nep-afr New Economics Papers
on Africa
Issue of 2009‒09‒05
seven papers chosen by
Quentin Wodon
World Bank

  1. Agricultural Distortions, Poverty and Inequality in South Africa By Herault, Nicolas; Thurlow, James
  2. Africa and Arab Gulf states : divergent development paths and prospects for convergence By Fofack, Hippolyte
  3. How many more infants are likely to die in Africa as a result of the global financial crisis ? By Friedman, Jed; Schady, Norbert
  4. Factor Decomposition of Sectoral Growth in South Africa, 1970-2007 By Tregenna, F.
  5. Potential gains from capital flight repatriation for Sub-Saharan African countries By Fofack, Hippolyte; Ndikumana, Leonce
  6. Competitiveness and the real exchange rate: the standpoint of countries in the CEMAC zone By Lendjoungou, Francis
  7. Inequality and Poverty Impacts of Trade Distortions in Mozambique By Arndt, Channing; Thurlow, James

  1. By: Herault, Nicolas; Thurlow, James
    Keywords: Distorted incentives, agricultural and trade policy reforms, national agricultural development, Agricultural and Food Policy, International Relations/Trade, F13, F14, Q17, Q18,
    Date: 2009–06
  2. By: Fofack, Hippolyte
    Abstract: In spite of the similarities between Sub-Saharan Africa and the Arab Gulf region (Gulf Cooperation Council states), development policies implemented in these two regions of the world have produced markedly different and even divergent outcomes. While Gulf Cooperation Council states have drawn on hydrocarbon revenues to dramatically transform their economic landscape, Sub-Saharan African countries have exhibited abysmal economic and social outcomes. The remarkable increase in personal income and large current account surpluses in Arab Gulf states is in sharp contrast with widespread poverty and recurrent balance of payments crises in Sub-Saharan Africa. This paper reviews the possible causes of these divergent development paths and discusses the prospects for economic convergence in the new globalization landscape of growing trade ties between the two regions. In particular, it shows that development models underpinned by institutional continuity and intergenerational accountability could enhance long-run growth in Sub-Saharan Africa and income convergence between the two regions.
    Keywords: Economic Theory&Research,Emerging Markets,Currencies and Exchange Rates,Debt Markets,
    Date: 2009–08–01
  3. By: Friedman, Jed; Schady, Norbert
    Abstract: The human consequences of the current global financial crisis for the developing world are presumed to be severe yet few studies have quantified such impact. The authors estimate the additional number of infant deaths in sub-Saharan Africa likely due to the crisis and discuss possible mitigation strategies. They pool birth-level data as reported in female adult retrospective birth histories from all Demographic and Health Surveys collected in sub-Saharan Africa nations. This results in a data set of 639,000 births to 264,000 women in 30 countries. The authors use regression models with flexible controls for temporal trends to assess an infant’s likelihood of death as a function of fluctuations in national income. They then apply this estimated likelihood to expected growth shortfalls as a result of the crisis. At current growth projections, their estimates suggest there will be 30,000 - 50,000 excess infant deaths in sub-Saharan Africa. Most of these additional deaths are likely to be poorer children (born to women in rural areas and lower education levels) and are overwhelmingly female. If the crisis continues to worsen the number of deaths may grow much larger, especially those to girls. Policies that protect the income of poor households and that maintain critical health services during times of economic contraction should be considered. Interventions targeted at female infants and young girls may be particularly beneficial.
    Keywords: Population Policies,Early Child and Children's Health,Adolescent Health,Gender and Health,Health Systems Development&Reform
    Date: 2009–08–01
  4. By: Tregenna, F.
    Abstract: Chenery’s factor decomposition method is used to analyse the sources of growth, by sector, in South Africa from 1970 to 2007. Using input-output data, the growth of each sector is decomposed into components associated with export growth; import substitution; growth in domestic demand; and growth in intermediate demand. The results highlight the dependence on domestic demand expansion as a source of growth in the period since 2000, especially for manufacturing. However, subsectors which relied exclusively or primarily on domestic demand expansion generally performed relatively poorly. The technological change component of growth is the only component with a consistently positive and statistically significant correlation with sectoral growth. The only two manufacturing subsectors for which all four components were positive in the period since 2000, were also the two fastest growing subsectors of the whole economy. The analysis also enables a typology of the subsectors of each of manufacturing and services, according to the relative importance of each of the four components.
    Keywords: growth, sectors, factor decomposition, South Africa
    JEL: E20 O11 O14 O40
    Date: 2009–07–30
  5. By: Fofack, Hippolyte; Ndikumana, Leonce
    Abstract: Despite the recent increase in capital flows to Sub-Saharan Africa, the region remains largely marginalized in financial globalization and chronically dependent on official development aid. And with the potential decline in the level of official development assistance in a context of global financial crisis, the need to increase domestic resources mobilization as well as non-debt generating external resources is critical now more than ever before. However, the debate on resource mobilization has overlooked an important untapped source of funds consisting of the massive stocks of private wealth stashed in Western financial centers, a substantial part of which left the region in the form of capital flight. This paper argues that the repatriation of flight capital should take a more prominent place in this debate from a moral standpoint and for clear economic reasons. On the moral side, the argument is that a large proportion of the capital flight legitimately belongs to the Africans and therefore must be restituted to the legitimate claimants. The economic argument is that repatriation of flight capital will propel the sub-continent on a higher sustainable growth path while preserving its financial stability and without mortgaging the welfare of its future generations through external borrowing. The analysis in the paper demonstrates quantitatively that the gains from repatriation are large and dominate the expected benefits from other sources such as debt relief. It is estimated that if only a quarter of the stock of capital flight was repatriated to Sub-Saharan Africa, the region would go from trailing to leading other developing regions in terms of domestic investment, thus initiating a ‘big-push’-led sustainable long-term economic growth. The paper proposes some strategies for inducing capital flight repatriation, but cautions that the success of this program is contingent on strong political will on the part of African and Western governments and effective coordination and cooperation at the global level.
    Keywords: Access to Finance,Economic Theory&Research,Investment and Investment Climate,Debt Markets,Emerging Markets
    Date: 2009–08–01
  6. By: Lendjoungou, Francis
    Abstract: This paper focuses on real exchange rate in the case of CEMAC countries. To analyze the situation in Cameroon, Central African Republic, Congo, Gabon and Chad we used annual data from 1979 to 2008. Two approaches were used related to equilibrium real exchange rate model based on fundamentals and calculations show that terms of trade, public expenditure, the degree of openness of the economy and productivity are the most important variables which influence the equilibrium of real exchange rate. Based on the estimated paths, there was a clear pattern of overvaluation before 1994, suggesting that the exchange rate adjustment was needed. Despite a relative appreciation trend during last years, the real exchange rate of CEMAC countries has not experienced an important overvaluation.
    Keywords: Equilibrium real exchange rate; CEMAC; FEER
    JEL: C53 O55 F41 C22 F31
    Date: 2009–09–02
  7. By: Arndt, Channing; Thurlow, James
    Keywords: Distorted incentives, agricultural and trade policy reforms, national agricultural development, Agricultural and Food Policy, International Relations/Trade, F13, F14, Q17, Q18,
    Date: 2009–06

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