nep-afr New Economics Papers
on Africa
Issue of 2010‒11‒27
twelve papers chosen by
Quentin Wodon
World Bank

  1. Mobilising Tax Revenue to Finance Development: The Case for Property Taxation in Francophone Africa By Nara F. Monkam
  2. Can Africa replicate Asia's green revolution in rice ? By Larson, Donald F.; Otsuka, Keijiro; Kajisa, Kei; Estudillo, Jonna; Diagne, Aliou
  3. Persistence of Inflationary Shocks On: Implications for West African Monetary Union Membership By Paul Alagidede; Simeon Coleman; Juan Carlos Cuestas
  4. Why a Diversified Portfolio Should Include African Assets By Paul Alagidede; Theodore Panagiotidis; Xu Zhang
  5. Stock Market Development in Africa: do all macroeconomic financial intermediary determinants matter? By Asongu , Anutechia Simplice
  6. When does rigorous impact evaluation make a difference ? the case of the millennium villages By Clemens, Michael A.; Demombynes, Gabriel
  7. Fiscal Effects of Aid By Mark McGillivray; Oliver Morrissey
  8. Diamonds are not forever : Botswana medium-term fiscal sustainability By Kojo, Naoko C.
  9. From Conflict to Reconstruction By Tony Addison
  10. Regional trade policy options for tanzania : the importance of services commitments By Jensen, Jesper; Tarr, David G.
  11. La fin des exonérations de TVA sur les biens agricoles est-elle favorable aux pauvres ? Le cas du Niger By Dorothée Boccanfuso; Céline de Quatrebarbes; Luc Savard
  12. Réduction de Droits de Douane et Convergence Réelle dans l'UEMOA. By FE, Doukouré Charles

  1. By: Nara F. Monkam (Department of Economics, University of Pretoria)
    Abstract: In the context of a widespread focus on decentralisation in Africa, there has been an imperative to find suitable ways to maximise potential own revenue sources at all sub-national government levels. This need in particular and the need for greater domestic resource mobilisation by African states in general have been exacerbated by the current global financial crisis that has led many countries into recession and left developed and developing countries alike scrambling to find solutions at home. Indeed, greater domestic resource mobilisation will go a long way toward providing African countries with the means to finance their development agenda without relying excessively on external assistance.
    Date: 2010–11
  2. By: Larson, Donald F.; Otsuka, Keijiro; Kajisa, Kei; Estudillo, Jonna; Diagne, Aliou
    Abstract: Asia's green revolution in rice was transformational and improved the lives of millions of poor households. Rice has become an increasingly important part of African diets and imports of rice have grown. Agronomists point out that large areas in Africa are well suited for rice and are encouraged by the field tests of new rice varieties. So is Africa poised for its own green revolution in rice? This study reviews the recent literature on rice technologies and their impact on productivity, incomes, and poverty, and compares current conditions in Africa with the conditions that prevailed in Asia as its rice revolution got under way. An important conclusion is that, to a degree, a rice revolution has already begun in Africa. Moreover, many of the same practices that have proved successful in Asia and in Africa can be applied where yields are currently low. At the same time, for many reasons, Africa's rice revolution has been, and will continue to be, characterized by a mosaic of successes, situated where the conditions are right for new technologies to take hold. This can have profound effects in some places. But because diets, markets, and geography are heterogeneous in Africa, the successful transformation of the Africa's rice sector must be matched by productivity gains in other crops to fully launch Africa's Green Revolution.
    Keywords: Agricultural Research,Crops&Crop Management Systems,Climate Change and Agriculture,Food&Beverage Industry,Agricultural Knowledge&Information Systems
    Date: 2010–11–01
  3. By: Paul Alagidede; Simeon Coleman; Juan Carlos Cuestas
    Abstract: Plans are far advanced to form a second monetary union, the West African Monetary Zone (WAMZ), in Africa. While much attention is being placed on convergence criteria and preparedness of the five aspiring member states, less attention is being placed on how the dynamics of inflation in individual countries are (dis)similar. This paper aims to stimulate debate on the long term sustainability of the union by examining the dynamics of inflation within these countries. Using Fractional Integration (FI) methods, we establish that some significant differences exist among the countries. Shocks to inflation in Sierra Leone are non mean reverting; results for The Gambia, Ghana and Guinea-Bissau suggest some inflation persistence, despite being mean reverting. Some policy implications are discussed and possible outstanding policy questions are also raised.
    Keywords: Inflationary shocks, fractional integration, stationarity, West Africa, Monetary unions.
    JEL: C14 E31 E58
    Date: 2010–11
  4. By: Paul Alagidede (Department of Economics, University of Stirling, UK); Theodore Panagiotidis (Department of Economics, University of Macedonia, Greece; RCEA, Italy); Xu Zhang (Economic Research Institute, Guosen Research Institute, China)
    Abstract: We employ parametric and non-parametric cointegration to investigate the extent of integration between African stock markets and the rest of the world. Long-run correlation estimates imply very low association between the two. The two distinct cointegration approaches confirm the latter through recursive estimation. The implication is that global market movements may have little impact on Africa. However, we argue that including African assets in a mean variance portfolio could be beneficial to international investors.
    Keywords: Correlation, Long-run correlation, Cointegration, Non-parametric cointegration, African Stock Markets
    JEL: C22 C52 G10
    Date: 2010–01
  5. By: Asongu , Anutechia Simplice
    Abstract: This study brings light to some financial intermediary development factors that could negate stock market development, as well as those that could improve it. Using a panel of eight countries, from 1989 to 2008, we derive indexes via Principal Component Analysis; based on which panel fixed effect regressions are performed. The principal edge of this work is that, in policy making, not all aspects of financial intermediary development should be prioritized for stock market development.
    Keywords: Financial intermediary development; Stock market development; Africa
    JEL: G1 G2 G0
    Date: 2010–11–22
  6. By: Clemens, Michael A.; Demombynes, Gabriel
    Abstract: When is the rigorous impact evaluation of development projects a luxury, and when a necessity? This Paper studies one high-profile case: the Millennium Villages Project (MVP), an experimental and intensive package intervention to spark sustained local economic development in rural Africa. it illustrates the benefits of rigorous impact evaluation in this setting by showing that estimates of the project's effects depend heavily on the evaluation method. Comparing trends at the MVP intervention sites in Kenya, Ghana, and Nigeria to trends in the surrounding areas yields much more modest estimates of the project's effects than the before-versus-after comparisons published thus far by the MVP. Neither approach constitutes a rigorous impact evaluation of the MVP, which is impossible to perform due to weaknesses in the evaluation design of the project's initial phase. These weaknesses include the subjective choice of intervention sites, the subjective choice of comparison sites, the lack of baseline data on comparison sites, the small sample size, and the short time horizon. The authors describe how the next wave of the intervention could be designed to allow proper evaluation of the MVP's impact at little additional cost.
    Keywords: Housing&Human Habitats,Poverty Monitoring&Analysis,Science Education,Scientific Research&Science Parks,Population Policies
    Date: 2010–11–01
  7. By: Mark McGillivray; Oliver Morrissey
    Abstract: It is clear from the implications of growth theory that the impact of aid depends on how it affects savings, investment and government behaviour. In respect of low-income countries, which are the principal aid recipients and the economies for which the issue of the impact of aid on growth is most important, it is government that is most important. This paper presents a review of studies that address the impact of aid on government fiscal behaviour. In particular, the focus is on fungibility and fiscal response studies. [Discussion Paper No. 2001/61]
    Keywords: fiscal policy, aid, sub-Saharan Africa
    Date: 2010
  8. By: Kojo, Naoko C.
    Abstract: This paper analyzes Botswana's medium-term fiscal sustainability in view of the expected depletion of diamonds in the future. The analysis shows that in the absence of policy adjustments, Botswana's current fiscal policy strategy is unsustainable over the longer term, which could endanger macroeconomic stability and Botswana's reputation as Africa's success story. Ensuring medium-term sustainability of Botswana's public finances requires stronger revenue collection, through improved revenue administration, greater tax enforcement, and the rationalization of tax exemptions in order to realize the full revenue potential. Opportunities also exist to generate more revenue from the non-mining sector through changes in the tax regime. At the same time, the government needs to maximize the effectiveness of public expenditure and bring down public spending to levels that are more in line with long-term revenue prospects. A greater control over the public sector wage bill is critically important. In-house capacity for macroeconomic monitoring and fiscal analysis also needs to be enhanced further. Looking ahead, growth of a dynamic non-mining sector is crucial for Botswana not only from the fiscal sustainability point of view, but from the point of view of achieving balanced development that will create jobs and deliver durable reduction in poverty and inequality. Fiscal policy will have to play a central role in this process.
    Keywords: Debt Markets,Economic Theory&Research,Public Sector Expenditure Policy,Access to Finance,Public Sector Economics
    Date: 2010–11–01
  9. By: Tony Addison
    Abstract: Governments frequently compartmentalize issues of reform and reconstruction into separate strategies and separate ministries (the fate of poverty reduction as well). Donors do likewise, for each has its own responsibilities; the IMF focuses on reform, the UN concentrates on conflict resolution and reconstruction, and the World Bank- whose operations span both the agendas- has yet to integrate reform and conflict issues. However, reform and reconstruction can be kept separate if conflict is to be halted and poverty reduced. [Discussion Paper No. 2001/16]
    Keywords: Sub-Saharan Africa, conflict, economic reform
    Date: 2010
  10. By: Jensen, Jesper; Tarr, David G.
    Abstract: Despite the growing importance of commitments to foreign investors in services in regional trade agreements, there are no applied general equilibrium models in the literature that assess these regional impacts. This paper develops a 52 sector applied general equilibrium model of Tanzania with foreign direct investment, and uses that model to assess Tanzania's regional and multilateral trade options. The model incorporates the features of the modern theory of international trade that has shown empirically that trade and foreign direct investment can increase productivity, and trade and foreign direct investment with technologically advanced countries is especially valuable for that purpose. To assess the sensitivity of the results to parameter values, the model is executed 30,000 times, and the results are reported as confidence intervals of the sample distributions. The analysis finds that a 50 percent preferential reduction in the ad valorem equivalents of barriers in all business services by Tanzania with respect to its African regional partners would be slightly beneficial for Tanzania. But wider liberalization, with larger partners or multilaterally, it will yield much larger gains due to providing access to a much wider set of service providers. Finally, the results show that the largest gains in services would be derived from reduction of regulatory barriers that are geographically non-discriminatory.
    Keywords: Economic Theory&Research,Transport Economics Policy&Planning,Emerging Markets,Environmental Economics&Policies,Banks&Banking Reform
    Date: 2010–11–01
  11. By: Dorothée Boccanfuso (GREDI, Faculte d'administration, Université de Sherbrookel); Céline de Quatrebarbes (CERDI, Universite d'Auvergne); Luc Savard (GREDI, Faculte d'administration, Université de Sherbrooke)
    Abstract: Afin de disposer des ressources publiques nécessaires à son développement, le Niger étudie la possibilité d’élargir l’assiette fiscale de la TVA aux biens exonérés et aux biens d’alimentations de base. Cette proposition a provoqué des oppositions violentes conduisant à poser la question des impacts sociaux de la fiscalité. Nous avons construit le premier modèle d’équilibre général calculable micro-macro de l’économie réelle du Niger, permettant d’analyser l’impact social et de mener une analyse distributive de différents systèmes de TVA : TVA pure, maintien de certaines exonérations, système de TVA à taux multiples. Selon nos résultats, l’impact d’un système de TVA pure à taux unique est préférable en termes de croissance économique néanmoins, les exonérations de TVA dans l’agriculture permettent de ne pas contrecarrer les programmes de lutte contre la pauvreté tout en assurant une augmentation du revenu de l’Etat.
    Keywords: Modèle d’équilibre général calculable, micro-simulation, Taxe sur la Valeur Ajoutée, exonérations, analyse distributive, Niger
    JEL: D58 E62 H22 I32
    Date: 2010–11–16
  12. By: FE, Doukouré Charles
    Abstract: Economic integration in WAEMU is manifested among others policies, by tariffs reductions in order to reinvigorate economic and trade relationshiph between member countries. This study show that the first trade agreement establish after WAEMU creation, has contributed to reduce per capita income disparities in WAEMU. So we show that this south-south trade agremment is profitable for these countries. Beyond the fact that there is significant convergence process among theses countries, I show that the steady state is not unique. There are three convergence clubs in WAEMU. One of them is formed by the richest countries. Those countries converge in their club so does'nt the others. These promote living conditions improvement in the wole WAEMU.
    Keywords: Analyse en double différences; Convergence réelle; Droits de douane; sigma-convergence
    JEL: F15 O10 C23 R11
    Date: 2010–11

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