Daniel Sakyi

IEA – Could you walk us through the key moments that shaped your path from your earliest exposure to economic thinking to how it piqued your interest to pursue academic research in the field?

Daniel – My intellectual journey into economic thinking and academic research began when I enrolled in the joint Erasmus Mundus Master of International Trade and European Integration (Master EITEI) at the University of Antwerp, Belgium in 2006, followed by Ph.D. in Economics from the University of Pisa, Italy in 2008. The excellent training I received from the Master EITEI programme shaped my thinking about the role of international trade in driving economic outcomes, including labour market employment, growth, and development. My desire to specifically understand the growth and development challenges faced by developing countries, with Africa being no exception, informed the focus of my doctoral thesis on “Liberalisation, Growth and Development in sub-Saharan Africa”, which was awarded in 2012. The key outcomes of my thesis supported the general view that trade liberalisation has a positive impact on the growth and development of developing countries. The knowledge I gained from my doctoral research and other related studies shaped and broadened the scope of my academic research and publications, which focus broadly on development macroeconomics, economic growth and development, international trade, and regional integration. To this end, I have explored several growth and development topics in Africa and other developing countries, including trade facilitation, seaport efficiency and service quality, foreign direct investment, financial inclusion, external debt, regionalism and economic integration, as well as agricultural and food trade.

IEA – In your paper “The Impact of Financial Inclusion on Rural–Urban Households Welfare Inequality in Ghana,” you examined how access to finance shapes welfare outcomes across different groups. What do you see as the most important channels through which financial inclusion reduces inequality, and where do you think current policies or financial-sector practices fall short in reaching vulnerable households?

Daniel – Thank you for this insightful question – it touches on several crucial aspects of financial inclusion. As you rightly pointed out, the study identified multiple channels through which financial inclusion can reduce inequality. These channels include access to credit and availability of digital financial services and payment systems, all of which remain important for alleviating the plight of vulnerable households in Ghana. Access to credit gives households and firms the opportunity to, inter alia, invest in education, health, and consumption. It also promotes ‘consumption smoothening’ by allowing households and firms to borrow for both consumption and entrepreneurial ventures against future earnings, which directly improve their welfare in periods of lower income. Furthermore, digital financial services and payment systems increase efficiency by lowering transaction costs, which concurrently promotes households’ engagement in business activities by facilitating swift payment (and receipt of payment) for goods and services. By reducing barriers to participation in markets and public services and ensuring the availability of digital financial services and payment systems, the ultimate outcomes of these prudent financial remedies could help reduce inequality.

Despite the many benefits of financial inclusion, current financial-sector practices still fall short in reaching vulnerable households. While digital financial services and payment systems are designed to improve efficiency and reduce transaction costs, the reality is that service fees associated with digital transactions – such as banking, mobile money transfers, and cash-outs – are often too high for low-income users. For households living near or below the poverty line, service fees can discourage them from adopting and consistently using formal financial services. Moreover, many vulnerable households, especially those in rural and peri-urban areas, lack a deep understanding of financial products, interest rates, and their consumer rights. Without proper financial education, individuals may misuse services, fall victim to fraudsters, or altogether, develop a sense of apathy towards the use of digital financial services and payment systems.

IEA – In “When you need it quick, let us ship it right,” you analytically demonstrate how port inefficiencies make it harder for exporters to meet food standards. How do these challenges differ for smaller versus larger firms, and based on your findings, should policy efforts prioritise infrastructure upgrades, regulatory coordination, or improvements in service quality?

Daniel – Thank you again for this thought-provoking question. As is widely recognized, many African countries rely heavily on agricultural (food) exports, given their potential for poverty reduction, particularly among smallholder farmers. However, these countries face a complex mix of challenges, including institutional constraints related to meeting high food trade standards, as well as port inefficiencies and poor service delivery. These freight-related challenges are pronounced in both small and large ports across African countries. Based on our findings, we believe policy efforts should prioritize a comprehensive approach that addresses both infrastructure upgrades and regulatory coordination, as well as improvements in port efficiency and service quality. Our results suggest that tackling these institutional bottlenecks requires a multi-faceted solution. For instance, investing in better port infrastructure – such as expanding terminal capacity, adding cold and dry storage facilities, and providing testing labs for pesticide residue monitoring – and additional personnel to expedite inspections and handling at the port has the potential to reduce the high lead time that tend to affect exports of perishable food products. We contend that, by addressing these interconnected challenges, we can create a more efficient and competitive export environment for both small and large ports that benefit the entire food value chain.