nep-afr New Economics Papers
on Africa
Issue of 2011‒05‒07
nine papers chosen by
Quentin Wodon
World Bank

  1. Cutting Bread or Cutting Throats? – Findings from a New Database on Religion, Violence and Peace in Sub-Saharan Africa By Matthias Basedau; Georg Strüver; Johannes Vüllers
  2. Drought and Civil War in Sub-Saharan Africa By Mathieu Couttenier; Raphael Soubeyran
  3. Political Crises and Risk of Financial Contagion in Developing Countries: Evidence from Africa By Simplice A., Asongu
  4. Competition between the U.S. and West Africa in International Cotton Trade: A Focus on Import Demand in China By Muhammad, Andrew; McPhail, Lihong; Kiawu, James
  5. Property Rights, Institutions and Fuel Wood Demand, by Source, in Rural Ethiopia By Abebe Damte; Steven F. Koch
  7. Sources of International Economic Spillovers to Ghana's Economic Growth By Ofori, F.
  8. Food Calorie Intake and Food Security under Grain Price Inflation: Evidence from Malawi By pan, suwen
  9. Financial development, international migrant remittances, and endogenous growth in Ghana By Adenutsi, Deodat E.

  1. By: Matthias Basedau; Georg Strüver; Johannes Vüllers
    Abstract: Despite the religious diversity in sub-Saharan Africa and the religious overtones in a number of African conflicts, social science research has inadequately addressed the question of how and to what extent religion matters for conflict in Africa. This paper presents an innovative data inventory on religion and violent conflict in all sub-Saharan countries for the period 1990–2008 that seeks to contribute to filling the gap. The data underscore that religion has to be accounted for in conflict in Africa. Moreover, results show the multidimensionality (e.g. armed conflicts with religious incompatibilities, several forms of non-state religious violence) and ambivalence (inter-religious networks, religious peace initiatives) of religion vis-à-vis violence. In 22 of the 48 sub-Saharan countries, religion plays a substantial role in violence, and six countries in particular—Chad, Congo-Brazzaville, Ethiopia, Nigeria, Sudan and Uganda— are heavily affected by different religious aspects of violence.
    Keywords: religion, sub-Saharan Africa, violence, peace, conflict
    Date: 2011–02
  2. By: Mathieu Couttenier; Raphael Soubeyran
    Abstract: In this paper, we show that drought has a positive effect on the incidence of civil war over the 1945-2005 period in Sub-Saharan Africa. We use the Palmer Drought Severity Index which is a richer measurement of drought than the measures used in the literature (rainfall and temperature) as it measures the accumulation of water in the soil in taking into account the temperature and the geological characteristics of the soil. We show that the risk of civil war increases by more than 42% from a “normal” climate to an “extremely drought” climate. Surprisingly, only 2.5% of this effect is channeled through economic growth.
    Date: 2010–10
  3. By: Simplice A., Asongu
    Abstract: The recent waves of political crises in Africa and the Middle East have inspired the debate over how political instability could pose a risk of financial contagion to emerging countries. With retrospect to the Kenyan political crisis, our findings suggest stock markets in Lebanon, Mauritius and Nigeria were contaminated.
    Keywords: Political crisis; Contagion; Developing countries; Equity Markets
    JEL: F30 G15 G10
    Date: 2011–04–04
  4. By: Muhammad, Andrew; McPhail, Lihong; Kiawu, James
    Abstract: We estimate the demand for imported cotton in China and assess the competitiveness of cotton-exporting countries. Given the assertion that African cotton producers are ill affected by U.S. cotton subsidies, our focus is the price competition between the C4 countries (Benin, Burkina Faso, Chad and Mali) and United States in China. Demand estimates are used to project how U.S. prices affect Chinaâs imports by country. In comparing demand projections, results show that the relationship between the United States and the C4 has more to do with how U.S. prices can affect global prices rather than any substitute or competitive relationship in the Chinese market.
    Keywords: Africa, China, cotton, demand, imports, United States, Demand and Price Analysis, International Relations/Trade, F17, Q11, Q17,
    Date: 2011
  5. By: Abebe Damte (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria)
    Abstract: This study examines the relationship between property rights, defined by land tenure security, the strength of local-level institutions, and household demand for fuel wood, as measured by the source from which fuel wood is collected. A multinomial regression model is applied to survey data collected in rural Ethiopia. Results from the discrete choice model indicate that active local-level institutions reduce the dependency on community forests, but, otherwise, increase household dependency on open access forests. However, property rights do not increase demand for fuel wood collected from private forests. The results suggest that there is a need to bring more open access forests under the management of the community and increase the quality of community forestry management in order to realize improvements in forest conservation.
    Keywords: Property rights, institutions, fuel wood rural, Ethiopia
    Date: 2011–04
  6. By: Abebe Damte (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria)
    Abstract: The heavy dependence and inefficient utilization of biomass resources for energy have resulted in high depletion of the forest resources in Ethiopia, while the use of traditional cooking technology, one source of inefficient biomass resource use, has been linked to indoor air pollution and poor health. In response, the government and other institutions have pushed for the adoption of new cooking technologies. This research examines the speed of adoption of some of these technologies – Mirt and Lakech cook stoves – in urban Ethiopia. The duration analysis suggests that adoption rates have been increasing over time, that income and wealth are important contributors to adoption, and that substitute technologies tend to hinder adoption. However, it was not possible to consider prices or perceptions related to either the technologies or biomass availability in the duration models, and, therefore, further research is needed in order to further inform policy with respect to household technology adoption decisions.
    Keywords: Improved stoves, Duration, Adoption, Urban Ethiopia
    Date: 2011–04
  7. By: Ofori, F.
    Abstract: In a world where policy co-ordination among countries is paramount, the growth of one depends on the behaviour of another in terms of policy instruments being pursued. One important question this study sought to answer was whether international economic spillovers emanating from all trading partners mattered for Ghana’s growth. The study therefore investigated the spillover effects emanating from three of the eight key trading partners of Ghana, namely, U.S.A., China and Nigeria. The study was conducted over the variables; technology diffusion; inflation rates and GDP growth of trading partners; labour; and capital, using annual data from 1980 to 2009. The methodology used involved estimating a growth equation for Ghana, capturing the effects and specific sources of spillovers from trading partners. An autoregressive distributed lag (ARDL) model and a vector autoregressive (VAR) model were used in arriving at various spillover effects from trading partners. The results showed that capital, inflation rates of U.S.A, and China’s GDP contributed significantly to Ghana’s GDP growth both in the long-run and the short-run. High spillover effects were observed to emanate from countries with high GDP growth. Another interesting result emphasized the fact that annual GDP growths are independent of each other. Finally, it was observed that spillover effects generally subsided after about fifteen years of persistent shocks.
    Keywords: ARDL; Economic Growth; Ghana; International Economic Spillovers; VAR
    JEL: F15 F14 F43
    Date: 2011–03–01
  8. By: pan, suwen
    Abstract: A comprehensive analysis of food demand and nutrient consumption using recent, representative household survey data from Malawi is presented. Expenditure and price elasticities have been estimated for 20 food groups using a quadratic almost ideal demand system based on 4 income groups identified by the Goldfeld-Quandt tests. Although the current boom of maize price provides an opportunity to rethink development strategies that diversify the commodity sectors, developing countries will not necessarily benefit from this change absent significant improvements in production capacities and trade infrastructures. Malawi is likely to suffer from higher commodity prices in the short-run.
    Keywords: Goldfeld-Quandt tests, a quadratic almost ideal demand system, Malawi, Agricultural and Food Policy, Consumer/Household Economics, Food Security and Poverty, D12, O13, R21, R31, Q11, Q12,
    Date: 2011
  9. By: Adenutsi, Deodat E.
    Abstract: Purpose: This paper seeks to provide further insights into understanding the finance-growth nexus by verifying the hypothesis that financial development promotes economic growth through its capacity to attract increased international migrant remittances to Ghana. Design/Methodology/Approach: A dynamic equilibrium-correction mechanism model for the period 1987(3)-2007(4) was estimated following the Johansen cointegration procedure. This approach produced maximum likelihood estimators of the unconstrained cointegrating vector, and suggested the number of cointegrating vectors without relying on an arbitrary normalization. Findings: The findings reveal two stylized facts with reference to Ghana. First, although financial development Granger-causes international migrant remittance inflows, it is in itself directly detrimental to endogenous growth. Second, international migrant remittance inflows are statistically significant in explaining variations in endogenous growth in the short run as well as in the long run. Practical Implications: Since directly, financial development hampers endogenous growth, but Granger-causes increased inflows of migrant remittances, and these remittances impact positively but marginally on endogenous growth, it follows that the sequencing of implementing Ghana’s financial reform programmes should be re-examined, whilst an enabling environment is created to induce Ghanaians living abroad to remit home through official channels. Originality/Value: International migrant remittances were found to be statistically significant in promoting endogenous growth, albeit marginally. Financial development does not directly engender growth, unless it succeeds in attracting non-debt foreign capital in the form of remittances through the formal sector. Financial development causes migrant remittance inflows which impact positively on growth.
    Keywords: Financial Development; Economic Growth; International Migrant Remittances; Ghana
    JEL: F3 O16
    Date: 2011

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