nep-afr New Economics Papers
on Africa
Issue of 2009‒01‒03
nineteen papers chosen by
Quentin Wodon
World Bank

  1. Potential for Intra-Regional Maize Trade in Southern Africa: an Analysis for Zambia at the Sub-National Level By Steven Haggblade; T.S. Jayne; David L. Tschirley; Steven Longabaugh
  2. Seed Cotton Market Structure and Cotton Sector Performance: Many Lessons but No Fixed Prescriptions By Valerie Kelly; David L. Tschirley
  3. Can Regional Cross-listings Accelerate Stock Market Development? Empirical Evidence from Sub-Saharan Africa By O. Janet Adelegan
  4. The Role of Telecommunication Infrastructure in the Regional Economic Growth of Africa By Enowbi Batuo, Michael
  5. Cotton in West and Central Africa: Adapting a Successful Model to New Realities By Valerie Kelly; David L. Tschirley
  7. Global Change in African Fish Trade: Engine of Development or Threat to Local Food Security? By Christophe Béné
  8. Child Mortality in Eastern and Southern Africa By Sudhanshu Handa; Steven F. Koch; Shu Wen Ng
  10. Adoption of Organic Farming Technologies: Evidence from Semi-Arid Regions of Ethiopia By Kassie, Menale; Zikhali, Precious; Manjur, Kebede; Edwards, Sue
  11. Organic Farming Technologies and Agricultural Productivity: The case of Semi-Arid Ethiopia By Kassie, Menale; Zikhali, Precious; Pender, John; Köhlin, Gunnar
  12. "Hypothetical Integration in a Social Accounting Matrix and Fixed-price Multiplier Analysis" By Kijong Kim
  13. Macroeconomic Agenda for Fiscal Policy and Aid Effectiveness in Post-Conflict Countries By AZAM, Jean-Paul
  14. Values and Economic Performance: Theory and some Evidence from Kenya By Gilad Aharonovitz; Elizabeth Kabura Nyaga
  15. Analyzing Determinants of Inflation When There Are Data Limitation:The Case of Sierra Leone By Jan Gottschalk; Ken Miyajima; Kadima D. Kalonji
  16. Commodity Reform and Extensive Production Growth: Evidence from Burkinabè cotton farmers By KAMINSKI Jonathan; THOMAS Alban
  17. South-South Investment in Infrastructure: The Operation of Indian Firms in Developing Countries By Pradhan, Jaya Prakash
  18. Why Capital does not Migrate to the South: A New Economic Geography Perspective By Jang Ping Thia
  19. The Financial Crisis and Mandatory Pension Systems in Developing Countries: Short- and Medium-term Responses By Dorfman, Mark; Hinz, Richard; Robalino, David

  1. By: Steven Haggblade; T.S. Jayne; David L. Tschirley; Steven Longabaugh
    Abstract: This working paper explores the prospects for regional maize trade in helping to stabilize food availability and prices in Zambia. It reviews these general prospects within the maize economy of southern Africa. Given the important regional differences in Zambia’s food economy, it explores spatial differences in national food production, consumption and marketed surpluses. It also evaluates the impact of regional maize trade on price stability and food security in different parts of Zambia. The empirical evidence from Zambia, summarized in this paper, suggests that both consumers and farmers stand to benefit from the reduced price volatility that results from opening borders to regional trade in food staples.
    Keywords: maize, trade, Africa, Zambia
    JEL: Q18
    Date: 2008–11
  2. By: Valerie Kelly; David L. Tschirley
    Abstract: This Policy Brief summarizes evidence reported in a recent study on the links between seed cotton market structures and selected cotton sector performance indicators in nine African countries (Tschirley et al. 2008). The purpose of the study is to contribute to better design and implementation of cotton sector reforms by building a reliable, broad assessment of cotton sector performance from detailed empirical information collected and analyzed by independent researchers and cotton sector experts.
    Keywords: cotton, seed, market, Africa
    JEL: Q18
    Date: 2008–11
  3. By: O. Janet Adelegan
    Abstract: This study analyzes the impact of regional cross-listing of stocks on the depth of the stock markets in sub-Saharan Africa (SSA). It analyzes data from 1990 to 2007 for a panel of 13 stock markets in SSA countries, only some of which have regional cross-listings. Using event study methodology, the paper finds significant positive effects in measures of stock market depth around regional cross-listing events. Overall, growth in the regional crosslisting of stocks facilitates stock market deepening, and the stock markets of countries with regional cross-listings perform better than those without. The study thus suggests that SSA countries can benefit from putting in place the necessary conditions for promoting regional cross-listings and thereby deepening their stock markets. These include sound legal and regulatory frameworks, macroeconomic and political stability, harmonization of listing rules, accounting laws and disclosure requirements across the region, and strong money markets.
    Keywords: Stock markets , Sub-Saharan Africa , Money markets , Capital markets , Economic integration , Economic models ,
    Date: 2008–12–10
  4. By: Enowbi Batuo, Michael
    Abstract: This paper deals with the effects of telecommunications on the economic growth in African countries. The telecommunications sector became a vital sector during the era of the economic reform that has been characterising the continent. We investigate empirically the role of telecommunication infrastructures on long-run economic growth in African countries, for the span of time from 1984 to 2005. We use the panel data approach with a dynamic fixed effect model, which evidences that telecommunications contribute in a major way to the economic development of the continent. It is a crucial determinant, as findings indicate a significant and positive correlation between telecommunication infrastructures and regional growth in Africa, after controlling for a number of other factors. Results also show that investment in telecommunications is subject to diminishing returns.
    Keywords: Infrastructure; Growth; Africa; Panel
    JEL: H54 O47 O55
    Date: 2008–06–22
  5. By: Valerie Kelly; David L. Tschirley
    Abstract: This Policy Brief introduces a series of synthesis papers on the relationship between cotton sector structure and performance, drawing on recent studies of cotton sectors across Africa. The series is targeted at the wide range of stakeholders involved in cotton sector reforms in West and Central Africa (WCA). This introductory brief focuses on the cotton sector structural model most prevalent in WCA—the ‘filière integrée’. The brief reviews the early successes of the ‘filière integrée’ approach and the more recent history of crisis and reforms. This sets the stage for comparisons between the ‘filière integrée’ system of WCA and other systems that are described in subsequent briefs.
    Keywords: cotton, stakeholder, Africa
    JEL: Q18
    Date: 2008–11
  6. By: NWAOBI, GODWIN (Quantitative Economics Research Bureau)
    Abstract: Technological progress is considered as a source of growth and productivity gains for national economies. Thus,understanding the factors that determine the diffusion of new technologies across african countries is important to understanding the process of economic development. And whereas, energy is linked with the capacity to perform, the rate at which energy is consumed for the accerelation of the pace of socio-economic activities is regarded as power. Consequently, it will be obvious that the magnitude of the standard of living in any society; the growth and development of such an economy ; and its ability to affect the course of events(such as ICT revolution) will be a function of the extent to which its energy(power)resources are developed and utilised. This paper therefore argued for the need to provide assistance in reducing vulnerability and building the capacity of african countries to more widely reap the benefits of the clean development mechanism in areas such as the development of cleaner and renewable energies.Inevitably, this is the critical condition for the sustainability of the emergent e-learning platforms and digital networks in africa.
    Keywords: ict; learning; elearning; development; energy; power; information; communication; solar; electricity; wind; governance; africa; electronics; telecommunications; internet; digitalsatellite; renewableenergy; gasturbine; powerplants; bandwidth; coal; hydro; biomass; steam; transmission; distribution; utilization
    JEL: A20 D80 I20 O30 O33 Q30 Q40 R38
    Date: 2008–12–16
  7. By: Christophe Béné
    Abstract: Today fish is the most traded food commodity in the World. This situation is not without generating potential issues. On the one hand, fish trade is said to support economic growth processes in developing countries by providing an important source of cash revenue. On the other hand, fish trade is also said to lead to a decline in food security and a decrease in the availability of fish for the local population. In this paper we explore more thoroughly those two opposite views in the specific case of sub-Sahara Africa. For this we consider a range of eight national development indicators that encapsulate both economic and well-being of sub-Sahara countries over the last decade and correlate them against four indicators reflecting the country-specific importance of fish trade, industrial and small-scale fisheries in the economy of Sub-Sahara Africa. Our statistical analysis shows that when sub-Sahara countries’ data are considered at the macro-economic level the fear that fish trade may affect negatively fish food security is not substantiated by any statistical evidences. At the same time the analysis also shows no evidence to support the claim that international fish trade contributes effectively to national economic development and/or wellbeing. The last section of the paper discusses the various possible reasons for this apparent lack of correlation and highlights the respective flaws underlying the two opposite discourse about the role of fish trade in national development and food security. fish trade poverty reduction Sub-Sahara Africa trickle down <P>Internationalisation et commerce du poisson africain: moteur de développement ou menace pour la sécurité alimentaire locale? <BR>Le poisson arrive aujourd’hui en tête dans les échanges mondiaux de produits alimentaires. Cette situation peut être appréciée de différentes manières. D’une part, le commerce du poisson sous tendrait le processus de croissance économique dans les pays en développement, grâce aux recettes appréciables ainsi générées. D’autre part, il aurait pour effet d’entamer la sécurité alimentaire et de réduire les quantités de poisson mises à la disposition des populations locales. Il s’agit ici d’étudier de plus près ces deux points de vue opposés dans le cas particulier de l’Afrique subsaharienne. Nous examinons à cette fin huit indicateurs nationaux de développement rendant compte à la fois de la réalité économique et du bien-être des pays de la région durant la décennie écoulée, en les articulant avec quatre indicateurs qui font ressortir, pour chaque pays, l’importance du commerce des produits halieutiques, de la pêche industrielle et de la pêche artisanale dans l’économie de l’Afrique subsaharienne. D’après notre analyse statistique, lorsque les données des pays subsahariens sont envisagées au niveau macroéconomique, la crainte d’un effet négatif sur la sécurité de l’approvisionnement en poisson ne se vérifie pas. L’analyse ne vient pas davantage étayer l’argument selon lequel le commerce international du poisson contribuerait effectivement au développement économique et/ou au bien-être national. La dernière section du document passe en revue les diverses raisons susceptibles d’expliquer cette absence apparente de corrélation et souligne les inconvénients respectifs des deux thèses qui s’affrontent sur le rôle joué par le commerce du poisson dans le développement et la sécurité alimentaire à l’échelle nationale.
    Keywords: economic growth, fish trade, poverty reduction, Sub-Sahara Africa, trickle down
    Date: 2008–12
  8. By: Sudhanshu Handa (Public Policy, University of North Carolina at Chapel Hill); Steven F. Koch (Department of Economics, University of Pretoria); Shu Wen Ng (Public Policy, University of North Carolina at Chapel Hill)
    Abstract: High rates of infant mortality in Africa continue to be a major public health concern today, despite the fact that most deaths can be prevented from well known, relatively low cost technologies. Using multiple years of DHS from four countries, we estimate the change in the relative risk of death as well as the main contributions to the change in mortality over time. We find significant declines in the mortality hazard in each of the 4 countries, with the largest declines in Malawi (44 percent) and Tanzania (22 percent) between the mid 1990s to mid 2000s, although there is significant variation by age group in the hazard rate across time. In Zambia for example, the hazard increased for children ages 25-60 months in spite of on overall decline in mortality, while in Mozambique the largest decline in mortality was exactly among this age group. The decomposition analysis illustrates that some of the main correlates of mortality did not contribute to overall declines over time, because the levels of these correlates did not change during the study period. This is particularly true for birth spacing, attended births and breastfeeding. The analysis also demonstrates the overall lack of explanatory power of the individual and household level variables available for use in the DHS, indicating the need to collect complementary supply side information, through community questionnaires for example, that can be linked to DHS households and thus expand the set of covariates available for modeling child survival and other health outcomes.
    Date: 2008–10
  9. By: Olufunke A. Alaba (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria)
    Abstract: A large number of child deaths in developing countries could be averted if ill children received care sooner rather than later. However, analysis in these developing countries rarely considers the pathway, through which, health care is sought at the household level. This paper considers two separate pathways of health-seeking decisions and finds that household controls affect decisions in different ways across the pathway; for example, different measures of female empowerment increase treatment, as well as preferences for private care along the pathway, but not consistently.
    JEL: I12 D13 C35
    Date: 2008–10
  10. By: Kassie, Menale (Department of Economics, School of Business, Economics and Law, Göteborg University); Zikhali, Precious (Department of Economics, School of Business, Economics and Law, Göteborg University); Manjur, Kebede (Tigray Agricultural Research Institute); Edwards, Sue (Institute for Sustainable Development,)
    Abstract: In the wake of resource constraints faced by farmers in developing countries in using external farm inputs, sustainable agricultural production practices that rely on local or farm renewable resources present desirable options for enhancing agricultural productivity. In this paper we use plot-level data from the semi-arid region of Ethiopia, Tigray, to investigate the factors influencing farmers' decisions to adopt sustainable agricultural production practices, with a particular focus on conservation tillage and compost. While there is heterogeneity with regards to factors influencing the choice to use either practice, results from a multinomial logit analysis underscore the importance of both plot and household characteristics on adoption decisions. In particular we find that poverty, and access to information, among other factors, impact the choice of farming practices significantly. We also find evidence that the impact of gender on technology adoption is technology specific while the significance of plot characteristics indicate the decision to adopt specific technologies is location-specific. Furthermore the use of stochastic dominance analysis supports the contention that sustainable farming practices enhance productivity -they even prove to be superior to the use of chemical fertilizers- justifying the need to investigate factors that influence adoption of these practices and use this knowledge to formulate policies that encourage adoption.<p>
    Keywords: Sustainable agriculture; Adoption; Productivity; Compost; Conservation tillage; Ethiopia
    JEL: Q12 Q16 Q24
    Date: 2008–12–16
  11. By: Kassie, Menale (Department of Economics, School of Business, Economics and Law, Göteborg University); Zikhali, Precious (Department of Economics, School of Business, Economics and Law, Göteborg University); Pender, John (International Food Policy Research Institute, (IFPRI)); Köhlin, Gunnar (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Organic farming practices, in as far as they rely on local or farm renewable resources, present desirable options for enhancing agricultural productivity for resource-constrained farmers in developing countries. In this paper we use plot-level data from semi-arid area of Ethiopia to investigate the impact of organic farming practices on crop productivity, with a particular focus on conservation tillage. Specifically we seek to investigate whether conservation tillage results in more or less productivity gains than chemical fertilizer. Our results reveal a clear superiority of organic farming practices over chemical fertilizers in enhancing crop productivity. Thus our results underscore the importance of encouraging resource-constrained farmers in developing countries to adopt organic farming practices, especially since they enable farmers to reduce production costs, provide environmental benefits, and as our results confirm, enhance crop productivity.<p>
    Keywords: Conservation tillage; Chemical fertilizer; Crop productivity; Matched observations; Ethiopia
    JEL: C21 Q12 Q15 Q16 Q24
    Date: 2008–12–16
  12. By: Kijong Kim
    Abstract: This study proposes a simple modification to a Social Accounting Matrix (SAM) in order to analyze the multiplier effects of a new sector. A different input composition, or technology, of the sector makes a conventional analysis of final-demand injections on existing sectors invalid. Author Kijong Kim shows that the modification--so-called hypothetical integration--is an efficient way to incorporate the difference into the SAM, rather than costly full-scale rebalancing. He applies this method to the case of the Expanded Public Works Programme in South Africa, and demonstrates that the proposed approach effectively represents the labor intensity requirement of the program and a new-factor income distribution.
    Date: 2008–12
  13. By: AZAM, Jean-Paul
    Date: 2008–11
  14. By: Gilad Aharonovitz; Elizabeth Kabura Nyaga (School of Economic Sciences, Washington State University)
    Abstract: Policy, saving rates, human capital, etc. are possible explanations for poor economic performance, but while these factors are changeable, underdevelopment persists. Looking for an unchangeable factor, we construct a theory for the effect of values, such as moral values, risk-taking, and responsibility to others, on economic performance, and demonstrate it using a model in which responsibility for parents prevents development. We construct data of economic performance and values of seven tribes in Kenya by inferring values from children's stories, and verify the model. Thus, we open a door for the quantitative analysis of the effect of values over the economy.
    Keywords: economic development, values, social norms, Kenya
    JEL: A13 O10 O55 Z10
    Date: 2008–08
  15. By: Jan Gottschalk; Ken Miyajima; Kadima D. Kalonji
    Abstract: This paper examines the determinants of inflation in Sierra Leone using a structural vector autoregression (VAR) approach to help forecast inflation for operational purposes. Despite data limitations, the paper accurately models inflation in Sierra Leone. As economic theory predicts, domestic inflation is found to increase with higher oil prices, higher money supply, and nominal exchange rate depreciation. The paper then employs a historical decomposition approach to pinpoint the sources of a marked decline in inflation in 2006 and assesses its forecasting properties. Overall, the model serves as a useful addition to the toolkit for analyzing and forecasting inflation in countries with limited data availability.
    Keywords: Inflation , Sierra Leone , Data analysis , Economic forecasting , Oil prices , Money supply , Exchange rate depreciation , Forecasting models ,
    Date: 2008–12–08
  16. By: KAMINSKI Jonathan; THOMAS Alban
    Date: 2009–01
  17. By: Pradhan, Jaya Prakash
    Abstract: Since 1990s South-South investment flows have assumed a considerable significance in the economic relations among developing countries. The host developing countries tend to see the growing FDI flows from co-developing economies as a prospective source of financial capital, skills and technologies useful for their economic development. However, there is clearly a lack of recognition among them about the potential of southern investment in improving their civil, social and industrial infrastructure. A distinction can be made between the two main forms in which developing country firms participate in the infrastructure sector of co-developing countries. The first is the project exports resorted by southern firms in various infrastructure areas like transportation, communication, energy, etc. The second form comprises direct investment operation of southern firms to provide infrastructure services to the end users. India presents a classic example of South-South investment in infrastructure sector with Indian firms consistently expanding their project exports and infrastructure-related FDI activities over the years. In the light of growing size of Indian project exports and infrastructure FDI, this study calls for evolving a holistic policy framework by both home and host developing countries to enhance the potential of such investment for infrastructure development.
    Keywords: FDI; Project Exports; Developing Countries
    JEL: F23 F14 F21 R11
    Date: 2008–08
  18. By: Jang Ping Thia
    Abstract: This paper explains why capital does not flow from the North to the South - the LucasParadox - with a New Economic Geography model that incorporates mobile capital,immobile labour, and productively heterogeneous firms. In contrast to neoclassical theories,the results show that even a small difference in the ex-ante productivity distribution betweenNorth and South can a have significant impact on the location of firms. Despite differences inaggregate capital to labour ratios, wage and rental rates continue to be the same in bothlocations. The paper also analyses the effects of risk on industrial locations, and shows why'low-tech' industries tend to migrate to the South, while 'high-tech' industries continue tolocate in the North.
    Keywords: Firm heterogeneity, capital mobility, economic geography
    JEL: F12 F15
    Date: 2008–11
  19. By: Dorfman, Mark; Hinz, Richard; Robalino, David
    Abstract: 􀂉 The impact of the financial crisis extends beyond immediate losses to pension fund assets. 􀂉 Abrupt policy changes in response to the immediate circumstances should be avoided. Pension systems are designed to function over very long time periods. Short term responses to relatively rare circumstances can potentially have negative long term consequences on the capacity of pension systems to reliably provide adequate levels of retirement income. 􀂉 Measures to mitigate the affects on the relatively small number of retiring individuals can be considered without fundamentally altering the system design. 􀂉 The current crisis strengthens the need for diversified multi-pillar pension systems that are able to manage risks and provide protection to individuals who may be vulnerable to the kind of economic shocks now being experienced. 􀂉 Increasing attention should be paid to managing the exposure of individuals to short term financial risks in funded systems through portfolios designed for workers nearing retirement age and the development of phased transitions to the payout of benefits that limit the impact of shorter term financial volatility
    Keywords: financial crisis; pensions; financial risks; labor market risks
    JEL: H55 G23
    Date: 2008–12

This nep-afr issue is ©2009 by Quentin Wodon. 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.