nep-afr New Economics Papers
on Africa
Issue of 2009‒11‒21
eighteen papers chosen by
Quentin Wodon
World Bank

  1. The association between remarriage and HIV infection : evidence from national HIV surveys in Africa By de Walque, Damien; Kline, Rachel
  2. Biomass Fuel Consumption and Dung Use as Manure - Evidence from Rul Households in the Amrahara Region of Ethiopia By Mekonnen, Alemu; Köhlin, Gunnar
  3. Rural electrification programmes in Kenya: Policy conclusion from a valuation study By Abdullah, Sabah; Markandya, Anil
  4. Urban youth bulges and social disorder : an empirical study of Asian and Sub-Saharan African cities By Urdal, Henrik; Hoelscher, Kristian
  5. Can eliminating school fees in poor districts boost enrollment? Evidence from South Africa By Evan Borkum
  6. Climate volatility and poverty vulnerability in Tanzania By Ahmed , Syud Amer; Diffenbaugh, Noah S.; Hertel , Thomas W.; Lobell, David B.; Ramankutty, Navin; Rios, Ana R.; Rowhani, Pedram
  7. Regionalizing telecommunications reform in West Africa By Kessides, Ioannis N.; Noll, Roger G.; Benjamin, Nancy C.
  8. Demand for Electricity Connection in Rural Areas: The Case of Kenya By Abdullah, Sabah; Jeanty, P.W.
  9. A multivariate approach for identification of optimal locations with in Ethiopia’s wheat market to tackle soaring inflation on food price By Mezgebo, Taddese
  10. Domestic Debt Dynamics and Fiscal Sustainability in Nigeria: An Empirical Evidence By Mohammed, Shehu Tijjani
  11. Increasing world food prices: blessing or curse? By Matovu, John M.; Twimukye, Evarist P.
  12. Aid allocation effects on growth and poverty: A CGE framework By Twimukye, Evarist; Nabiddo, Winnie; Matovu, John
  13. Gender and incidence of indirect taxation: Evidence from Uganda By Ssewanyana, Sarah
  14. The Jatropha Biofuels Sector in Tanzania 2005-9: Evolution Towards Sustainability? By Adrian Marjolein Caniels; Henny Romijn
  15. Imapct of Tax Reforms on Household Welfare By Matovu, John; Twimukye, Evarist; Nabiddo, Winnie; Guloba, Madina
  16. Tax evasion and widening the tax base in Uganda By Sennoga, Edward; Matovu, John M.; Twimukye, Evarist
  17. Labor Migration and Social Networks Participation: Evidence from Southern Mozambique By Juan Miguel Gallego; Mariapia Mendola
  18. Social cash transfers for the poorest in Uganda By Sennoga, Edward; Matovu, John; Twimukye, Evarist

  1. By: de Walque, Damien; Kline, Rachel
    Abstract: The literature shows that divorced, separated, and widowed individuals in Africa are at significantly increased risk for HIV. Using nationally representative data from 13 countries in Sub-Saharan Africa, this paper confirms that formerly married individuals are at significantly higher risk for HIV. The study goes further by examining individuals who have remarried. The results show that remarried individuals form a large portion of the population - usually larger than the divorced, separated, or widowed - and that they also have higher than average HIV prevalence. This large number of high-risk remarried individuals is an important source of vulnerability and further infection that needs to be acknowledged and taken into account in prevention strategies.
    Keywords: Disease Control&Prevention,Population Policies,Gender and Health,HIV AIDS,HIV AIDS and Business
    Date: 2009–11–01
  2. By: Mekonnen, Alemu; Köhlin, Gunnar (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Soil nutrient depletion is a critical problem, contributing to low agricultural productivity and the limited domestic food supply in sub-Saharan Africa. Fertilizer use in Ethiopia is one of the lowest in sub-Saharan Africa. Particularly in the northern half of the Ethiopian highlands, use of dung as manure is also limited partly because of a significant level of dung consumption as a source of household fuel. Use of dung as fuel is also an important cause of health problems, mainly through indoor air pollution. Plantation interventions are carried out based on the expectation that fuelwood could substitute for dung, thus increasing agricultural productivity. This study examined (1) the determinants of rural households’ decision to use dung as fuel and as manure, and (2) the determinants of consumption of woody biomass and dung as household fuel sources. We found that the decision to use dung as fuel and manure was influenced by household assets (such as livestock and land size), as well as household characteristics (such as family size and age-sex composition of members), suggesting the important role of asset, product, and labor market imperfections. The type of stove and distance to towns also influenced fuel use. We found no evidence that woody biomass and dung were substitutes as household fuel, and in fact there were indications that they are complements. These results suggest the need to focus on asset-poor households to address the limited use of manure. Moreover, energy issues should be considered simultaneously. Encouraging the use of more appropriate (or energy efficient) stoves and other sources of energy that can reduce the use of dung as fuel are important options because they can improve energy efficiency and agricultural productivity, as well as improved health from reduced indoor air pollution.<p>
    Keywords: Biomass fuel; dung use; manure; Ethiopia
    JEL: Q12 Q42 Q56
    Date: 2009–11–19
  3. By: Abdullah, Sabah; Markandya, Anil
    Abstract: Developing countries have struggled with low electrification rates in the rural areas. This study investigates one major issue impeding the rural electrification programmes in rural Kenya: high connection payments. The paper uses estimates obtained from a stated preference study, namely a contingent valuation method completed in 2007, to examine the willingness to pay to connect to grid-electricity and photovoltaic services. Expanding rural electrification will need subsidies, but the study shows that some forms of subsidy are more effective than others. The key findings suggest that the government needs to reform the energy subsidies, increase market ownership and performance of private suppliers, establish financial schemes and create markets that vary according to social-economic and demographic groups.
    Keywords: Sub-Saharan Africa; willingness to pay (WTP); affordability; energy; rural electrification
    Date: 2009–09
  4. By: Urdal, Henrik; Hoelscher, Kristian
    Abstract: By 2050, two-thirds of the world’s population will live in cities, and the greatest growth in urban populations will take place in the least developed countries. This presents many governments with considerable challenges related to urban governance and the provision of services and opportunities to a burgeoning urban population. Among the concerns is that large youth bulges in urban centers could be a source of political instability and violence. Here, we assess this claim empirically using newly collected data on city-level urban social disorder, ranging from non-violent actions, such as demonstrations and strikes, to violent political actions, such as riots, terrorism, and armed conflict. The dataset covers 55 major cities in Asia and Sub-Saharan Africa for 1960-2006. The study also utilizes a new United Nations Population Division dataset on urban populations by age and sex. The study further considers factors that could condition the effect of age structure, in particular the level of informal employment, economic growth, education, and gender imbalances. The analysis finds that large male youth bulges aged 15-24 are not generally associated with increased risks of either violent or non-violent social disturbance. Furthermore, the proxy measures of"youth exclusion"do not seem to increase the risk that large urban male youth bulges are associated with either form of disturbance. However, several other factors that may be associated with higher levels of youth exclusion - notably absence of democratic institutions, low economic growth, and low levels of secondary educational attainment - are significantly and robustly associated with increasing levels of urban social disturbance.
    Keywords: Youth and Governance,Adolescent Health,Population Policies,Urban Housing and Land Settlements,National Urban Development Policies&Strategies
    Date: 2009–11–01
  5. By: Evan Borkum (Columbia University - Department of Economics)
    Abstract: The charging of school user fees is a much-debated policy issue in developing countries. In this paper, I evaluate the impact of a South African fee elimination program that was targeted at the poorest two quintiles of schools based on a community poverty score. Fixed effects estimates find that the program increased enrollment by almost 2% in treated secondary schools, an increase concentrated in earlier secondary grades. There is substantial heterogeneity in the estimated secondary school effect: it is driven entirely by an increase of around 3.5% in the poorer of the two treated quintiles. Regression discontinuity estimates confirm that the relatively wealthy schools near the treatment cutoff did not experience any effects on enrollment. Overall, the abolition of fees seems to have been reasonably effective in increasing secondary school enrollment in particularly poor communities. This is despite the fact that the eliminated fees were relatively low, comprising only around 1.5% of annual household income (per child) in these communities.
    Date: 2009
  6. By: Ahmed , Syud Amer; Diffenbaugh, Noah S.; Hertel , Thomas W.; Lobell, David B.; Ramankutty, Navin; Rios, Ana R.; Rowhani, Pedram
    Abstract: Climate models generally indicate that climate volatility may rise in the future, severely affecting agricultural productivity through greater frequency of yield-diminishing climate extremes, such as droughts. For Tanzania, where agricultural production is sensitive to climate, changes in climate volatility could have significant implications for poverty. This study assesses the vulnerability of Tanzania’s population to poverty to changes in climate variability between the late 20th century and early this century. Future climate scenarios with the largest increases in climate volatility are projected to make Tanzanians increasingly vulnerable to poverty through its impacts on the production of staple grains, with as many as 90,000 additional people, representing 0.26 percent of the population, entering poverty in the median case. Extreme poverty-increasing outcomes are also found to be greater in the future under certain climate scenarios. In the 20th century, the greatest predicted increase in poverty was equal to 880,000 people, while in the 21st century, the highest possible poverty increase was equal to 1.17 million people (approximately 3.4 percent of the population). The results suggest that the potential impacts of changes in climate volatility and climate extremes can be significant for poverty in Sub-Saharan African countries like Tanzania.
    Keywords: Rural Poverty Reduction,Climate Change Mitigation and Green House Gases,Science of Climate Change,Regional Economic Development,Climate Change Economics
    Date: 2009–11–01
  7. By: Kessides, Ioannis N.; Noll, Roger G.; Benjamin, Nancy C.
    Abstract: In recent years, there has been an increasing recognition that significant welfare gains could be realized through deep forms of regional integration which entail harmonization of legal, regulatory and institutional frameworks. Reforms that reduce cross-border transaction costs and improve the performance of “backbone” infrastructure services are arguably even more important for the creation of an open, unified regional economic space than trade policy reforms narrowly defined. This paper assesses the potential gains from regionalized telecommunications policy in West Africa. To this end, the paper: (i) discusses how regional cooperation can overcome national limits in technical expertise, enhance the capacity of nations credibly to commit to stable regulatory policy, and ultimately facilitate infrastructure investment in the region; (ii) identifies trade-distorting regulations that inhibit opportunities for regional trade and economic development, and so are good candidates for regional trade negotiations to reduce indirect trade barriers; and (iii) describes substantive elements of a harmonized regional regulatory policy that can deliver immediate performance benefits.
    Keywords: E-Business,Environmental Economics&Policies,ICT Policy and Strategies,Transport Economics Policy&Planning,Emerging Markets
    Date: 2009–11–01
  8. By: Abdullah, Sabah; Jeanty, P.W.
    Abstract: A modern form of energy, in particular electricity for household use, is an important vehicle in alleviating poverty in developing countries. However, access and costs of connecting to this service for most poor in these countries is inconceivable. Policies promoting electricity connection in rural areas are known to be beneficial in improving the socio-economic and health well-being for households. This paper examines willingness to pay (WTP) for rural electrification connection in Kisumu district, Kenya, using the contingent valuation method (CVM). A nonparametric and a parametric model are employed to estimate WTP values for two electricity products: grid electricity (GE) and photovoltaic (PV) electricity. The results indicate that respondents are willing to pay more for GE services than PV and households favoured monthly connection payments over a lump sum amount. Some of the policies suggested in this paper include: subsidizing the connection costs for both sources of electricity, adjusting the payment periods, and restructuring the market ownership of providing rural electricity services.
    Keywords: Contingent valuation; Double bounded; Electricity connection; Rural; Willingness to pay (WTP)
    Date: 2009–11
  9. By: Mezgebo, Taddese
    Abstract: Two surplus markets of Bale Robe and Shashimiene and one deficit market of Jimma are observed to fix long run price. However the system is observed to have better capacity to process demand side than supply side shocks. Therefore for efficient stabilization the focus should be in Jimma. For equity and political feasibility it would be preferable if poor deficit centers are provided with subsidized supply of grain, too. Though distance did not seem to be an important factor for border of one price but only for strength of cointegration, the methodology used by early papers is observed to work.
    Keywords: Inflation cointegration ethiopia food price grain market
    JEL: E31 Q13 D4 P44
    Date: 2009–11–14
  10. By: Mohammed, Shehu Tijjani
    Abstract: The purpose of this paper is to examine the relationship between domestic debt dynamics and fiscal deficits over the period 1970-2006. We pretest the variables for stationarity by carrying out unit root tests. However, a variable may appear to exhibit non-stationary behavior when in actual fact it is stationary. Testing for unit root in the presence of structural break sometimes results in a stationary process. Thus a test for unit root utilizing ADF statistic may be insufficient to justify classifying a variable as stationary or non-stationary. Testing for unit root in the presence of structural break may give a clearer indication. This is what we have done in this study. As a result of these tests we find that all the variables of our model are integrated of order zero, that I(0). This led to the estimation of a multiple regression model. The results of our estimation show that all the variables significantly affect the debt dynamics while the inflation rate bears no significant relationship with the debt dynamics. The empirical results indicate that deterioration of primary fiscal balance account for the worsening of the debt dynamics as domestic debt outstanding continue to grow even in the face of modest economic growth. We recommend that government should take all necessary steps to implement the Fiscal Responsibility Act and intensify its efforts in utilizing the capital market whenever it is in need of funds.
    Keywords: Fiscal Deficits; Debt sustainability; Structural Break
    JEL: C22 C01
    Date: 2009–11–07
  11. By: Matovu, John M.; Twimukye, Evarist P.
    Abstract: This study evaluates the potential impact of the recent world food prices on the Ugandan economy and possible policy options to respond to it. Uganda is largely a net exporter of some cereals whose prices increasing considerably especially maize. Using a recursive dynamic CGE model, we attempt to answer questions on who are the beneficiaries and losers after the surge in food prices. The rural producers of maize tend to benefit considerably with their poverty levels reducing. On the other hand, the urban purchasers of cereals are affected owing to the higher prices of food. this therefore suggests that the Ugandan government should take advantage of the increasing food prices by stimulating and undertaking policies that would enhance productivity especially for crops where on the urban population, the government could design targeted programs for the urban poor.
    Keywords: Urban poor, Food prices, CGE model, Food security, Matovu, Twimukye, Economic Policy Research centre, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, Farm Management, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Livestock Production/Industries, Production Economics,
    Date: 2009
  12. By: Twimukye, Evarist; Nabiddo, Winnie; Matovu, John
    Abstract: It has been argues that increased aid causes Dutch disease as a result of appreciation of the exchange rate which reduces the competitiveness of the country's exports. In this paper, we argue that if the aid is used productively, there are both short and long term gains. Applying a recursive dynamic general equilibrium model on Uganda, we find that while the currency appreciates and some exports decline, the overall impact on growth outweighs the losses in competitiveness. In addition, it aid is used productively, poverty would be substantially reduced as long as the aid increase is sustained.
    Keywords: Aid, Exchange rate, Dutch disease, Twimukye, Nabiddo, Matovu, Exports, Foreign aid, Poverty reduction, Economic policy research center, Community/Rural/Urban Development, Consumer/Household Economics, Demand and Price Analysis, Financial Economics, International Development, Labor and Human Capital, Production Economics, Productivity Analysis, Public Economics,
    Date: 2009–05
  13. By: Ssewanyana, Sarah
    Abstract: Since the 1990's, Uganda system has undergone various reforms. However, both tax policies and reforms have been formulated without clearly indication the channels through which gender impacts on these policies/reforms. Using the national household survey of 2005/06, this paper provided insight into how tax policies and reforms on indirect taxes impact differently on women and men. The incidence rate of tax gender-based household typologies controlled by expenditure quintile brings out interesting findings. teh incidence rate of indirect tax is significantly greater on households headed by male compared to their female counterparts regardless of income level. This also holds after controlling for the presence of children. More importantly, the impact on different households typologies is largely influenced by differences in consumption patterns. future tax reforms should take these gender differences in account as a means of improving the social welfare of every Ugandan...
    Keywords: Tax policies, Tax reforms, Household expenditures, Ssewanyana, Economic policy research center, Community/Rural/Urban Development, Consumer/Household Economics, Demand and Price Analysis, Institutional and Behavioral Economics, Labor and Human Capital,
    Date: 2009–04
  14. By: Adrian Marjolein Caniels; Henny Romijn
    Abstract: Biofuel production from the tropical plant Jatropha curcas L. has recently attracted a great deal of attention. Some anticipate substantial social and environmental benefits from its cultivation, while at the same time expecting sound profitability for investors. Others are more doubtful, envisaging large trade-offs between the pursuit of social, environmental and economic objectives. The paper explores these issues in Tanzania, a forerunner in the cultivation of Jatropha in Africa. We trace how isolated Jatropha biofuel experiments in the country developed since their inception in early 2005 towards a fully fledged sectoral production and innovation system; and investigate to what extent that system has been capable of developing ánd maintaining sustainable practices and producing sustainable outcomes. The application of evolutionary economic theory allows us to view the ongoing development processes in the sector as a result of evolutionary variation and selection on the one hand, and revolutionary contestation between different coalitions of stakeholders on the other. Both these processes constitute significant engines of change in the sector. While variation and selection is driven predominantly by localised learning, the conflict-driven dynamics are highly globalised. The sector is found to have moved some way towards a full sectoral innovation and production system, but it is impossible to predict whether a viable sector with a strong "triple bottom line" orientation will ultimate emerge, since many issues surrounding the social, environmental and financial sustainability still remain unresolved.
    Keywords: biofuels, Jatropha, evolutionary theory, sustainability, stakeholder conflict, learning, Tanzania
    Date: 2009–11
  15. By: Matovu, John; Twimukye, Evarist; Nabiddo, Winnie; Guloba, Madina
    Abstract: The Uganda government has since 1987 initiated a sequence of tax reforms to address the fiscal challenges facing the country. This paper uses a Computable General Equilibrium (CGE) model to analyze the welfare effects of tax reforms on households and the impact of these challenges on production and firm activities. The findings are consistent with previous studies which found that the introduction of VAT was indeed a progressive policy reform. Zero rating all food items and agricultural products mainly benefit the low income households whose consumption basket is mainly food items. In a quest for further sources of revenue by overtaxing the rich, this could generate further revenues albeit lower savings and investments by this group. Finally, over-reliance on excise duties especially on petroleum and alcohol drinks affects the transportation sectors which are also used by the poor. In our results we find that taxation of petrol and rising excise duties indeed is a regressive policy stance.
    Keywords: Computable General Equilibrium (CGE), Twimukye, Nabiddo, Taxation, Tax base, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, Farm Management, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Livestock Production/Industries,
    Date: 2009–05
  16. By: Sennoga, Edward; Matovu, John M.; Twimukye, Evarist
    Abstract: Uganda still lags behind in its tax collections at the domestic level. For most of the commodities the tax collection effort is not more than 5 percent relative to the statutory rate of 18 percent. This results into a situation where the government has to rely a lot on foreign financing. From the analysis, there is a lot of improvement where URA can be able to increase its tax effort. this could be achieved by targeting commodities that are under-taxed and excluding food items for equity purposes. Increasing domestic collection would also result into less over reliance on taxing a few commodities especially fuel which is interlinked with a lot of other sectors and could indeed harm growth in the long-run. We also find that the tax effort on imports is sufficient. However, import duties on fuel remain very high and this could be a symptom of the poor domestic tax collection.
    Keywords: Taxation, Tax base, Domestic taxes, import duty, Sennoga, Twimukye, Matovu, EPRC, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Public Economics,
    Date: 2009–05
  17. By: Juan Miguel Gallego (Toulouse School of Economics and LdA); Mariapia Mendola (University of Milan Bicocca and LdA)
    Abstract: There is a large literature pointing to community participation and social networks as salient components of household well-being in developing settings. Yet, there are few insights into whether people mobility affects incentive problems associated with social networks, or whether labor migration displaces social informal institutions in village economies at origin. This paper directly tests the role of international migration in shaping participation in groups and social networks by migrant sending households in village economies at origin. By using an original household survey from two southern regions in Mozambique, we find that households with successful migrants (i.e. those receiving either remittances or return migration) engage more in community based social networks. Our findings are robust to alternative definitions of social interaction and to endogeneity concerns suggesting that stable migration ties and higher income stability through remittances may decrease participation constraints and increase household commitment in cooperative arrangements in migrant-sending communities.
    Keywords: International Migration, Social Capital, Networks, Group Participation, Mozambique
    JEL: O17 O15 O12
    Date: 2009–11–17
  18. By: Sennoga, Edward; Matovu, John; Twimukye, Evarist
    Abstract: This paper mainly focuses on the various ways through which a social cash transfer program can be be designed and financed. We identify four types of households which are considered to be vulnerable to be targeted with cash transfers. This includes households with orphans, old individuals, young and labor constrained. Extending a cash transfer to these households would lead to less poverty over the simulation period. these programs which would be constrained to less than 0.5 percent of GDP would have a small impact on the overall economy. By increasing taxes to finance the program this would wipe out the potential benefits of the cash transfer program of reducing poverty.
    Keywords: Poverty, Cash transfers, Vulnerable groups, Sennoga, Twimukye, Matovu, EPRC, Poor people, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, Financial Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Health Economics and Policy, Institutional and Behavioral Economics,
    Date: 2009–05

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