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on Africa |
| By: | Paul Cipamba Wa Cipamba |
| Abstract: | This study re-investigates the empirical relationship between exports and economic growth in South Africa using econometric techniques of co-integration and Granger causality over the period 1970Q1-2012Q4. The Johansen approach of co-integration shows that exports and GDP evolved together overtime, though deviations from the steady state might happen in the short-run. Furthermore, Granger causality based on a Vector Error Correction model (VECM) reveals the existence of short and long run bi-directional causality between export and GDP growth. Similarly, Granger causality based on an augmented vector auto-regression (VAR) model confirms that export Granger causes GDP and vice versa. Overall, the empirical findings of this study support the validity of export-led growth and growth –driven export hypothesizes in the case of South Africa. The main policy implication of these results is that a speedy and sound execution of government’s plans aimed at stimulating and diversifying production for export will contribute to the improvement of growth and employment prospects. |
| Keywords: | Export-led growth, Granger causality, South Africa |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:355&r=afr |
| By: | Johane Dikgang and Edwin Muchapondwa |
| Abstract: | This paper looks at the impact of land restitution involving the Khomani San “bushmen†in the Kgalagadi area of South Africa. It seeks to test whether there is a positive correlation between land restitution and poverty reduction among the beneficiaries. We run instrumental variable probit models on poverty and access to nature. Our results suggest that using restituted land by the claimants’ has no positive effect on poverty alleviation. However, a positive link with greater access to nature is established. Therefore, land restitution should become part of a broader, carefully crafted rural developmental strategy for it to be effective. Otherwise land restitution risks enabling indigenous communities to continue with their “traditional†way of life and, in fact, keep them poor. |
| Keywords: | Access to nature, Instrumental variable, Khomani San, Land restitution, poverty |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:352&r=afr |
| By: | Boansi, David |
| Abstract: | This study presents an analysis of Ghana’s performance in export of cocoa using the revealed comparative advantage and revealed symmetric comparative advantage measures of competitiveness for the periods 1964-69 (immediate years following the collapse of world price of cocoa), 1983-92 (Reform and Adjustment Period) and 2000-2010 (recent decade). In addition, the magnitude and effects of key economic determinants of cocoa exports, production and farm gate price for Ghana are estimated. RCA and RSCA figures computed in the current study show that Ghana has comparative advantage in export of both raw and processed cocoa, with its advantage being higher in exports of the raw product. Ghana’s performance in export of cocoa has improved significantly since 1983. This observation is attributed to initiation of the Economic Recovery Program in 1983(which created the right conditions for agricultural investment and helped address inefficiencies in marketing and fiscal disciplines), the Agricultural Services Rehabilitation Project (ASRP) between 1987 and 1990 (which helped in strengthening the capacity of agricultural research, extension and policy planning), opening up of the domestic market to competition through partial liberalization of internal marketing from the early 1990s, establishment of a price stabilization system and continuous government support to the sector through increased public spending on infrastructure and productivity-enhancing innovations. Improvement in the export performance, anticipated increases in global demand and world price of cocoa, wide yield gap of Ghana, positive attitude of farmers towards supply of cocoa due to increased government support, and intensification of competition on the domestic market indicate potential for further improvement in Ghana’s production and export of cocoa. However, upon estimates obtained in the current study, to realize any further improvement in the performance of the cocoa subsector, measures should be put in place to bridge the wide yield gap, ensure continuous government support to various stakeholders in the supply chain, and tighten the loose border between Ghana and Côte d’Ivoire to help minimize smuggling in times of increasing farm gate price of cocoa in Côte d’Ivoire |
| Keywords: | Competitiveness, cocoa exports, value addition, determinants, government support, price stabilization, world price of cocoa, producer price of cocoa, cocoa production |
| JEL: | E6 F1 F11 F13 Q11 Q13 Q14 Q17 Q18 |
| Date: | 2013–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48345&r=afr |
| By: | nnamdi, Kelechi; ifionu, Ebele |
| Abstract: | This research paper examines exchange rate volatility over time (1970-2012) using the Generalized Autoregressive Conditional Heteroscedasticity (AR GARCH) model of the Maximum Likelihood techniques. Our AR GARCH result showed that lagged (last year) exchange rate is significantly responsible for the dynamics of Naira/ Dollar exchange rate in Nigeria. Most glaring is that our ARCH and GARCH parameters indicate that exchange rate volatility shocks are rather persistent in Nigeria. We also find that exchange rate uncertainty has a direct relationship with current exchange rate in Nigeria. Further, the Granger causality test conducted shows that the direction of causality is more powerful and significant from exchange rate uncertainty to actual exchange rate in Nigeria. Thus the paper suggests a proper management of exchange rate, to forestall costly distortions in the Nigerian economy. |
| Keywords: | GARCH Models, Financial Econometrics, Foreign Exchange rate, Monetary Policy |
| JEL: | C58 F31 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48316&r=afr |
| By: | Marcel Kohler |
| Abstract: | The effect of trade liberalisation on environmental conditions has yielded significant debate in the energy economics literature. Although research on the relationship between energy consumption, emissions and economic growth is not new in South Africa, no study specifically addresses the role that SA’s foreign trade plays in this context. A surprising fact given trade is one of the most important factors that can explain the Environmental Kuznets Curve. Our research employs recent SA trade and energy data and modern econometric techniques to investigate this. The main finding is the existence of a long run relationship between environmental quality, levels of per capita energy use and foreign trade in SA. As anticipated per capita energy use has a significant long run effect in raising the country’s CO2 emission levels, yet surprisingly higher levels of trade act to reduce these emissions. Granger causality tests confirm the existence of a positive bidirectional relationship between per capita energy use and CO2 emissions. Whilst we also find positive bidirectional causality between trade and income per capita and between trade and per capita energy use, it appears that SA trade liberalisation has not contributed to a long run growth in pollution-intensive activities nor higher emission levels. |
| Keywords: | CO2 Emissions, Energy, Foreign Trade |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:356&r=afr |
| By: | Alexander Zimper (Department of Economics, University of Pretoria) |
| Abstract: | The financial sector of emerging economies in Africa is characterized by a non-competitive banking sector which dominates any direct participation of agents in asset markets. Based on a variant of Diamond and Dybvig's (1983) model of financial intermediation, we formally explain both stylized facts through market inexperience of agents in emerging economies. While experienced agents correctly predict future market clearing equilibrium prices, inexperienced agents are ignorant about future market equilibria. As a consequence, a monopolistic banking sector can exploit these agents because their only outside option is an autarkic investment project. |
| Keywords: | Emerging Economies, Demand Deposit Contract, Asset Market, Asymmetric Information |
| JEL: | O16 G14 G21 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201334&r=afr |
| By: | Deborah E. Lee, Stephen G. Hosking and Mario du Preez |
| Abstract: | Many valuations have been made of changes to in-estuary attributes but few have been made of out-of-estuary attributes. From a recreation perspective, an important type of out-of-estuary attribute is the availability of public paths by which to access attractive features of the estuary environment. This paper values an improvement in the level of public access in the form of an additional nature trail along the banks of the Sundays River Estuary in the Eastern Cape, but does not compare this value with the costs. By means of choice experiment modelling analyses it is estimated that in 2010 the marginal willingness-to-pay for an investment in a nature trail was R34 per user per annum. In order to determine whether the development of this trail is efficient, this benefit (R34 per user per annum) needs to be compared to the cost of the development, an analysis that remains to be done. However, this find does serve to provide guidance on how much funding could efficiently be allocated to such a development - about R1.22 million, assuming a social discount rate of 8.38%. |
| Keywords: | Estuary, willingness to pay, choice experiment, public access, recreational attributes |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:353&r=afr |
| By: | Margaret S. McMillan; William A. Masters; Harounan Kazianga |
| Abstract: | This paper addresses the role of tropical disease in rural demography and land use rights, using data from Onchocerciasis (river blindness) control in Burkina Faso. We combine a new survey of village elders with historical census data for 1975-2006 and geocoded maps of treatment under the regional Onchocerciasis Control Program (OCP). The OCP ran from 1975 to 2002, first spraying rivers to stop transmission and then distributing medicine to help those already infected. Controlling for time and village fixed effects, we find that villages in treated areas acquired larger populations and also had more cropland transactions, fewer permits required for cropland transactions, and more regulation of common property pasture and forest. These effects are robust to numerous controls and tests for heterogeneity across the sample, including time-varying region fixed effects. Descriptive statistics suggest that treated villages also acquired closer access to electricity and telephone service, markets, wells and primary schools, with no difference in several other variables. These results are consistent with both changes in productivity and effects of population size on public institutions. |
| JEL: | I00 Q0 Q00 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19245&r=afr |
| By: | Peter Chacha, Edwin Muchapondwa, Anthony Wambugu and Daniel Abala |
| Abstract: | This study analyses the factors influencing pricing of National Park visits in Kenya. A two step regression procedure is used to develop a pricing mechanism for Lake Nakuru National Park (LNNP). In the first stage, count data models are applied to estimate the Trip generating function to LNNP and in the second, the results from count data models are used to simulate visitation as price varied through an increase in the gate fee to LNNP. The simulated data is used to estimate the demand curves for LNNP. The finding shows that the current price set-up at LNNP of Ksh. 7,050 for international tourists and Ksh. 1,000 for domestic tourists is in fact cost recovery. However, there is greater scope to raise more revenue from an increase in entry fees. The study proposes price increase for international visits from the current Ksh. 7,050 (US$75) to Ksh.20,000 (US$230) in the medium term. This will yield a total revenue estimated at Ksh. 2,823 million (US$33 million) without major decline in visitation days. With regard to domestic visitors, the Kenya Wildlife Service (KWS) can increase the price from the current Ksh. 1,000 (US$11.8) to Ksh. 2,000 (US$ 22) over the same horizon. This price increase will yield revenue equivalent to Ksh. 288 million (US$ 3.4 million) but also lead to a decline in visitation levels from domestic group by 30 percent. |
| Keywords: | Pricing, protected areas, international and domestic visits, travel costs |
| JEL: | C24 C25 I31 Q26 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:357&r=afr |