nep-afr New Economics Papers
on Africa
Issue of 2013‒07‒15
twenty-two papers chosen by
Quentin Wodon
World Bank

  1. Air Transport and Destination Performance – A case study of three African countries (Ethiopia, Kenya and South Africa) By Tchouamou Njoya, Eric
  2. Africa and Global Economic Trends Quarterly Review - First Quarter 2013 By AfDB
  3. Is There a Long-Term Effect of Africa's Slave Trades? By Margherita Bottero; Björn Wallace
  4. Size and liquidity effects in Nigeria: an industrial sector study By Hearn, Bruce
  5. The Day of the Week effect on stock market returns and volatility: Evidence from Nigeria and South Africa. By Ndako, Umar Bida
  6. Access to Schooling and Staying in School in Sub-Saharan Africa By KUEPIE Mathias; SHAPIRO David; TENIKUE Michel
  7. Constraints to Agricultural Technology Adoption in Uganda: Evidence from the 2005/06-2009/10 Uganda National Panel Survey By Ibrahim, Kasirye
  8. African brain drain and its impact on source countries: What do we know and what do we need to know? By Capuano, Stella; Marfouk, Abdeslam
  9. User Fee Abolition in South Africa: Re-Evaluating the Impact? By Steven F. Koch
  10. The 1996 User Fee Abolition in South Africa: A Difference-in-Difference Analysis By Anna S. Brink; Steven F. Koch
  11. Identifying a financial conditions index for South Africa By Kirsten Thompson; Renee van Eyden; Rangan Gupta
  12. Impact of Agricultural Market Information Systems Activities on Market Performance in Mozambique By Kizito, Andrew M.; Donovan, Cynthia; Staatz, John M.
  13. Output supply and yield response of rice in Nigeria: implications for future rice policy By Boansi, David
  14. Youth Employment in Africa: New Evidence and Policies from Swaziland By Brixiova, Zuzana; Kangoye, Thierry
  15. Household's willingness to pay for health microinsurance and its impact on actual take-up: results from a field experiment in Senegal By BONAN Jacopo; LEMAY-BOUCHER Philippe; TENIKUE Michel
  16. Prospects and Challenges of Corporate Governance in Ghana By Agyemang, Otuo Serebour; Aboagye, Emmanuel; Ahali, Aaron Yao Ofoe
  17. Energy consumption, output and trade nexus in North Africa By Ben Jebli, Mehdi; Ben Youssef, Slim
  18. Intensification of lowland rice-based farming systems in Laos in the context of diversified rural livelihoods By Newby, J.C.; Manivong, V.; Cramb, R.A.
  19. Working Paper 177 - A Macroeconometric Model for Rwanda By AfDB
  20. How Responsive to Prices is the Supply of Milk in Malawi? By Revoredo-Giha, Cesar; Arakelyan, Irina; Chalmers, Neil; Chitika, Rollins
  22. Who is Rich in Cameroun? By Chameni Nembua, Célestin; Biloa Essimi, Jean Aristide

  1. By: Tchouamou Njoya, Eric
    Abstract: Tourism is increasingly being promoted as an important source of economic growth especially in developing countries. While there are many elements that contribute to tourism growth, without an efficient air transport system, it is almost impossible for a number of landlocked and geographically isolated developing nations to expand and sustain domestic and international tourism. From the perspective of an African nation the most important question is whether the benefit of aviation expansion would have any superiority in poverty reduction. This paper seeks to (1) investigate the relationship between air transport and tourism growth especially in selected African countries and (2) highlight ways and means of capturing and strengthening air transport and tourism industry’s contribution. To achieve these objectives the research uses a combination of literature review and case study analyses. It concludes that efficient air transport can act as a facilitator in the development of more diversified export-based industries, away from over-reliance on natural resources, which in the presence of linkages with other domestic economic sectors can act as a stimulus for broadly based growth.
    Keywords: air transport, tourism, Sub-Saharan Africa, Kenya, Ethiopia, South Africa, Yamoussoukro Decision
    JEL: L5
    Date: 2013–02–14
  2. By: AfDB
    Date: 2013–07–02
  3. By: Margherita Bottero (Bank of Italy); Björn Wallace (University of Cambridge)
    Abstract: Nunn (2008) found a negative relationship between past slave exports and economic performance within Africa. Here we investigate these findings and the suggested causal pathway in further detail. Extending the sample period back in time we reveal that the coefficient on slave exports did not become significantly negative until 1970, and that it was close to zero in 1960. While one potential explanation for this temporal pattern could be decolonization, we analyse other episodes of slave raiding outside Africa, and find evidence that questions the validity of such suggestion. In addition, our reading of the historical and anthropological literature differs from that of Nunn. For instance, taking a global rather than African perspective we find that the African slave trades cannot without difficulties explain the patterns of ethnic fractionalization that we observe today.
    Keywords: Africa, economic history, history, slave trade
    JEL: N01 N37 N47
    Date: 2013–04
  4. By: Hearn, Bruce
    Abstract: This study estimates liquidity premiums using the recently developed Liu (2006) measure within a multifactor capital asset pricing model (CAPM) including size premiums and a time varying parameter model for the West African emerging market of Nigeria. The evidence suggests that liquidity factors are relevant only for financial and basic materials sector stocks while size factor is more generally relevant in explaining the cross section of stock returns in the Nigerian domestic equity market. Costs of equity estimates are high further underlining the limitations of this market as a capital-raising venue in contrast to the dominant banking sector.
    Keywords: Liquidity, Asset Pricing, CAPM, Africa, Nigeria
    JEL: G11 G12 G15 G20 O55
    Date: 2013–01
  5. By: Ndako, Umar Bida
    Abstract: This paper examines the day of the week effect for the Nigerian and South African equity markets over pre-liberalisation and post-liberalisation periods. The paper uses Exponential Generalized Autoregressive Conditional Hetroskedasticity (EGARCH) model to estimate the day of the week effect both in the mean and variance equations. The post-liberalisation period for the Nigerian equity market exhibits day of the week effect on Fridays only in the mean equation. While in the variance equation, there is evidence of day of the week effect on Tuesdays and Thursdays respectively. In South Africa, there is significant evidence of the day of the week effect on Mondays and Fridays during the pre-liberalization period. During the post-liberalisation period, there is evidence of day of the week effect on Thursdays in the mean equation and Fridays only in the variance equation.
    Keywords: day of the week effect; volatility; E-GARCH model
    JEL: G1 G12
    Date: 2013–07–05
  6. By: KUEPIE Mathias; SHAPIRO David; TENIKUE Michel
    Abstract: This study jointly investigates factors driving the processes of accessing and staying in school in sub-Saharan Africa. We explicitly account for the fact that staying in school or its converse, dropping out, is observed only among children who ever attend school. We use data from Demographic and Health Surveys from 12 countries. We find that access to school is typically lower for females, rural youth, and those from poorer households. Conditional on having ever attended school, these factors, as well as age in grade ? an indicator of performance in school ? typically help account for staying in school. We also find that, keeping girls at school is very sensitive to school performance: girls with comparatively weak performance in school are more likely than their male counterparts to drop out of school, while girls who do relatively well in school are more likely to remain in school than boys, other things equal.
    Keywords: Access to education; ; school dropout; ; sub-Saharan Africa; ; school delay
    JEL: I20 I21 O15
    Date: 2013–07
  7. By: Ibrahim, Kasirye
    Abstract: The study examines the determinants of improved agricultural technologies adoption in Uganda, using a nationally representative panel data set of 1,600 farming households, collected by the Ugandan Bureau of Statistics in 2005/6 and 2009/10. Two agricultural technologies—improved seeds and fertilizer—out of the seven types identified by the study were further considered and analyzed. Estimates from the probit regression model show that farmers with low education and land holdings are less likely to adopt improved seeds and fertilizer, while peer effects play a big role in influencing farmers to either use improved seeds or fertilizer. Furthermore, cattle keeping farmers in Western Uganda are more likely to abandon fertilizers and possibly resort to organic manure from livestock excreta. Policy, therefore, should be directed at addressing the supply side constraints of agricultural technologies.
    Keywords: Agricultural technologies adoption, Improved seeds and fertilizer, Farming households, Uganda, EPRC, Agribusiness, Agricultural Finance, Consumer/Household Economics, Crop Production/Industries, Farm Management, Institutional and Behavioral Economics, Land Economics/Use, Livestock Production/Industries, Research and Development/Tech Change/Emerging Technologies,
    Date: 2013–03
  8. By: Capuano, Stella; Marfouk, Abdeslam
    Abstract: While there appears to be deep and growing concern for the brain drain from Africa, lack of adequate data has so far prevented a comprehensive analysis of its magnitude and its impact on source countries. Using original datasets on international migration, this paper addresses both issues. We show that many African economies lost a consistent part of their highly skilled labor force due to migration to developed countries. We also highlight that significant effort is still needed, in terms of data collection and empirical analysis, before drawing clear conclusions on the effects of the brain drain on Africa.
    Keywords: Education, International Migration, Human Capital, Labor Mobility, African brain drain
    JEL: F22 J11 O15
    Date: 2013–05
  9. By: Steven F. Koch (Department of Economics, University of Pretoria)
    Abstract: The impact of the abolition of user fees in South Africa, a policy implemented in 1994 for children under the age of six and the elderly, as well as pregnant and nursing mothers, is examined via regression discontinuity. The analysis focuses on the use of public health care facilities for the receipt of curative care for the uninsured. The research also examines potential externalities that could arise from the policy, especially increased demand for curative care in the public sector amongst the insured. Regression discontinuity estimates, which control for the underlying relationship between age and receipt of curative care, point to a statistically insignificant policy impact amongst uninsured children and a statistically significant positive impact amongst insured children. In other words, the policy did not appear to improve access to healthcare, at least curative health care, for children who should have benefitted from the policy.
    Keywords: Free Health Care, Regression Discontinuity
    Date: 2013–07
  10. By: Anna S. Brink (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria)
    Abstract: South Africa waived user fees for primary health care, first in 1994, and again, in 1996. Since the 1994 plan focused on young children and older adults, as well as pregnant and nursing mothers, the 1996 change, which waived fees for the remainder of the population, subject to means tests, can be examined via differences-in-differences (DD). DD is applied to a subsample of children, underpinned by a multinomial logit regression of health-seeking behavior amongst ill and injured children. Although the policy provided free primary care to all at public clinics, the results of the analysis do not support the hypothesis that free primary care significantly increased public clinic visits amongst ill and injured children. However, there is strong evidence that ill and injured children were more likely (by 6%) to seek at least some sort of treatment following the change in policy, implying that the policy was indirectly successful.
    Date: 2013–07
  11. By: Kirsten Thompson (Department of Economics, University of Pretoria); Renee van Eyden (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: The global financial crisis that began in 2007-08 demonstrated how severe the impact of financial markets’ stress on real economic activity can be. In the wake of the financial crisis policy-makers and decision-makers across the world identified the critical need for a better understanding of financial conditions, and more importantly, their impact on the real economy. To this end, we have constructed a financial conditions index (FCI) for the South African economy, to enable the gauging of financial conditions and to better understand the macro-financial linkages in the country. The FCI is constructed using monthly data over the period 1966 to 2011, and is based on a set of sixteen financial variables, which include variables that define the state of international financial markets, asset prices, interest rate spreads, stock market yields and volatility, bond market volatility and monetary aggregates. We explore different methodologies for constructing the FCI, and find that recursive principal components analysis (PCA) yields the best result. We furthermore investigate whether it is beneficial to purge the FCI of the real effects of inflation, economic growth and interest rates, and use the identified FCI in causality testing with three macroeconomic variables.
    Keywords: financial conditions, financial crisis, principal components
    JEL: C32 C52 C53 G01
    Date: 2013–07
  12. By: Kizito, Andrew M.; Donovan, Cynthia; Staatz, John M.
    Abstract: The objective of this research is to analyze the impact of agricultural market information systems (MIS) activities on market performance in Mozambique. This report analyzes factors that are associated with reception of improved agricultural market information from the MIS and other sources among farmers in Mozambique; and how the reception of improved agricultural market information affects prices obtained by sellers of maize in Mozambique. From the econometric analysis of a two-year panel household data set for four provinces in Mozambique, the study finds that the generic factors that are associated with the reception of improved agricultural market information include: (a) growing maize and large and small groundnuts; (b) owning a radio; (c) presence of a cell phone network in the village; (d) membership in a farmer association; (e) access to extension services; (f) proximity to a road with public transport; (g) being nearer to a village administrative post; (h) level of education; and (i) the agro-ecological zone in which the household is located. The analysis indicates that, holding other factors constant, reception of market information by staple crops farmers in Mozambique is associated with a higher probability of market participation of up to 34%.
    Keywords: Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies,
    Date: 2012–07
  13. By: Boansi, David
    Abstract: With the local rice industry of Nigeria been hindered by inconsistent government policies, improper methods of production, high cost and scarcity of vital inputs of production among other constraints, domestic production of rice has failed to catch up with the increasing pace of consumption. In spite of the strong agricultural and natural resource base it hauls, Nigeria spends a total of about US$11 billion annually on importation of rice, wheat, sugar and fish. Attempts by previous regimes and the current government to reverse the net rice importer status of the country has proven futile regardless of the high tariffs imposed on imports, quantitative restriction through the use of quota and outright ban between the years 1986 and 1995. To inform future rice policy decisions on the way forward, the current study analyzed the output supply and yield response of rice in Nigeria. The results show that output of rice increases with increasing harvested area of rice, increasing farm gate price of rice, increasing nominal rate of assistance and increasing labor availability. It however decreases with increasing price of maize. Yield increases with increasing farm gate price of rice, nominal rate of assistance and labor availability. It however decreases with increasing harvested area of rice and price of maize. To improve on its rice supply, it is advised that policy measures be devised to couple area expansion with intensification to help mitigate the adverse effect of area expansion on yield, reduce labor shortages through appropriate investment in development of the rural communities (to help minimize rural-urban migration), ensure continuous government support to the sector, maintain fair prices for local rice farmers, and ensure appropriate transmission in times of price increment.
    Keywords: Output supply response, yield response, nominal rate of assistance, government policies
    JEL: E61 Q11 Q14 Q17 Q18
    Date: 2013–07–02
  14. By: Brixiova, Zuzana (African Development Bank); Kangoye, Thierry (African Development Bank)
    Abstract: Drawing on the 2007 and 2010 Swaziland Labor Force Surveys, this paper provides first systematic evidence on recent youth employment challenges in Swaziland, a small, land-locked, middle-income country with one of the highest youth unemployment rates in Africa. The paper first documents the various labor market disadvantages faced by the Swazi youth, such as high unemployment and discouragement, and how they changed from 2007 to 2010. A multinomial logit regression analysis is then carried out to analyze the socio-economic drivers of the unfavorable youth labor market outcomes on the supply side. Since many of the factors that can unlock the employment potential of the Swazi youth are on the demand side of the labor market, the paper examines the barriers to job creation and youth entrepreneurship. It concludes with experiences of other countries that could inform design of more effective interventions for youth employment in Swaziland.
    Keywords: youth employment and entrepreneurship, multivariate analysis, policies, Africa
    JEL: J11 J08 L26 O11
    Date: 2013–06
  15. By: BONAN Jacopo; LEMAY-BOUCHER Philippe; TENIKUE Michel
    Abstract: In the region of Thies in Senegal community-based health insurance schemes(CBHI)have been present for years. And yet despite the benefits they offer, there remain low take-up rates. Our paper measures the willingness to pay (WTP) for CBHI premiums in such context. Our results highlight the role of income, wealth and risk preferences as determinants of WTP. We also provide an analysis of the predictive power of WTP on the actual take-up of insurance following our offering of membership to a sample of 360 households. WTP has a positive and significant impact on actual take-up.
    Keywords: Community-based health insurance; Willingness to pay; Africa; Senegal
    JEL: D10
    Date: 2013–07
  16. By: Agyemang, Otuo Serebour; Aboagye, Emmanuel; Ahali, Aaron Yao Ofoe
    Abstract: The relevance of corporate governance principles in the management of corporate organisations cannot be underestimated. The increasing influence of principles of corporate governance across the globe has been greatly linked to the recent corporate frauds and scandals. These frauds and scandals largely resulted from the failure of authorities of countries to effectively implement the legal and regulatory frameworks pertaining to corporate governance. Ghana is archetypal in regards to the failure of authorities to enforce the laws and regulations in relation to corporate governance. During the enforcement of the laws and regulations of corporate governance, some vitally important issues are either overlooked or deliberately deserted. This paper attempts to examine the legal and regulatory framework of Ghana in regards to corporate governance and points out the importance of complying with good corporate governance. It also highlights prevailing issues of corporate governance practice in Ghana. It finally makes some recommendations, which are considered the major contribution of this paper.
    Keywords: Prospects, Challenges, Corporate Governance, Ghana
    JEL: G3 G34
    Date: 2013–05–06
  17. By: Ben Jebli, Mehdi; Ben Youssef, Slim
    Abstract: This study uses panel cointegration techniques to examine the impact of energy consumption, and trade on economic growth for five North Africa countries within a multivariate framework over the period 1980-2009. Short-run dynamic relationship shows that there is evidence of one way short-run relationship from i) output, exports, and capital to imports, ii) fossil fuels consumption to exports, iii) exports to capital and iv) labor to combustible renewables and waste consumption. The vector error correction model shows that there is evidence of long-run relationship running from i) combustible renewables and waste consumption, fossil fuels consumption, exports, imports, capital, and labor to output, ii) fossil fuels consumption, exports, imports, capital, and labor to combustible renewables and waste consumption, and iii) combustible renewables and waste consumption, fossil fuels consumption, exports, capital, and labor to imports. The long-run elasticities show that combustible renewables and waste consumption is not statistically significant and only fossil fuels consumption can affect output while trade is statistically significant and have a negative impact on output through imports and positive impact through exports. The policy implication of these results is that, in these countries, trade openness is not sufficiently efficient to incite the use of energies for production.
    Keywords: Energy consumption; panel cointegration, North Africa countries, trade.
    JEL: C33 F43 Q56
    Date: 2013–06
  18. By: Newby, J.C.; Manivong, V.; Cramb, R.A.
    Abstract: The cultural and economic importance of paddy rice production for households in the lowlands of Lao PDR cannot be overstated. Annual rice production is viewed by households and the Government alike as an indicator of poverty and food security. Over the past decade the adoption of new technologies has resulted in productivity improvements in lowland rice systems, yet further gains are being sought to maintain national rice self-sufficiency. The Government of Laos has established optimistic yield targets for both the lowland rainfed and irrigated rice production systems. However, survey evidence shows that, despite the adoption of improved technologies, most rainfed farmers remain subsistence-oriented and there is a significant yield gap between the current situation and the proposed targets. The diversification of household livelihoods through wage migration has reduced farm labour availability and increased farm wages. At the same time, price fluctuations due to supply shocks and government responses have created a further disincentive to the intensification of rice production systems. An economic analysis of rainfed rice production suggests that given current conditions we are likely to continue to see the adoption of low-input, labour-efficient, and relatively stable rice production systems for most households, with small areas of high-input, commercially-oriented systems in favourable conditions. We argue that research and extension efforts should recognise this diversity of production systems and household livelihood strategies.
    Keywords: Rainfed lowland rice, fertility management, risk analysis, Lao PDR, Crop Production/Industries, Farm Management, International Relations/Trade,
    Date: 2013–02
  19. By: AfDB
    Date: 2013–07–09
  20. By: Revoredo-Giha, Cesar; Arakelyan, Irina; Chalmers, Neil; Chitika, Rollins
    Abstract: Dairy is a key investment sector for the Government of Malawi. Advocacy institutions operating in the country have successfully lobbied for increasing the duty applied for powder milk, with the aim of improving the price received by farmers. It should be noted that whilst an increase of the price paid to farmers would rise their revenues (assuming the same amount of milk delivery), it might also bring additional blessings, in the sense that if farmers respond to prices, they may rise their revenues beyond the increase in prices, and furthermore, they would expand their delivery of milk to processors offsetting the imports of powder milk and reducing their idle capacity in factories. Hence, the purpose of this paper is to measure the responsiveness of the deliveries of milk at the milk bulking groups to prices paid to farmers (i.e., the elasticity of supply faced by processors). This is done using a unique dataset that comprises information by milk bulking group from January 2009 to February 2013. The results indicate that the supply of milk is price responsive. The price elasticity in the short term is equal to 0.6 and in the long term is 1.44. This indicates that farmers’ revenues not only benefit from an increase in the price of milk but also from the increase in the quantity produced. Furthermore, it indicates the possibility that domestic producers could offset imports of milk powder by processors, although answer to this requires further research.
    Keywords: Milk supply, autoregressive distributed lags, panel data., Food Consumption/Nutrition/Food Safety, International Relations/Trade,
    Date: 2013–07–09
  21. By: BILOA ESSIMI, Jean Aristide; CHAMENI NEMBUA, Celestin
    Abstract: In this study, we construct an affluence line for the country, using Cameroonian Households surveys (2007). This line is an anti-poverty line. The proposed affluence line is derived here based on the principle of transfer of resources of the richest to the poorest
    Keywords: Affluence, Richness, Poverty, Inequality, Cameroon
    JEL: C02 D31 R00
    Date: 2013–07–01
  22. By: Chameni Nembua, Célestin; Biloa Essimi, Jean Aristide
    Abstract: In the following paper, we analyze a new concept in the country: the concept of affluence (richness) line. The construction of this affluence line is primarily based on the egalitarian principle of transfer; which can perhaps be stated as anti-poverty obtained through equity. For the estimation of this line, we used Cameroonian Households surveys (2007).
    Keywords: Affluence, Richness, Income distribution, Cameroon
    JEL: D3 D31
    Date: 2013–07–02

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