nep-afr New Economics Papers
on Africa
Issue of 2013‒09‒28
24 papers chosen by
Quentin Wodon
World Bank

  1. Neighbours and Extension Agents in Ethiopia: Who matters more for technology diffusion? By Krishnan, Pramila; Patnam, Manasa
  2. Africa’s Burden: Labour Markets, Natural Resources and the FDI ‘Reliance-Rejection’ Paradox By de Mauro, Andrea
  3. Africa and Global Economic Trends Quarterly Review - Second Quarter 2013 By AfDB
  4. The Quality of the Recent High-Growth Episode in Sub-Saharan Africa By Marcelo Martinez; Montfort Mlachila
  5. Financial Depth in the WAEMU: Benchmarking Against Frontier SSA Countries By Calixte Ahokpossi; Kareem Ismail; Sudipto Karmakar; Mesmin Koulet-Vickot
  6. Mobile Phone Coverage and Producer Markets: Evidence from West Africa By Aker, Jenny; Fafchamps, Marcel
  7. Senegal: Poverty Reduction Strategy Paper - Joint Staff Advisory Note on the National Strategy for Economic and Social Development By International Monetary Fund. African Dept.
  8. Democratic Republic of the Congo: Joint Staff Advisory Note By International Monetary Fund. African Dept.
  9. Debt sustainability and financial crises in South Africa By Ruthira Naraidoo; Leroi Raputsoane
  10. Labour-market database for South Africa with HIV/AIDS detail By Louise Roos
  11. Health Care Facility Choice and User Fee Abolition: Regression Discontinuity in a Multinomial Choice Setting By Steven F. Koch; Jeffrey S. Racine
  12. Niger: Poverty Reduction Strategy Paper By International Monetary Fund. African Dept.
  13. Zimbabwe: Staff - Monitored Program By International Monetary Fund. African Dept.
  14. Current Account Norms in Natural Resource Rich and Capital Scarce Economies By Juliana Dutra Araujo; Grace Bin Li; Marcos Poplawski-Ribeiro; Luis-Felipe Zanna
  15. Nigeria: Publication of Financial Sector Assessment Program Documentation––Detailed Assessment of Observance of Insurance Core Principles By International Monetary Fund. African Dept.
  16. Democratic Republic of the Congo: 2012 Article IV Consultation—Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for the Democratic Republic of the Congo By International Monetary Fund. African Dept.
  17. Union of the Comoros: Poverty Reduction Strategy Paper—Review of the Second Year of Implementation By International Monetary Fund. African Dept.
  18. Technical Compendium: Descriptive Agricultural Statistics and Analysis for Zambia By Tembo, Solomon; Sitko, Nicholas
  19. Mali: Request for Disbursement under the Rapid Credit Facility—Staff Report; Informational Annex; Staff Statement; Press Release on the Executive Board Approval; and Statement by the Executive Director for Mali By International Monetary Fund. African Dept.
  20. Transmission of World Food Prices to Domestic Market: The Ethiopian Case By Kelbore, Zerihun Getachew
  21. Process and Constraint Analysis of Paraprofessionals regulation and legalisation By Fanka, A Yenah,Christa; Ilukor, John
  22. Financial development and Economic Growth: The Case of Cape Verde By Ogunyiola, Ayorinde
  23. Liberia: First Review Under the Extended Credit Facility Arrangement and Request for Waiver of Nonobservance of a Performance Criterion and Modification of Performance Criteria By International Monetary Fund. African Dept.
  24. Kingdom of Lesotho: Fifth Review Under the Three-Year Arrangement Under the Extended Credit Facility and Request for Extension of the Arrangement and Rephasing of Disbursement By International Monetary Fund. African Dept.

  1. By: Krishnan, Pramila; Patnam, Manasa
    Abstract: The increased adoption of fertiliser and improved seeds are key to raising land productivity in Ethiopian agriculture. However, as in much of sub-Saharan Africa, the adoption and diffusion of such technologies has been slow. We use data from the Ethiopia between 1999-2009 to examine the role of learning from extension agents versus neighbours for both improved seeds and fertiliser. We use the structure of spatial networks of farmers and panel data to identify these influences and find that while the initial impact of extension agents was high, the effect wore off, in contrast to learning from neighbours.
    Keywords: diffusion; social learning; social networks
    JEL: C31 Q16
    Date: 2013–07
  2. By: de Mauro, Andrea
    Abstract: This paper will attempt to provide a comprehensive answer to the complex issue of development in sub-Saharan Africa by identifying an FDI reliance-rejection paradox emanating from the incompatibility between colonial legacies and Structural Adjustment Programmes. Since the 1980s, international financial institutions have imposed foreign direct investment as the main source to finance the development of SSA, while ignoring the two main structural issues inherited from colonialism - the organisation of the labour market and the dependence on natural resources extraction. The former drastically reduces the attractiveness of the SSA economy to investors, while the latter forces FDIs to be exclusively oriented towards resource exports. The implication of this is the formation of three vicious cycles - economic instability, the Dutch disease and patronage - which locked the continent in an FDI paradox that prevents it from funding its own development.
    Keywords: Africa; Development; Investment; Structural Adjustment Programmes; Labour Markets; Natural Resources; Dutch Disease; Resource Curse; FDI; Zambia; Tanzania
    JEL: O11 O14 O16 O17 O19
    Date: 2013–06
  3. By: AfDB
    Date: 2013–09–09
  4. By: Marcelo Martinez; Montfort Mlachila
    Abstract: The paper explores the quality of the recent high-growth episode in sub-Saharan Africa by examining the following two questions: (i) what has been the nature and pattern of SSA growth over the past 15 years and how does it compare with previous episodes? (ii) has this growth had an impact on socially desirable outcomes, for example, improvements in health, education and poverty indicators? To do this, the paper first examines various aspects of the fundamentals of growth in SSA—levels, volatility, sources, etc.—according to various country analytical groupings. Second, it explores the extent to which the growth has been accompanied by improvements in social indicators. The paper finds that the quality of growth in SSA over the past 15 years has unambiguously improved, although progress in social indicators has been uneven.
    Keywords: Economic growth;Sub-Saharan Africa;Production;Productivity;Education;Health care;Poverty reduction;Social indicators;Quality of growth, social indicators, sub-Saharan Africa
    Date: 2013–02–26
  5. By: Calixte Ahokpossi; Kareem Ismail; Sudipto Karmakar; Mesmin Koulet-Vickot
    Abstract: Financial depth in Sub-Saharan Africa (SSA) has been uneven over the last two decades. The WAEMU countries are lagging behind other regions, particularly the High Growth Non-oil Exporters (HGNOEs) group. We use two complementary methodologies to compare the two groups of countries. In a panel of 16 countries over 1997–2009, we find that the financial gap between the two groups of countries can be explained by institutional factors. In a benchmarking exercise comparing the major economy in the WAEMU (Côte d’Ivoire) with the most structurally similar in the control group (Mozambique), we show that Côte d’Ivoire underperformed relative to Mozambique and to its estimated potential. We then identify policy and institutional asymmetries between the two countries that could explain the gap in performance.
    Keywords: Financial sector;West African Economic and Monetary Union;Sub-Saharan Africa;Nonoil developing countries;Cross country analysis;Economic models;Financial development, Financial possibility frontier, Benchmarking, WAEMU
    Date: 2013–07–03
  6. By: Aker, Jenny; Fafchamps, Marcel
    Abstract: Expansion in mobile phone coverage has improved access to information throughout the developing world, particularly within sub-Saharan Africa. The existing evidence suggests that information technology has improved market efficiency and reduced consumer prices for certain commodities. There are fewer studies assessing the impact of the technology on producers. Using market-level data we estimate the impact of mobile phone coverage on producer prices in Niger. We find that mobile phone coverage reduced the spatial dispersion of producer prices by 6 percent for a semi-perishable commodity, cowpea. These effects are strongest for remote markets and lowest at harvest time. Mobile telephony, however, has no effect on price dispersion for millet and sorghum, two storable crops. There is also no impact on the average producer price, but mobile phone coverage is associated with a reduction in the intra-annual price risk, primarily for cowpeas. These findings are confirmed by data from a farmer-level survey: we find that farmers owning mobile phones obtain more price information but do not engage more in spatial arbitrage and hence do not receive higher prices – except for peanuts. The additional evidence presented here helps understand how mobile phone coverage affects agricultural market efficiency in developing countries. It suggests that the impact differs across agents – depending on whether they use the information for arbitrage or not – and across crops – depending on whether inter-temporal arbitrage is possible or not.
    Keywords: Africa; Information; Information Technology; Market Performance; Niger; Search Costs
    JEL: O1 O3 Q13
    Date: 2013–05
  7. By: International Monetary Fund. African Dept.
    Keywords: Poverty Reduction Strategy Papers;Economic growth;Private sector;Agricultural sector;Public investment;Infrastructure;Energy sector;Education;Health care;Gender equality;Governance;Fiscal reforms;Senegal;
    Date: 2013–07–03
  8. By: International Monetary Fund. African Dept.
    Keywords: Economic growth;Agricultural sector;Forestry;Mining sector;Education;Health care;Environment;Fiscal reforms;Public enterprises;Governance;Poverty Reduction Strategy Papers;Congo, Democratic Republic of the;
    Date: 2013–07–23
  9. By: Ruthira Naraidoo (Department of Economics, University of Pretoria); Leroi Raputsoane (South African Reserve Bank)
    Abstract: This study assesses debt sustainability in South Africa allowing for possible nonlinearities in the form of threshold behaviour by fiscal authorities. A long historical data series on the debtto- GDP ratio and models with fixed and time-varying thresholds allowing the level of debt to vary relative to its recent history and the occurrence of financial crises are used in the analysis. First, the results reveal that fiscal consolidation occurs at a much lower debt-to-GDP ratio of 46 percent in the period 1946 to 2010 compared to 65 percent in the period 1865 to 1945. Secondly, the results provide evidence of a statistically insignificant fiscal consolidation below these threshold levels. Thirdly, the results reveal that fiscal consolidation occur at a higher debt-to-GDP ratio during financial crises periods.
    Keywords: Sovereign debt, thresholds, financial crisis
    JEL: C22 C51 E62 H63
    Date: 2013–09
  10. By: Louise Roos
    Abstract: This paper describes the construction of a database that underlies the labour supply module developed for South Africa, with a specific focus on HIV/AIDS. The labour supply theory imposes a stock/flow dynamic mechanism on labour market groups distinguished by labour market activity, age, gender, race, and HIV status/stage. Broadly, the theory specifies that at the start of year t, people aged 15-65 (the working age population, hereafter the WAP) are divided into categories based on common characteristics. These characteristics are age, gender, race, HIV status/stage and labour-market activity undertaken in year t-1. People in categories offer their labour services to activities performed during year t. At the end of year t, people still part of the WAP progress one year in age and may change their HIV status/stage. Some people leave the WAP due to retirement or death. After this transition, people are again grouped into categories, based on common characteristics. The process of labour supply from a category to an activity is then repeated. For the implementation of this theory, we need to create a database that contains matrices that form the initial solution of the model. Three characteristics of this database are noted: (1) it contains detailed information regarding the structure of the WAP in the base year (2002); (2) it includes a transition matrix that allows adults to change their age and HIV stage between year t-1 and year t and (3) it includes matrices describing the flow of adults from categories to activities. This paper is organised in three parts. The first part describes the construction of the activities matrix in the base year. The activities matrix describes the number of people in each labour-market activity by age, gender, race and HIV stage. The second part of this paper explains the construction of the categories matrix and the flow matrices. The categories matrix shows the number of people in each labour-market activity by age, gender, race and HIV stage at the start of the year. The flow matrices show the number of people by age, gender, race and HIV stage, moving from a labour-market category to an activity. The third part of the paper describes the construction of the transition matrix. This matrix allows people in each labour-market activity, given their gender and race, to change their age from to and change their HIV stage from to .
    Keywords: Africa, HIV/AIDS
    JEL: I19 O55
    Date: 2013–05
  11. By: Steven F. Koch; Jeffrey S. Racine
    Abstract: We apply parametric and nonparametric regression discontinuity methodology within a multinomial choice setting to examine the impact of public health care user fee abolition on health facility choice using data from South Africa. The nonparametric model is found to outperform the parametric model both in- and out-of-sample, while also delivering more plausible estimates of the impact of user fee abolition (i.e. the 'treatment effect'). In the parametric framework, treatment effects were relatively constant - around 7% - and that increase was drawn equally from both home care and private care groups. On the other hand, in the nonparametric framework treatment effects were largest for the least well-off (also around 7%) but fell for the most well-off. More plausibly, that increase was drawn primarily from the home care group, suggesting that the policy favoured those least well-off as more of these children received at least some minimum level of professional health care after the policy was implemented. Regarding the most well-off, despite having access to free public health care, children were still far more likely to receive health care at private facilities than at public facilities, which is also more plausible in South Africa's two-tier health sector.
    Date: 2013–09
  12. By: International Monetary Fund. African Dept.
    Keywords: Poverty Reduction Strategy Papers;Agricultural sector;Transport;Infrastructure;Governance;Social policy;Education;Gender equality;Health care;Labor markets;Unemployment;Sustainable development;Economic growth;Niger;
    Date: 2013–04–30
  13. By: International Monetary Fund. African Dept.
    Keywords: Staff-monitored programs;Fiscal policy;Budgets;Diamonds;Transparency;Banking sector;Bank supervision;Economic indicators;Zimbabwe;
    Date: 2013–07–03
  14. By: Juliana Dutra Araujo; Grace Bin Li; Marcos Poplawski-Ribeiro; Luis-Felipe Zanna
    Abstract: The permanent income hypothesis implies that frictionless open economies with exhaustible natural resources should save abroad most of their resource windfalls and, therefore, feature current account surpluses. Resource-rich developing countries (RRDCs), on the other hand, face substantial development needs and tight external borrowing constraints. By relaxing these constraints and providing a key financing source for public investment in RRDCs, temporary resource revenues might then be associated with current account deficits, or at least low surpluses. This paper develops a neoclassical model with private and public investment and several frictions that capture pervasive features in RRDCs, including absorptive capacity constraints, inefficiencies in investment, and borrowing constraints that can be relaxed when natural resources lower the country risk premium. The model is used to study the role of investment and these frictions in shaping the current account dynamics under windfalls. Since consumption and investment decisions are optimal, the model also serves to provide current account benchmarks (norms). We apply the model to the Economic and Monetary Community of Central Africa and discuss how our results can be used to inform the current account norm analysis pursued at the International Monetary Fund.
    Keywords: Current account balances;Central Africa;Natural resources;Developing countries;Private investment;Public investment;Central African Economic and Monetary Community;Economic models;Current Account, External Sustainability, Developing Economies
    Date: 2013–03–27
  15. By: International Monetary Fund. African Dept.
    Keywords: Insurance;Insurance supervision;Insurance regulations;Reports on the Observance of Standards and Codes;Financial Sector Assessment Program;Nigeria;
    Date: 2013–05–28
  16. By: International Monetary Fund. African Dept.
    Keywords: Article IV consultation reports;Fiscal policy;Mining sector;Transparency;Global competitiveness;Monetary policy;Reserves accumulation;Economic indicators;Debt sustainability analysis;Staff Reports;Public information notices;Congo, Democratic Republic of the;
    Date: 2013–04–03
  17. By: International Monetary Fund. African Dept.
    Keywords: Poverty Reduction Strategy Papers;Governance;Health care;Education;Infrastructure;Energy sector;Transport;Environmental sustainability;Comoros;
    Date: 2013–02–08
  18. By: Tembo, Solomon; Sitko, Nicholas
    Abstract: This technical compendium was developed to serve as a reference document for development organizations, researchers, government officials, and cooperating partners working in Zambia. It uses nationally representative survey data to provide descriptive trends and analysis relevant to the agricultural sector. It is also specifically targeted for organizations tasked with implementing programs associated with USAID’s Feed the Future (FtF) initiative. As such, a special section is dedicated to Eastern Province, with data disaggregation based on FtF requirements.
    Keywords: Agricultural and Food Policy,
    Date: 2013–08
  19. By: International Monetary Fund. African Dept.
    Keywords: Rapid Credit Facility;Fiscal policy;Fiscal reforms;Economic indicators;Staff Reports;Press releases;Mali;
    Date: 2013–06–21
  20. By: Kelbore, Zerihun Getachew
    Abstract: This paper investigates the integration of the Ethiopian grain market to the world market; and within country grain markets integration. To this end, two cereal crop markets: wheat and maize, have been investigated. For maize the integration into the world market is analyzed using the US and SAFEX exchange markets as a world market; for wheat Paris and Chicago exchange markets are considered a wheat world market. The analysis has been conducted using a cointegration method: Johansen (1988) procedure. The results show that the Ethiopian grain market is integrated into the world market, albeit to the once geographically proximate to it. And further, we found that the elasticity of the price pass through between the world and domestic markets has appeared to be more than unitary when evaluated at the mean prices of the two food crops. The analysis of domestic market integration is conducted using principal component analysis (PCA). The result shows that both wheat and maize markets are fairly integrated. However, the results demonstrate that in wheat market, of the traditionally known deficit markets Mekelle has shown an improvement in integration as its mean prices and price variability appear to be in line with the central market, but the maize market result has preserved the deficit market status. In the other deficit market, Dire Dawa, the mean prices of wheat and maize appear to be higher and more volatile than the central market. The other most striking result is that despite huge infrastructural improvement markets further from the central market exhibit higher level of price volatility than markets within a 300km distance from the central market, Addis Ababa. It has also been observed that the price differential between the central market and other local markets has shown a declining trend over time, and found to be stationary. This implies that the markets are more likely to converge in the long run, provided the market infrastructure continues to develop so as to reduce market information asymmetry that we believe has contributed to differences in price differentials and price volatility across markets
    Keywords: world market, domestic market, Price transmission, market integration , cointegration, PCA
    JEL: F1 F15 F42 O55 Q17 Q18
    Date: 2013–03–06
  21. By: Fanka, A Yenah,Christa; Ilukor, John
    Abstract: This study identifies influential actors in the integration of paraprofessionals, constraints and the best possible approach of integration. The research design is qualitative. The main problems are; poor veterinary legislation, limited finance, absence of organized and strong veterinarian and paraprofessional associations and low level of training among paraprofessionals. The most feasible integration approach is the moderate system. It was recommended that the veterinary surgeon act and paraprofessional bill should be passed in parliament, the Uganda Veterinary Board strengthened, more veterinarians and paraprofessionals need to be trained and establishment of veterinary training institutions and associations.
    Keywords: Integration, PRA, Perceptions, Actors, Paraprofessionals, Agricultural and Food Policy,
    Date: 2013
  22. By: Ogunyiola, Ayorinde
    Abstract: This study empirically investigates the long-run relationship and short-run dynamics between financial development and economic growth in Cape Verde for the period 1980 - 2011. The study employs the Johansen and Juselius approach to cointegration, pairwise granger causality test for causality and the VECM approach was also explored. The analysis was carried out using three indicators to measure financial development which are the money supply as a percentage of GDP(M2), ratio of credit provided by commercial banks as a percentage of GDP(DCPB) and the ratio of domestic credit to the private sector as a percentage of GDP (DCTP). Control variables such as interest rate and population growth rate were included in the analysis. The empirical result indicates the existence of a long run relationship between economic growth and financial development variables in Cape Verde. However, no short run relationship exists between economic growth and financial development variables but between the control variables and economic growth. The study also found a unidirectional relationship running from financial development to economic growth when money supply( M2) is used as well as a bidirectional causality running from financial development to economic growth and vice versa, when domestic credit provided by commercial bank (DCPB) is used. The study found a unidirectional causality from economic growth to domestic credit to private sector (DCTP).
    Keywords: Financial Development, Economic Growth, Endogenous Growth, Cape Verde, VECM
    JEL: E52 G1 O4 O42
    Date: 2013–09–01
  23. By: International Monetary Fund. African Dept.
    Keywords: Extended Credit Facility;Economic growth;Mining sector;Fiscal policy;Budgets;Fiscal reforms;Monetary policy;Reserves accumulation;Bank supervision;Economic indicators;Staff Reports;Press releases;Liberia;
    Date: 2013–07–23
  24. By: International Monetary Fund. African Dept.
    Keywords: Extended Credit Facility;Economic growth;Fiscal policy;Fiscal consolidation;Reserves;External borrowing;Debt management;Fiscal reforms;Staff Reports;Press releases;Performance criteria modifications;Performance criteria waivers;Lesotho;
    Date: 2013–05–22

This nep-afr issue is ©2013 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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