nep-afr New Economics Papers
on Africa
Issue of 2008‒11‒11
thirteen papers chosen by
Marco Novarese
University Amedeo Avogadro

  1. Transformation of a Woodworking and Furniture Industrial District in Kampala, Uganda: Dichotomous Development of SME Cluster and Large Firm Sector By Yoshida, Eiichi
  2. Paying the Piper: The High Cost of Funerals in South Africa By Anne Case; Anu Garrib; Alicia Menendez; Analia Olgiati
  3. Intrahousehold inequality and child gender bias in Ethiopia By Koohi-Kamali, Feridoon
  4. Modelling the Inflation Process in Nigeria By Olusanya E. Olubusoye; Rasheed Oyaromade
  5. Household Access to Microcredit and Children's Food Security in Rural Malawi: A Gender Perspective By Hazarika, Gautam; Guha-Khasnobis, Basudeb
  6. Excavating for economics in africana studies By Mason, Patrick L.
  7. Tanzania's Equilibrium Real Exchange Rate By Niko Hobdari
  8. Social Welfare and Demand for Health Care in the Urban Areas of Côte d'Ivoire By Arsène Kouadio; Vincent Monsan; Mamadou Gbongue
  9. The Decline in African-American Representation in Unions and Manufacturing, 1979-2007 By John Schmitt; Ben Zipperer
  10. Effect of Import Liberalization on Tariff Revenue in Ghana By William Gabriel Brafu-Insaidoo; Camara Kwasi Obeng
  11. The Benefits and Costs of Monetary Union in Southern Africa: A Critical Survey of the Literature By George S. Tavlas
  12. Distribution Impact of Public Spending in Cameroon: The Case of Health Care By Bernadette Dia Kamgnia
  13. The Impact of Tobacco Production Liberalization on Smallholders in Malawi By Harashima, Azusa

  1. By: Yoshida, Eiichi
    Abstract: Clustering small manufacturers are believed to attain various types of collective efficiency. A woodworking and furniture SME district in Uganda has created a learning environment for artisans to start up their own workshops. In the district workers can access various managerial information including business skills and input materials easily than outside. Hence it attracted new entrants to follow and district growth continued. On contrary large firms are locating separately and dispersedly from SME district and have a negative image to SME. This dichotomy has been created partly through spatial division of two sectors and partly through policy favouritism toward large firms. Clustering small manufacturers are believed to attain various types of collective efficiency. A woodworking and furniture SME district in Uganda has created a learning environment for artisans to start up their own workshops. In the district workers can access various managerial information including business skills and input materials easily than outside. Hence it attracted new entrants to follow and district growth continued. On contrary large firms are locating separately and dispersedly from SME district and have a negative image to SME. This dichotomy has been created partly through spatial division of two sectors and partly through policy favouritism toward large firms.
    Keywords: SME, Cluster, Agglomeration, Incubation, Woodworking, Furniture, Uganda, Kampala
    JEL: D10 Q12 R10
    Date: 2008–10
  2. By: Anne Case; Anu Garrib; Alicia Menendez; Analia Olgiati
    Abstract: We analyze funeral arrangements following the deaths of 3,751 people who died between January 2003 and December 2005 in the Africa Centre Demographic Surveillance Area. We find that, on average, households spend the equivalent of a year's income for an adult's funeral, measured at median per capita African (Black) income. Approximately one-quarter of all individuals had some form of insurance, which helped surviving household members defray some fraction of funeral expenses. However, an equal fraction of households borrowed money to pay for the funeral. We develop a model, consistent with ethnographic work in this area, in which households respond to social pressure to bury their dead in a style consistent with the observed social status of the household and that of the deceased. Households that cannot afford a funeral commensurate with social expectations must borrow money to pay for the funeral. The model leads to empirical tests, and we find results consistent with our model of household decision-making.
    JEL: D12 O12
    Date: 2008–10
  3. By: Koohi-Kamali, Feridoon
    Abstract: The Rothbarth model of intrahousehold resource allocation has consistently failed to detect child gender bias in many applications over the past two decades. This paper challenges the current consensus that the Rothbarth method is not effective in revealing child gender bias from consumption behavior of adults. It proposes an approach to the Rothbarth model that restricts its application to samples of nuclear households, and employs an index of child gender based on the number of children in the household and related to a specific selective mechanism of discrimination. It demonstrates the effectiveness of this approach with an application to a 2005-06 Ethiopian consumption survey of 21,299 households conducted by Ethiopia's Statistical Authority, covering both urban and rural areas. The paper presents the first clear and extensive evidence of discrimination against girls by all four adult goods employed, and the outcome persists, in various degrees, when reexamined with a lower definition of child age, and with female-headed households. The findings provide support for gender-based policies in child-health and education in Ethiopia.
    Keywords: Gender and Law,Gender and Development,Educational Sciences,Youth and Governance,Population Policies
    Date: 2008–10–01
  4. By: Olusanya E. Olubusoye; Rasheed Oyaromade
    Abstract: This study is motivated by the conviction that inflation entails sizeable economic and social costs, and controlling it is one of the prerequisites for achieving a sustainable economic growth. The study analyses the main sources of fluctuations in inflation in Nigeria. Using the framework of error correction mechanism, it was found that the lagged CPI, expected inflation, petroleum prices and real exchange rate significantly propagate the dynamics of inflationary process in Nigeria. The level of output was found to be insignificant in the parsimonious error correction model. Surprisingly, the coefficient of the lagged value of money supply was found to be negative and significant only at the 10% level. One of the major implications of this result is that efforts of the monetary regulating authorities to stabilize the domestic prices would continuously be disrupted by volatility in the international price of crude oil.
    Date: 2008–08
  5. By: Hazarika, Gautam (University of Texas at Brownsville); Guha-Khasnobis, Basudeb (UNU-WIDER)
    Abstract: Using data from the 1995 Malawi Financial Markets and Food Security Survey, this study seeks to discover if women's relative control over household resources or intra-household bargaining power in rural Malawi, gauged by their access to microcredit, plays a role in children's food security, measured by anthropometric nutritional Z-scores. Access to microcredit is assessed in a novel way as self-reported credit limits at microcredit organizations. Since credit limits, that is, the maximum sums that might be borrowed, hinge upon supply-side factors such as the availability of credit programs and the financial resources of lenders, it is plausible they are more exogenous than demand driven loan uptake or participation in microcredit organizations, the common ways of gauging access to microcredit. It is indicated that whereas the access to microcredit of adult female household members improves 0–6 year old girls', though not boys', long-term nutrition as measured by height-for-age, the access to microcredit of male members has no such salutary effect on either girls' or boys' nutritional status. This may be interpreted as evidence of a positive relation between women's relative control over household resources and young girls' food security. That women's access to microcredit improves young girls' long-term nutrition may be explained in part by the subsidiary finding that it raises household expenditure on food.
    Keywords: intra-household distribution, bargaining, microcredit, gender, Malawi
    JEL: O15
    Date: 2008–10
  6. By: Mason, Patrick L.
    Abstract: For 30 years, Africana Studies has developed as an interdisciplinary field. Although much attention has been paid within the field to the humanities and arts, much less has been paid to the social sciences, particularly economics. This analysis documents the presence of economists and economics course content among Africana Studies programs. The authors also discuss the presence of economists and economic content among leading general interest journals in Africana Studies and of economics content in several influential Africana Studies texts. Only 1.72% of the faculty members in leading Africana Studies departments are economists, and economics course content among Africana Studies programs is anemic. Also, there is little economics content in Africana journals, particularly peer-reviewed journals. Recommendations include incorporating accessible economics texts into course reading lists; encouraging African American students to take economics, calculus, and statistics; teaching statistics and economic theory in the context of course content; and adding economists to the editorial boards of Black Studies journals.
    Keywords: black studies; Africana studies; African American studies; interdisciplinary studies; Black political economy; African American economists; Africana Studies; African American intellectual history
    JEL: J15 A2 A14
    Date: 2008
  7. By: Niko Hobdari
    Abstract: Tanzania's real effective exchange rate (REER) has depreciated sharply since end-2000, reversing the appreciation that took place in the second half of the 1990s. Single-country and panel data estimates, and the external sustainability approach, suggest that Tanzania's REER is currently modestly undervalued relative to its estimated equilibrium level. Looking forward, a modest trend appreciation of the equilibrium REER is expected, consistent with continued high GDP growth and an expected recovery in terms of trade. In addition, capital inflows to Tanzania could be significantly higher than currently expected, to take advantage of Tanzania's natural resources and strong policy framework. If so, these inflows would contribute to an additional appreciation by as much as 20 percent of the equilibrium REER.
    Keywords: Working Paper , Tanzania , Exchange rate depreciation , Exchange rates , Fiscal sustainability , Terms of trade , Capital inflows ,
    Date: 2008–05–30
  8. By: Arsène Kouadio; Vincent Monsan; Mamadou Gbongue
    Abstract: This paper analyses the relationship between the demand for health care and that for health insurance by the population of Côte d’Ivoire. A Poisson model is used to estimate the demand for health care and a multinomial logit model for estimating the demand for insurance. The data on which the research was based were taken from a sample of 2,040 households that were interviewed as part of a survey on Recours aux soins et dépenses de santé or PSA 92 (Health care use and health expenses, or PSA 92), which was carried out in 1992 in Yopougon, a working class neighbourhood of Abidjan. The results show that the length of the illness appears to be the factor that triggers the use of modern health care. They also indicate that employment and age are important factors in making decisions about which insurance to take. Extending the data collection system to the rural population, or generalizing it to the whole population, and gaining a better definition of the variables “state of health”, “consulting a health service”, “behaviour of the insured person and of the insurance company vis-à-vis health services” should be envisaged to refine the research. All this will lead to a better grasp of the problems of moral hazard and adverse selection in Côte d’Ivoire’s health system as a result of the minimizing costs of the implementation of the expected Universal Health Insurance (AMU).
    Date: 2008–07
  9. By: John Schmitt; Ben Zipperer
    Abstract: This report details the sharp decline in African-American employment in manufacturing and in African-American unionization rates. The study, which analyzed data from the U.S. Census Bureau's Current Population Survey, shows that the share of American workers in unions continues to fall, but unionization rates for African-Americans have declined more sharply than for the rest of the workforce.
    Keywords: African-Americans, unions, employment rate
    JEL: J J68 J64
    Date: 2008–02
  10. By: William Gabriel Brafu-Insaidoo; Camara Kwasi Obeng
    Abstract: In contributing to the ongoing debate on the impact of trade liberalization, this paper investigates the quantitative effect of import liberalization on tariff revenue in Ghana. A decomposition analysis was conducted to determine the relative effects of the different features of the import policy reforms. In addition, the impact of tariff rate reductions on tariff revenue was inferred using estimated results from the real imports equation. The study indicates that import tariff revenue is neither buoyant nor elastic in Ghana. Even though exchange rate depreciation over the liberalization period has increased tariff revenue, it is offset by the revenue-reducing effect of tariff reductions over this period. Moreover, the net effect of import liberalization in the form of reductions in the average tariff rate has been negative. The study recommends further improvements in customs administration and duty collection mechanisms to reduce leakage, an effective detection of evasion, enforcement of penalties, and tax replacements as key complementing measures.
    Date: 2008–06
  11. By: George S. Tavlas (Bank of Greece)
    Abstract: With the 14 members of the Southern African Development Community (SADC) having set the objective of adopting a common currency for the year 2018, an expanding empirical literature has emerged evaluating the benefits and costs of a common-currency area in Southern Africa. This paper reviews that literature, focusing on two categories of studies; (1) those that assume that a country’s characteristics are invariant to the adoption of a common currency; and, (2) those that assume that a monetary union alters an economy’s structure, resulting in trade creation and credibility gains. The literature review suggests that a relative-small group of countries, typically including South Africa, satisfies the criteria necessary for monetary unification. The literature also suggests that, in a monetary union comprised of all SADC countries and a regional central bank that sets monetary policy to reflect the average economic conditions (e.g., fiscal balances) in the region, the potential losses (i.e., higher inflation) from giving up an existing credible national central bank, a relevant consideration for South Africa, could outweigh any potential benefits of trade creation resulting from a common currency.
    Keywords: South African Development Community; monetary union; optimum currency areas
    JEL: E42 E52 F36
    Date: 2008–04
  12. By: Bernadette Dia Kamgnia
    Abstract: The study assessed Cameroonians’ participation in public health care services in order to grasp the distributional effects of those services. Three specific objectives are specified: determine the extent to which public spending on health care may constitute a targeted means for poverty reduction; identify the determinants of participation in health care services in general and in public services in particular; and propose alternative health care policies compatible with the government’s concern for poverty alleviation. In a benefit incidence analysis, it is shown that the benefits acquired from using publicly funded health care services are globally progressive. Integrated health care centres are chosen because of their nearness. Households appreciate the quality of services provided at the peripheral health care centres. Private health care is chosen because of the quality of the service, and people go to traditional healers or resort to self-medication because of the low cost. The majority of the considered factors – cost, nearness, revenue, education, age, gender and illness – had the expected sign and significantly affect the choice of health care providers. But for educated individuals who are employed in the formal sector, nearness and cost are the key variables in the design of health care policies.
    Date: 2008–05
  13. By: Harashima, Azusa
    Abstract: Burley tobacco production in Malawi was liberalized to permit production by smallholders in the early 1990s. The purpose of this paper is to show which smallholders began producing burley tobacco after liberalization and which smallholders still continue to produce it. Analysis of the characteristics of burley tobacco producers shows that only smallholders who had adequate farm size and adequate funds could start to produce it. With regard to the farm size requirements, only smallholders who had enough acreage to sell tobacco on the auction floors and who had enough acreage to rotate crops could start to produce. With regard to the financial requirements, only smallholders who could procure funds through informal institutions or who possessed their own capital to meet the necessary agricultural expenditures could start. So, it was only the wealthy households which could start to produce tobacco after liberalization and continue to produce it.
    Keywords: Malawi, Tobacco, Agriculture, Smallholder, Agricultural income, Liberalization
    JEL: D10 Q12 R20
    Date: 2008–10

This nep-afr issue is ©2008 by Marco Novarese. 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.
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