hypotheses for this objective are to assess the effects of world uncertainty on economic growth. The results showed that there is significant positive relationship between world uncertainty on economic growth. It is likely due to increased foreign investment in the region during times of uncertainty as investors seek out less risky markets.