nep-afr New Economics Papers
on Africa
Issue of 2011‒01‒16
eighteen papers chosen by
Quentin Wodon
World Bank

  1. Market Access, Soil Fertility, and Income in East Africa By Takashi Yamano; Yoko Kijima
  2. Fertilizer Policies, Price, and Application in East Africa By Takashi Yamano; Ayumi Arai
  3. Price Dynamics in Tanzanian Maize Markets: Insights from a Semiparametric Cointegration Model By Rico Ihle; Stephan von Cramon-Taubadel
  4. Fifteen Years On: Household Incomes in South Africa By Murray Leibbrandt; James Levinsohn
  5. Deadly Cities? A Note on Spatial Inequalities in Mortality in Sub-Saharan Africa By Isabel Günther; Kenneth Harttgen
  6. Value chain analysis of Paprika and Bird's Eye Chillies in Malawi By Makoka, Donald; Chitika, Rollins; Simtowe, Franklin
  7. The Maize Farm-Market Price Spread in Kenya and Uganda By Takashi Yamano; Ayumi Arai
  8. Assessing Seasonal Asymmetric Price Transmission in Ghanaian Tomato Markets With the Johansen Estimation Method By Rico Ihle; Joseph Amikuzuno
  9. Food crisis, household welfare and HIV/AIDS treatment : evidence from Mozambique By de Walque, Damien; Kazianga, Harounan; Over, Mead; Vaillant, Julia
  10. The Impacts of Fertilizer Credit on Crop Production and Income in Ethiopia By Tomoya Matsumoto; Takashi Yamano
  11. The lion’s share. An experimental analysis of polygamy in Northern Nigeria. By Alistair Munro; Bereket Kebede; Marcela Tarazona-Gomez; Arjan Verschoor
  12. Domestic Work Time in Sierra Leone By Wodon, Quentin; Ying, Yvonne
  14. Methods of household consumption measurement through surveys : experimental results from Tanzania By Beegle, Kathleen; De Weerdt, Joachim; Friedman, Jed; Gibson, John
  15. Income Generation and Intra-Household Decision Making: A Gender Analysis for Nigeria By Angel-Urdinola, Diego; Wodon, Quentin
  16. How Does Growth Affect Labor Income by Gender? A Structural Path Analysis for Tanzania By Parra, Juan Carlos; Wodon, Quentin
  17. Gender Labor Income Shares and Human Capital Investment in the Republic of Congo By Backiny-Yetna, Prospere; Wodon, Quentin
  18. Togo growth diagnostics By Lundstrom, Susanna; Garrido, Leonardo

  1. By: Takashi Yamano (Foundation for Advanced Studies on International Development; National Graduate Institute for Policy Studies); Yoko Kijima (Tsukuba University)
    Abstract: We identify the major factors affecting farm and nonfarm income by using panel data in Ethiopia, Kenya, and Uganda. We supplement the panel data with household-level soil fertility data and road distance data to the nearest urban center. The proportion of the loose surface roads, instead of tarmac roads, has a clear negative association with crop income, livestock income, and per capita income in both Kenya and Uganda. We also find that soil fertility has a clear positive association with crop and livestock incomes in Kenya, but not in Uganda and Ethiopia. In Kenya, farmers produce not only cereal crops but also high value crops and engage in dairy and other livestock production if the fertility of the soil is good.
    Keywords: Soil Fertility, Market Access, Poverty, Road Infrastructure, East Africa
    Date: 2010–12
  2. By: Takashi Yamano (Foundation for Advanced Studies on International Development; National Graduate Institute for Policy Studies); Ayumi Arai (National Graduate Institute for Policy Studies)
    Abstract: In this chapter, we investigate the determinants of inorganic fertilizer use on major cereal crops in Kenya, Ethiopia, and Uganda. By using panel data in the three countries, we estimate the determinants of the fertilizer price and application at the household level and evaluate the fertilizer policies in each country. The determinants of the DAP price and application in Kenya can be mostly explained by market forces and agro-ecological factors, suggesting that market-based policies would be effective. In Ethiopia, on the other hand, the estimation results indicate that policy related factors determine the fertilizer price and application. Although the subsidy program in Ethiopia may contribute to poverty alleviation, technical returns from such programs could be low. Uganda should learn from the experience from these two neighboring countries.
    Keywords: Fertilizer Price, Fertilizer Policy, Kenya, Uganda, Ethiopia
    Date: 2010–12
  3. By: Rico Ihle (Georg-August-University Göttingen); Stephan von Cramon-Taubadel (Georg-August-University Göttingen)
    Abstract: Maize is a major staple food in Sub-Saharan Africa. Monthly maize prices in Tanzania are analyzed since the country is an important maize producer and exporter in East Africa. We analyze price transmission between the five most important urban regions of Tanzania between 2000 and 2008 which correspond to major maize production or consumption areas. We propose a novel method for the analysis. The semiparametric vector error-correction model allows the partial impact of the past deviations from price equilibria on current price changes to be potentially nonlinear. The nonparametric estimates of these partial influences suggest that they can be adequately modeled by linear functions.
    Keywords: cointegration; maize; nonlinear time series model; price transmission; semiparametric model; Tanzania
    JEL: C32 Q11 Q13
    Date: 2011–01–10
  4. By: Murray Leibbrandt; James Levinsohn
    Abstract: This paper uses national household survey data to examine changes in real per capita incomes in South Africa between 1993 and 2008; the start and the end of the first fifteen years of post-apartheid South Africa. These data show an increase in average per capita real incomes across the distribution. Over this period growth has been shared, albeit unequally, across almost the entire spectrum of incomes. However, kernel density estimations make clear that these real income changes are not dramatic and inequality has increased. We conduct a series of semi-parametric decompositions in order to understand the role of endowments and changes in the returns to these endowments in driving these observed changes in the income distribution. This analysis highlights the positive role played by changes in endowments such as access to education and social services over the period. If these endowment changes were all that changed in South Africa over the post-apartheid period, we would have seen a pervasive rightward shift of the distribution of per capita real incomes. In the rest of the paper we explore why this did not happen.
    JEL: O12
    Date: 2011–01
  5. By: Isabel Günther (ETH Zürich); Kenneth Harttgen (Georg-August University Göttingen)
    Abstract: In this paper we analyze if an `urban mortality penalty\' exists for today\'s developing countries, repeating the history of industrialized nations during the 19th century. We analyze the Demographic and Health Survey (DHS) of 19 Sub-Saharan African countries for differences in child and adult mortality between rural and urban areas. Our findings indicate that child mortality is higher in rural areas for almost all countries. On average child mortality rates are 13.6 percent in rural areas and `only\' 10.8 percent in urban areas. In contrast, average urban adult mortality rates (on average 14.5 percent) have indeed exceeded rural adult mortality rates (on average 12.8 percent) in many of our sample countries in the 2000s. For many countries high child mortality pockets do, however, exist in slum areas within cities. Child mortality rates in slum areas are on average 1.65 times higher than in the formal settlements of cities, but still lower than in rural areas.
    Keywords: mortality; urban; slum; inequality
    JEL: I10 I30 J10 R00
    Date: 2010–12–21
  6. By: Makoka, Donald; Chitika, Rollins; Simtowe, Franklin
    Abstract: Total LandCare Malawi (TLC) is implementing a three-year USAID-funded Spice Promotion in Commercial Enterprises (SPICE) project in collaboration with NALI Limited and ASSNAP. The main aim of the project is to link small-scale spice producers to high-value markets and develop the competitiveness of bird’s eye chillies and paprika through commercial upgrading of the major players in their respective value chains. Under the SPICE project, TLC commissioned the paprika and bird’s eye chillies’ value chain study in February 2010 with the overall objective of providing technical guidance, professional expertise and knowledge on the current status of the paprika and bird’s eye chillies sector in Malawi and the prospects for value addition of the two crops in Malawi. The study covered Dowa, Dedza, Ntcheu, Salima, Nkhotakota, Nkhatabay, Mzimba and Thyolo districts. A value chain approach was used to identify the main players in paprika and bird’s eye chillies sub-sectors, the governance of the respective value chains, the vertical and horizontal linkages along the value chains and opportunities for value chain upgrading. A review of the different policies that relate to agriculture was also done to highlight the extent to which different policies promote or inhibit paprika and bird’s eye chillies production and marketing in Malawi. An analysis of the institutional framework was also conducted to determine the degree of coordination between different institutions in the paprika and bird’s eye chillies sub-sector. Among the major findings of the study, male farmers dominate the production of both paprika and bird’s eye chillies in Malawi and the two crops are largely sold to large-scale traders, most of whom are also exporters of the commodities. The smallholder farmers allocated relatively less land (18 percent) to paprika production in 2009/2010 season, compared to 40 percent of land to bird’s eye chillies. Although production is dominated by small-scale farmers, a number of commercial producers are also involved, such as Africa Invest Malawi. Some of the commercial producers are also engaged in out-grower schemes with the smallholder farmers. It was also observed that a large proportion of the farmers of both paprika and chillies access their seed through market-based sources. Among the major constraints facing the smallholder farmers is access to market information, especially as it relates to prices. Gross margins for bird’s eye chillies were found to be significantly higher (MK79,057/Ha) than that of paprika in the study areas (MK11,553/Ha). The Malawi paprika value chain has a number of actors. Paprika is mostly grown by smallholder producers, with Africa Invest Malawi being the only commercial producer. Apart from NALI LTD that buys fresh paprika as an ingredient into its Mango achar, most of the paprika is sold to large-scale traders/players as de-seeded pods. Most of the Malawi paprika is exported to spice manufacturing companies and brokers in South Africa. The brokers then export the product to Europe and USA, among other markets. The governance of the Malawi paprika value chain rests with the final buyers. In this buyer-driven chain, the quality demanded by the international buyers is enforced through prices. Similarly, the bird’s eye chilli value chain also has few players. The producers are mostly smallholder farmers, who sell their dry chillies to large-scale traders (Nali LTD, Africa Invest Malawi, Cheetah Malawi LTD, and Duconti Produce, among others). The large-scale traders export the commodity mostly to brokers in South Africa, and to end-users in Europe, the United Kingdom and others parts of the developed world. In this buyer-driven chain, prices are dictated by the final consumers. In order to improve the paprika and bird’s eye chillies sector in Malawi, there is an urgent need to substantially increase the production levels and the productivity of the two crops. Specifically, there is need to improve the paprika and bird’s eye chillies seed system; improve farmer’s agronomic practices through the provision of quality agricultural extension services and also improve the organization of farmers into groups. In order to improve marketing of the two commodities there is need to promote legally-binding contracts between producers and buyers, promote value-adding activities and processes so that different players experience value chain upgrading, promote domestic demand for chillies and paprika, promote vertical linkages among the buyers of paprika and chillies, and also improve the quality, timeliness and utilization of market information. On the policy front, there is an urgent need to develop a horticultural policy, as the sector is operating without a policy, an institutional framework or a legislative framework. It is expected that the three-year SPICE project will help the targeted farmers to address the major constraints and challenges highlighted in this report.
    Keywords: value chain analysis; paprika; bird's eye chillies; Malawi
    JEL: Q0
    Date: 2010–07–01
  7. By: Takashi Yamano (Foundation for Advanced Studies on International Development; National Graduate Institute for Policy Studies); Ayumi Arai (National Graduate Institute for Policy Studies)
    Abstract: In this chapter, we analyze the farm-market price spreads of maize in Kenya and Uganda to examine how agricultural sectors are integrated with local markets. The farm-market price spread is calculated by subtracting the farm-gate price from the market price at the nearest maize market. We find that the farm-market price spread of maize is about 15 and 33 percent of the market price in Kenya and Uganda, respectively. In both countries, the price spread increases by 2 percentage points for each additional driving hour away from the nearest maize market. While the former finding suggests that the overall marketing costs are lower in Kenya than in Uganda, the latter finding indicates that reductions in transportation costs will increase the farmer prices of maize in both countries.
    Keywords: Price Spread, Market, Maize, Kenya, Uganda
    Date: 2010–12
  8. By: Rico Ihle (Georg-August-University Göttingen); Joseph Amikuzuno (University for Development Studies, Ghana.)
    Abstract: We assess market integration and price transmission of perishable agricultural produce in Sub-Saharan Africa by studying Ghanaian tomato markets which are characterized by pronounced seasonality in production and trade flows. We analyse the tomato markets of Ghana by simultaneously regarding its five most important markets, Navrongo, Techiman, Kumasi, Tamale and Accra, in a multivariate asymmetric price transmission framework. The estimation of the model is based on a unique dataset and on a modified version of the Johansen estimation procedure which is suitable for estimating such multivariate models. We estimate the price transmission parameters for four regimes which are a combination of the seasonal patterns in trade flows and asymmetries in the long-run price equilibrium between the most important production region (Techiman) and the most important consumption centre for tomatoes (Accra). We find strong evidence for integration of the five markets. In general, price transmission appears to be fast. Disequilibria mainly trigger price responses in the two production regions of Navrongo and Techiman. The regimes are found to matter for the whole system of tomato markets. Disequilibrium is shown to spillover between the price relationships. Consequently, tomato markets in Ghana appear to be integrated and function very well since price signals are rapidly passed through the country.
    Keywords: asymmetric price transmission; cointegration; Ghana; regime-dependent model; seasonality; tomato; vector error-correction model
    JEL: C32 Q11 Q13 F14 F15
    Date: 2011–01–10
  9. By: de Walque, Damien; Kazianga, Harounan; Over, Mead; Vaillant, Julia
    Abstract: Using panel data from Mozambique collected in 2007 and 2008, the authors explore the impact of the food crisis on the welfare of households living with HIV/AIDS. The analysis finds that there has been a real deterioration of welfare in terms of income, food consumption, and nutritional status in Mozambique between 2007 and 2008, among both HIV and comparison households. However, HIV households have not suffered more from the crisis than others. Results on the evolution of labor force participation suggest that initiation of treatment and better services in health facilities have counter-balanced the effect of the crisis by improving the health of patients and their labor force participation. In addition, the authors look at the effect of the change in welfare on the frequency of visits to a health facility of patients and on their treatment outcomes. Both variables can proxy for adherence to treatment. This is a particularly crucial issue as it affects both the health of the patient and public health, because sub-optimal adherence leads to the development of resistant forms of the virus. The paper finds no effect of the change in welfare on the frequency of visits, but does find that people who experienced a negative income shock also experienced a reduction or a slower progression in treatment outcomes.
    Keywords: Health Monitoring&Evaluation,Disease Control&Prevention,Food&Beverage Industry,Gender and Health,Food Security
    Date: 2011–01–01
  10. By: Tomoya Matsumoto (National Graduate Institute for Policy Studies); Takashi Yamano (Foundation for Advanced Studies on International Development; National Graduate Institute for Policy Studies)
    Abstract: In this chapter, we evaluate the impact of fertilizer credit on crop choice, crop yield, and income using two-year panel data of 420 households in rural Ethiopia. The fertilizer credit is found to increase input application for crop production. As a consequence, it has a substantial impact on the yield of teff. We also find that the impact on net crop income per cultivated area and also on per capita income is marginal because of the low profitability due to the low output price and high input cost of agricultural production.
    Keywords: Input Credit, Fertilizer Policy, Agricultural Technology, Crop Production, Ethiopia
    Date: 2010–12
  11. By: Alistair Munro (National Graduate Institute for Policy Studies); Bereket Kebede (School of Development Studies, University of East Anglia); Marcela Tarazona-Gomez (School of Development Studies, University of East Anglia); Arjan Verschoor (School of Development Studies, University of East Anglia)
    Abstract: Using samples of polygamous and non-polygamous households from villages in rural areas south of Kano, Northern Nigeria we test basic theories of household behaviour. Husbands and wives play two variants of a voluntary contributions game in which endowments are private knowledge, but contributions are public. In one variant, the common pool is split equally. In the other treatment the husband allocates the pool (and wives are forewarned of this). Most partners keep back at least half of their endowment from the common pool, but we find no evidence that polygynous households are less efficient than their monogamous counterparts. We also reject a strong form of Bergstrom’s model of polygyny in which all wives receive an equal allocation. In our case, senior wives often receive more from their husbands, no matter what their contribution. Thus the return to contributions is higher for senior wives compared to their junior counterparts. When they control the allocation, polygynous men receive a higher payoff than their monogamous counterparts. We speculate on the implications of this pattern of investment and reward for the sustainability of polygynous institutions.
    Keywords: Polygyny, Polygamy, Experiment, Household, Nigeria
    Date: 2010–12
  12. By: Wodon, Quentin; Ying, Yvonne
    Abstract: The objective of this paper is to provide a descriptive analysis of domestic work time in Sierra Leone using a 2003-2004 household survey that for the first time provides information on time use. Basic statistics on the time allocated to domestic work according to gender, age, urban/rural location status, household consumption status, access to infrastructure, employment, and migration are provided, together with a regression analysis examining the determinants or correlates of domestic time use.
    Keywords: Gender; Time Use; Sierra Leone
    JEL: J22
    Date: 2010–08
  13. By: Usman OWOLABI A (Department of Management Science, Ladoke Akintola University of Technology, Ogbomoso, Nigeria); AKINLO A. E (Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria.)
    Abstract: Recapitalization process that has recently become an imperative process in the Nigerian Financial industry has implications for the survival of insurance sector, especially on their service delivery efficiency. This study therefore seeks to investigate the problem of inefficiency in the Nigerian Insurance market from the perspective of their cost structures. The study takes advantage of secondary data of financial reports of thirty randomly selected insurance firms which span over a period of ten years and applied transcendental logarithm model to evaluate their performance from the cost structures strategy. The results indicate that only large scale firms enjoy cost saving advantages. Twenty percent firms sampled belong to this category. The result suggests that premium income would contribute to insurance firm’s performance, only when a sound investment decisions are made.
    Keywords: Transcedental Logarithm, Cost Structures, Insurance firms and Efficiency
    JEL: G22
    Date: 2010–08
  14. By: Beegle, Kathleen; De Weerdt, Joachim; Friedman, Jed; Gibson, John
    Abstract: Consumption expenditure has long been the preferred measure of household living standards. However, accurate measurement is a challenge and household expenditure surveys vary widely across many dimensions, including the level of reporting, the length of the reference period, and the degree of commodity detail. These variations occur both across countries and also over time within countries. There is little current understanding of the implications of such changes for spatially and temporally consistent measurement of household consumption and poverty. A field experiment in Tanzania tests eight alternative methods to measure household consumption on a sample of 4,000 households. There are significant differences between consumption reported by the benchmark personal diary and other diary and recall formats. Under-reporting is particularly relevant in illiterate households and for urban respondents completing household diaries; recall modules measure lower consumption than a personal diary, with larger gaps among poorer households and households with more adult members. Variations in reporting accuracy by household characteristics are also discussed and differences in measured poverty as a result of survey design are explored. The study concludes with recommendations for methods of survey based consumption measurement in low-income countries.
    Keywords: Consumption,Regional Economic Development,Rural Poverty Reduction,Poverty Lines
    Date: 2010–12–01
  15. By: Angel-Urdinola, Diego; Wodon, Quentin
    Abstract: Even without a comprehensive household survey with detailed consumption and income data, it is still often feasible to conduct useful empirical work on gender and intra-household allocations. This paper documents the extent to which income generation affects decision making within households in Nigeria, using the 2003 CWIQ surveys implemented in eight Nigerian states. While these surveys do not have income and consumption data, they do provide information on labor force participation and whether household members generate income for the household, as well as data on who makes the decisions within the household for a wide range of expenditure categories. This type of data can be used to assess, using simple statistical and econometric methods, the impact of income generation by women on their decision power within the household.
    Keywords: Gender; Labor Income; Intra-household allocations; Decision Power
    JEL: D13 J22
    Date: 2010–08
  16. By: Parra, Juan Carlos; Wodon, Quentin
    Abstract: This paper uses structural path analysis to examine the transmission channels through which an initial shock travels through the economy to affect other accounts of a Social Accounting Matrix. The focus is on the impact of shocks on labor income by gender in Tanzania and the analysis is used to characterize what we call the concentration, strength, and speed of various transmission channels.
    Keywords: Gender; Labor income; Social Accounting Matrix; Structural Path Analysis; Tanzania
    JEL: D57 J22
    Date: 2010–08
  17. By: Backiny-Yetna, Prospere; Wodon, Quentin
    Abstract: This paper uses a recent, nationally representative household survey for the Republic of Congo—the 2005 ECOM (Enquête Congolaise auprès des Ménages) survey—to test the unitary model of household consumption. The study finds that a higher labor income share obtained by women does lead to a higher share of household consumption allocated to investments in human capital (as proxied through spending for food, education, health, and children’s clothing). The impact is not negligible and it is statistically significant, suggesting long-term benefits through children from efforts to increase female labor income.
    Keywords: Gender; Labor Income; Consumption Patterns; Republic of Congo
    JEL: D13 J22 J16
    Date: 2010–08
  18. By: Lundstrom, Susanna; Garrido, Leonardo
    Abstract: This paper starts by analyzing past growth trends and sources of growth in Togo, as well as the structure of the economic actors in the country. The second part explores the current binding constraints to rapid and sustainable growth. For increased international competitiveness and growth, Togo will need to raise efforts to streamline its costly and cumbersome business procedures. However, for this to have a sizable impact, Togo must prove to potential investors that political stability is permanent and that corruption, poor budget execution and mismanagement of state owned enterprises belongs to the past. As a result of the new government's reform agenda and the return of international aid, a window of opportunities for high returns to the still limited public investments has opened up. This is especially true in infrastructure and connectivity services, which would not only take advantage of Togo's geographical location as a regional hub, but also make growth in Togo more inclusive. And as economic opportunities arise for the private sector, there is a need to restructure the banking sector, which has already started, to smooth distortions in the credit market. Promising sectors within agriculture that are vital to economic growth, employment opportunities, and poverty reduction remain important, but will need to overcome a number of coordination failures. Not least due to the history of government interventions causing economic distortions, the government must allow for a stronger role for private operators and encourage it wherever possible. Finally, although education does not exhibit constraints to economic activity in Togo today, it is of importance to improve the quality of education, not least to profit from and catalyze the opportunities related to Togo's potential as a regional hub.
    Keywords: Economic Theory&Research,Access to Finance,Achieving Shared Growth,Banks&Banking Reform,Debt Markets
    Date: 2010–12–01

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