nep-afr New Economics Papers
on Africa
Issue of 2011‒03‒05
eleven papers chosen by
Quentin Wodon
World Bank

  1. Accounting for the Effects of AIDS on Growth in Sub-Saharan Africa. By Paul Cahu; Falilou Fall
  2. Is the Informal Sector Constrained from the Demand Side? Evidence for Six West African Capitals By Marcus Böhme; Rainer Thiele
  3. Agricultural Productivity Growth in Africa: Is Efficiency Catching-up or Lagging Behind? By Mugera, Amin; Ojede, Andrew
  4. Electricity Intensities of the OECD and South Africa: A Comparison By Roula Inglesi-Lotz; James Blignaut
  5. The "Out of Africa" Hypothesis, Human Genetic Diversity, and Comparative Economic Development By Quamrul Ashraf; Oded Galor
  6. South Africa's Electricity Consumption: A Sectoral Decomposition Analysis By Roula Inglesi-Lotz; James Blignaut
  7. Fiscal Performance and Sustainability of Local Government in South Africa — An Empirical Analysis By Niek J. Schoeman
  9. Nigeria’ Power Sector: Analysis of Productivity By Carlos Pestana Barros; Ade Ibiwoye; Shunsuke Managi
  11. Methodological innovations in estimating the (inverse) relationship between farm productivity and farm size in a developing economy: a case study of Burundi By Verschelde, Marijn; Vandamme, Ellen; DâHaese, Marijke; Rayp, Glenn

  1. By: Paul Cahu (The World Bank); Falilou Fall (Centre d'Economie de la Sorbonne)
    Abstract: In this paper, we first, perform a quantitative assessment of the impact of the HIV/AIDS epidemic on growth. Second, we precisely account for the effects of the epidemic on income per capita through human and physical capital accumulations, population and labor force. That is, we disentangle the effect on the different sources of short and long run growth. Using a dynamic panel of 46 Sub-Saharan African countries over the period 1981-2007, we show that HIV/AIDS has negative, significant and long-lasting effects on demography and growth. According to the estimates presented, GDP per working age population will be 12% lower in the long-run for the average African country than it should be if the epidemic had not spread out. However, the impact is huge for the countries experiencing a high prevalence rate. To tackle the endogeneity issue of HIV/AIDS, we provide a new series of HIV prevalence rate build from the estimation of the propagation dynamic of the epidemic.
    Keywords: Health, AIDS epidemic, human capital, growth, Sub-Saharan Africa.
    JEL: I10 J11 O15 O40 O55
    Date: 2011–01
  2. By: Marcus Böhme; Rainer Thiele
    Abstract: Employing a unique dataset that covers households from six West African capitals, this paper provides new evidence on the demand for informal sector products and services. We first investigate whether demand linkages exist between formal and informal products and distribution channels, and whether there is an overlapping customer base, which would imply that both formal sector wage earners and informal workers buy both formal and informal products using both formal and informal distribution channels. In a second step, we estimate demand elasticities based on Engel curves. We find a strongly overlapping customer base and strong demand-side linkages between the formal and informal sector, with the exception that informal goods are hardly bought through formal distribution channels. The estimated demand elasticities tend to show that rising incomes are associated with a lower propensity to consume informal sector goods and to use informal distribution channels. We therefore conclude that the informal sector in West Africa is likely to be constrained from the demand side
    Keywords: Informal sector; formal-informal linkages; Engel curve estimates; West Africa
    JEL: D12 O17
    Date: 2011–02
  3. By: Mugera, Amin; Ojede, Andrew
    Abstract: Recent empirical studies on agricultural productivity growth in African countries have produced mixed results; some find that uptake of new technology (technical progress) is the main source of total factor productivity growth while others point to improved use of existing technology (efficiency catch-up). This study tests for efficiency catch-up in the agricultural productivity of 33 African countries from 1966 to 2001. We use recent advances in data envelopment analysis (DEA) to generate standard and bootstrap bias corrected technical efficiency scores. In general, we find no evidence of efficiency catching-up. The standard DEA overestimated the efficiency scores of some countries due to small sample bias.
    Keywords: Agriculture, Efficiency Catch-up, Bootstrap DEA, Africa, International Development, Production Economics,
    Date: 2011
  4. By: Roula Inglesi-Lotz (Department of Economics, University of Pretoria); James Blignaut (Department of Economics, University of Pretoria)
    Abstract: Improving a country’s electricity efficiency is considered one of the important ways to reduce its greenhouse gas emissions and to meet its commitments concerning climate change mitigation. In this paper, we conduct a comparative analysis between South Africa and OECD members’ total and sectoral electricity intensities. This is done to establish a sense of South Africa’s relative performance in this regard, to ascertain the possible scope for improvement and, if such scope exists, to determine in which of the industrial sectors.
    Date: 2011–02
  5. By: Quamrul Ashraf (Williams College); Oded Galor
    Abstract: This research argues that deep-rooted factors, determined tens of thousands of years ago, had a significant effect on the course of economic development from the dawn of human civilization to the contemporary era. It advances and empirically establishes the hypothesis that, in the course of the exodus of Homo sapiens out of Africa, variation in migratory distance from the cradle of humankind to various settlements across the globe affected genetic diversity and has had a long-lasting effect on the pattern of comparative economic development that is not captured by geographical, institutional, and cultural factors. In particular, the level of genetic diversity within a society is found to have a hump-shaped effect on development outcomes in both the pre-colonial and the modern era, reflecting the trade-off between the beneficial and the detrimental effects of diversity on productivity. While the intermediate level of genetic diversity prevalent among Asian and European populations has been conducive for development, the high degree of diversity among African populations and the low degree of diversity among Native American populations have been a detrimental force in the development of these regions. Further, the optimal level of diversity has increased in the process of industrialization, as the beneficial forces associated with greater diversity have intensified in an environment characterized by more rapid technological progress.
    Keywords: The "Out of Africa" hypothesis, Human genetic diversity, Comparative development, Income per capita, Population density, Neolithic Revolution, Land productivity
    JEL: N10 N30 N50 O10 O50 Z10
    Date: 2010–08
  6. By: Roula Inglesi-Lotz (Department of Economics, University of Pretoria); James Blignaut (Department of Economics, University of Pretoria)
    Abstract: South Africa's electricity consumption has increased sharply since the early 1990s. Here we conduct a sectoral decomposition analysis of the electricity consumption for the period 1993 to 2006, to determine the main drivers of this increase. The results show that the increase was due mainly to output- or production-related factors, with structural changes playing a secondary role. While there is some evidence of efficiency improvements, indicated here as a slowdown in the rate of increase in electricity intensity, it was not nearly sufficient to onset the combined production and structural effects that propelled electricity consumption higher.
    Date: 2011–02
  7. By: Niek J. Schoeman (Department of Economics, University of Pretoria)
    Abstract: This paper analyses fiscal performance in terms of own-revenue collection and sustainability of local municipalities in South Africa. Criteria such as gross value added, revenue collected from own sources, debtors outstanding, the ageing of debt and dependency on grants are considered. The conclusion is that a large number of municipalities do not comply with the requirement that a “reasonable” amount of current expenditures be financed by means of own resources. Furthermore, local government finances are featured by substantial variance as far as collection of own income is concerned. While close to half of them finance more than 50 percent of their current expenditures from own resources, about one third are largely dependent on grants from upper spheres of government and generate less than 20 percent of current expenditures from own resources. As a whole, the fiscal sustainability of the local government sector, given the current scenario of flows, is a reason for concern. In order to comply with international criteria for solid fiscal performance, a number of municipalities will have to improve their performance with regard to own-revenue collection. The reason for this phenomenon seems to be the problem of “soft budgets” and an historic dependence on grants to finance not only capital expenditures but also most, if not all of, current expenditures. Due to historical and political factors, local governments in South Africa differ substantially in terms of potential revenue base, but it may be that in many cases potential revenue is not exploited and that the high level of dependency on grants is the result of inefficiency and lack of political will to be more self-reliant. In view of the wide-spread protest actions against poor quality of service delivery at the local government level, fiscal authorities should take a fresh look at the extent to which these governments are accountable for being more financially independent. This would help prevent the accumulation of debt as a result of growing backlogs in service payments.
    Keywords: Local government, fiscal sustainability, South Africa
    JEL: H71 H72
    Date: 2011–01
  8. By: Mignouna, DB; Mutabazi, KDS; Senkondo, EM; Manyong, VM
    Abstract: Last two decades have been dominated by issues on poverty as major growth area with the adoption by United Nations member countries of the Millennium Development Goals, the first of which calls for halving the incidence of poverty and hunger by 2015, this has underlined the importance of introduction of improved agricultural technologies. Most poor rural households in developing countries usually depend on agriculture and have to cope with poverty stills a rural phenomenon. Agricultural production has continuously decreased, subject to serious limitations such as declining soil fertility, diseases, pests, drought and erosion plaguing crops growing areas. This situation should have encouraged rural households to increasingly consider the use of promising technologies. This study was done using a case of imazapyr-resistant maize (IRM) technology for combating noxious Striga weed which has devastating effects on maize production in western Kenya. A cross sectional survey that included randomly a total selected sample of 600 households of which 169 IRM users and 431 non-users was employed.
    Keywords: IRM technology, striga control, poverty reduction, Kenya., Research and Development/Tech Change/Emerging Technologies,
    Date: 2011
  9. By: Carlos Pestana Barros; Ade Ibiwoye; Shunsuke Managi
    Abstract: This study analyzes the productivity change in Nigeria’s power sector from 2004-2008, Applying the Malmquist index with the input technological bias. The results show that on average, the Nigerian power sector becomes both more efficient and experience technological improvements. Furthermore, the assumption of Hicks neutral technological change is not suitable and therefore the traditional growth accounting method is not appropriate for analyzing changes in productivity for Nigeria power sector. Policy implications are derived.
    Keywords: Power, Nigeria; productivity, technological change, policy implications.
    Date: 2011–02
  10. By: Constant, Labintan
    Abstract: Nowadays climate change event and poor population vulnerability become more severe and natural resources scarcity intensity increased. In order to mitigate climate change negative effects adaptive policies such as poverty reduction Strategy and National Adaptation Plan of Action (NAPA) as effectiveâs responsive strategies. There are also farmers traditional adaptation methods which are consider as local mainstreaming climate change adaptation framework. This paper has explore subjective qualitative evaluation of climate change risk management framework strategic and link its with poverty reduction strategy in the Sahel .Sahel is one of the most vulnerable areas in the world with lower HDI(0.2%) and have the highest poverty rate (over 45% of the people live below the poverty line). The study was focused on 9 Sahel countries (Senegal, Mauritania, Mali, Niger, Burkina-Faso, Nigeria, Chad, Soudan and Eritrea) and their Poverty Reduction Strategy Papers (PRSP) and National Adaptation Programmes of Action (NAPA) by assessing criteria such as: a) the consideration of climate change scenarios and the vulnerabilities of the country; b) the analysis of poverty-climate links; and c) the climate change institutional framework of the country. However Soudan and Eritrea donât have PRSP and Nigeria donât have NAPA. The results show that most Sahel countries does not included Climate change 2 effect in their PRSP (except Burkina-Faso) but have a better performance with NAPA framework elaboration. Burkina-Faso is Climate risk management model country in the region but policies have failed because of farmerâs difficult conditions to get access to credit and lack of good technical supports. NAPA and PRSP objectives did not achieved because majority of poor were excluded, inefficiency in domestic accounting systems and inefficient monitoring. Furthermore, donors funding problems, natural disasters such as floods or droughts; biophysical modeling and simulation insufficient data, lack of skilled labor are others reason. To conclude, it is illustrates that mainstreaming natural hazards into PRSP and the development of NAPA are a step forward into establishment of institutional process to incorporate climate change into national policies. The World Bank and the UNFCCC should coordinate efforts to support developing countries in their efforts to incorporate adaptation to climate change in PRSP. Country need to strength the coordination, networks and information flows between ministries, at different levels of government and civil society to have more efficient integration of climate change variables into poverty reduction and development strategies. Country's should also have sustainable funding and should not rely only on donor. Policies should target more vulnerable peoples, need good policies implementation and good monitoring.
    Keywords: Sahel, Climate Change, Poverty Reduction, Adaptation Strategy., Resource /Energy Economics and Policy,
    Date: 2011
  11. By: Verschelde, Marijn; Vandamme, Ellen; DâHaese, Marijke; Rayp, Glenn
    Abstract: We use a nonparametric estimation of the production function to investigate the relation- ship between farm productivity and farming scale in poor smallholder agricultural systems in the north of Burundi. Burundi is one of the poorest countries in the world, with a pre- dominant small scale subsistence farming sector. A Kernel regression is used on data of mixed cropping systems to study the determinants of production including different factors that have been identified in literature as missing variables in the testing of the inverse relationship such as soil quality, location and household heterogeneity. Household data on farm activities and crop production was gathered among 640 households in 2007 in two Northern provinces of Burundi. Four production models were specified each with different control variables. For the relatively small farms, we find clear evidence of an inverse relationship. The relatively large farms show a different pattern. Returns to scale are found to be farm scale dependent. Parametric Cobb-Douglass models tend to over-simplify the debate on returns to scale because of not accounting for the different effects of large farms. Other factors that significantly positively affect production include the soil quality and production orientation towards banana or cash crop production. Production seems to be negatively affected by field fragmentation.
    Keywords: inverse relationship, farm size, nonparametric, Burundi, Agricultural and Food Policy, Community/Rural/Urban Development, Environmental Economics and Policy, D24, O13, Q12, Q18,
    Date: 2011–02–10

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