nep-afr New Economics Papers
on Africa
Issue of 2011‒11‒14
ten papers chosen by
Quentin Wodon
World Bank

  1. The impact of the financial and economic crisis on ten African economies and labour markets in 2008-2010 : findings from the ILO/World Bank policy inventory By Catherine Saget; Jean-François Yao
  2. Race, poverty, and deprivation in South Africa By Carlos Gradín
  3. Volatility Spillovers between the Equity Market and Foreign Exchange Market in South Africa By Lumengo Bonga-Bonga; Jamela Hoveni
  4. Understanding life-satisfaction changes in post-apartheid South Africa By Bookwalter, Jeffrey; Fitch-Fleischmann, Benjamin; Dalenberg, Douglas
  5. Land deals in Africa: pioneers and speculators By Collier, Paul; Venables, Anthony J.
  6. Global Value Chains and Market Formation Process in Emerging Export Activity: Evidence from Ethiopian Flower Industry By Mulu Gebreeyesus; Tetsushi Sonobe
  7. Determinants of smallholder farmers’ demand for purchased inputs in Lilongwe District, Malawi: evidence from Mitundu extension planning area By Maganga, Assa; Mehare, Abure; Ngoma, Kisa; Magombo, Elizabeth; Gondwe, Paul
  8. Participative Planning in Africa. Firts steps in the Director Plano of Huambo By Tomaz Dentinho; Paulo Oliveira
  9. A capability approach to the analysis of rural households' wellbeing in Nigeria By Oni, Omobowale A.; Adepoju, Temitayo A.
  10. Is informality welfare-enhancing structural transformation ? evidence from Uganda By Fox, Louise; Pimhidzai, Obert

  1. By: Catherine Saget (International Labour Office, Economic and Labour Market Analysis Department); Jean-François Yao
    Abstract: The main contribution of this document is to analyse the financial and economic crisis impact on economies and labour markets, and a range of policy responses in 10 African countries, namely Benin, Burkina Faso, Cameroon, Egypt, Ghana, Kenya, Mali, Mozambique, Nigeria, and Tanzania. This document compares policy measures implemented in 2008-2009 in these ten economies using data from the ILO/WB inventory of policy responses to the financial and economic crisis. It looks at fiscal policy responses using data on direct beneficiaries and costs reported in this inventory. These measures included oil and food subsidies to answer the rise in commodity prices up to May 2008. The packages also included new measures to support agriculture and exports, to build and maintain infrastructure, and to create jobs for youth, as well as, in four cases, an increase in public wages.
    Keywords: economic development / employment / unemployment / economic indicator / economic recession / economic implication / social implication / trend / Benin / Burkina Faso / Cameroon / Egypt / Ghana / Kenya / Mali / Mozambique / Nigeria / Tanzania
    Date: 2011
  2. By: Carlos Gradín (Universidade de Vigo)
    Abstract: The aim of this paper is to explain why poverty and material deprivation in South Africa are significantly higher among those of African descent than among whites. To do so, we estimate the conditional levels of poverty and deprivation Africans would experience had they the same characteristics as whites. By comparing the actual and counterfactual distributions, we show that the racial gap in poverty and deprivation can be attributed to the cumulative disadvantaged characteristics of Africans, such as their current level of educational attainment, demographic structure, and area of residence, as well as to the inertia of past racial inequalities. Progress made in the educational and labor market outcomes of Africans after Apartheid explains the reduction in the racial poverty differential.
    Keywords: poverty, deprivation, race, decomposition, South Africa, households’ characteristics.
    JEL: D31 D63 I32 J15 J71 J82 O15
    Date: 2011
  3. By: Lumengo Bonga-Bonga; Jamela Hoveni
    Abstract: This paper attempts to assess the extent of volatility spillovers between the equity market and the foreign exchange market in South Africa. The multi-step family of GARCH models are used for this end, whereby volatility shocks obtained from the mean equation estimation in each market are included in the conditional volatility of the other market, respectively. The appropriate volatility models for each market are selected, following criteria such as covariance stationarity, persistence in variance and leverage effects. The finding indicates that there is a unidirectional relationship in terms of volatility spillovers, from the equity market to the foreign exchange market. The paper supports the view that the extent of foreign participation in the South African equity market contributes to this pattern of volatility spillover.
    Keywords: equity market, foreign exchange market, spillover, GARCH models
    JEL: F31 G10 C10
    Date: 2011
  4. By: Bookwalter, Jeffrey; Fitch-Fleischmann, Benjamin; Dalenberg, Douglas
    Abstract: We analyze the large changes in the level and distribution of reported life satisfaction In South Africa from 1993 to 1998, a period spanning the end of apartheid and the creation of a more inclusive democracy. The percentage of black South Africans reporting dissatisfaction with their lives dropped by over two-thirds, despite only modest improvements in material living conditions. Using household surveys five years apart, we show that the vast majority (over 85 percent) of the improved life satisfaction is attributable to changes in the satisfaction derived from specific living conditions, not to changes in the actual level of those living conditions. While some of these shifts are likely attributed to the social churn at the end of apartheid, these changes also indicate changing opportunities for black South Africans. These results are consistent with hedonic adaptation and show that the factors that make people happier can change dramatically over a relatively short time period.
    Keywords: Adaptation; Happiness; Oaxaca decomposition; South Africa; Well-Being
    JEL: O1
    Date: 2011
  5. By: Collier, Paul; Venables, Anthony J.
    Abstract: Much African land currently has low productivity and has attracted investors purchasing (or leasing) land as a speculative option on higher future prices or productivity. If land deals are to be beneficial they need to induce productivity enhancing investments. Some of these will be publicly provided (infrastructure, agronomic knowledge), and some can only be provided by ‘pioneer’ investors who discover what works and who create demonstration effects. Such pioneers can be rewarded (incentive compatibly) for the positive externalities they create by being granted options on large areas of land. However, pioneers must be separated from speculators by screening and by requirements to work a fraction of the land.
    Keywords: Africa; farmland; land deals; lease; rent
    JEL: O13 O55 Q1
    Date: 2011–11
  6. By: Mulu Gebreeyesus (United Nations University Maastricht Economic and Social Research and Training Centre on Innovation and Technology); Tetsushi Sonobe (National Graduate Institute for Policy Studies)
    Abstract: This paper provides a case study of the Ethiopian flower export industry which successfully emerged at time when the EU market (main destination) was already characterized by increasingly stringent standards and delivery requirements. Entering this market required a multitude of capabilities at firm, sector and national levels. Several of these capabilities were absent or weak in the domestic market when the new activity kicked off. The paper analyzes how the capabilities of individual firms and the industry at large co-evolved and the role of various actors in the ‘market formation’ process.
    Keywords: Africa, Ethiopia, global value chain, market formation, cut-flower industry
    Date: 2011–11
  7. By: Maganga, Assa; Mehare, Abure; Ngoma, Kisa; Magombo, Elizabeth; Gondwe, Paul
    Abstract: The aim of this study was to empirically determine the factors that affect smallholder farmers’ demand for purchased fertilizer and seed using cross section data from 160 farmers. Model solutions, which were created by using Translog Cost Function were carried out by Seemingly Unrelated Regression (SUR). To this end this study revealed that education, field size (plot of land cultivated) and household size have significant negative relationship with the share of fertilizer purchased and positively related with share of seed. Whereas price of output, seed, fertilizer and income of the household are found to be significant and positively related to share of fertilizer and negatively related with share of purchased seed.
    Keywords: Translog; Cost; Purchase inputs; Demand
    JEL: D0
    Date: 2011–01–05
  8. By: Tomaz Dentinho; Paulo Oliveira
    Abstract: Huambo has central capacities able to compete and complement other major towns in Africa such as Johannesburg and Nairobi. Nevertheless, Huambo, the second city of Angola, was at war from 1975 till 2002 and continued to be relatively isolated from 2002 till 2006, because it took some time to rebuilt former roads. Furthermore the destruction of the export based activities during the war reduced the capacity of the city to regain the development path experienced in the sixties and early seventies. Under these circumstances the design of a Director Plan is necessarily a strategic plan of a city that has lost its export base and has obvious difficulties in getting its role in Africa. The Provincial Government asked for a Plan which design should be participated. The first question is to know who the stakeholders are and what are their expectations? The second issue is to design a participative and consistent strategy. In this paper we report the first phase of the Plan which includes not only the characterization and diagnosis of the region but also the design of a participatory strategy. We used Q Methods to interact with the stakeholders and a Spatial Interaction Model with Land Use to create consistent scenarios that arise from the political and entrepreneurial options related to the location of a new modern airport, the new export base of the town, the solution in terms of urban densities, the structure of the transport network and the design of land use planning measures.
    Date: 2011–09
  9. By: Oni, Omobowale A.; Adepoju, Temitayo A.
    Abstract: Rural households in Nigeria have been characterized as poor, and with little opportunity for development. Many studies have equated poverty with well being, however empirical literature on well being is less researched. This paper attempts bridge the knowledge gap in the empirical literature of well being studies and specifically the use of the capability approach in its application in the Nigerian well being context which is not as well researched as poverty studies. The study made use of the Nigerian Core welfare indices survey questionnaires of 2006 to provide data relevant to capability well being dimensions. The dimensions include housing, health, nutrition, education, asset ownership/economic, information flow and security. The first part of the study involve developing indices of well being using the fuzzy set in order to generate a composite well being index by the elementary indicators of the well being dimensions. The second part of the study used a logistic regression to explore the variability in achieving the composite well being index value by a set of Conversion factors. The fuzzy set result revealed that the capability to attain a desired state of well being is highest with respect to asset ownership and lowest with respect to security. The logistic analysis shows that the predicted probability of attaining the mean capability well being level increases for male headed rural households, increasing educational level and age of the head, increasing household size, employment in the public sector and residence in any other geopolitical zone except the Northwestern zone.
    Keywords: Well being; Capability; Rural Households; Nigeria
    JEL: D69 I31
    Date: 2011–08
  10. By: Fox, Louise; Pimhidzai, Obert
    Abstract: While Africa's recent decade of growth and poverty reduction performance has been lauded, concern has been expressed regarding the structure of this growth. In particular, questions have been raised about whether the growth is based on a commodities boom, or whether it is the beginning of a structural transformation that will lift workers from low-productivity jobs into higher-productivity ones. Macro evidence has suggested that the structural transformation has not started. But macro analysis misses the evidence that the process of transformation has started, because this process begins at the household level. Household livelihoods do not move from ones based on subsistence farming and household level economic activities into livelihoods based on individual wage and salary employment away from the household in one leap -- this process takes generations. The intermediate step is the productive informal sector. It is income gains at the household level in this sector that fuel productivity increases, savings, and investment in human capital in this sector. Ensuring that most households are able to diversify their livelihoods into the non-farm sector through productive informality not only increases growth, but also allows the majority of the population to share in the growth process. This paper illustrates this point with the case of Uganda which followed this path and experienced two decades of sustained growth and poverty reduction.
    Keywords: Rural Poverty Reduction,Achieving Shared Growth,Labor Policies,Regional Economic Development,Economic Theory&Research
    Date: 2011–10–01

This nep-afr issue is ©2011 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.
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