nep-afr New Economics Papers
on Africa
Issue of 2007‒09‒16
fifteen papers chosen by
Suzanne McCoskey
George Washington University

  1. Africa’s food and nutrition security situation: where are we and how did we get here? By Benson, Todd
  2. The Impact of Growth and Redistribution on Poverty and Inequality in South Africa By Kalie Pauw; Liberty Mncube
  3. Export Processing Zones in Madagascar: the impact of the dismantling of clothing quotas on employment and labour standards By Jean-Pierre Cling; Mireille Razafindrakoto; François Roubaud
  4. Monetary Policy Rules for Managing Aid Surges in Africa By Edward F. Buffie; Christopher Adam; Catherine A. Pattillo; Stephen A. O'Connell
  5. Realizing the Gains From Trade: Export Crops, Marketing Costs, and Poverty By Jorge Balat; Irene Brambilla; Guido Porto
  6. Transition in FSU and sub-Saharan countries: The role of institutions By Laurila , Juhani
  7. Estimation of Equilibrium Exchange Rates in the WAEMU: A Robustness Approach By Charalambos G. Tsangarides; Magnus Saxegaard; Stéphane Roudet
  8. Institutional Infrastructure to Support 'Super Growth' in Kenya: Governance Thresholds, Reversion Rates and Economic Development By Mwangi S. Kimenyi
  9. On-the-job learning and earnings in Benin, Morocco and Senegal By Christophe Nordman; François-Charles Wolff
  10. Determinants of Tax Revenue Efforts in Developing Countries By Abhijit Sen Gupta
  11. Measuring the economic impact of climate change on Ethiopian agriculture : Ricardian approach By Deressa, Temesgen Tadesse
  12. Insurance for the Poor: The Case of Informal Insurance Groups in Benin By Philippe LeMay-Boucher
  13. Focused Targeting against Poverty Evidence from Tunisia By Christophe Muller; Sami Bibi
  14. What Do We Know About Namibia's Competitiveness By Ken Miyajima
  15. ROSCA Participation in Benin: A Commitment Issue By Olivier Dagnelie; Philippe LeMay-Boucher

  1. By: Benson, Todd
    Abstract: "Efforts and initiatives to combat hunger and malnutrition in Africa are gaining momentum at all levels—local, national, continental, and international. To design and implement effective strategies for action, it is vital that we have a clear understanding of the problems and options. In this 2020 discussion paper, Todd Benson reviews the extent of food and nutrition insecurity across Africa. He assesses recent patterns and trends, exploring where significant progress has occurred, or not, and why. The differences between food and nutrition security, and how they are linked, are clarified. Benson examines the key direct and indirect determinants and consequences of food and nutrition insecurity in the African context and offers a menu of actions and strategies. Lack of access to and availability of food—the key factors behind food insecurity—remain central concerns in Africa. When food insecurity interacts with health and care problems it translates into nutrition insecurity. HIV/AIDS is an important issue in that context. This comprehensive paper gives prominent attention to the oft-neglected issue of nutrition security. Reflecting emerging Africa-wide initiatives, the paper takes a continental perspective, which should be helpful for strategic consideration by the New Partnership for Africa’s Development (NEPAD) and the African Union. This paper was commissioned for the IFPRI 2020 Africa Conference on “Assuring Food and Nutrition Security in Africa by 2020: Prioritizing Actions, Strengthening Actors, and Facilitating Partnerships,” held in Kampala, Uganda on April 1-3, 2004. There, it served to illuminate the discussions on why Africa has not yet achieved food and nutrition security and what needs to be done." -- Foreword by Joachim von Braun, Director General, IFPRI
    Keywords: food security, Nutrition security, africa, Public action
    Date: 2007
  2. By: Kalie Pauw; Liberty Mncube (Development Policy Research Unit, University of Cape Town)
    Abstract: Abstract: This country study evaluates the experience of the South African economy with respect to growth, poverty and inequality trends since the advent of democracy in 1994. The post-apartheid government took a definite turn toward greater spending on social security, while job creation and a narrowing of the gap between the so-called first and second economies – the latter defined as the informal part of the economy that is also largely removed from formal sector activities – enjoyed priority in its economic strategy. Despite this focus on uplifting the poor it remains unclear as to what extent government has been successful. Some controversy exists around whether relatively fewer South Africans are poor ten years after the democratic government came into power. There seems to be greater consensus among analysts that inequality has increased. This study attempts to shed some light on these issues, drawing on recent South African literature and data.
    Keywords: growth, poverty and inequality trends, South Africa
    JEL: A1
    Date: 2007–08
  3. By: Jean-Pierre Cling (DIAL); Mireille Razafindrakoto (DIAL, IRD, Paris); François Roubaud (DIAL, IRD, Paris)
    Abstract: (english) The success of Export Processing Zones (EPZs) or the Zone Franche in Madagascar is, with the exception of Mauritius, an isolated and unrecognized case in Africa. The Zone Franche has had a highly significant macroeconomic impact in terms of exports and jobs. Madagascar became the number two clothing exporter in sub-Saharan Africa. At its peek in 2004, the Zone Franche employed 100,000 employees. The final phase-out of the Multi-Fibre Arrangements in 2005 has had a negative impact on the Zone Franche. The export and employment growth has come to a halt. Our econometric estimates, based on first-hand data, show that average wages in the Zone Franche have become lower than in the formal industrial sector, other things being equal; labor standards are higher than average but are progressively being reduced in a context of increased international competition. As the example of Madagascar shows, EPZs can no longer be placed at the core of development and employment policies in Africa since the end of clothing quotas, although no alternative strategy has emerged yet. _________________________________ (français) Le succès de la Zone franche malgache est un cas méconnu et unique en Afrique sub-saharienne, si on excepte l'Ile Maurice. La Zone franche a eu un impact macro-économique important en termes d'exportations et d'emplois. Madagascar est ainsi devenu le deuxième exportateur de produits de l'habillement en Afrique sub-saharienne. A son maximum en 2004, la Zone franche comptait 100.000 employés. Le démantèlement final des quotas imposes dans le cadre des Accords Multi- Fibres depuis le début de 2005 a eu un impact négatif sur la Zone franche. La croissance des exportations et de l'emploi s'est interrompue. Nos estimations économétriques, basées sur des données individuelles auprès des ménages de première main, montre que les salaires dans la Zone franche sont devenus inferieurs a leur niveau dans le reste du secteur industriel formel, toutes choses égales par ailleurs. Par ailleurs, les normes de travail hors salaires restent meilleures mais cet avantage est en réduction progressive, dans un contexte de concurrence internationale accrue. Comme le montre l'exemple de Madagascar, les zones franches d'exportation ne peuvent plus être mises au centre d'une stratégie de développement et d'emploi en Afrique depuis la fin des quotas textiles, bien qu'aucune alternative n'ait encore émerge.
    Keywords: Export processing zones, employment, wages, labour standards, Madagascar, zones franches, emploi,salaires, normes de travail.
    JEL: E24 F16 J32 J81 O55
    Date: 2007–09
  4. By: Edward F. Buffie; Christopher Adam; Catherine A. Pattillo; Stephen A. O'Connell
    Abstract: Since the turn of the century, aid flows to Africa have increased on average and become more volatile. As a result, policymakers, particularly in post-stabilization countries where inflation has only recently been brought under control, have been increasingly preoccupied with how best to deploy the available instruments of monetary policy without yielding on hard-won inflation gains. We use a stochastic simulation model, in which private sector currency substitution effects play a central role, to examine the properties of alternative monetary and fiscal policy strategies in the face of volatile aid flows. We show that simple monetary rules, specifically an (unsterilized) exchange rate crawl and a 'reserve buffer plus float'-under which the authorities set a time-varying reserve target corresponding to the unspent portion of aid financing and allow the exchange rate to float freely once this reserve target is satisfied-have attractive properties relative to a range of alternative strategies including those involving heavy reliance on bond sterilization or a commitment to a 'pure' exchange rate float.
    Date: 2007–07–26
  5. By: Jorge Balat; Irene Brambilla; Guido Porto
    Abstract: This paper explores the role of export costs in the process of poverty reduction in rural Africa. We claim that the marketing costs that emerge when the commercialization of export crops requires intermediaries can lead to lower participation into export cropping and, thus, to higher poverty. We test the model using data from the Uganda National Household Survey. We show that: i) farmers living in villages with fewer outlets for sales of agricultural exports are likely to be poorer than farmers residing in market-endowed villages; ii) market availability leads to increased household participation in export cropping (coffee, tea, cotton, fruits); iii) households engaged in export cropping are less likely to be poor than subsistence-based households. We conclude that the availability of markets for agricultural export crops help realize the gains from trade. This result uncovers the role of complementary factors that provide market access and reduce marketing costs as key building blocks in the link between the gains from export opportunities and the poor.
    JEL: F10 F14
    Date: 2007–09
  6. By: Laurila , Juhani (BOFIT)
    Abstract: This study compares transition processes in countries of Central and Eastern Europe, the former Soviet Union (FSU) and sub-Saharan Africa. By widening the scope from most- to least-developed transition economies, the study establishes the importance of a strong state with evolved institutional capacity to protect citizens, enforce property rights and generate social capital. The evidence presented further argues that enforceable, credible property rights with associated market discipline are among the best antidotes to corruption, shadow economies, criminal injustice and poverty. The presence of accountable institutions also influences economic growth and the ability of a country to attract trade and foreign direct investment. Consequently, when institutions of FSU and sub-Saharan countries develop to the point they become attractive to traders and investors from rich countries, their governments need to focus on abolition of barriers to trade, investment and capital. The author commends the recent reorientation of the international donor community towards encouraging recipient governments to commit credibly to increasing capacities of their state institutions with a view to supporting property-based rule of law and social order.
    Date: 2007–09–12
  7. By: Charalambos G. Tsangarides; Magnus Saxegaard; Stéphane Roudet
    Abstract: Using the FEER approach we investigate the long-run equilibrium paths of the real effective exchange rates (REERs) of countries in the West African Economic and Monetary Union (WAEMU). In an attempt to address econometric estimation uncertainty, we employ both single-country (Johansen and ARDL) and panel-data (FMOLS and PMG) cointegration techniques. We find that (i) much of the long-run behavior of REERs in WAEMU countries can be explained by fluctuations in terms of trade, government consumption, investment, and productivity; (ii) the use of different econometric techniques suggests that there is significant uncertainty about the path of the underlying equilibrium REERs and the degree of exchange rate misalignment, which underscores the need for robustness analyses in exchange rate modeling; and (iii) results from panel-data cointegration may sometimes be useful, but should always be complemented with single-country estimations to ensure that the results take into account country-specific characteristics.
    Keywords: Working Paper , West African Economic and Monetary Union ,
    Date: 2007–08–02
  8. By: Mwangi S. Kimenyi (University of Connecticut)
    Abstract: Kenya Growth Vision 2030 proposes policy and institutional reforms that make it possible for the country to achieve development status of a middle income country by 2030. This paper outlines the institutional framework necessary to achieve ÈSuper Growth,É which describes the character of growth required to meet targets stipulated in the Vision. The paper provides evidence confirming the importance of improving the quality of governance to the achievement of the Vision. The paper also demonstrates that the country is characterized by a high probability of reverting to poor governance. It is argued that, to achieve super growth, the country must attain an institutional tipping point which associates with low reversion rates to weaker institutions. The paper provides suggestions for institutional reforms that result in the achievement of an institutional tipping point and super growth.
    Keywords: Geovernance, Super Growth, Institutional Tipping, Kenya Growth Vision 2030
    JEL: O10 O20 O55
    Date: 2007–09
  9. By: Christophe Nordman (DIAL, IRD, Paris); François-Charles Wolff (LEN, Université de Nantes, CNAV, INED)
    Abstract: (english) In this paper, we consider a model of on-the-job learning where workers learn informally by watching and imitating colleagues. We estimate the rate of knowledge diffusion inside the firm using three matched worker-firm data sets from Benin, Morocco and Senegal. We rely on non-linear least squares to estimate the structural parameters of the informal learning model and account for unobserved firm heterogeneity using firm factors derived from a principal component analysis. We find that the rate of knowledge diffusion is around 7 percent in Morocco and Senegal and much higher in Benin, but part of the learning-bywatching returns stems from firm heterogeneity. Informal training significantly affects the shape of returns to tenure in African countries. Finally, we estimate an extended model with both learning-by-watching and learning-by-doing and find significant benefits from imitating colleagues in Morocco.
    Keywords: Earnings functions, informal training, learning-by-watching, learning-by-doing,returns to tenure, African countries
    JEL: J24 J31 O12
    Date: 2007–07
  10. By: Abhijit Sen Gupta
    Abstract: This paper contributes to the existing empirical literature on the principal determinants of tax revenue performance across developing countries by using a broad dataset and accounting for some econometric issues that were previously ignored. The results confirm that structural factors such as per capita GDP, agriculture share in GDP, trade openness and foreign aid significantly affect revenue performance of an economy. Other factors include corruption, political stability, share of direct and indirect taxes etc. The paper also makes use of a revenue performance index, and finds that while several Sub Saharan African countries are performing well above their potential, some Latin American economies fall short of their revenue potential.
    Date: 2007–07–26
  11. By: Deressa, Temesgen Tadesse
    Abstract: This study uses the Ricardian approach to analyze the impact of climate change on Ethiopian agriculture and to describe farmer adaptations to varying environmental factors. The study analyzes data from 11 of the country ' s 18 agro-ecological zones, representing more than 74 percent of the country, and survey of 1,000 farmers from 50 districts. Regressing of net revenue on climate, household, and soil variables show that these variables have a significant impact on the farmers ' net reven ue per hectare.The study carries out a marginal impact analysis of increasing temperature and changing precipitation across the four seasons. In addition, it examines the impact of uniform climate scenarios on farmers ' net revenue per hectare. Additionally, it analyzes the net revenue impact of predicted climate scenarios from three models for the years 2050 and 2100. In general, the results indicate that increasing temperature and decreasing precipitation are both damaging to Ethiopian agriculture. Although the analysis did not incorporate the carbon fertilization effect, the role of technology, or the change in prices for the future, significant information for policy-making can be extracted.
    Keywords: Environmental Economics & Policies,Climate Change,Crops & Crop Management Systems,Global Environment Facility,Common Property Resource Development
    Date: 2007–09–01
  12. By: Philippe LeMay-Boucher
    Abstract: This paper studies indigenous insurance groups using evidence from urban areas in Benin. Many of these informal institutions co-exist within neighbourhood-distance. They are based on well-defined rules and regulations, offering premium-based insurance for funeral expenses, as well as other forms of insurance and credit to cope with hardships. We provide first a description of these groups. Then we investigate, with the help of an original dataset, which individual characteristics are significant in explaining both the probability to join such groups and the choice of insurance coverage.
    Keywords: groups, insurance, Benin
    JEL: O17 O18 C21
    Date: 2007
  13. By: Christophe Muller (Departamento de Fundamentos del Análisis Económico Universidad de Alicante, Campus de San Vicente); Sami Bibi (Faculté des Sciences Economiques et de Gestion de Tunis (FSEGT),Unité de Recherche en Econométrie Appliquée (URECA))
    Abstract: (english) This paper introduces a new methodology to target direct transfers against poverty. Our method is based on estimation methods that focus on the poor. Using data from Tunisia, we estimate ‘focused’ transfer schemes that highly improve anti-poverty targeting performances. Post-transfer poverty can be substantially reduced with the new estimation method. In terms of P2, the most popular axiomatically valid poverty indicator, moving from 1.30, the level reached under subsidies, to 0.36, the level reached with the best OLS method, costs about 2.9 percent of GDP. An additional reduction down to 0.25, that is another 30 percent reduction in poverty, requires only a few hours of statistician work. Finally, the obtained levels of under-coverage of the poor is so low that ‘proxy-means’ focused transfer schemes becomes a realistic alternative to price subsidies, likely to avoid social unrest.
    Keywords: Poverty, Targeting, Transfers.
    JEL: D12 D63 H53 I32 I38
    Date: 2007
  14. By: Ken Miyajima
    Abstract: This paper evaluates Namibia's competitiveness using several traditional indicators; it concludes that, while the real effective exchange rate (REER) is in equilibrium at present?suggesting no imminent need for concern?the country may wish to improve its competitiveness by increasing educational attainment, reducing the skills mismatch, and diversifying its exports. Moreover, although Namibia scores relatively well on survey-based major indicators of structural competitiveness, the business environment can be made more conducive to private sector activity.
    Keywords: Export competitiveness , Namibia , Economic models , Governance , Working Paper ,
    Date: 2007–08–01
  15. By: Olivier Dagnelie; Philippe LeMay-Boucher
    Abstract: In the light of first-hand data from a Beninese urban household survey in Cotonou, we investigate several motives aiming to explain participation in Rotating Savings and Credit Associations (ROSCAs). We provide empirical findings which lead us to think that the main reason why individuals join a ROSCA is to commit themselves against self-control problems.
    Keywords: ROSCA, self-control, Benin
    JEL: G2 O16 O17
    Date: 2007

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