nep-afr New Economics Papers
on Africa
Issue of 2009‒05‒16
twenty-two papers chosen by
Quentin Wodon
World Bank

  1. Re-Think Russian Investment in Southern Africa By Gerasimchuk, Ivetta
  2. Infrastructure and growth in Africa By Calderon, Cesar
  3. Effectiveness of agricultural extension with respect to farm size: The case of Uganda By Betz, Michael
  4. Making sense of Africa's infrastructure endowment : a benchmarking approach By Yepes, Tito; Pierce, Justin; Foster, Vivien
  5. Paying the price for unreliable power supplies : in-house generation of electricity by firms in Africa By Foster, Vivien; Steinbuks, Jevgenijs
  7. Does Digital Divide or Provide? The Impact of Cell Phones on Grain Markets in Niger By Jenny Aker
  8. Does Subsidizing Fertilizer Increase Yields? Evidence from Malawi By Ricker-Gilbert, J.; Jayne, T.S.; Black, J.R.
  9. Evaluating the Effectiveness of Alternative Extension Methods:Triple-Bag Storage of Cowpeas by Small-Scale Farmers in West Africa By Moussa, Bokar; Otoo, Miriam; Fulton, Joan; Lowenberg-DeBoer, James
  10. Sensitivity of welfare effects estimated by equilibrium displacement model: a biological productivity growth for semi-subsistence crop in Sub-Sahara African market with high transactions costs By Takeshima, Hiroyuki
  11. Poverty status and the impact of social networks on smallholder technology adoption in rural Ethiopia By Liverpool, Saweda Onipede. L.; Winter-Nelson, Alex
  12. Are small Sub-Sahara African farmers willing to pay for vegetative propagated orange fleshed sweetpotato planting material? Evidence from Central Mozambique By Labarta, Ricardo
  13. Food vs. Wood: Dynamic Choices for Kenyan Smallholders By Peralta, M. Alexandra; Swinton, Scott M.
  14. Have coffee reforms and coffee supply chains affected farmers' income? The case of coffee growers in Rwanda By Murekezi, Abdoul; Loveridge, Scott
  15. Paving the Way for Development: The Impact of Road Infrastructure on Agricultural Production and Household Wealth in the Democratic Republic of Congo By Ulimwengu, John; Funes, Jose; Headey, Derek; You, Liang
  16. Risks, ex-ante actions and public assistance : impacts of natural disasters on child schooling in Bangladesh, Ethiopia and Malawi By Yamauchi, Futoshi; Yohannes, Yisehac; Quisumbing, Agnes
  17. Recurrent Shocks, Poverty Traps, and the Degradationof the Social Capital Base of Pastoralism: A Case Study from Southern Ethiopia. By Wassie Berhanu; Bichaka Fayissa
  18. AIDS and dualism : Ethiopia's burden under rational expectations By Bell, Clive; Koukoumelis, Anastasios
  19. Natural disasters, self-insurance and human capital investment : evidence from Bangladesh, Ethiopia and Malawi By Yamauchi, Futoshi; Yohannes, Yisehac; Quisumbing, Agnes
  20. Assessing the economic impacts of an economic partnership agreement on Nigeria By Andriamananjara, Soamiely; Brenton, Paul; von Uexkull, Jan Erik; Walkenhorst, Peter
  21. Climate Volatility and Poverty Vulnerability in Tanzania By Ahmed, Syud Amer; Diffenbaugh, Noah S.; Hertel, Thomas W.; Ramankutty, Navin; Rios, Ana R.; Rowhani, Pedram
  22. Can risk averse competitive input providers serve farmers efficiently in developing countries ? By Makdissi, Paul; Wodon, Quentin

  1. By: Gerasimchuk, Ivetta
    Abstract: Russia’s direct investment of about USD 3 billon in Southern Africa over the past decade has placed before the country’s government and corporate sector two choices in the accelerating race among foreign investors into Africa. The first choice is to follow the established path of direct investment from developed economies that has, in the words of a famous African leader Walter Rodney, ‘underdeveloped Africa’ and involved a serious negative environmental impact. The second choice is one that corresponds with the former Soviet Union’s policy of mutually advantageous cooperation with Africa. In the current context, this will prove possible only through joint cooperation to achieve environmental sustainability and economic diversification requiring long-term planning and innovation. The purpose of this interdisciplinary empirical research paper is to investigate the current and future state of environmental practices in joint ventures between Russia and Southern Africa as compared with other patterns of cooperation among emerging market economies.
    Keywords: Russia; FDI; investment; Southern Africa; SADC; sustainable development; leapfrogging development; natural resources
    JEL: Q32 P33 O55 Q56
    Date: 2009–02
  2. By: Calderon, Cesar
    Abstract: The goal of the paper is to provide a comprehensive assessment of the impact of infrastructure development on growth in African countries. Based on econometric estimates for a sample of 136 countries from 1960-2005, the authors evaluate the impact on per capita growth of faster accumulation of infrastructure stocks and of enhancement in the quality of infrastructure services for 39 African countries in three key infrastructure sectors: telecommunications, electricity, and roads.<BR>Using an econometric technique suitable for dynamic panel data models and likely endogenous regressors, the authors find that infrastructure stocks and service quality boost economic growth. The growth payoff of reaching the infrastructure development of the African leader (Mauritius) is 1.1 percent of GDP per year in North Africa and 2.3 percent in Sub-Saharan Africa, with most of the contribution coming from more, rather than better, infrastructure. Across Africa, infrastructure contributed 99 basis points to per capita economic growth, versus 68 points for other structural policies. Most of the contribution came from increases in stocks (89 basis points), versus quality improvements (10 basis points). The findings show that growth is positively affected by the volume of infrastructure stocks and the quality of infrastructure services; simulations show that our empirical findings are significant statistically and economically. Identifying areas of opportunity to generate productivity growth, the authors find that African countries are likely to gain more from larger stocks of infrastructure than from enhancements in the quality of existing infrastructure. The payoffs are largest for telephone density, electricity-generating capacity, road-network length, and road quality.
    Keywords: Transport Economics Policy&Planning,Infrastructure Economics,E-Business,Private Participation in Infrastructure,Non Bank Financial Institutions
    Date: 2009–04–01
  3. By: Betz, Michael
    Abstract: Raising the incomes of agricultural households is central to reducing poverty in Uganda. In many areas of the country agriculture has encroached into marginal or fragile lands, leaving little room for the expansion of agricultural lands (Kraybill, Bashaasha, and Betz 2009). Additionally, soil degradation has become a barrier to agricultural productivity (Pender et al. 2004), especially in the Eastern region of the country. Farmers now look for alternatives that will increase output without further depleting soil fertility or expanding into fragile lands. Agricultural extension is the primary government mechanism through which developing country governments attempt to improve the knowledge and methods that farmers use to increase output; However, many extension programs throughout Sub-Saharan Africa have the reputation of being largely ineffective (Dejene 1989; Gautam 2000). This study estimates an agricultural production function for 3 farm sizes to determine whether agricultural extension has differential effects on farms of different size. Extension is found to have a positive and significant relationship with the value of output produced for small and large farms, but has not significant relationship with the value of output for medium size farms. This result has distinct policy implications for the design and implementation of agricultural extension programs in Uganda and other parts of Sub-Saharan Africa.
    Keywords: Uganda, Africa, agriculture, extension, productivity, NAADS, Agricultural and Food Policy, Farm Management, International Development, Production Economics,
    Date: 2009
  4. By: Yepes, Tito; Pierce, Justin; Foster, Vivien
    Abstract: The paper's objective is to explain factors underlying Africa's weak infrastructure endowment and to identify suitable infrastructure goals for the region based on benchmarking against international peers. The authors use a dataset covering the stocks of key infrastructure-including information and communication technology (ICT), power, roads, and water-across 155 developing countries over the period 1960 to 2005. The paper also examines subregional differences within Africa. They make use of regression techniques to control for a comprehensive set of economic, demographic, geographic, and historic conditioning factors, as well as adjusting for potential endogeneities. Results show that Africa lags behind all other regions of the developing world in its infrastructure endowment, except in ICT. By far the largest gaps arise in the power sector, with generating capacity and household access to electricity at half the levels observed in South Asia. While it is often assumed that Africa's infrastructure deficit is largely a reflection of its relatively low income levels, the authors find that African countries have much more limited infrastructure than income peers in other parts of the developing world. Countries that face the most challenging environment, with low population density, weak governance, and history of conflict, have the poorest infrastructure endowments. At the outset of the data series, Africa was doing significantly better than other developing regions for road density, generation capacity, and fixed-line telephones, but Africa's relative position has deteriorated over time. The most dramatic loss of ground has come in electrical generating capacity, which has stagnated since 1980.
    Keywords: Transport Economics Policy&Planning,Urban Slums Upgrading,Urban Services to the Poor,Banks&Banking Reform,Infrastructure Regulation
    Date: 2009–04–01
  5. By: Foster, Vivien; Steinbuks, Jevgenijs
    Abstract: This paper documents the prevalence of in-house generation of electric power by firms in Sub-Saharan Africa and attempts to identify the underlying causes. The analysis is based on two data sources. The UDI World Electric Power Plants Data Base (WEPP), a global inventory of electric power generating units, provides a detailed inventory of in-house generation at the country level. The World Bank's Enterprise Survey Database captures business perceptions of the obstacles to enterprise growth for 8,483 currently operating firms in 25 African countries. Overall, so-called own generation by firms-which has been on the rise in recent years-accounts for about 6 percent of installed generation capacity in Sub-Saharan Africa (equivalent to at least 4,000 MW of installed capacity). However, this share doubles to around 12 percent in the low-income countries, the post-conflict countries, and more generally on the Western side of the continent. In a handful of countries own generation represents more than 20 percent of capacity. Rigorous empirical analysis shows that unreliable public power supplies is far from being the only or even the largest factor driving generator ownership. Firm characteristics have a major influence-in particular, the probability of owning a generator doubles in large firms relative to small ones. Our model predicts that the prevalence of own generation would remain high (at around 20 percent) even if power supplies were perfectly reliable, suggesting that other factors, such as emergency back-up and export regulations, play a critical role in the decision to own a generator.
    Keywords: Energy Production and Transportation,Infrastructure Economics,Power&Energy Conversion,E-Business,Energy Technology&Transmission
    Date: 2009–04–01
  6. By: Sang H. Lee; John Levendis; Luis Gutierrez
    Abstract: We examine the effect on economic growth of mobile cellular phones in sub-Saharan Africa where a marked asymmetry is present between land-line penetration and mobile telecommunications expansion. This study extends previous ones along two important dimensions. First, we allow for the potential endogeneity between economic growth and telecommunications expansion by employing a special linear generalized method of moments (GMM) estimator. Second, we explicitly model for varying degrees of substitutability between mobile cellular and land-line telephony, so that greater expansion of mobile telecommunications can have a different impact whenever the level of land-line penetration differs. We find that mobile cellular phone expansion is an important determinant of the rate of economic growth in Sub-Saharan Africa. Moreover, we find that the contribution of mobile cellular phones to economic growth has been growing in importance in the region, and that the marginal impact of mobile telecommunication services is even greater wherever land-line phones are rare. Given the low cost of mobile telecommunications technology relative to other broad infrastructure projects, especially land-line infrastructure, we advocate that mobile telecommunication services be encouraged in the area.
    Date: 2009–05–03
  7. By: Jenny Aker
    Abstract: Cell phones are quickly transforming markets in low-income countries. The effect is particularly dramatic in rural areas of sub-Saharan Africa, where cell phones often represent the first telecommunications infrastructure. Niger had approximately 2 landlines for every 1,000 people when mobile phones were first introduced in 2001. Since that time, mobile phone coverage has increased significantly throughout the country, with over 78 percent of markets covered by 2007. This working paper assesses the impact of mobile phones on grain market performance in one of the world’s poorest countries. Aker finds that the introduction of mobile phones is associated with a 20-percent reduction in grain price differences across markets, with a larger impact for markets that are farther apart and those that are linked by poor-quality roads. Cell phones also have a larger impact over time: as more markets have cell phone coverage, the greater the reduction in price differences. This is primarily due to changes in grain traders’ marketing behavior: cell phones lead to reduced search costs, more market information and increased efficiency in moving goods across the country. Aker concludes by outlining the ways in which information technology can be used as an effective poverty-reduction strategy in low-income countries.
    Keywords: Africa, Information, Information Technology, Market Performance, Search Costs, Niger
    Date: 2008–10
  8. By: Ricker-Gilbert, J.; Jayne, T.S.; Black, J.R.
    Abstract: Despite their strain on government and donor budgets, fertilizer subsidies have once again become popular policy tools in several Sub-Saharan Africa countries as a potential way to increase yields in staple crops like maize. Policy makers often assume that farmers who receive the subsidy will achieve yield responses that are similar to those obtained by farmers who pay commercial prices for the input. This notion has not been verified empirically. Our study uses panel data from Malawi, a country that recently implemented a fertilizer subsidy program, to compare maize yield response to fertilizer from farmers who received subsidized fertilizer with yield responses from those who paid commercial prices for the input. Descriptive results indicate that maize plots using commercial fertilizer obtain higher yields per kilogram of fertilizer than maize plots that used subsidized fertilizer. Conversely, the results obtained using a fixed-effects estimator indicate that when other factors are controlled for, maize plots that use subsidized fertilizer obtain a higher yield response than other plots. The results seems to be influenced by a group of farmers who used no fertilizer before the subsidy program began, but used subsidized fertilizer after the program was implemented. This group of farmers obtained significantly higher yields in the year when they receive the subsidy than did the rest of the farmers in the sample during that year. These findings indicate that in order to be effective, government officials should specifically target fertilizer subsidies to farmers who lack access to commercial markets or would not otherwise find it profitable to purchase the input.
    Keywords: Malawi, Fertilizer Subsidies, Production Function, Crop Production/Industries,
    Date: 2009
  9. By: Moussa, Bokar; Otoo, Miriam; Fulton, Joan; Lowenberg-DeBoer, James
    Abstract: This study examined two questions related to the adoption of triple-bag storage technology for farmers storing cowpeas in West Africa. First the effect of an extension program, focused on village demonstrations, on adoption was considered. Second, the effect of radio messages to augment this extension program was analyzed. The results indicate that adoption was positively affected by the extension program and radio messages do augment the effectiveness.
    Keywords: Effective extension methods, cowpeas, hermetic storage, Teaching/Communication/Extension/Profession,
    Date: 2009–04–30
  10. By: Takeshima, Hiroyuki
    Abstract: This paper discusses the application of the equilibrium displacement model (EDM) to estimate ex-ante the welfare effects of biological productivity growth for semi-subsistence crop and its impact on poverty reduction. The conventionally used EDM is compared with an alternative model (alternative EDM) that reflects arguably more realistic assumptions for African semi-subsistence crops, such as the shape and shift of supply curve, significant margins due to high transportation costs between farmgate and consumption market, as well as between different consumption markets, and the degree of precisions of estimated structural parameters. The application to the dataset for Benin cassava farmers provides an example that the conventional EDM may significantly overestimate the total welfare gains, and may also lead to very different interpretation of how pro-poor the technology is.
    Keywords: equilibrium displacement model, pivotal shift, cassava, semi-subsistence, market margins, double buffering, Agricultural and Food Policy, Consumer/Household Economics, Food Security and Poverty, International Development, Productivity Analysis, Research Methods/ Statistical Methods, C65, D13, D31, D60, Q11, Q12,
    Date: 2009
  11. By: Liverpool, Saweda Onipede. L.; Winter-Nelson, Alex
    Abstract: Despite recent traces of economic growth, Ethiopia remains one of the poorest countries in the world. Though about 80% of its population is engaged in agriculture, agricultural productivity remains low and extremely vulnerable to climatic conditions. The adoption and use of modern technologies is generally accepted as a potential vehicle out of poverty for many but adoption rates in the country remain low with the nature of the adoption process largely unstudied (Spielman et al, 2007). This paper studies the impact of social networks in the technology adoption process in rural Ethiopia. In particular it tests for the presence of social learning effects. In addition to geographic networks, it considers the role played by other networks with more purposeful interactions such as a householdâs friends. The study explores the differential impacts of social networks by network type, technology and the asset poverty status of households.
    Keywords: social learning, persistent poverty, technology adoption, Ethiopia, Food Security and Poverty, International Development, Research and Development/Tech Change/Emerging Technologies, O31, O33, Q12, Q13,
    Date: 2009–04
  12. By: Labarta, Ricardo
    Abstract: This paper evaluates farmersâ willingness to pay (WTP) for the vegetative propagated orange fleshed sweetpotato (OFSP) planting material that is many times considered as a public good. Famersâ WTP for OFSP vines was elicited by conducting a real choice experiment (RCE) among 121 small sweetpotato growers in central Mozambique with prior experience growing OFSP but with no participation in OFSP vine distributions in the previous 3 years of the experiment. Results reveals a higher farmersâ willingness to pay for OFSP varieties (US$0.07-0.12) compared to the non-orange planting material (US$ 0.03) and compared to the traditional subsidized price of clean sweetpotato vines (US$ 0.06) used in Mozambique. These results may encourage formation of a network of private vine multipliers that would supply permanently OFSP planting material in wider areas.
    Keywords: Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Farm Management, Food Security and Poverty, Health Economics and Policy, International Development, Production Economics, Q16,
    Date: 2009
  13. By: Peralta, M. Alexandra; Swinton, Scott M.
    Keywords: agroforestry, eucalyptus, food security, Kenya, linear programming, smallholder agriculture, whole farm model, Crop Production/Industries, International Development, Production Economics, Resource /Energy Economics and Policy, O13, Q12,
    Date: 2009–04–30
  14. By: Murekezi, Abdoul; Loveridge, Scott
    Abstract: Low prices in the international coffee markets have worsened the economic well-being among coffee farmers. In the face of this situation, the Government of Rwanda has introduced coffee sector reforms that aimed to transform the sector in a way that targets the high quality market and moves away from the bulk coffee market. The high quality coffee market has shown consistent growth over time and exhibits price premiums in international market. If these high prices are passed on to farmers who take advantage of the benefits of the new high quality market by selling coffee cherries, access to this new market could help alleviate poverty brought on by low prices in the conventional sector. However, the majority of coffee farmers in Rwanda rely on the conventional market by selling parchment coffee. The present study analyzes the effects of coffee sector reforms in terms of household expenditures, a proxy of income, on farmers selling coffee to two supply chains: parchment coffee channel and coffee cherry channel. Results from the random effects model on the two year panel data indicate that farmers benefited from coffee reforms by increasing their consumption over time. Farmers selling coffee cherries have gained from the coffee sector reforms in comparison to farmers selling parchment coffee. Based on these results, it seems that efforts to promote the production of high quality coffee would improve food security and the overall consumption expenditures of coffee growers.
    Keywords: Rwanda, market reforms, coffee supply chains, farmersâ income, Agricultural and Food Policy, Crop Production/Industries,
    Date: 2009
  15. By: Ulimwengu, John; Funes, Jose; Headey, Derek; You, Liang
    Abstract: Given its vast land resources and favorable water supply, the Democratic Republic of Congoâs (DRC) natural agricultural potential is immense. However, the economic potential of the sector is handicapped by one of the most dilapidated transport systems in the developing world (World Bank, 2006). Road investments are therefore a high priority in the governmentâs investment plans, and those of its major donors. Whilst these are encouraging signs, very little is known about how the existing road network constrains agricultural and rural development, and how these new road investments would address these constraints. To inform this issue the present paper primarily employs GIS-based data to assess the impact of market access on agricultural and rural development (ARD). Compared to existing work, however, the paper makes a number of innovations to improve and extend the generic techniques used to estimate the importance of market access for ARD. First, the DRC road network data is augmented with survey-based data from Minten and Kyle (1999) on agricultural transport times to calculate improved âmarket accessâ measures for the DRC. Second, we follow Dorosh et al (2009) in estimating the long run relationship between market access and agricultural production, although we also investigate the relationship with household wealth. Finally, we run simulations of how proposed infrastructure investments would affect market access, and how market access would in turn affect agricultural production and household wealth.
    Keywords: Infrastructure, market access, road and river transport, agricultural production, poverty., Agricultural and Food Policy, Crop Production/Industries, Food Security and Poverty, Production Economics,
    Date: 2009
  16. By: Yamauchi, Futoshi; Yohannes, Yisehac; Quisumbing, Agnes
    Abstract: This paper examines the impacts of natural disasters on schooling investments with special focus on the roles of ex-ante actions and ex-post responses using panel data from Bangladesh, Ethiopia, and Malawi. The importance of ex-ante actions depends on disaster risks and the likelihood of public assistance, which potentially creates substitution between the two actions. The findings show that higher future probabilities of disasters increase the likelihood of holding more human capital and/or livestock relative to land, and this asset-portfolio effect is significant in disaster prone areas. The empirical results support the roles of both ex-ante and ex-post responses (public assistance) in coping with disasters, but also show interesting variations across countries. In Ethiopia, public assistance plays a more important role than ex-ante actions to mitigate the impact of shocks on child schooling. In contrast, households in Malawi rely more on private ex-ante actions than public assistance. The Bangladesh example shows active roles of both ex-ante and ex-post actions. These observations are consistent with the finding on the relationship between ex-ante actions and disaster risks. The results also show that among ex-ante actions, human capital accumulated in the household prior to disasters helps mitigate the negative effects of disasters in both the short and long runs.
    Keywords: Natural Disasters,Hazard Risk Management,Disaster Management,,Economic Theory&Research
    Date: 2009–04–01
  17. By: Wassie Berhanu; Bichaka Fayissa
    Abstract: The long-term effects of shocks are examined in the context of a traditional pastoral community. The impacts are empirically examined in connection with the micro-level poverty trap hypothesis and the associated minimum poverty threshold estimates reported in previous studies. We argue that these estimates cannot be taken as definitive and the core explanations behind them are incongruent with the institutional realities of the pastoral community for which they are reported. The reality is that shocks have implied long-term community-wide deprivation with a lasting effect of deterioration in the indigenous capacity to cushion those who slide into permanent destitution. This is evident in the empirically identified increasing loss of confidence in the indigenous social support structures. The findings rather highlight the need for policy interventions to focus on system level community-wide development issues rather than the commonly emphasized individual targeting implied by such exercises as asset-based poverty threshold estimates.
    Keywords: Shocks; Poverty Trap; Pastoralism; Social Capital; Ethiopia
    JEL: D62 I32 O13 Q18
    Date: 2009–04
  18. By: Bell, Clive; Koukoumelis, Anastasios
    Abstract: An AIDS epidemic threatens Ethiopia with a long wave of premature adult mortality, and thus with an enduring setback to capital formation and economic growth. The authors develop a two-sector model with three overlapping generations and intersectorally mobile labor, in which young adults allocate resources under rational expectations. They calibrate the model to the demographic and economic data, and perform simulations for the period ending in 2100 under alternative assumptions about mortality with and without the epidemic. Although the epidemic does not bring about a catastrophic economic collapse, which is hardly possible in view of Ethiopia's poverty and high background adult mortality, it does cause a permanent, downward displacement of the path of output per head, amounting to 10 percent in 2100. An externally funded program to combat the disease is socially very profitable.
    Keywords: Population Policies,Economic Theory&Research,,Access to Finance,Adolescent Health
    Date: 2009–04–01
  19. By: Yamauchi, Futoshi; Yohannes, Yisehac; Quisumbing, Agnes
    Abstract: This paper examines the impacts of disasters on dynamic human capital production using panel data from Bangladesh, Ethiopia, and Malawi. The empirical results show that the accumulation of biological human capital prior to disasters helps children maintain investments in the post-disaster period. Biological human capital formed in early childhood (long-term nutritional status) plays a role of insurance with resilience to disasters by protecting schooling investment and outcomes, although disasters have negative impacts on investment. In Bangladesh, children with more biological human capital are less affected by the adverse effects of floods, and the rate of investment increases with the initial human capital stock in the post-disaster recovery process. In Ethiopia and Malawi, where droughts are rather frequent, exposure to highly frequent droughts in some cases reduces schooling investment but the negative impacts are larger among children embodying less biological human capital. Asset holdings prior to the disasters, especially the household's stock of intellectual human capital, also helps maintain schooling investments at least to the same degree as the stock of human capital accumulated in children prior to the disasters.
    Keywords: Natural Disasters,Hazard Risk Management,Access to Finance,Economic Theory&Research,Health Monitoring&Evaluation
    Date: 2009–04–01
  20. By: Andriamananjara, Soamiely; Brenton, Paul; von Uexkull, Jan Erik; Walkenhorst, Peter
    Abstract: This study discusses potential economic implications for Nigeria of an Economic Partnership Agreement with the European Union. It uses the World Bank’s Tariff Reform Impact Simulation Tool to assess the effects of preferential tariff liberalization with respect to the European Union. The results suggest that the impact of an Economic Partnership Agreement on total imports into Nigeria will be slight. This is in part because the Agreement will likely allow the most protected sectors to be excluded from liberalization, and also because where substantial tariffs are involved much of the increase in imports from the European Union will occur at the expense of other suppliers of imports. It is this trade diversion, arising from the discriminatory nature of the EPA, which generates a negative welfare impact of the tariff reforms. One way for Nigeria to limit these losses is to pursue non-preferential trade liberalization before implementing an EPA. The paper looks at the large number of import bans in Nigeria and argues that the positive impact on welfare of removing these import bans is likely to be substantial. Their removal would undermine a major reason for cross border smuggling and pave the way for a return to normal regional trade flows. The paper shows how an Economic Partnership Agreement presents an opportunity for accelerating the reforms that are needed to support a strategy to increase regional and global trade integration. Such an agreement is more likely to have positive and significant impacts when integrated into a comprehensive strategy toward competitiveness and alleviation of the supply constraints that have stifled the impact of previous trade agreements. Key issues that should be addressed include liberalization and regulatory strengthening of services sectors to ensure that all firms in Nigeria have access to efficiently produced backbone services and initiatives to address the country’s poor trade logistics performance.
    Keywords: Free Trade,Trade Policy,Currencies and Exchange Rates,Debt Markets,Trade Law
    Date: 2009–04–01
  21. By: Ahmed, Syud Amer; Diffenbaugh, Noah S.; Hertel, Thomas W.; Ramankutty, Navin; Rios, Ana R.; Rowhani, Pedram
    Abstract: Climate volatility will increase in the future, with agricultural productivity expected to become increasingly volatile as well. For Tanzania, where food production and prices are sensitive to the climate, rising climate volatility can have severe implications for poverty. We develop and use an integrated framework to estimate the poverty vulnerabilities of different socio-economic strata in Tanzania under current and future climate. We find that households across various strata are similarly vulnerable to being impoverished when considered in terms of their stratumâs populations, with poverty vulnerability of all groups higher in the 21st Century than in the late 20th Century. When the contributions of the different strata to the national poverty changes are taken into account, the rural and urban households with diversified income sources are found to account for the largest poverty changes due to their large shares in initial total poverty.
    Keywords: climate, volatility, poverty vulnerability, Tanzania, Environmental Economics and Policy, Food Security and Poverty, International Development,
    Date: 2009
  22. By: Makdissi, Paul; Wodon, Quentin
    Abstract: Under price ceilings and quality floors for agricultural inputs in cash crop sectors in developing countries where credit markets are weak, imperfect information on the ability of farmers to pay for their inputs at the end of the cropping season may lead the decentralized production of those inputs by risk averse private input providers to be inefficient. A coordinating agency and/or subsidies for new farmers could help to produce and distribute more agricultural inputs, thereby increasing the profits for input providers while also enabling more farmers to produce the crops that are key to their livelihood.
    Keywords: Rural Poverty Reduction,Economic Theory&Research,Crops&Crop Management Systems,Access to Finance,Rural Development Knowledge&Information Systems
    Date: 2009–04–01

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