nep-afr New Economics Papers
on Africa
Issue of 2010‒05‒22
fourteen papers chosen by
Quentin Wodon
World Bank

  1. An Empirical Analysis of Cellular Demand in South Africa By Gasmi, Farid; Ivaldi, Marc; Recuero Virto, Laura
  2. Reflections on Africa's Wars By Azam, Jean-Paul
  3. Revisiting the âCotton Problemâ: A comparative analysis of cotton reforms in Sub-Saharan Africa By Delpeuch, Claire; Vandeplas, Anneleen; Swinnen, Johan F.M.
  4. Learning-by-Exporting and Destination Effects: Evidence from African SMEs By Boermans, Martijn Adriaan
  5. A Life Insurance Deterrent to Risky Behavior in Africa By de Araujo, Pedro; Murray, James
  6. How do Roads Spread AIDS in Africa? A Critique of the Received Policy Wisdom By Djemaï, Elodie
  7. Agricultural Distortions in Sub-Saharan Africa: Trade and Welfare Indicators, 1961 to 2004 By Croser, Joanna; Anderson, Kym
  8. Fiscal adjustment and growth in Sub-Saharan Africa : overview and lessons from the current downturn By Fofack, Hippolyte
  9. The Marginal Cost of Public Funds and Tax Reform in Africa By Auriol, Emmanuelle; Walters, Michael
  10. Politiques actives du marché du travail en Afrique : un cadre d'analyse théorique By Adama Zerbo
  12. Internal migration in Ghana : determinants and welfare impacts By Ackah, Charles; Medvedev, Denis
  13. Food Security and Nutition trend in Nigeria By Omotor, Douglason G.

  1. By: Gasmi, Farid; Ivaldi, Marc; Recuero Virto, Laura
    Date: 2009–09
  2. By: Azam, Jean-Paul
    Date: 2009–10
  3. By: Delpeuch, Claire; Vandeplas, Anneleen; Swinnen, Johan F.M.
    Abstract: The cotton sector has been amongst the most regulated in Africa, and still is to a large extent in West and Central Africa (WCA), despite repeated reform recommendations by international donors. On the other hand, orthodox reforms in East and Southern Africa (ESA) have not always yielded the expected results. This paper uses a stylized contracting model to investigate the link between market structure and equity and efficiency in sub-Saharan cotton sectors and analyze the potential consequences of orthodox reforms in WCA. We argue that the level of the world price and of government intervention, the degree of post-reform competition, as well as the degree of parastatal inefficiency, all contribute to making reforms less attractive (but not less pressing) to farmers and governments in WCA today, as compared to ESA in the 1990s. We illustrate our arguments with empirical observations on the performance of cotton sectors across sub-Saharan Africa.
    Keywords: Sub-Saharan Africa, cotton reforms, self-enforcing contracts, Agricultural and Food Policy, Crop Production/Industries, Institutional and Behavioral Economics, Q12, L33, O12,
    Date: 2010
  4. By: Boermans, Martijn Adriaan
    Abstract: Vast empirical evidence underscores that exporting firms are more productive than non-exporters. As governments accordingly pursue export-promoting policies we are interested in the firmness of these conclusions with respect to African small and medium sized enterprises (SMEs) and the influence of the destination of export trade. Using a micro-panel dataset from five African countries we confirm the self-selection. We apply propensity scores to match exporters and use a difference-in-difference methodology to test if African SMEs experience productivity gains because of export participation. Results indicate that African firms significantly learn-by-exporting. Manufacturers obtain significant performance improvements due to internationalization although this effect is moderated by export destination. Firms that export outside Africa become more capital intensive and at the same time hire more workers. In contrast we find evidence that exporters within the African region significantly downsize in capital intensity. Results regarding skill-bias of internationally active firms are mixed, where exporters within the region expand in size and hire more relatively unskilled workers.
    Keywords: learning-by-exporting; destination effects; firm-level; Africa; propensity scores
    JEL: D21 O55 F14 O12 L60
    Date: 2010–03–21
  5. By: de Araujo, Pedro; Murray, James
    Abstract: The spread of HIV and AIDS and risky sexual behavior continues to be a problem in Sub-Saharan African countries despite government measures to educate people on the risk and severity of the disease and measures to promote safe sex practices such as making condoms readily available at reduced or no cost. We examine whether people decide to engage in risky sexual behavior due to low income and low life expectancy. Sub-Saharan Africa is characterized by conditions that significantly reduce life expectancy such as unsanitary conditions prevalent in poverty stricken areas, inaccessibility to health care, and dangerous working conditions such as those in very poor mining regions. Moreover, since income per capita in these countries is very low, the opportunity cost associated with dying from AIDS and foregoing future consumption is very low. We examine how a government provided life insurance benefit may be an effective means of deterring risky sexual behavior. To evaluate this policy prescription we develop a life-cycle model with personal and family consumption and endogenous probability of survival. In the model, agents can receive life insurance benefits if their death is not the result of AIDS. We demonstrate that excessive risky behavior does result from low life expectancy and low levels of income and illustrate the conditions for which the life insurance benefit can replicate the effects of higher income and life expectancy, deterring risky sexual behavior and reducing the spread of HIV/AIDS.
    Keywords: AIDS; life-cycle; life expectancy; sub-Saharan Africa
    JEL: H51 I18 I38
    Date: 2010–05–12
  6. By: Djemaï, Elodie
    Abstract: This paper empirically analyzes the influence of road proximity on HIV-infection using geographical data on road infrastructure and the Demographic and Health Surveys collected in six African countries. Firstly we show that living in proximity to a major road increases the individual risk of infection. This observed relationship is found to be sensitive to the use of the road and to be robust after correcting for potential selection bias related to the non random placement of people. Secondly, our findings reveal that road infrastructure improves the level of HIV/AIDS-knowledge and facilitates access to condoms, providing no support to the hypothesis that HIV-infection is purely due to ignorance and misfortune. Thirdly, we find that the increased risk of infection is driven by a higher likelihood of engaging in casual sexual partnerships that more than osets the eect of the increased use of condoms.
    Keywords: HIV/AIDS epidemic, spatial inequalities, risk taking
    JEL: I10 O12 O18
    Date: 2009–11
  7. By: Croser, Joanna; Anderson, Kym
    Abstract: For decades, agricultural price and trade policies in Sub-Saharan Africa hampered farmersâ contributions to economic growth and poverty reduction. While there has been much policy reform over the past two decades, the injections of agricultural development funding, together with on-going regional and global trade negotiations, have brought distortionary policies under the spotlight once again. A key question asked of those policies is: how much are they still reducing national economic welfare and trade? Economy-wide models are able to address that question, but they are not available for many poor countries. Even where they are, typically they apply to just one particular previous year and so are unable to provide trends in effects over time. This paper provides a partial-equilibrium alternative to economy-wide modelling, by drawing on a modification of so-called trade restrictiveness indexes to provide theoretically precise indicators of the trade and welfare effects of agricultural policy distortions to producer and consumer prices over the past half-century. We generate time series of country level indices, as well as Africa-wide aggregates. We also provide annual commodity market indices for the region, and we provide a sense of the relative importance of the key policy instruments used.
    Keywords: Distorted incentives, agricultural price and trade policies, trade restrictiveness index, International Development,
    Date: 2010
  8. By: Fofack, Hippolyte
    Abstract: In light of the proliferation of exceptionally large fiscal stimuli to ward off the recession triggered by the 2008 global economic and financial crisis in most advanced economies, this paper revisits the fiscal adjustment and growth nexus in Sub-Saharan Africa. Using transfer functions, it quantifies expected losses in terms of aggregate output largely attributed to a systematic implementation of pro-cyclical expenditure switching and reducing policies to achieve low deficit targets throughout the decades ofadjustments. The results consistently highlight a much higher predicted aggregate output under the hypothesized counter-cyclical fiscal expansion option. This consistent outcome suggests that the output gap would have been significantly smaller in the region if countries had drawn on stop-and-go policies of fiscal expansion to sustainably raise the stock of capital investments.
    Keywords: Debt Markets,Public Sector Expenditure Policy,Fiscal Adjustment,Economic Stabilization,Economic Theory&Research
    Date: 2010–05–01
  9. By: Auriol, Emmanuelle; Walters, Michael
    Abstract: In this paper we propose estimates of the marginal cost of public funds (MCF) in 38 African countries. We develop a simple general equilibrium model that can handle taxes on five major tax classes, and can be calibrated with little more than national accounts data. Our base case estimate of the average MCF from marginal increases in all five tax instruments is 1.2. Focusing on the lowest cost tax instruments in each country, commonly the VAT but not always, the average MCF is 1.1. A key feature of our model is explicit recognition of the informal economy. The larger the informal economy, the higher MCFs tend to be. Extending the tax base to include sections of the informal economy by removing some tax exemptions offers the potential for a low MCF source of public funds, and a lowering of MCFs on other tax instruments.
    JEL: D43 H25 H26 H32 H60
    Date: 2009–11
  10. By: Adama Zerbo (GED, Université Montesquieu Bordeaux IV)
    Abstract: Ce travail s’est fixé pour objectif de formuler des fondements théoriques des politiques actives du marché du travail en Afrique. En s’appuyant sur la théorie des trajectoires notionnelles, un modèle dynamique de l’emploi a été développé. L’analyse du modèle montre que lorsque la population active adopte des stratégies évolutives d’offre de travail, la dynamique de l’emploi est positive, par contre lorsqu’elle adopte des stratégies de subsistance sur le marché du travail, la dynamique de l’emploi est négative ; l’économie s’installe dans un cercle vicieux de sous-emploi. Dans une telle situation, la mise en œuvre de politiques actives du marché du travail est nécessaire pour rompre le cercle vicieux ou inverser la tendance négative de l’emploi. This paper aimed to formulate theoretical analysis framework of actives labour market policies in Africa. Based on the theory of notional trajectories, a dynamic model of employment has been developed. Analysis of this model shows that when labour force adopts progressive strategies of labour supply, dynamics of employment is positive. By cons when labour force adopts subsistence strategies on the labour market, dynamics of employment is negative, therefore national economy moves into vicious circle of underemployment. In such situation, implementation of actives labour market policies is needed to break the vicious circle or reverse negative trend of employment.(Full text in french)
    JEL: J21 J24
    Date: 2010–05
  11. By: Mkwara, Bentry
    Abstract: Three key questions are addressed in this paper: (1) Have Malawiâs tobacco policy reforms led to improvements in the absolute prices that smallholders get? (2) How do the prices that smallholders receive compare with what the rich estate owners get? (3) Are there any lessons that Malawi can learn from the Australian experiences? Results from three tests, namely the empirical fluctuation process (efp) test, Poe, et al. (1994) convolutions test and Kolmogorov-Smirnov (KS) test indicate that overtime tobacco policy reforms have indeed led to some improvements in both absolute and relative prices that smallholder farmers receive. However, when compared with Victoria in 2006, Malawiâs tobacco land use is nearly 256 times more than Victoria and engages more farmers but gets far less farm gate value from tobacco. Adoption of modern farming technologies, specialization and value adding at the domestic scene can be appropriate lessons for Malawi. The closure of the Victorian tobacco industry in 2006 suggests that relying on tobacco as the only tool for Malawiâs economic growth and poverty reduction may not be sustainable in the long run. There is need to diversify to other crops such as cotton, pulses, cassava, and bananas.
    Keywords: Marketing,
    Date: 2010
  12. By: Ackah, Charles; Medvedev, Denis
    Abstract: Using a recently compiled dataset on migration and remittances in Ghana, this paper estimates the determinants of an individual’s likelihood to be an internal migrant and the relationship between internal migration and welfare. The analysis finds that the likelihood to migrate is determined by a combination of individual (pull) and community-level (push) characteristics. The probability of migration is higher for younger and more educated individuals, but communities with higher levels of literacy, higher rates of subsidized medical care, and better access to water and sanitation are less likely to produce migrants. The analysis finds that households with migrants tend to be better off than similar households without migrants, even after controlling for the fact that households with migrants are a non-random sample of Ghanaians. However, the positive relationship is only true for households with at least one migrant in urban areas; the welfare of households with migrants exclusively in rural areas is no different from households without any migrants.
    Keywords: Population Policies,Anthropology,Gender and Development,Remittances,Voluntary and Involuntary Resettlement
    Date: 2010–04–01
  13. By: Omotor, Douglason G.
    Abstract: Nigeria has a chequered history of food production, sustainability and food security. This paper discusses the food and nutrition situation of Nigeria, it highlights some of the socio-economic factors- price, income, employment, demography (population density) that has influenced the food consumption system (supply, distribution, consumption) and addresses some of the major issues that would arise therein. It was observed that more Nigerians live below the poverty line and are food insecure. To overcome the problem of food insecurity in Nigeria, the paper posits that agriculture deserves all necessary support to raise its output. The political will of leaders at all levels of governance is also solicited.
    Keywords: Food security; socio-economic; food consumption system; Agriculture; Nigeria
    JEL: I31
    Date: 2009–09–25
  14. By: Aye, Goodness C.; Mungatanga, E.D.
    Abstract: The study evaluates the technical, allocative and cost efficiencies of maize farmers and analyses the impact of technological innovations on these efficiency measures. The investigation of farm efficiency is of vital importance from both microeconomic and macroeconomic points of view. It indicates the potentials there is to improve productivity, household welfare, overall economic growth and poverty reduction by improving efficiency. It also assists policy makers in better targeting and priority setting. Policy conclusions may vary with the approach used for analysis. A number of efficiency studies in Nigeria employed the stochastic production or cost function approach. While the former may suffer from simultaneous equation bias, the later may not be practical when there is limited input price variation among farms as is evidenced in the study area or when there is a systematic deviation from cost minimizing behaviour. This study contributes methodologically by employing a parametric stochastic input distance function approach that avoids all of these problems. Results show that there is considerable inefficiency among the maize farmers and that technological innovations have significant positive impact on efficiency. Thus there is need for further public investment in maize technology development and other policy factors expected to bring about efficiency improvement of the farmers.
    Keywords: Community/Rural/Urban Development,
    Date: 2010

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.