nep-afr New Economics Papers
on Africa
Issue of 2009‒04‒13
six papers chosen by
Quentin Wodon
World Bank

  1. Orphanhood and the living arrangements of children in sub-saharan Africa By Beegle, Kathleen; Filmer, Deon; Stokes, Andrew; Tiererova, Lucia
  2. Trade Impacts of Selected Regional Trade Agreements in Agriculture By Jane Korinek; Mark Melatos
  3. Poverty effects of higher food prices : a global perspective By De Hoyos, Rafael E.; Medvedev, Denis
  4. Changing Fertility Preferences One Migrant at a Time: The Impact of Remittances on the Fertility Rate By Naufal, George; Vargas-Silva, Carlos
  5. Term of Trade Shocks in a Monetary Union: an Application to West-Africa By Loic Batte; Agnes Benassy-Quere; Benjamin Carton; Gilles Dufrenot
  6. Are International Market Demands Compatible with Serving Domestic Social Needs? Challenges in Strengthening Innovation Capacity in Kenya’s Horticulture Industry By Steglich, Mirjam; Keskin, Ekin; Hall, Andy; Dijkman, Jeroen

  1. By: Beegle, Kathleen; Filmer, Deon; Stokes, Andrew; Tiererova, Lucia
    Abstract: Increasing adult mortality due to HIV/AIDS in Sub-Saharan Africa raises considerable concerns about the welfare of surviving children. Studies have found substantial variability across countries in the negative impacts of orphanhood on child health and education. One hypothesis for this variability is the resilience of the extended family network in some countries to care for orphans-networks under increasing pressure by the sheer number of orphans in many settings. Using household survey data from 21 countries in Africa, this study examines trends in orphanhood and living arrangements, and the links between the two. The findings confirm that orphanhood is increasing, although not all countries are experiencing rapid rises. In many countries, there has been a shift toward grandparents taking on increased childcare responsibility-especially where orphan rates are growing rapidly. This suggests some merit to the claim that the extended network is narrowing, focusing on grandparents who are older and may be less able to financially support orphans than working-age adults. However there are also changes in childcare patterns in countries with stable orphan rates or low HIV prevalence. This suggests future work on living arrangements should not exclude low HIV/AIDS prevalence countries, and explanations for changes should include a broader set of factors.
    Keywords: Street Children,HIV AIDS,Youth and Governance,Primary Education,Population Policies
    Date: 2009–03–01
  2. By: Jane Korinek; Mark Melatos
    Abstract: This paper provides an in-depth examination of the trade effects of three regional trade agreements (RTAs) – the ASEAN Free Trade Agreement (AFTA), the Common Market for Eastern and Southern Africa (COMESA) and the Southern Cone Common Market (MERCOSUR) -- in the agricultural sector. Results from a gravity model suggest that the creation of AFTA, COMESA and MERCOSUR have increased trade in agricultural products between their member countries. There is no robust indication of trade diversion with respect to imports from outside the region. The agreements are therefore net trade creating. There is no robust indication however that there has been strong trade creation with non-members in the case of any of the RTAs under study. In some cases, lack of transport and communications infrastructure, in addition to supply constraints, lessens the effect of the RTA on trade flows. Trade costs such as transport and logistics seem to remain important factors in determining agricultural trade flows. In some RTAs, countries have a comparative advantage in exporting many of the same agricultural products, thereby decreasing the impact of the preferential market access. A number of implications for South-South RTAs can be drawn from examining these very different agreements.
    Keywords: tariffs, trade liberalisation, RTA, regional trade agreements, agricultural trade, gravity model, AFTA, COMESA, Mercosur, ASEAN, access, South-South, trade diversion, preferential market access, trade creation
    JEL: F13 F53
    Date: 2009–04–03
  3. By: De Hoyos, Rafael E.; Medvedev, Denis
    Abstract: The spike in food prices between 2005 and the first half of 2008 has highlighted the vulnerabilities of poor consumers to higher prices of agricultural goods and generated calls for massive policy action. This paper provides a formal assessment of the direct and indirect impacts of higher prices on global poverty using a representative sample of 63 to 93 percent of the population of the developing world. To assess the direct effects, the paper uses domestic food consumer price data between January 2005 and December 2007--when the relative price of food rose by an average of 5.6 percent --to find that the implied increase in the extreme poverty headcount at the global level is 1.7 percentage points, with significant regional variation. To take the second-order effects into account, the paper links household survey data with a global general equilibrium model, finding that a 5.5 percent increase in agricultural prices (due to rising demand for first-generation biofuels) could raise global poverty in 2010 by 0.6 percentage points at the extreme poverty line and 0.9 percentage points at the moderate poverty line. Poverty increases at the regional level vary substantially, with nearly all of the increase in extreme poverty occurring in South Asia and Sub-Saharan Africa.
    Keywords: Rural Poverty Reduction,Food&Beverage Industry,Poverty Lines,Emerging Markets
    Date: 2009–03–01
  4. By: Naufal, George (American University of Sharjah); Vargas-Silva, Carlos (Sam Houston State University)
    Abstract: In this article we study the relationship between workers' remittances and fertility rate of the remittance receiving country. We identify two main channels by which remittances transfers affect fertility. First, migrants may adopt and later transmit to the household the ideas, values and attitudes predominant in the host country. Arguably, migrants with more attachment to the household would be more inclined to remit money home. Therefore, remittances can be seen as a proxy for the level of social norms (including fertility preferences) that is transmitted from the migrant to the household. Second, previous studies have shown that remittances money is often used for health services and educational expenses, factors that may ultimately decrease fertility rates. Using panel data for several countries we find a negative relationship between remittances and the fertility rate. The relationship is robust for a sub-sample of Latin American and African countries, but not for a sub-sample of Asian countries. In addition to finding evidence on the transfer of social norms from migrants to the home country, the paper also confirms that several socio-economic factors such as female labor force participation, percent of the population in rural areas and GDP per capita affect fertility rates.
    Keywords: remittances, fertility rate, panel data, Latin America, Africa, Asia
    JEL: F22 F24 J13 Q56
    Date: 2009–03
  5. By: Loic Batte; Agnes Benassy-Quere; Benjamin Carton; Gilles Dufrenot
    Abstract: We propose a two-country DSGE model of the Dutch disease in a monetary union, calibrated on Nigeria and WAEMU. Three monetary regimes are successively studied at the union level: a flexible exchange rate with constant money supply, a flexible exchange rate with an accommodating monetary policy, and a fixed exchange rate regime. We find that, in the face of oil shocks, the most stabilizing regime for Nigeria is a fixed money supply whereas it is a fixed exchange rate for WAEMU. However, the introduction of an oil stabilization fund can reduce the disagreement on the common policy rule. Furthermore, the two zones may agree on a fixed money-supply rule in the face of both oil and agricultural price shocks.
    Keywords: Dutch disease; DSGE; monetary union; optimal monetary policy
    JEL: E52 F41 Q33
    Date: 2009–04
  6. By: Steglich, Mirjam (LINK, UNU-MERIT); Keskin, Ekin (LINK, UNU-MERIT); Hall, Andy (LINK, UNU-MERIT); Dijkman, Jeroen (FAO)
    Abstract: Agrifood stakeholders across the world are under ever-increasing pressure with globalization and new market demands — together with changing quality and safety requirements. The ability to respond to new challenges and opportunities is important not just for producers but also for industries in developing countries. This paper explores the horticulture sector of Kenya in order to gain a better understanding of what has most significantly contributed to its success in terms of innovation response capacity. This paper aims to present what “innovation response capacity” entails, especially for natural resource-based industries in a developing country context. It will also provide an analytical framework that draws elements from agricultural innovation capacity and the innovation systems framework. This is provided through case study research conducted in Kenya by exploring a prominent horticultural enterprise, Homegrown Ltd. The paper concludes that an important element of success in this case was the formation of a range of linkages that enabled a systemic sector response to challenges rather than isolated action of individual players.
    Keywords: Innovation Response Capacity, Kenya, Horticulture, Globalization, Smallholder Production, Policy
    JEL: N57 Q13
    Date: 2009

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