Governance and innovation: positive drivers of Africa’s economic performance

This study examines the relevance of governance in shaping the effect of innovation on Africa’s economic performance. The analysis is based on a sample of 39 African countries, utilizing data from 2010 to 2023. The adopted empirical strategy is the interactive generalized method of moments (GMM), tailored to assess how governance and disaggregated governance dynamics (i.e., economic governance, political governance, and institutional governance) moderate innovation to enhance economic performance. The conceptualization and measurement of innovation and economic performance in this study are based on the Global Innovation Index (GII), GDP growth (annual %), and GDP per capita growth (annual %). The findings establish a positive net impact of innovation on economic performance, alongside a corresponding positive synergy between governance dynamics and innovation. This positive synergy is based on two key insights: (i) the existence of an unconditional positive relationship between innovation and economic performance, and (ii) a positive moderating role of governance dynamics in the innovation–economic performance nexus. Additional findings and policy implications are discussed within the framework of the African Union’s Agenda 2063 and the Sustainable Development Goals (SDGs).