nep-afr New Economics Papers
on Africa
Issue of 2014‒03‒30
ten papers chosen by

  1. Farmland Investments in Africa: What’s the Deal? By Luca Di Corato; Sebastian Hess
  2. Do the Poor Pay More for Maize in Malawi? By Mussa, Richard
  3. The Implied Volatility Analysis: The South African Experience By Romuald N. Kenmoe S; Carine D. Tafou
  4. Externalities of Education on Efficiency and Production Uncertainty of Maize in Rural Malawi By Mussa, Richard
  5. Explaining gender differentials in agricultural production in Nigeria By Oseni, Gbemisola; Corral, Paul; Goldstein, Markus; Winters, Paul
  6. Why pay NGOs to involve the community? By Ronelle Burger; Indraneel Dasgupta; Trudy Owens
  7. Economic Growth in Developing Countries: Is Landlockedness Destiny? By Ramesh Chandra Paudel
  8. Youth Wage Employment and Parental Education in Malawi By Mussa, Richard
  9. Implementation of REDD+ mechanisms in Tanzania By Salas, Paula Cordero
  10. Inputs, Gender Roles or Sharing Norms? Assessing the Gender Performance Gap Among Informal Entrepreneurs in Madagascar By Nordman, Christophe Jalil; Vaillant, Julia

  1. By: Luca Di Corato (Department of Economics, Swedish University of Agricultural Sciences, Sweden); Sebastian Hess (Department of Economics, Swedish University of Agricultural Sciences, Sweden)
    Abstract: Large-scale foreign investments in African farmland are rising and may contribute to agricultural productivity growth and economic development. However, host countries sometimes have to wait longer for the economic benefits to arrive than initially expected. In this respect, the timing of project development is crucial and depends on the economic incentives provided to the investors. We therefore present a dynamic stochastic programming model that reflects the typical bargaining situation concerning large land deals in Africa and allows the effect of market- and country-specific risks and taxation to be assessed. The model shows that commodity price volatility increases the value of the land development option, but slows down the land development process. Furthermore, it shows that host country attempts to negotiate fixed commitments to the speed of project development may run counter to the structure of economic incentives at the project site. The applicability of the model is demonstrated for a recent 10,000-hectare cotton project in Ethiopia. Response surface estimations suggest that Ethiopia has negotiated a contract under which it will receive about half the expected total project value, as long as it levies the regular corporate tax rate.
    Keywords: Foreign Direct Investment, Land Leasing, Real Options, Nash Bargaining
    JEL: C61 D81 F23 Q24
    Date: 2014–03
  2. By: Mussa, Richard
    Abstract: The paper uses data from the Third Integrated Household Survey to examine whether or not the poor pay more for maize in Malawi. Two approaches are adopted; an indirect approach which is based on quantity discounting, and a direct approach which is based the relationship between an expensiveness variable and household consumption expenditure. The paper finds that the poor in rural and urban areas pay more for maize. This evidence of a poverty penalty in the maize market is not sensitive to method used. It is found that the poor pay more for maize irrespective of when the maize is purchased. Thus, seasonality does not seem to be behind the observed poverty penalty. The paper also finds that the poverty penalty varies with seasonality.The poverty penalty is significantly more pronounced in the postharvest period when maize is in abundance; it is however reduced in the lean season.
    Keywords: Poverty penalty; quantity discounting; Malawi
    JEL: D1
    Date: 2014–02–13
  3. By: Romuald N. Kenmoe S; Carine D. Tafou
    Abstract: In this paper, we analyse the South African implied volatility in various setting. We assess the information content in SAVI implied volatility using daily markets data. Our empirical application is focused on the FTSE/JSE Top 40 index and we emphasize our models performance in distinct sub-periods. Our results are compared with VIX/VXN and S&P 500/NASDAQ 100 data in some points which are taken as our benchmark. We find a significant negative relationship between returns and volatility, in line with the results found in other markets. Finally, the link between SAVI, VIX and VXN are undertaken to examine the equity market transmission with respect to uncertainty.
    Date: 2014–03
  4. By: Mussa, Richard
    Abstract: The paper looks at the existence, nature and form of intrahousehold and interhousehold externalities of education on efficiency and production uncertainty of maize in rural Malawi. Data from the Third Integrated Household Survey are used. I find statistically and economically significant positive intrahousehold and interhousehold externalities of education on both efficiency and production uncertainty, and that the intrahousehold externality effects are larger than interhousehold externality effects. Community level schooling is found to substitute for household level schooling in the sense that farmers who reside in households where members are not educated have relatively higher efficiency and lower production uncertainty on account of living in communities where some inhabitants are educated. The paper also finds that the intrahousehold and interhousehold externality effects are more pronounced for the least efficient farmers, and that they are monotonic, and largest when schooling is relatively low.
    Keywords: intrahousehold; interhousehold;externality; Malawi
    JEL: D1
    Date: 2014–02–04
  5. By: Oseni, Gbemisola; Corral, Paul; Goldstein, Markus; Winters, Paul
    Abstract: This paper uses data from the General Household Survey Panel 2010/11 to analyze differences in agricultural productivity across male and female plot managers in Nigeria. The analysis utilizes the Oaxaca-Blinder decomposition method, which allows for decomposing the unconditional gender gap into (i) the portion caused by observable differences in the factors of production (endowment effect) and (ii) the unexplained portion caused by differences in returns to the same observed factors of production (structural effect). The analysis is conducted separately for the North and South regions, excluding the west of the country. The findings show that in the North, women produce 28 percent less than men after controlling for observed factors of production, while there are no significant gender differences in the South. In the decomposition results, the structural effect in the North is larger than the endowment at the mean. Although women in the North have access to less productive resources than men, the results indicate that even if given the same level of inputs, significant differences still emerge. However for the South, the decomposition results show that the endowment effect is more important than the structural effect. Access to resources explains most of the gender gap in the South and if women are given the same level of inputs as men, the gap will be minimal. The difference in the results for the North and South suggests that policy should vary by region.
    Keywords: Gender and Health,Gender and Development,Gender and Law,Rural Development Knowledge&Information Systems,Labor Policies
    Date: 2014–03–01
  6. By: Ronelle Burger (Department of Economics, University of Stellenbosch); Indraneel Dasgupta (Economic Research Unit, Indian Statistical Institute); Trudy Owens (School of Economics, University of Nottingham)
    Abstract: We examine the case for donors providing financial incentives to NGOs to increase community participation. We show that, when such incentives are provided, there need not exist any meaningful relationship between beneficiary welfare and the extent of community participation implemented by an NGO. Higher community participation is consistent even with reduced beneficiary welfare. Thus, eliminating community participation from the set of conditions for funding an NGO may improve beneficiary welfare. We provide evidence from the NGO sector in Uganda consistent with our theoretical conclusions. Beneficiaries themselves do not appear to perceive community participation as generating appreciable value-addition in project output.
    Keywords: regulation of non-governmental organizations, developing countries, community participation, Uganda
    JEL: I38 L31 L38
    Date: 2014
  7. By: Ramesh Chandra Paudel
    Abstract: This paper examines the determinants of economic growth in developing countries within the standard growth regression framework, with special attention being paid to the experience of landlocked countries. The results confirm the findings of previous studies that landlockedness hampers economic growth, but the magnitude of negative impact is sensitive to alternative estimation methods. However, the analysis suggests that good governance, trade-openness, and coordinating infrastructure development with neighbours explain the significant aspect of the inter-country differences in growth rates among landlocked developing countries (LLDCs). The results also suggest that African landlocked are not different from the other LLDCs. Contrary to the 'resource-curse' hypothesis, natural resources seem to contribute to economic growth of LLDCs.
    Keywords: Landlocked Countries, Economic Growth, Governance, Hausman-Taylor Estimation
    JEL: O50 F43 O43 C33
    Date: 2013
  8. By: Mussa, Richard
    Abstract: This paper looks at the relationship between the likelihood of being in regular wage employment and parental education for Malawian youth. It uses data from the third integrated household survey (IHS3). Only a mother's education is found to have a statistically significant effect on the likelihood of being in regular wage employment for young females and males. It is established that the effect of a mother's education on young males is significantly larger than that for young females. The paper also finds that regardless of gender, a mother's education complements/reinforces the positive effect of a youth's own education on the probability of being in wage employment. The evidence from this paper points to the existence of an intergenerational poverty trap; with children of uneducated mothers or mothers with low education finding themselves outside regular wage jobs.
    Keywords: youth employment; parental education; Malawi
    JEL: J2
    Date: 2014–03–10
  9. By: Salas, Paula Cordero
    Abstract: This paper explains the major issues and lessons derived from the national forest management program and REDD+ initiatives in Tanzania. It finds that addressing the most important drivers of forest degradation and deforestation, in particular the country energy needs and landownership, is essential for success in reducing emissions regardless of the type of program implemented. It also finds that, through the national program, forest users have learned to maximize profit from the sustainable use of the forest; however, the program reports great variability in the success of forest conservation. REDD+ may complement the national program by adding funding and other resources to start projects at the local level while giving additional payments for the permanence of carbon stocks may help to improve the social outcomes of those villages practicing sustainable forest management. However, a careful characterization of the national projects is necessary to generalize how REDD+ can be effectively implemented so that additional economic and environmental benefits are generated over what the national program is already achieving. Addressing this issue is key for identifying the conditions under which REDD+ achieves environmental additionality in Tanzania.
    Keywords: Climate Change Mitigation and Green House Gases,Wildlife Resources,Forestry,Climate Change and Environment,Environmental Economics&Policies
    Date: 2014–03–01
  10. By: Nordman, Christophe Jalil (IRD, DIAL, Paris); Vaillant, Julia (World Bank)
    Abstract: We use a representative sample of informal entrepreneurs in Madagascar to add new evidence on the magnitude of the gender performance gap. After controlling for business and entrepreneur characteristics, female-owned businesses exhibit a value added 28 percent lower than their male counterparts. Correcting for endogenous selection into informal self-employment raises the gap by 5 percentage points. We then investigate the role of sharing norms and gender-differentiated allocation of time within the household in the gender performance gap, by estimating their effect on the technical inefficiency of female and male entrepreneurs. Only male entrepreneurs seem subject to pressure to redistribute from the distant network. Our findings are consistent with situations where women working at home would essentially feel negatively the burden of their own community due to intense social norms and obligations in their workplace but also of domestic chores and responsibilities. We find evidence of females self-selecting themselves into industries in which they can combine market-oriented and domestic activities.
    Keywords: gender, entrepreneurship, informal sector, sharing norms, household composition, Madagascar
    JEL: D13 D61 O12 J16
    Date: 2014–03

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