nep-afr New Economics Papers
on Africa
Issue of 2006‒01‒24
nine papers chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. Global and EU Agricultural Trade Reform: What is in it for Tanzania, Uganda and Sub-Saharan Africia? By Thomas Giblin; Alan Matthews
  2. Initial Conditions, European Colonialism and Africa's Growth By Chris Papageorgiou; Winford H. Masanjala
  3. The Debt-Growth Nexus: a Dynamic Panel Data Estimation By Andrea PRESBITERO
  4. The IMF and the Mobilization of Foreign Aid By Graham Bird; Dane Rowlands
  5. International benchmarking of Lesotho ' s infrastructure performance By Bogetic, Zeljko
  6. ACT Now or Later: The Economics of Malaria Resistance By Laxminarayan, Ramanan
  7. Non State Actors under the current ACP-EU cooperation agreement: A sectoral review of the Nigerian Context By Bruno Venditto; Biodun Oguyeni; Sheriffdeen Tella
  8. Economic Growth in Egypt: Constraints and Determinants By Anton Dobronogov; Farrukh Iqbal
  9. Choice Under Uncertainty in Developing Countries By Glenn Harrison; Steven Humphrey; Arjan Verschoor

  1. By: Thomas Giblin; Alan Matthews
    Abstract: This paper uses the ATPSM partial equilibrium trade model (developed by UNCTAD and the FAO) to examine the impact of various agricultural trade liberalisation scenarios on the countries of Sub-Saharan Africa. The model is presented in some detail along with an assessment of some of its strengths and limitations. Two types of trade policy liberalisation scenario are simulated. The first is a set of benchmark total unilateral agricultural trade liberalisation scenarios - by the EU, other regions of the world, Sub-Saharan Africa and our two individual case study countries Tanzania and Uganda. These benchmark simulations give an idea of the potential welfare effects from trade reform. The second set of simulations covers different trade reform proposals that have been put forward in the context of the Doha Development Round. The paper focuses in particular on the Harbinson proposal. Results are reported for total welfare changes as well as more disaggregated welfare impacts on producers, consumers, and government revenue. Changes in export volume and value, and changes in quota rent from preferential trade agreements are also reported. The findings for Tanzania and Uganda are that the welfare effects of rich-country agricultural trade reform are small and typically modestly negative. This reflects both their trade balance in agricultural goods and the erosion in the value of some preferences in the case of Tanzania. Liberalisation by the countries themselves generates the biggest, albeit still small, total welfare gains but at the cost of lost government revenue and significant losses in welfare for net-agricultural producers in rural areas where most of the poor live. The paper is an important contribution in moving beyond the aggregate results for Sub-Saharan Africa that are typically presented in trade simulation papers on agricultural liberalisation, aggregates which include a significant diversity of contrasting individual country impacts.
    Keywords: agriculture, trade, modelling, sub-Saharan Africa
    Date: 2005–12–15
  2. By: Chris Papageorgiou; Winford H. Masanjala
    Abstract: We investigate the role of initial conditions at colonial independence on economic growth in Africa in the post-independence period using Bayesian Model Averaging (BMA). A key innovation in our estimation methodology is that we incorporate parameter heterogeneity in model averaging as well as try to mitigate the endogeneity problem present in growth regressions. In order to ensure that differences in the growth determinants between Africa and the world are not driven by experiences of an alternative group of countries, we also control for the presence of OECD countries and former European colonies in the global sample. We find that the impact of different initial conditions on growth in Africa is strikingly different from the world. We argue that these initial conditions reflect the state of development at the close of the colonial era and are therefore inherently related with the legacy of colonialism.
  3. By: Andrea PRESBITERO
    Abstract: This paper investigates the relationship between external debt and economic growth in poor countries. The adverse effects of external debt on economic performance are due to the crowding out of public investment and to the disincentive effects, because of debt overhang and uncertainty. Notwithstanding a general agreement on theory, empirical evidence is not conclusive and lacks of robustness. This contribution aims to shed more light on the relationship between external debt and economic growth and to draw some policy implication for debt relief. This work highlights the critical role of econometric and methodological issues. The results for a panel of 152 developing countries over the period 1977-2002 support a negative linear relationship between external debt and economic growth, and between debt service and investment. These effects are found to be stronger in the Low-Income Countries than in the overall sample, raising concern about the dramatic effect that debt has on economic performance in the world's poorest countries. In LICs, a debt reduction from a debt-to-exports ratio of 300 to the HIPC threshold of 150 is estimated to add more than one percentage point to per capita GDP growth, and a debt service reduction is found to be more than two times more effective than an equal increase in foreign aid. Eventually, external debt impairs economic growth through the liquidity constraint, the creation of macroeconomic instability, the lower efficiency of investment, and its effect on macroeconomic policies and institutional development.
    Keywords: HIPC, debt relief, economic growth, external debt
    JEL: C33 F34 H63 O11
    Date: 2005–10
  4. By: Graham Bird (University of Surrey); Dane Rowlands (Carleton University)
    JEL: F33 F35 O19
    Date: 2005–04
  5. By: Bogetic, Zeljko
    Abstract: The author provides a preliminary benchmarking of infrastructure performance in Lesotho in four major sectors--electricity, water and sanitation, information and communication technology, and road transportation--against the relevant group of comparator countries using a new World Bank international data base with objective and perception-based indicators of infrastructure performance from over 200 countries. The results of the benchmarking are revealing of several major, comparative deficiencies in infrastructure performance in Lesotho: (1) extremely low access to electricity and its affordability; (2) poor coverage, quality, and the cost of local (non-cellular) telephony; and (3) poor quality of roads. Infrastructure service delivery in electricity, telephony, and roads is well below what would be expected, on average, for a country in Lesotho ' s income group. In these sectors, Lesotho also compares unfavorably with many other geographical country groups. Unless addressed, such infrastructure shortfalls are likely to adversely affect the welfare of Lesotho ' s poor, and the cost competitiveness and growth prospects of a range of economic sectors (such as tourism and trade) that depend critically on a stable and competitive supply of basic infrastructure service. They could also affect the speed and quality of Lesotho ' s regional economic integration within the South Africa Customs Union (SACU) sub-region with attendant consequences for the long-term growth of regional trade and real output. By contrast, Lesotho ' s performance is solid in the access to improved water and sanitation, in the aggregate and in both rural and urban areas. Finally, this benchmarking, combined with more in-depth, sector analyses, could provide policymakers in Lesotho a useful guide to the areas of infrastructure performance requiring attention.
    Keywords: Infrastructure Regulation,Urban Services to the Poor,Urban Slums Upgrading,Banks & Banking Reform,Roads & Highways
    Date: 2006–01–01
  6. By: Laxminarayan, Ramanan (Resources For the Future)
    Abstract: In the past, malaria control efforts in sub-Saharan Africa have relied on a combination of vector control and effective treatment using chloroquine. With increasing resistance to chloroquine, attention has now turned to alternative treatment strategies to replace this failing drug. Although there are strong theoretical arguments in favor of switching to more expensive artemisinin-based combination treatments (ACTs), the validity of these arguments in the face of financial constraints has not been previously analyzed. In this paper, we use a bioeconomic model of malaria transmission and evolution of drug resistance to examine questions of optimal treatment strategy and coverage when drug resistance places an additional constraint on choices available to the policymaker. Our main finding is that introducing ACTs sooner is more economically efficient if the planner had a relatively longer time horizon. However, for shorter planning horizons, delaying the introduction of ACTs is preferable.
    Keywords: Malaria; mathematical models; drug resistance; bioeconomics
    JEL: I10 I19 C61
  7. By: Bruno Venditto (ISSM); Biodun Oguyeni (Olabisi Onabanjo University); Sheriffdeen Tella (Olabisi Onabanjo University)
    Abstract: The concept of Non-State Actors (NSAs) is relatively new within the parlance of civil society organisations (CSOs) or Non-governmental Organisations (NGOs) connotations. The term NSA emerged from the 2000 Cotonou Agreement which regulates the cooperation mechanism between the two groups of countries as it tries to expand the scope of coverage of definitions of CSOs and/or NGOs. Within this context, the place of NSAs in the socio-economic and political transformation of post-military Nigeria as from 1999 has become an issue of public discourse. On the one hand, government is wont to suspect the genuine intensions of civil CSOs whose claim to legitimacy looks tenuous in view of reported lack of transparency, accountability and internal democracy. On the other, the civil society groups accuse government of “hidden agenda” by surreptitiously excluding them from active involvement in development policy initiation, implementation, monitoring and evaluation. The need for partnership between the civil society and government is however underscored in various international instruments to which Nigeria subscribes. These include the Millennium Development Goals (MDG), the New Partnership for Africa’s Development (NEPAD), and the Cotonou Agreement of 2000. A pattern of tripartite cooperation among the government, external development-support funding agencies such as World Bank and the European Commission is evident in the emerging trends. However, without adequate capacity for constructive engagement of state actors and appreciable resources for collaborative initiatives, it is apparent that little or no success would come out of ongoing efforts to make NSAs critical partners in the development process. Broadly, this paper sets out to provide a sectoral study on the NSAs in Nigeria. This paper traces the emergence of NSAs as the broadening of sphere of civil society partnering with state actors within the particular framework of the Cotonou Agreement. It then analyses the strategic position of NSAs and the antecedents to current mutual distrust between state and NSAs. More specifically, the paper attempts a conceptual framework of relations between NSAs and government/donor agencies, the nature and structure of NSAs in Nigeria, and the roles or expected roles of NSAs in the political, social and economic development of the country. Relying mainly on secondary sources, it goes further to classify NSAs in Nigeria and undertakes a broad review of NGO activism based on their focal sectors. A review of emerging trends and implications for NSAs is then undertaken before projecting into the future of NSA participation in development in Nigeria. We supported some of the ideas with analysis of a sample database of NSAs developed by collating different database available in the country. The paper concludes with some recommendations.
    JEL: O P
    Date: 2005–12–27
  8. By: Anton Dobronogov (World Bank); Farrukh Iqbal (World Bank)
    Abstract: Egypt accelerated its ongoing transition from a public sector dominated economy to a private sector led and market oriented economy after the collapse of oil prices in the mid-1980s. Some aspects of the economy, such as trade policy, have been substantially transformed since then whereas other aspects, such as public control of the financial sector, have experienced less change in substance. We examine some determinants of growth in Egypt since the mid-1980s using insights from both standard econometric techniques and a diagnostic approach proposed by Hausmann, Rodrik and Velasco (2004). We find that trends in government consumption, credit to the private sector and the average growth rate of OECD countries have been significant determinants of growth in Egypt in the past. We also present evidence that suggests that inefficiency of financial intermediation is a significant current constraint on growth.
    Keywords: Economic growth, Egypt, growth diagnostic, binding constraint, financial intermediation
    JEL: O P
    Date: 2005–12–26
  9. By: Glenn Harrison (Department of Economics, College of Business Administration, University of Central Florida); Steven Humphrey (School of Economics, University of Nottingham); Arjan Verschoor (School of Development Studies, University of East Anglia)
    Abstract: We review experimental evidence collected from risky choice experiments using poor subjects in Ethiopia, India and Uganda. Using these data we estimate that just over 50% of our sample behaves in accordance with expected utility theory and that the rest subjectively weight probability according to prospect theory. Our results show that inferences about risk aversion are robust to whichever model we adopt when we estimate each model separately. However, when we allow both models to explain portions of the data simultaneously, we infer risk aversion for subjects behaving according to expected utility theory and risk seeking behavior for subjects behaving according to prospect theory. We conclude that the current practice of designing policies under the assumption that one or other explains all behavior is fundamentally flawed.
    Keywords: choice under uncertainty, field experiments, developing countries
    JEL: O12 D81 C93
    Date: 2005–10

This nep-afr issue is ©2006 by Suzanne McCoskey. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.