nep-afr New Economics Papers
on Africa
Issue of 2010‒04‒17
27 papers chosen by
Quentin Wodon
World Bank

  1. Foreign Aid, Fertility and Population Growth:Evidence from Africa By Leonid V. Azarnert
  2. The Composition of Foreign Capital Stocks in South Africa: The Role of Institutions, Domestic Risk and Neighbourhood Effects By Farayi Gwenhamo; Johannes Fedderke
  3. Unvravelling the impact of the global financial crisis on the South African labour market By Sher Verick
  4. Female participation in African agricultural research and higher education: New insights By Beintema, Nienke M.; Di Marcantonio, Federica
  5. Growth, History, or Institutions? What Explains State Fragility in Sub-Saharan Africa By Graziella Bertocchi; Andrea Guerzoni
  6. The economics of renewable energy expansion in rural Sub-Saharan Africa By Deichmann, Uwe; Meisner, Craig; Murray, Siobhan; Wheeler, David
  7. Modelling Fugitive Natural Resources in the Context of Transfrontier Parks: Under what conditions will conservation be successful in Africa? By Edwin Muchapondwa; Tafara Ngwaru
  8. Incomplete markets and fertilizer use : evidence from Ethiopia By Zerfu, Daniel; Larson, Donald F.
  9. Comparing Multidimensional Poverty with Qualitative Indicators of Well-Being By Yélé Maweki Batana; Jean-Yves Duclos
  10. The remitting patterns of African migrants in the OECD By Bollard, Albert; McKenzie, David; Morten, Melanie
  11. Globalization and growth in the low Income African countries with the extreme bounds analysis By Rao, B. Bhaskara; Vadlamannati, Krishna Chaitanya
  12. The ethnicity distraction ? political credibility and partisan preferences in Africa By Keefer, Philip
  13. What are the links between aid volatility and growth ? By Markandya, Anil; Ponczek Vladimir; Yi, Soonhwa
  14. Household Tree Planting in Tigrai, Northern Ethiopia: Tree Species, Purposes, and Determinants By Gebreegziabher, Zenebe; Mekonnen, Alemu; Kassie, Menale; Köhlin, Gunnar
  15. Democratization via Elections in an African “Narco-state”? The Case of Guinea-Bissau By Dirk Kohner
  16. Quantitative value chain analysis : an application to Malawi By Tchale, Hardwick; Keyser, John
  17. The Sikasso Paradoxe: Cotton and Poverty in Mali, By Jocelyne Delarue; Sandrine Mesplé-Somps; Jean-David Naudet; Anne-Sophie Robilliard
  18. Agricultural growth and investment options for poverty reduction in Nigeria By Diao, Xinshen; Nwafor, Manson; Alpuerto, Vida; Akramov, Kamiljon; Salau, Sheu
  19. After Janjaweed? Socioeconomic Impacts of the Conflict in Darfur By Olsson, Ola
  20. The short-term impact of higher food prices on poverty in Uganda By Simler, Kenneth R.
  21. Hydro-economic modeling of climate change impacts in Ethiopia By You, Gene Jiing-Yun; Ringler, Claudia
  22. Child labor, agricultural shocks and labor sharing in rural Ethiopia By Zelalem Yilma Debebe
  23. Role of Governance in Explaining Domestic Investment in Nigeria By Olusegun Ayodele Akanbi
  24. An assessment of the effects of the 2002 food crisis on children's health in Malawi By Renate Hartwig; Michael Grimm
  25. Financial liberalisation and industrial development in Malawi By Grant P. Kabango; Alberto Paloni
  26. Degré de répercussion du Taux de change sur l’Inflation en République Démocratique du Congo de 2002 à 2007 By Luyinduladio, Menga
  27. Do labor statistics depend on how and to whom the questions are asked ? results from a survey experiment in Tanzania By Bardasi, Elena; Beegle, Kathleen; Dillon, Andrew; Serneels, Pieter

  1. By: Leonid V. Azarnert (Bar Ilan University)
    Abstract: This article investigates the relationship between foreign aid and population growth in sub-Saharan Africa. The work considers population growth rate and a directly related to fertility demographic indicator – total fertility rate. Using a panel of 43 African countries over the last four decades of the 20th century, it demonstrates the positive association between foreign aid and population growth and suggests that foreign aid affects population growth primarily through its effect on fertility. These findings suggest that the appreciation of the demographic effect of foreign aid can have important implications for the design of policies regarding to foreign aid for presently developing countries, particularly in sub-Saharan Africa.
    Keywords: Foreign aid, Fertility, Population growth
    JEL: F35 J11 O11
    Date: 2009–04
  2. By: Farayi Gwenhamo; Johannes Fedderke
    Abstract: This paper investigates the determinants of the absolute volumes and composition of foreign capital stocks in South Africa, focusing on the role played by institutional quality (property rights), domestic risk and neighbourhood effects as potential determinants. The empirical findings show that secure property rights and low risk in the host country positively affect the absolute volumes of both long-term and short-term foreign capital, but tilt the composition of foreign capital in favour of long-term foreign capital. The empirical results also demonstrate the existence of neighbourhood effects where the institutional environment in Zimbabwe has a significant impact on South Africa's foreign capital in.ows. It is shown that weak property rights in Zimbabwe lead to an increase in South Africa's foreign direct investment (FDI), but a reduction in South Africa's portfolio investment. This suggests that Zimbabwe and South Africa compete for foreign direct investment in similar sectors, and present two alternative investment destinations to foreign investors. As such, when property rights in Zimbabwe worsen, FDI appears to switch to South Africa as an alternative. By contrast, poor property rights in Zimbabwe appear to raise the perceived risk for portfolio investment in South Africa.
    Keywords: Foreign capital stocks, Composition, FDI, Portfolio Investment and South Africa
    JEL: F21
    Date: 2010
  3. By: Sher Verick (International Labour Office, Economic and Labour Market Analysis Department)
    Abstract: The global financial crisis of 2008-2009 has deeply impacted South Africa due to its financial and trade links with the rest of the world. As a consequence, Africa’s largest economy fell into recession late in 2008. Although almost 900,000 jobs have since been lost, the results presented in this paper show that the contraction did not initially translate into a surge in official unemployment. Rather, the main effect of the downturn in South Africa has been a rise in the number of discouraged individuals, from 1.08 million in the second quarter of 2008 to 1.63 million in the third quarter of 2009. Drawing on the micro estimates, discouragement has increased more for vulnerable segments of the population, namely, uneducated black South Africans (especially males). The findings presented in this paper highlight the need to look at the impact of the crisis on all labour force states, not just unemployment, and of analysing the role of socio-economic characteristics in driving vulnerability in the labour market using micro-data. Though the economy has now registered positive growth in the third quarter of 2009, South African policymakers are still confronted with the challenge of formulating and implementing policies that encourage job search and self-employment among the low-skilled. Over the longer term, education and training for the low-skilled and an appropriate industrial policy should remain key priorities for the Government of South Africa.
    Keywords: labour market / employment status / economic recession / South Africa
    Date: 2010
  4. By: Beintema, Nienke M.; Di Marcantonio, Federica
    Abstract: Female farmers play a vital role in African agriculture, accounting for the majority of the agricultural workforce. However, agricultural research and higher education are disproportionately led by men. There is an urgent need for greater representation of women in the field of agricultural science and technology (S&T) in Sub-Saharan Africa. Female scientists, professors, and senior managers offer different insights and perspectives to help research institutes to more fully address the unique and pressing challenges of both female and male farmers in the region. Gender-disaggregated data on S&T capacity are scarce, often lack sufficient detail, and focus more generally on S&T rather than on agriculture specifically. Data are not always comparable due to different methodologies and coverage. The Agricultural Science and Technology Indicators (ASTI) initiative and the CGIAR Gender & Diversity (G&D) Program partnered together to address this information gap. This report presents the results of an in-depth benchmarking survey on gender-disaggregated capacity indicators, covering 125 agricultural research and higher education agencies in 15 countries in Sub-Saharan Africa. This is the first study of its kind to present detailed human resources data on female participation in agricultural science, the main findings of which include the following: • Total capacity in terms of the professional staff employed at the agricultural research and higher education agencies included in this study increased by 20 percent between 2000/01 and 2007/08, and women constituted almost half of this capacity increase. The female population of professional staff grew by eight percent per year on average, which is four times higher than the comparable rate of increase for the male population, indicating that the gender gap in African agricultural sciences is closing. • The proportion of female professional staff employed at the sample agricultural research and higher education agencies increased from 18 percent in 2000/01 to 24 percent in 2007/08, but fewer women have advanced degrees compared to their male colleagues. In 2007/08, for example, 27 percent of the sample’s professional women held PhD degrees compared with 37 percent of the sample’s professional men. • Of concern, about two-thirds of the overall (female and male) capacity increase comprised staff holding only BSc degrees, indicating that the overall quality of capacity in agricultural research and higher education is declining in some Sub-Saharan African countries. Notably, the total number of male professional staff trained to the MSc level declined between 2000/01 and 2007/08; however, more in-depth analysis is needed to explain the underlying causes of these shifts and to what degree they represent structural changes. • Levels of female participation in agricultural research and higher education among the sample agencies were particularly low in Ethiopia (6 percent), Togo (9 percent), Niger (10 percent), and Burkina Faso (12 percent). Shares of female professional staff were much higher in South Africa, Mozambique, and Botswana (32, 35, and 41 percent, respectively). • The female share of students enrolled in higher agricultural education was higher than the female shares of professional staff employed at the agricultural research and higher education agencies in most cases, but a significant proportion of the female students concerned were undertaking only BSc-level studies (83 percent). • Only 14 percent of the management positions were held by women, which is considerably lower than the share of female professional staff employed at the sample’s agricultural research and higher education agencies (24 percent). • The pool of female staff is much younger on average than the pool of male staff. • The prevalence of female professional staff is comparatively higher in fields related to life and social sciences, and comparatively lower in fields involving areas traditionally thought of as “hard science”, such as engineering.
    Keywords: agricultural R&D, Sub-Saharan Africa, female participation, S&T capacity, agricultural higher education,
    Date: 2010
  5. By: Graziella Bertocchi; Andrea Guerzoni
    Abstract: We explore the determinants of state fragility in sub-Saharan Africa. Controlling for a wide range of economic, demographic, geographic and istitutional regressors, we find that institutions, and in particular the civil liberties index and the number of revolutions, are the main determinants of fragility, even taking into account their potential endogeneity. Economic factors such as income growth and investment display a non robust impact after controlling for omitted variables and reverse causality. Colonial variables reflecting the history of the region display a marginal impact on fragility once institutions are accounted for.
    Keywords: State fragility, Africa, institutions, colonial history
    JEL: O43 H11 N17
    Date: 2010–03
  6. By: Deichmann, Uwe; Meisner, Craig; Murray, Siobhan; Wheeler, David
    Abstract: Accelerating development in Sub-Saharan Africa will require massive expansion of access to electricity -- currently reaching only about one-third of households. This paper explores how essential economic development might be reconciled with the need to keep carbon emissions in check. The authors develop a geographically explicit framework and use spatial modeling and cost estimates from recent engineering studies to determine where stand-alone renewable energy generation is a cost effective alternative to centralized grid supply. The results suggest that decentralized renewable energy will likely play an important role in expanding rural energy access. But it will be the lowest cost option for a minority of households in Africa, even when likely cost reductions over the next 20 years are considered. Decentralized renewables are competitive mostly in remote and rural areas, while grid connected supply dominates denser areas where the majority of households reside. These findings underscore the need to de-carbonize the fuel mix for centralized power generation as it expands in Africa.
    Keywords: Energy Production and Transportation,Climate Change Mitigation and Green House Gases,Transport Economics Policy&Planning,Power&Energy Conversion,Carbon Policy and Trading
    Date: 2010–01–01
  7. By: Edwin Muchapondwa; Tafara Ngwaru
    Abstract: The conservation of fugitive natural resources across national boundaries poses significant challenges in Africa. This realisation has resulted in the creation of transfrontier parks. While transfrontier parks help de-fragment wildlife habitats, in the presence of governance heterogeneity the same arrangements create uncertainty as they allow a diverse range of park managers to make decisions about wildlife. This paper formulates a bioeconomic model to examine the determinants of successful conservation of migratory wildlife across a transfrontier park with patch heterogeneity. The examination shows three key results. Firstly, it is both ecologically and economically worthwhile to establish a unified transfrontier park rather than have disjointed national ones only if stronger governance institutions exist in higher-resource potential areas. Secondly, the local communities will cooperate with transfrontier conservation effort only if they derive greater benefit flows from transfrontier park-based wildlife conservation than from anti-conservation activities such as wildlife poaching. Thirdly, successful conservation requires transfrontier arrangements that equalise the long-run costs and benefits for all constituent partners. Given the presence of patch and governance heterogeneity, successful elephant conservation in Southern Africa requires that South Africa shares benefits with Mozambique and Zimbabwe despite their weaker institutions to prevent resource leakages from threatening the transfrontier park.
    Date: 2010
  8. By: Zerfu, Daniel; Larson, Donald F.
    Abstract: While the economic returns to using chemical fertilizer in Africa can be large, application rates are low. This study explores whether this is due to missing and imperfect markets. Results based on a panel survey of Ethiopian farmers suggest that while fertilizer markets are not altogether missing in rural Ethiopia, high transport costs, unfavorable climate, price risk, and illiteracy present formidable hurdles to farmer participation. Moreover, the combination of factors that promote or impede effective fertilizer markets differs among locations, making it difficult to find a single production technology that is uniformly profitable -- perhaps explaining the inconsistency between field studies finding large returns to fertilizer use in Ethiopia and survey-based studies finding fertilizer use to be uneconomic. The results suggest that households with greater stores of wealth, human capital and authority can overcome these hurdles. The finding offers some encouragement, but also implies a self-enforcing link between low agricultural productivity and poverty, since low-asset households are less able to overcome these problems. The study suggests that the provision of extension services can be effective and that lowering transport costs can raise the intensity of fertilizer use by lowering the cost of fertilizer and boosting the farmgate value of output.
    Keywords: Climate Change and Agriculture,Fertilizers,Crops&Crop Management Systems,Access to Finance,Fertilizers&Agricultural Chemicals Industry
    Date: 2010–03–01
  9. By: Yélé Maweki Batana; Jean-Yves Duclos
    Abstract: This paper examines multidimensional stochastic dominance when one of the indicators of well-being, such as household size or place of residence, is qualitative. It also uses a test for strict dominance based on the empirical likelihood ratio. Empirical applications are based on the DHS (Demography and Health Surveys) for several countries in Western Africa. The results show the existence of multidimensional dominance relationships between most of these countries.
    Keywords: Stochastic dominance, multidimensional poverty, empirical likelihood tests, bootstrap tests, West Africa
    JEL: C10 C11 C12 C30 C39 I32
    Date: 2010
  10. By: Bollard, Albert; McKenzie, David; Morten, Melanie
    Abstract: Recorded remittances to Africa have grown dramatically over the past decade. Yet data limitations still mean relatively little is known about which migrants remit, how much they remit, and how their remitting behavior varies with gender, education, income levels, and duration abroad. This paper constructs the most comprehensive remittance database on immigrants in the OECD currently available, containing microdata on more than 12,000 African immigrants. Using this microdata the authors establish several basic facts about the remitting patterns of Africans, and then explore how key characteristics of policy interest relate to remittance behavior. Africans are found to remit twice as much on average as migrants from other developing countries, and those from poorer African countries are more likely to remit than those from richer African countries. Male migrants remit more than female migrants, particularly among those with a spouse remaining in the home country; more-educated migrants remit more than less educated migrants; and although the amount remitted increases with income earned, the gradient is quite flat over a large range of income. Finally, there is little evidence that the amount remitted decays with time spent abroad, with reductions in the likelihood of remitting offset by increases in the amount remitted conditional on remitting.
    Keywords: Population Policies,Remittances,Gender and Development,Debt Markets,International Migration
    Date: 2010–04–01
  11. By: Rao, B. Bhaskara; Vadlamannati, Krishna Chaitanya
    Abstract: The relationship between globalization and economic growth, especially in the poorer developing countries, is controversial. Many previous studies have used single globalization indicators such as the ratio of exports plus imports to GDP. This paper uses a comprehensive measure of a globalization of Dreher (2006), which is based on measures of globalization of the economic, social and political sectors. Panel data estimates with data of 21 low income African countries show a small but significant positive permanent growth effects. The sensitivity of this growth effect is examined with the extreme bounds analysis (EBA). Contrary to the findings by Levine and Renelt (1992) that cross country growth relationships are fragile, the effects of globalization and some other determinants of the long run growth rate are found to be robust by EBA.
    Keywords: Globalization; Economic growth; Solow model; Africa and Extreme bounds analysis.
    JEL: N01
    Date: 2010–04–07
  12. By: Keefer, Philip
    Abstract: Much of the research on ethnicity, development and conflict implicitly assumes that ethnic groups act collectively in pursuit of their interests. Collective political action is typically facilitated by political parties able to make credible commitments to pursue group interests. Other work, however, emphasizes the lack of political credibility as a source of adverse development outcomes. Evidence presented here uses partisan preferences across 16 Sub-Saharan African countries to distinguish these positions. The evidence is inconsistent with the credibility of party commitments to pursue collective ethnic interests: ethnic clustering of political support is less widespread than expected; members of clustered ethnic groups exhibit high rates of partisan disinterest and are only slightly more likely to express a partisan preference; and partisan preferences are more affected by factors, such as gift-giving, often associated with low political credibility. These findings emphasize the importance of looking beyond ethnicity in analyses of economic development.
    Keywords: Parliamentary Government,Educational Sciences,Social Inclusion&Institutions,Population Policies,Education and Society
    Date: 2010–03–01
  13. By: Markandya, Anil; Ponczek Vladimir; Yi, Soonhwa
    Abstract: This paper adds to aid volatility literature in three ways: First it tests the validity of the aid volatility and growth relationship from various aspects: across different time horizons, by sources of aid, and by aid volatility interactions with country characteristics. Second, it investigates the relationship by the level of aid absorption and spending. Third, when examining the relationship between International Development Association aid volatility and growth, it isolates International Development Association aid volatility due to the recipient country's performance from that due to other sources. The findings suggest that, in the long run, on average, aid volatility is negatively correlated with real economic growth. But the relationship is not even. It is stronger for Sub-Saharan African countries than for other regions and it is not present in middle-income countries or countries with strong institutions. For economies where aid is fully absorbed, aid volatility matters for long-run growth; economies with full aid spending also bear a negative impact of aid volatility on long-run growth. Where aid is not fully absorbed, or where it is not fully spent, the aid volatility relationship is not significant. Looking at International Development Association aid separately, the volatility arising from the recipient country's International Development Association performance does not have a causal relationship with growth. In policy terms, the results suggest that low- income countries with weak institutions, especially in Sub-Saharan Africa, could benefit from reduced aid volatility or from being better prepared for the volatility that is there.
    Keywords: Economic Conditions and Volatility,Development Economics&Aid Effectiveness,Emerging Markets,Gender and Health,Achieving Shared Growth
    Date: 2010–02–01
  14. By: Gebreegziabher, Zenebe (Department of Economics, Mekelle University, and Environmental Economics Policy Forum for Ethiopia (EEPFE)); Mekonnen, Alemu (Department of Economics, Addis Ababa University, Ethiopia); Kassie, Menale (Department of Economics, School of Business, Economics and Law, Göteborg University); Köhlin, Gunnar (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Trees have multiple purposes in rural Ethiopia, providing significant economic and ecological benefits. Planting trees supplies rural households with wood products for their own consumption, as well for sale, and decreases soil degradation. In this paper, we used cross-sectional household-level data to analyze the determinants of household tree planting and explored the most important tree attributes or purpose(s) that enhance the propensity to plant trees. We set up a sample selection framework that simultaneously takes into account the two decisions of tree growers (whether or not to plant tree and how many) to analyze the determinants of tree planting. We used logistic regression to analyze the most important tree attributes contributing to households’ tree-planting decisions. We found that land size, age, gender, tenure security, education, exogenous income, and agro-ecology increased both the propensity to plant trees and the amount of tree planting, while increased livestock holding impacted both decisions negatively. Our findings also suggested that households consider a number of attributes in making decision to plant trees. These results can be used by policymakers to promote tree planting in the study area by strengthening tenure security and considering households’ selection of specific tree species for their attributes (criteria).<p>
    Keywords: Tree planting; tree species; tree attributes/purposes; sample selection; Tigrai; Ethiopia
    JEL: Q20 Q23 Q28
    Date: 2010–02–18
  15. By: Dirk Kohner (GIGA German Institute of Global and Area Studies)
    Abstract: Recent development cooperation with Guinea-Bissau, focusing on good governance, statebuilding and conflict prevention, did not contribute to democratization nor to the stabilization of volatile political, military and economic structures. The portrayal of Guinea- Bissau as a failed “narco-state”, as well as Western aid meant to stabilize this state, are both based on dubious concepts. Certainly, the impact of drug trafficking could endanger democratization and state-building if continued unchecked. However, the most pressing need is not state-building facilitated by external aid that is poorly rooted in the social and political fabric of the country. Rather, it is grassroots nation-building that is a pre-condition for the creation of viable state institutions.
    Keywords: Guinea-Bissau, elections, democratization, informal institutions, aid, nationbuilding, institution building, drug trafficking
    Date: 2010–02
  16. By: Tchale, Hardwick; Keyser, John
    Abstract: The Government of Malawi has since 2005 been pursuing a growth strategy mainly based on increasing the volume of agricultural exports. This entails that Malawi should endeavor to improve the competitiveness of its agricultural commodities so as to gain an increasing share of the regional and international markets. This paper analyzes the competitiveness of the country's key agricultural commodities -- tobacco, maize, cotton, and rice -- using prices that prevailed in the 2007/08 agricultural season. The paper employs a quantitative value chain methodology to assess the country's prospects for competitiveness and suggest weak links along the value chain that require attention in order to improve trade competitiveness. The results indicate that Malawi has some competitive advantage in the production and exportation of tobacco and cotton, and that this mostly derives from its low labor cost advantage. However, the results indicate that based on 2007/08 prices and costs, Malawi does not have competitive edge in maize and rice production for export. As such, Malawi would better pursue an import substitution strategy in these cereals, and perhaps only aim at the export market when regional market opportunities arise. Key factors that underpin Malawi's narrow competitiveness include the high cost of inorganic fertilizer and other inputs, low productivity, and the higher trader margins and intermediation costs along the value chains. Furthermore, farm gate prices in Malawi are higher than in other countries, and this undercuts its trade competitiveness.
    Keywords: Transport Economics Policy&Planning,Crops&Crop Management Systems,Economic Theory&Research,Markets and Market Access,Climate Change and Agriculture
    Date: 2010–03–01
  17. By: Jocelyne Delarue (AFD, Département de la Recherche); Sandrine Mesplé-Somps (DIAL, IRD, Paris); Jean-David Naudet (AFD, Département de la Recherche); Anne-Sophie Robilliard (DIAL, IRD, Paris)
    Abstract: (english) In Mali, the situation of cotton growing households has traditionally been considered as more favorable than that of food crop producers. However, official statistics on poverty suggest that the cotton growing region of Sikasso is among the poorest regions of the country and that cotton producers are on average poorer than all other farmers. This article offers a detailed analysis of this paradox, the so-called Sikasso paradox. The official statistics on poverty are set out and data and methodological issues are exposed.The reworking of the data led to the conclusion that cotton producers have an “advantage” over other farmers. This analysis underlines the need for open debate concerning data – an oft neglected step in the analysis of development policy. _________________________________ (français) Au Mali, il est entendu que la situation des producteurs de coton est meilleure que celle des producteurs de produits viviers. Cependant, les statistiques officielles de la pauvreté suggèrent que la région de Sikasso - région dans la quelle le coton est essentiellement cultivé fait partie des régions les plus pauvres du pays et que les producteurs de coton sont en moyenne plus pauvres que les autres agriculteurs. Cet article examine en détail ce paradoxe, souvent nommé le paradoxe de Sikasso, ainsi que ses enjeux en termes d’économie politique du « chiffre ». Nous analysons en détail les statistiques officielles et les problèmes méthodologiques qu’elles posent. Nous montrons que finalement les producteurs de coton connaissent de meilleures conditions de vie que les autres agriculteurs. La conclusion d’un tel cas d’étude n’est évidemment pas de se détourner de la mesure des conditions de vie des populations. L’exemple de Sikasso plaide au contraire pour que les évaluateurs et concepteurs de politiques publiques accordent une importance première à la fabrication des données, et que ces dernières fassent l’objet d’un débat contradictoire. Dans tous les instruments de pilotage, de conception et d’évaluation des politiques publiques, la collecte et le traitement des données devraient sans doute recueillir une attention au moins aussi importante que leur analyse, et susciter tout autant la contradiction.
    Keywords: Africa; Mali; Poverty; Cotton.
    JEL: O13 O15 O55
    Date: 2009–11
  18. By: Diao, Xinshen; Nwafor, Manson; Alpuerto, Vida; Akramov, Kamiljon; Salau, Sheu
    Abstract: This study uses an economy-wide, dynamic computable general equilibrium (DCGE) model to analyze the ability of growth in various agricultural subsectors to accelerate overall economic growth and reduce poverty in Nigeria over the next years (2009-17). In addition, econometric methods are used to assess growth requirements in agricultural public spending and the relationship between public services and farmers’ use of modern technology. The DCGE model results show that if certain agricultural subsectors can reach the growth targets set by the Nigerian government, the country will see 9.5 percent annual growth in agriculture and 8.0 percent growth of GDP over the next years. The national poverty rate will fall to 30.8 percent by 2017, more than halving the 1996 poverty rate of 65.6 percent and thereby accomplishing the first Millennium Development Goal (MDG1). This report emphasizes that in designing an agricultural strategy and prioritizing growth, it is important to consider the following four factors at the subsectoral level: (i) the size of a given subsector in the economy; (ii) the growth-multiplier effects occurring through linkages of the subsector with the rest of the economy; (iii) the subsector-led poverty reduction-growth elasticity; and (iv) the market opportunities and price effects for individual agricultural products. In analyzing the public investments that would be required to support a 9.5 percent annual growth in agriculture, this study first estimates the growth elasticity of public investments using historical spending and agricultural total factor productivity (TFP) growth data. The results show that a 1 percent increase in agricultural spending is associated with a 0.24 percent annual increase in agricultural TFP. With such low elasticity, agricultural investments must grow at 23.8 percent annually to support a 9.5 percent increase in agriculture. However, if the spending efficiency can be improved by 70 percent, the required agricultural investment growth becomes 13.6 percent per year. The study also finds that investments outside agriculture benefit growth in the agricultural sector. Thus, assessments of required growth in agricultural spending should include the indirect effects of nonagricultural investments and emphasize the importance of improving the efficiency of agricultural investments. To further show that efficiency in agricultural spending is critically important to agricultural growth, this study utilizes household-level data to empirically show that access to agricultural services has a significantly positive effect on the use of modern agricultural inputs.
    Keywords: Agricultural growth, agricultural investments, agricultural services, Development strategies, Dynamic Computable General Equilibrium (DCGE), low elasticity, market opportunities, Millennium Development Goals (MDG), modern agricultural inputs, nonagricultural investments, Poverty reduction, Public investments, Total factor productivity (TFP),
    Date: 2010
  19. By: Olsson, Ola (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: In this article, we use a unique database on 542 villages in southwestern Darfur to analyze patterns of population growth and land reallocation that have emerged as a consequence of the recent conflict. Our analysis demonstrates that a displacement from this region alone of more than 300,000 people from three targeted African groups has occurred and that villages have been repopulated by Arab and other African groups. Almost a fourth of all villages have been squatted by newly settled populations. The probability of squatting is shown to be largest in peripheral areas with good access to surface water, where soils are of good quality, and where many households from targeted tribes have fled. A key challenge in post-conflict reconstruction will therefore be the restoration of rights to land.<p>
    Keywords: Population growth; land redistribution; reconstruction; Darfur
    JEL: O41 P16
    Date: 2010–01–29
  20. By: Simler, Kenneth R.
    Abstract: World prices for staple foods increased between 2006 and 2008, and accelerated sharply in 2008. Initial analysis indicated that the adverse effects of higher food prices in Uganda were likely to be small because of the diversity of its staple foods, high level of food self-sufficiency, and weak links with world markets. This paper extends the previous analyses, disaggregating by regions and individual food items, using more recent price data, and estimating the impact on consumption poverty. The analysis finds that poor households in Uganda tend to be net buyers of food staples, and therefore suffer welfare losses when food prices increase. This is most pronounced in urban areas, but holds true for most rural households as well. The diversity of staple foods has not been an effective buffer because of price increases across a range of staple foods. The paper estimates that both the incidence and depth of poverty have increased -- at least in the short run -- as a result of higher food prices in 2008, increasing by 2.6 and 2.2 percentage points, respectively. The increase in poverty is highest in the Northern region, which is already the poorest in Uganda. The need for mitigating social protection measures appears to be greater than previously recognized. Not only are the negative impacts larger, but they are also much more widespread geographically. This suggests the need for continued close monitoring of the situation, including monitoring the adequacy of existing safety nets and feeding programs.
    Keywords: Food&Beverage Industry,Rural Poverty Reduction,Regional Economic Development,Markets and Market Access
    Date: 2010–02–01
  21. By: You, Gene Jiing-Yun; Ringler, Claudia
    Abstract: Ethiopia is susceptible to frequent climate extremes such as disastrous droughts and floods. These disastrous climatic events, which have caused significant adverse effects on the country’s economy and society, are expected to become more pronounced in the future under climate change. To identify the potential threat of climate change to the Ethiopian economy, this study analyzes three major factors that are changing under global warming: water availability under higher temperatures and changing precipitation patterns, the impact of changing precipitation patterns on flooding, and the potential impact on crop production of the carbon dioxide (CO2) fertilization effect. These issues are analyzed based on an existing multi-market-sector model for the Ethiopian economy, with a focus on agriculture. Our analysis finds that the major impact of climate change on Ethiopia’s economy will result from more frequent occurrence of extreme hydrologic events, which cause losses in both the agricultural and nonagricultural sectors. To adapt to these long-term changes, Ethiopia should invest in enhanced water control to expand irrigation and improve flood protection.
    Keywords: carbon dioxide (CO2) fertilization effect, Climate change, Droughts, floods, Global warming, hydro-economic modeling, hydrologic events,
    Date: 2010
  22. By: Zelalem Yilma Debebe
    Abstract: The author studies the effect of an agricultural shock and a labor sharing arrangement (informal social network) on child labor. Albeit bad parental preference to child labor (as the strand of literature claims), poor households face compelling situations to send their child to work. This is, especially, true when they are hit by an income shock and face a binding adult labor constraint. The author used panel data from the ERHS and employed a fixed effects model to pin down causal relation between shocks, membership in a labor sharing arrangement and child labor. It was found that child labor is, indeed, a buffer stock. Though a labor sharing arrangement doesn’t affect child labor at normal times, it helps households to lessen the pressure to rely on it when hit by idiosyncratic shocks. While almost the whole effect of these shocks is offset by participation in a labor sharing arrangement, the covariate shock is not. Even if this may well affect a child’s academic performance, school attendance doesn’t decrease. This differential effect of shocks on child labor in participant households might be because of the extra adult labor made available or due to mutual support that comes with these social networks. This paper is indicative of the importance of considering social networks in smoothing out consumption. Further, it highlights the difficulty to cope up with covariate shocks and hence, calls for development interventions that are particularly meant to address their impact.
    Keywords: child labor, shocks, labor sharing, social networks, Ethiopia
    Date: 2010
  23. By: Olusegun Ayodele Akanbi
    Abstract: This study empirically examines the pattern of domestic investment that is consistent with a neoclassical supply-side model of the Nigerian economy. The estimations are carried out with time-series data from 1970 to 2006 using the Johansen estimation techniques. The results conform to the findings of existing literature that real output, user cost of capital, and the level of financial development are significant determinants of domestic investment in Nigeria. The distinctive feature of the study is the significant role played by governance in explaining the long-term pattern of domestic investment in Nigeria. The results from the long-run estimation and the impulse responses revealed that a well-structured and stable socio-economic environment will boost domestic investment over the long run. Therefore, in modelling domestic investment for Nigeria, it is imperative to incorporate the significant role played by governance.
    Keywords: Investment; Governance; Nigeria
    JEL: E22 E21 G39
    Date: 2010
  24. By: Renate Hartwig; Michael Grimm
    Abstract: In 2002 Malawi experienced a serious shortage of cereals due to adverse climatic conditions. The World Food Programme assumed that about 2.1 to 3.2 million people were threatened of starvation at that time. However, not much research has been undertaken to investigate the actual consequences of this crisis. In particular, little is known about how the crisis affected the health status of children. Obviously, quantifying the health impact of such a crisis is a serious task given the lack of data and the more general problem of relating outcomes to specific shocks and policies. In this paper a difference-in-difference estimator is used to quantify the impact of the food crisis on the health status of children. The findings suggest that at least in the short run, there was neither a significant impact on child mortality nor on malnutrition. This would suggest that the shock might have been less severe than initially assumed and that the various policy interventions undertaken at the time have been effective or at least sufficient to counteract the immediate effects of the crisis.
    Keywords: child mortality, malnutrition, food crisis, Malawi
    Date: 2010
  25. By: Grant P. Kabango; Alberto Paloni
    Abstract: It has been suggested that financial liberalisation may be a key policy to promote industrialisation as it removes the credit access constraint on firms, especially small and medium ones. We investigate the effect of credit expansion in the wake of liberalisation on the structure of the industrial sectors in Malawi and find that, in contrast to the hypothesis above, it resulted in an increase in industrial concentration and a decrease in net firm entry, especially in sectors that are more finance dependent. The case of Malawi is interesting because financial liberalisation has been justified precisely as a means for industrial development and because the implementation of the policy has been regarded as relatively successful.
    JEL: O16 O55 G20
    Date: 2010–03
  26. By: Luyinduladio, Menga
    Abstract: This study examines for period going from 2002 to 2007 in the case of the Democratic Republic of Congo, the existence of a degree of pass through between the rate of exchange and inflation. The model VAR was chooses in order to clarify the relation which exists between the reactions of the general index of the price the consumer domestic, of the price index of the gasoline following the innovations of the rate of exchange. The results of the empirical analysis show that the innovations on the rate of exchange (DE) involve a rapid answer on the consumer price index (IPC) and the price index of gasoline (IPP). This is explained by the fact, as announces Krugman(2006) that in "an inflationary economy, it is difficult to simply modify the rate of real exchange by changing the rate of nominal exchange, insofar as the rise of the request which results from it quickly causes an interior inflation and thus a rise of the domestic prices".
    Keywords: Inflation; taux de change; Degré de répercussion; modèle VAR
    JEL: C22 F41 E41
    Date: 2010–04–08
  27. By: Bardasi, Elena; Beegle, Kathleen; Dillon, Andrew; Serneels, Pieter
    Abstract: Labor market statistics are critical for assessing and understanding economic development. In practice, widespread variation exists in how labor statistics are measured in household surveys in low-income countries. Little is known whether these differences have an effect on the labor statistics they produce. This paper analyzes these effects by implementing a survey experiment in Tanzania that varied two key dimensions: the level of detail of the questions and the type of respondent. Significant differences are observed across survey designs with respect to different labor statistics. Labor force participation rates, for example, vary by as much as 10 percentage points across the four survey assignments. Using a short labor module without screening questions on employment generates lower female labor force participation and lower rates of wage employment for both men and women. Response by proxy rather than self-report yields lower male labor force participation, lower female working hours, and lower employment in agriculture for men. The differences between proxy and self reporting seem to come from information imperfections within the household, especially with the distance in age between respondent and subject playing an important role, while gender and educational differences seem less important.
    Keywords: Labor Markets,Labor Policies,Work&Working Conditions,Social Analysis,Housing&Human Habitats
    Date: 2010–01–01

This nep-afr issue is ©2010 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.