THE EFFECT OF INNOVATION ON ECONOMIC GROWTH IN SUBSAHARAN AFRICA COUNTRIES

Studying the relationship between innovation and economic growth in sub–Saharan Africa countries is important due to limited research in developing countries and to clarify innovation’ true impact on economic growth. The main goal of this research to empirically analyze the effectof innovation on economic growth in Sub-Saharan African nations between 2004 and 2022 by using panel data analysis of the system GMM model. The study examines innovation, measured by the average value of research and development expenditure, patent applications and Scientific and technical journal articles alongside control variables influencing economic growth, Inflation rate, investment, Labor force participation rate, Unemployment and debt service. The system GMM model helps to address potential biases arising from reverse causality, and measurement errors. The study's findings demonstrate that investment, labour force participation, and innovation are significantly and positively affect GDP growth in Sub-Saharan African nations. However, Inflation and external debt were found to have negative and significant impacts on economic growth. The study also found that foreign direct investment (FDI) and unemployment rate did not exhibit statistically significant effect on economic growth at the 0.05 significance level. Thus, Governments and private entities should allocate greater resources towards supporting R&D initiatives. This could involve establishing innovation hubs, providing tax breaks for companies investing in R&D, and promoting collaboration between academia and industry.