nep-afr New Economics Papers
on Africa
Issue of 2014‒07‒28
28 papers chosen by
Christian Zimmermann
Federal Reserve Bank of St. Louis

  1. Non-Farm Enterprise Productivity and Spatial Autocorrelation in Rural Africa: Evidence from Ethiopia and Nigeria By Owoo, Nkechi S.; Naudé, Wim
  2. Exploring the Causality Links between Energy and Employment in African Countries By Arouri, Mohamed El Hedi; Ben Youssef, Adel; M'henni, Hatem; Rault, Christophe
  3. Re-evaluating Okun's law in South Africa: A nonlinear co-integration approach By Phiri, Andrew
  4. Migration Policy, African Population Growth and Global Inequality By Mountford, Andrew; Rapoport, Hillel
  5. A Tax Revenue Dataset for Sub-Saharan Africa: 1980-2010 By Mario MANSOUR
  6. Knowledge Economy and Financial Sector Competition in African Countries By Asongu, Simplice A
  7. Corporate Debt Market in India: Lessons from the South African Experience By Anand, Vaibhav; Sengupta, Rajeswari
  8. Questionable Inference on the Power of Pre-Colonial Institutions in Africa By Denis Cogneau; Yannick Dupraz
  9. Analysis of the Lead-Lag Relationship on South Africa capital market By Rešovský, Marcel; Gróf, Marek; Horváth, Denis; Gazda, Vladimír
  10. Rwanda: First Review Under the Policy Support Instrument-Staff Report; and Press Release By International Monetary Fund. African Dept.
  11. Do Institutions Quality Affect FDI Inflows in Sub Saharan African Countries? By Fiodendji, Daniel Komlan
  12. Senegal: Seventh Review Under the Policy Support Instrument and Request for Modification of Assessment Criteria-Staff Report; and Press Release By International Monetary Fund. African Dept.
  13. Republic of Madagascar: Request for Disbursement Under the Rapid Credit Facility; Staff Report; Press Release; and Statement by the Executive Director for the Republic of Madagascar By International Monetary Fund. African Dept.
  14. Wait and Sell: Farmers’ individual preferences and crop storage in Burkina Faso By Tristan Le Cotty; Elodie Maître d’Hôtel; Raphaël Soubeyran; Julie Subervie
  15. Public Debt, Economic Growth, and Inflation in African Economies By Lopes da Veiga, José; Ferreira-Lopes, Alexandra; Sequeira, Tiago
  16. Is it the climate or the weather? Differential economic impacts of climatic factors in Ethiopia By Mintewab Bezabih; Salvatore Di Falco; Alemu Mekonnen
  17. A comparative analysis of EU and US trade preferences for the LDCs and AGOA beneficiaries By Davies, E.; Nilsson, L.
  18. Hot Money Flows, Cycles in Primary Commodity Prices, and Financial Control in Developing Countries By Ronald McKINNON
  19. Seychelles: Request for An Arrangement Under the Extended Fund Facility-Staff Report; Press Release; and Statement by the Executive Director for Seychelles By International Monetary Fund. African Dept.
  20. A simple framework for the estimation of climate exposure By Xavier Vollenweider
  21. Une base de données sur les recettes fiscales en Afrique sub-saharienne, 1980-2010 By Mario MANSOUR
  22. Milk supply contracts and default incidence in Kenya By Mailu, Stephen; Will, Margret; Mwanza, Rosemary; Nkanata, Kinyua; Mbugua, David
  23. Self-Selection into Credit Markets: Evidence from Agriculture in Mali By LORI BEAMAN; DEAN KARLAN; BRAM THUYSBAERT; CHRISTOPHER UDRY
  24. The effect of Microfinance Institutions on the growth of small businesses in Kumasi, Ashanti Region of Ghana By Mintah, Emmanuel Kofi; Attefah, Kingsford Justice; Amoako-Agyeman, Francis Kofi Amoako-Agyeman
  25. Ex-post evaluation of the additionality of Clean Development Mechanism afforestation projects in Tanzania, Uganda and Moldova By Mark Purdon; Razack Lokina
  26. La pauvreté à Djibouti : une analyse multidimensionnelle By Waais Idriss Okiye
  27. Operation of distance education at the tertiary level: A case study of students of Cape Coast University, Valley View University and University of Education Winneba By Mintah, Emmanuel Kofi; Osei, Samuel
  28. Customers’ adoption of electronic banking: An investigation on the commercial banking industry in Zimbabwe. By Makosana, Musa

  1. By: Owoo, Nkechi S. (University of Ghana); Naudé, Wim (Maastricht University)
    Abstract: The productivity of non-farm enterprises in rural Africa may be associated with the productivity of other spatially proximate farm and non-farm enterprises. To test for the presence and significance of such spatial autocorrelation we use data from the geo-referenced 2011 Ethiopian Rural Socioeconomic Survey (ERSS) and the 2010/2011 Nigeria General Household Survey (NGHS). We find evidence of significant spatial autocorrelation. Productivity of non-farm enterprises is widely dispersed across space in both countries. In Ethiopia rural non-farm enterprises are more productive in locations where farms are less productive. In Nigeria, we find evidence for spatial autocorrelation at the individual enterprise level but not at the community level, once we control for location variables. Hence, taking spatial autocorrelation into account using spatial lag and spatial error models, we find education, age, size of the household, religious affiliation and community infrastructure are significant determinants of the labour productivity of non-farm enterprises in Ethiopia and Nigeria. This is the first time, to the best of our knowledge, that the productivity of rural non-farm enterprises in Africa has been studied in this way.
    Keywords: entrepreneurship, Africa, rural development, agriculture, spatial autocorrelation, Ethiopia, Nigeria
    JEL: L26 C21 M13 O55
    Date: 2014–06
  2. By: Arouri, Mohamed El Hedi (EDHEC Business School); Ben Youssef, Adel (University of Nice Sophia-Antipolis); M'henni, Hatem (University of Manouba); Rault, Christophe (University of Orléans)
    Abstract: Using a bootstrap panel analysis that allows for cross-country dependence, without requiring the use of pre-tests for a unit root, we study the causality links between energy use and employment for a sample of 16 African countries over the 1991-2010 period (according to availability of countries' data) in a panel Vector AutoRegressive model. Our results indicate that employment and energy use are strongly linked in Africa. Unidirectional causality from employment to energy use in Tunisia, Cameroun, Zambia and Ethiopia is found. A unidirectional causality from energy use to employment is found in DRC and Egypt. We found also bidirectional causality for Algeria, Benin, Kenya, Mozambique and Tanzania). However, our estimates did not indicate any causality in Big African players like South Africa, Nigeria, Morocco, Ghana and Senegal.
    Keywords: growth, energy consumption, employment, VAR
    JEL: Q43 Q53 Q56
    Date: 2014–06
  3. By: Phiri, Andrew
    Abstract: This study undertakes an examination of asymmetric co-integration adjustment in Okun’s law for South Africa between the periods of 2000-2013. This objective is tackled through the use of momentum threshold autoregressive (MTAR) econometric framework. Contrary to conventional theory, the results show that unemployment granger causes economic growth in the long-run, a result which may account for the job-less growth experienced by South Africa over the last decade or so. The obtained results have important implications for policy conduct in South Africa. Firstly, they prove that increases of economic growth in the long run may not cause a decrease in the unemployment rate yet a decrease in the unemployment rate will lead to increases in output growth. Secondly, these results further highlight the importance of labour market policies in improving economic growth in South Africa as opposed to policy authorities depending on higher economic growth to be driving force behind reducing unemployment rates.
    Keywords: Okun’s law; South Africa; Nonlinear Unit Root Tests; Nonlinear Cointegration, Nonlinear granger tests
    JEL: C22 C51 E23 E24
    Date: 2014–07–18
  4. By: Mountford, Andrew (Royal Holloway, University of London); Rapoport, Hillel (Paris School of Economics)
    Abstract: According to recent UN projections more than 50 percent of the growth in world population over the next half century will be due to population growth in Africa. Given this, any policy that influences African demography will have a significant impact on the world distribution of income. In this paper we discuss the potential for migration policies to affect fertility and education decisions, and hence, population growth in Africa. We present the results from different scenarios for more or less restrictive/selective migration policies and derive their implications for the evolution of world inequality.
    Keywords: global inequality, migration, fertility, Africa
    JEL: O40 F11 F43
    Date: 2014–07
  5. By: Mario MANSOUR (Fiscal Affairs Department - International Monetary Fund)
    Abstract: This paper presents a unique tax revenue dataset for Sub-Saharan Africa, which main innovation is the level of detail it provides about tax revenue sources for a large number of countries (41) and over a long time period (1980-2010). The paper describes how the dataset was constructed, identifying along the way problem areas in tax revenue statistics in Sub-Saharan Africa and possible improvements. A graphical analysis highlights revenue performance over time and across three dimensions: income levels, the relative importance of tax revenue from extractive industries, and trading groups (free-trade areas and customs unions). The dataset, available at, should be useful to a wide range of users and researchers, including academics, tax policy practitioners and advisers, and revenue and customs administrations.
    JEL: H20 O10
    Date: 2014–07
  6. By: Asongu, Simplice A
    Abstract: The goal of this paper is to assess how knowledge economy (KE) plays out in financial sector competition. It suggests a practicable way to disentangle the effects of different components of KE on various financial sectors. The variables identified under the World Bank’s four knowledge economy index (KEI) are employed. An endogeneity robust panel instrumental variable fixed-effects estimation strategy is employed on data from 53 African countries for the period 1996-2010. The following findings are established. First, education and innovation in terms of scientific and technical publications broadly bear an inverse nexus with financial development. Second, the incidence of information and communication technologies is positive on all financial sectors but increases the non-formal sectors to the detriment of the formal sector. Third, economic incentives have positive implications for all sectors though the formal financial sector benefits most. Fourth, institutional regime is positive (negative) for the semi-formal (informal) financial sector. The findings contribute at the same time to the macroeconomic literature on measuring financial development and respond to the growing fields of informal sector importance, microfinance and mobile banking by means of KE promotion. Policy implications and future research directions are discussed.
    Keywords: Financial development; Knowledge Economy; Africa
    JEL: G21 O10 O34 P00 P48
    Date: 2014–07–10
  7. By: Anand, Vaibhav; Sengupta, Rajeswari
    Abstract: Development of long-term debt markets is critical for the mobilization of the huge magnitude of funding required to finance potential businesses as well as infrastructure expansion. India has been distinctly lagging behind other emerging economies in developing its long-term corporate debt market. Traditionally, bank finance, coupled with equity markets and external borrowings have been the preferred funding sources. The domestic corporate debt market suffers from deficiencies in products, participants and institutional framework. Large fiscal deficit, high interest rates, inadequate market infrastructure, lack of transparency, excessive regulatory restrictions on the investment mandate of financial institutions, and distortionary tax and stamp duty regime are some of the key issues that may potentially hamper the development of a well-functioning corporate debt market in an emerging economy. Several of these issues need the political will to bring about legislative, regulatory and fiscal reforms. In order to gain insight into the required reforms, it may be useful to look at an economy that implemented not only the regulatory but also the policy level reforms in debt markets. South Africa is one such economy where the long term debt market reforms lasted nearly two decades starting from early 1980s. In this paper, we study the development of the South African corporate debt market, which underwent a significant transformation from being moribund into one that is vibrant and large. We also draw lessons for the Indian corporate debt market from the South African experiences.
    Keywords: Corporate bond market, Government Securities, Secondary market, Hedging instruments, Private placement.
    JEL: G1 G2
    Date: 2014–07–21
  8. By: Denis Cogneau (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, IRD - Institut de Recherche pour le Développement - Institut de Recherche pour le Développement); Yannick Dupraz (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: In their paper "Pre-Colonial Ethnic Institutions and Contemporary African Development" [Econometrica 81(1): 113-152], Stelios Michalopoulos and Elias Papaioannou claim that they document a strong relationship between pre-colonial political centralization and regional development, by combining Murdock's ethnographic atlas (1967) with light density at night measures at the local level. We argue that their estimates do not properly take into account population effects. Among lowly populated areas, luminosity is dominated by noise, so that with linear specifications the coefficient of population density is biased downwards. We reveal that the identification of the effect of ethnic centralization very much relies on these areas. We implement a variety of models where the effect of population density is non-linear, and/or where the bounded or truncated nature of luminosity is taken into account. We conclude that the impact of ethnic-level political centralization on development is all contained in its long-term correlation with population density. We also abstract from the luminosity-population nexus by analyzing survey data for 33 countries. We show that individual-level outcomes like access to utilities, education, asset ownership etc. are not correlated with ethnic-level political centralization.
    Keywords: Institutions ; Africa ; Population ; Development ; Light intensity at night
    Date: 2014–06
  9. By: Rešovský, Marcel; Gróf, Marek; Horváth, Denis; Gazda, Vladimír
    Abstract: Despite the efficient market hypothesis (EHM), lead-lag relationships can be observed mainly between financial derivatives and underlying asset prices, prices of large and small companies, etc. In our paper, we examined the lead- lag relationship between prices of open ended funds and an all-share index as a representative of the capital market. Along with more traditional methods of using cross correlations, partial correlation and Toda-Yamamoto causality tests, we also analysed the speed of adjustment of assets to their intrinsic values and identified the most prevalent lag using rolling time windows. The analysis was performed using data from the South Africa capital market.
    Keywords: lead-lag relationship, open ended fund, all-share index, causality, efficient market hypothesis
    JEL: G14
    Date: 2014
  10. By: International Monetary Fund. African Dept.
    Abstract: KEY ISSUES Main challenges: Rwanda continues to face the challenge of sustaining high growth while reducing its reliance on aid and preventing the build-up of imbalances. After using foreign exchange reserves over the past few years to support the economy, the room for maneuver is more limited and it will be important to rebuild policy buffers. Outlook and risks: Growth is projected to increase to 6 percent in 2014, while inflation is expected to remain well contained. Downside risks to the outlook center around delays in government financed projects and a weak second season for agriculture. Policy discussions focused on the short and medium-term economic challenges: • In the short term, the need to support growth and preserve the level of foreign reserves requires a cautious fiscal stance while maintaining priority spending and leaving scope for private sector credit expansion. In the absence of inflationary pressures, and faced with a binding balance of payments constraint, the monetary stance is appropriate to prevent a build-up of pressures in the foreign exchange market. Exchange rate flexibility would help preserve reserve buffers. • In the medium term, the challenge will be the cost-effective financing of development projects, and implementation of the government’s second Economic Development and Poverty Reduction Strategy (EDPRS2). Mobilizing domestic resources in support of the ambitious agenda embodied in the EDPRS2 will be crucial. The significant scaling up of investment also requires careful project selection and prioritization, with judicious recourse to non-concessional financing.
    Date: 2014–07–03
  11. By: Fiodendji, Daniel Komlan
    Abstract: One of the problems which sub-Saharan African (SSA) countries are confronted with is the low level of investment. Yet, the theory of capital tells us that it is impossible to envisage development without a considerable accumulation of capital. An important channel through which those countries can solve this capital issue is to resort to foreign direct investment (FDI), especially knowing the considerable role such investment played in the development of the economy of several Asian countries. Sub-Saharan African countries have not benefited enough from such a type of investment form many reasons. One of them is the quality of institutions. This paper investigates the linkages between political risk, institutional quality and FDI using different econometric techniques for a data sample of 30 African Sub-Saharan countries from period 1984 to 2007. This paper argues that countries whose governments are highly ranked according to various indices of the quality of institutions tend to do better in attracting FDI. In an empirical analysis of cross-section data, the paper finds that different aspects of the quality of institutions of a country (corruption, law and order, government stability, profile of investment, internal and external conflicts etc...) are almost always significant, regardless of the other control variables that are used in the least-squares and instrumental variables estimation. By using the interaction approaches, we find that when a host country's institutions qualities are sufficiently low, a further decrease in institutions may not stimulate and, in fact, may even decrease FDI inflows. In addition, FDI inflows significantly rise as the institutions quality become better. We also find that the marginal effect of natural resources on FDI depends on the level of resources abundance; i.e., when a country is resource-intensive, the marginal effect of natural resource on FDI inflows increases. In the non resource-intensive countries, natural resources might be more effective to attract FDI. Our results suggest that the institutional quality competition between FDI host countries may have different impacts on countries with different natural resource levels. Thus, the ability of a country to benefit from financial globalization and its vulnerability to financial crises can be significantly affected by the quality of its domestic institutions and its macroeconomic framework.
    Keywords: Foreign Direct Investment, Natural Resources, Institutional Quality
    JEL: D7 F21 O1
    Date: 2013–03
  12. By: International Monetary Fund. African Dept.
    Abstract: KEY ISSUES Context. GDP growth was lower than expected in 2013 (an estimated 3.5 percent) but would increase to 4.9 percent in 2014 with a rebound in agriculture, mining, and industry. Inflation stood at 0.7 percent on average in 2013 and would remain subdued in 2014. Political tensions have increased, with local elections scheduled for end-June 2014 and the recent return to Senegal of former President Wade. Plan Sénégal Emergent (PSE). Senegal’s new growth strategy offers a good diagnostic and a vision for Senegal. It is more focused than earlier strategies on key projects and reforms. Ownership of the plan at the highest level and strong support from the international community should also facilitate implementation. The authorities’ reiterated strong commitment to preserving fiscal sustainability is welcome. In light of the poor total productivity performance in recent years, the focus should be on raising economic efficiency more than increasing the volume of investment. Accelerating reforms to improve the business environment and a deep reform of the state are critical for this purpose. Reforming the state is also required to finance the public investment effort without jeopardizing fiscal sustainability. Program implementation. All quantitative assessment criteria and indicative targets for end-2013 were met, including on the budget deficit despite a significant revenue shortfall. Structural reform implementation has been slow, with many benchmarks met after their respective deadlines. This partly reflects the focus on designing the PSE since the last review. A significant risk to program performance is insufficient progress in reform implementation combined with strong expenditure pressures. Fiscal outlook and reforms. Despite challenging prospects for 2014, the authorities intend to continue reducing the deficit. Strong efforts will be needed on the revenue side to offset part of the 2013 revenue shortfalls. The recent review of current and capital expenditures, with a view to identifying less productive spending to be streamlined, is welcome and a step towards increasing the efficiency of public spending and aligning the budget with PSE priorities. Efforts should be made to improve fiscal transparency and make fiscal accounts more meaningful. Accelerating the implementation of the WAEMU directives on public financial management and of the agency reform plan is highly desirable. Transparency also requires being more explicit about the cost of certain transfers and subsidies, including those in favor of the energy sector, and reporting on the implementation of the reform of public agencies.
    Date: 2014–07–02
  13. By: International Monetary Fund. African Dept.
    Abstract: EXECUTIVE SUMMARY Economic background and outlook. The Malagasy authorities managed to avert a macroeconomic crisis during a difficult period of political transition and economic uncertainty since 2009. However, these disruptions have constrained growth and fiscal revenue, leading to a sharp compression of public investment and social outlays, with serious social consequences. In addition to accumulating domestic payment arrears, budgetary subsidies for fuel, and energy more generally, have become costly and have been crowding out the room for other priority fiscal spending. About 90 percent of the population now lives below US$2 a day (adjusted for purchasing-power parity), making poverty a critical issue for Madagascar. Supported by large mining projects that are reaching commercial output, recovering rice production, and a less uncertain political environment, growth is projected to increase to 3 percent in 2014. However, the economy remains vulnerable with large balance of payments needs that could get in the way of a robust economic recovery if not addressed promptly. Key challenges. The government’s immediate objective for 2014 is to start to raise social and infrastructure spending back to more normal levels and create a solid foundation for faster and more inclusive growth and for poverty reduction. There are large balance of payments and fiscal gaps that need to be filled in order not to jeopardize an economic recovery. Key measures to be undertaken in 2014 include: • Improve tax and customs revenue collections. • Increase funding of priority public investment programs and social spending. • Stop the accumulation of new domestic arrears and clear existing arrears in a phased manner. • Address the issue of fuel price subsidies over time, while identifying mechanisms for supporting vulnerable groups. Against this background, the authorities are requesting a disbursement under the Rapid Credit Facility (RCF). They also see the RCF as a stepping stone for a possible future arrangement addressing Madagascar’s medium-term challenges and as a positive signal to development partners. Staff supports the authorities’ request for a disbursement under the RCF.
    Date: 2014–07–02
  14. By: Tristan Le Cotty; Elodie Maître d’Hôtel; Raphaël Soubeyran; Julie Subervie
    Abstract: This paper investigates the reasons why African farmers differ in storage behavior and establishes a causal link between farmers’ time and risk preferences and storage. We first provide a stylized on farmstorage model in which impatience and risk aversion interact in the storage decision process. We show that impatience decreases grain storage whereas risk aversion may increase or decrease the quantity of grain stored from the harvest season to the lean season. We then test these propositions using original data on agricultural decisions, which we have collected from 1,500 farmers in two regions of Burkina Faso, who were also asked hypothetical questions about risk aversion and time discounting. Parameterized to our data, the model predicts that stored quantities decrease with impatience and increase with risk aversion. We then turn to an econometric analysis and provide an identification strategy which tackles a sample selection issue in our data [...].
    Date: 2014–07
  15. By: Lopes da Veiga, José; Ferreira-Lopes, Alexandra; Sequeira, Tiago
    Abstract: We analyse the implications of public debt on economic growth and inflation in a group of 52 African economies between 1950 and 2012. The results indicate that the limits of public debt affect economic growth and exhibit negatively, from a given level of debt, an inverted U behaviour regarding the relationship between economic growth and public debt. The highest average rates of real and per capita growth are achieved when public debt reaches 60% of the real GDP and an average inflation rate of 8.2%. When this ratio falls between 60-90%, the average rate of economic growth drops by up to 1.32 p.p. and continues dropping by up to 1.64 p.p. when the ratio exceeds 90%. Briefly, the high levels of public debt are reflected in reduced rates of economic growth and rising levels of inflation. Our results for three specific geographical areas resemble those of the overall analysis, despite some differences. In North African countries, the growth rates of the GDP and inflation also show an inverted U behaviour as the ratio of public debt/GDP increases. The highest rate of economic growth is recorded when the ratio public debt/GDP is below 30% of GDP and corresponds to an average inflation rate of 5.33%. Identical behaviour of the GDP growth rates and inflation also appears in Sub-Saharan countries until the third interval (60-90%). However, the highest growth rate of the GDP and GDP per capita is registered when the public debt/GDP ratio is in the second interval (30-60%). For SADC countries, the highest average rate of economic growth (6.8%) is similar to North African countries, when the ratio public debt/GDP is below 30% of GDP, with an average inflation rate of 11%. The high level of public debt is reflected in reduced rates of economic Growth and increasing inflation rates.
    Keywords: Public Debt; Economic Growth; Inflation; African Countries
    JEL: E31 E62 H63 O40
    Date: 2014–07–17
  16. By: Mintewab Bezabih; Salvatore Di Falco; Alemu Mekonnen
    Abstract: This paper assesses the distinct impacts of weather and climate change measures on agricultural revenue of farm households in the Amhara region of Ethiopia. This distinction is highlighted by observations in the temperature data, which show that the pattern of temperature for both short term and long values follows a bell-shaped distribution, with the striking feature that the extreme ends of the distribution have fatter tails for the long term values. The analysis employs monthly rainfall and 14 temperature categories related to weather measures and four categories corresponding with the extreme ends of the long term temperature distribution. The analysis also distinguishes between summer and spring seasons and different crops in recognition of Ethiopia’s multi-cropping and multi-season agriculture. The major findings show that temperature effects are distinctly non-linear but only when the weather measures are combined with the extreme ends of the distribution of the climate measures. In addition, rainfall generally has a less important role to play than temperature, contrary to expectations in rain-fed agriculture.
    Date: 2014–02
  17. By: Davies, E. (Oxford University); Nilsson, L. (DG Trade)
    Abstract: In light of the much praised US African Growth and Opportunity Act (AGOA), this study compares EU and US preferential trade policies towards the least developed countries (LDCs) under the EU Everything but Arms (EBA) initiative and the countries covered by the US AGOA. The descriptive analysis examines and compares product coverage, diversification of imports, share and value of preferential imports and preference utilisation rates. The empirical analysis, conducted in a gravity setting, compares the relative trade creating effects of the EU and US schemes. Excluding mineral fuels, it finds that EU preferential trade policies generate about twice as much trade as do corresponding US policies.
    Keywords: EU trade; US trade; preference utilisation; LDCs
    JEL: F13 F14 F35
    Date: 2013–02–07
  18. By: Ronald McKINNON (Université de Stanford)
    Abstract: Because the U.S. Federal Reserve’s monetary policy is at the center of the world dollar standard, it has a first-order impact on global financial stability. However, except during international crises, the Fed focuses on domestic American economic indicators and generally ignores collateral damage from its monetary policies on the rest of the world. Currently, ultra-low interest rates on short-term dollar assets ignite waves of hot money into Emerging Markets (EM) with convertible currencies. When each EM central bank intervenes to prevent its individual currency from appreciating, collectively they lose monetary control, inflate, and cause an upsurge in primary commodity prices internationally. These bubbles burst when some accident at the center, such as a banking crisis, causes a return of the hot money to the United States (and to other industrial countries) as commercial banks stop lending to foreign exchange speculators. World prices of primary products then collapse. African countries with exchange controls and less convertible currencies are not so attractive to currency speculators. Thus, they are less vulnerable than EM to the ebb and flow of hot money. However, African countries are more vulnerable to cycles in primary commodity prices because food is a greater proportion of their consumption, and—being less industrialized—they are more vulnerable to fluctuations in prices of their commodity exports. Supply-side shocks, such as a crop failure anywhere in the world, can affect the price of an individual commodity.  But joint fluctuations in the prices of all primary products— minerals, energy, cereals, and so on—reflect monetary conditions in the world economy as determined by the ebb and flow of hot money from the United States, and increasingly from other industrial countries with near-zero interest rates.
    Date: 2014–07
  19. By: International Monetary Fund. African Dept.
    Abstract: KEY ISSUES Context. The 4-year EFF-supported program that expired in December 2013 attained its key goals of reducing public debt, building reserves and implementing structural reforms to raise growth potential, strengthen public finances, and enhance oversight of state-owned enterprises. Nevertheless, substantial policy challenges remain, including the need to further reduce the still-high debt level, ensure external sustainability in the face of balance of payments pressures, and entrench structural reforms to maintain growth and bolster economic resilience. To help address this remaining agenda, the authorities have requested a successor EFF arrangement. Main elements of the program. The program aims to bolster the foundations for sustained, inclusive growth, while addressing vulnerabilities: • Fiscal policy will be anchored by the authorities’ target of reducing public debt below 50 percent of GDP by 2018. • The monetary and exchange rate policy framework will be anchored by an average reserve money ceiling with a flexible exchange rate, permitting a gradual reserve accumulation to roughly maintain current coverage levels in the face of balance of payments pressures. The Central Bank of Seychelles will also move toward a more forward looking monetary policy regime. • The authorities are committed to an ambitious structural reform agenda aimed at: fostering sustained and inclusive growth; enhancing the quality and management of public finances; and strengthening the performance and oversight of state-owned enterprises. • Under the arrangement, Seychelles would be able to access up to SDR 11.445 million (about US$17.8 million, 105 percent of quota), subject to semi-annual reviews. On this basis staff supports the authorities’ request for an extended arrangement under the Extended Fund Facility. Risks. Risks to the program are considered moderate; they include exogenous shocks to the small and vulnerable economy, as well as a possible reversal of the pro-reform sentiment.
    Date: 2014–07–03
  20. By: Xavier Vollenweider
    Abstract: This article introduces a new methodology to estimate climate exposure at the household’s level with the standardized precipitation evapotranspiration index (SPEI) as its building block. As the probability distribution of the SPEI is known, one can easily recover the marginal probability distribution of expected consumption. Furthermore, the approach is simple enough to accommodate quantile regressions and hence offer the opportunity to broaden the scope of the analysis to different categories of the population. I illustrate the methodology with a case study on Ethiopia. I find notably that while poor households in the most remote villages are almost as resilient to a 10-year return period drought as poor households living in the vicinity of a town (up to 20 km), the contrary is true for richer households: the ones living in remote parts of Ethiopia are much more at risk than their suburban counterparts.
    Date: 2014–05
  21. By: Mario MANSOUR (Département des Finances - Fonds Monétaire International)
    Abstract: Ce papier présente une base de données unique sur les recettes fiscales en Afrique sub-saharienne. Sa nouveauté réside dans le niveau de détail qui est fourni sur les sources de recettes fiscales pour un grand nombre de pays (41) et sur une longue période temporelle (1980-2010). Le papier décrit la construction de la base, tout en identifiant les problèmes liés aux statistiques de recettes fiscales en Afrique sub-saharienne, et en suggérant de possibles améliorations. Une analyse graphique souligne l’évolution du niveau des recettes dans le temps et suivant trois dimensions : les niveaux de revenus, l’importance relative des recettes fiscales issues des industries extractives, et les blocs commerciaux (zones de libre-échange et unions douanières). Disponible sur, la base de données devrait être utile à un grand nombre d’utilisateurs et de chercheurs, y compris les universitaires, les praticiens de la politique fiscale et les administrations fiscales et douanières. Le version française est à publier dans la Revue d'Ecomomie du développement.
    JEL: H20 O10
    Date: 2014–07
  22. By: Mailu, Stephen; Will, Margret; Mwanza, Rosemary; Nkanata, Kinyua; Mbugua, David
    Abstract: Using cross sectional data from all 47 Counties in Kenya, the presence of contract breaches between the producers and chain intermediary node is investigated. Most farmers do not engage in contracting and for those who do, many of these contracts are found to be informal. In addition, most of these contracts (whether formal or informal) were breached. However, some buyers appear to be associated with contract breaches. A distinct pattern emerges showing that larger milk producers are more likely to make formal contracts than small producers while the results also confirm that most of the contracts between farmers and individual consumers as well as traders and middlemen are informal and subject to contract breaches. Using a multiple correspondence analysis, these associations between contract breaches and farmer characteristics are explored. Results indicate that collective action institutions might encourage formalization of contracts while households that do not engage in some form of collective action engagements in most cases make informal contracts although both formal and informal contracts are equally subject to contract breaches. An examination of the underlying institutional, psychological and sociological drivers to contract breaches is recommended as such information can reveal how best to upgrade successful contract farming arrangements.
    Keywords: Multiple Correspondence Analysis, Contract Farming
    JEL: C14 C7 K00 Z13
    Date: 2014–01–07
    Abstract: We partnered with a micro-lender in Mali to randomize credit offers at the village level. Then, in no-loan control villages, we gave cash grants to randomly selected households. These grants led to higher agricultural investments and profits, thus showing that liquidity constraints bind with respect to agricultural investment. In loan-villages, we gave grants to a random subset of farmers who (endogenously) did not borrow. These farmers have lower – in fact zero – marginal returns to the grants. Thus we find important heterogeneity in returns to investment and strong evidence that farmers with higher marginal returns to investment self-select into lending programs.
    Keywords: credit markets; agriculture; returns to capital
    JEL: D21 D92 O12 O16 Q12 Q14
    Date: 2014–05
  24. By: Mintah, Emmanuel Kofi; Attefah, Kingsford Justice; Amoako-Agyeman, Francis Kofi Amoako-Agyeman
    Abstract: The influx of Microfinance institutions in Ashanti Region of Ghana over the past two decades and their importance to small businesses has attracted heated debate. This study reports on the effect of microfinance Institutions (MFIs) on the growth of Small Businesses(SBs). The main data collection instruments were questionnaires and interview. Twenty(20) Microfinance institutions and two hundred (200) Small Businesses respectively were sampled for the study. The study assessed the services Microfinance Institutions render to Small Businesses, how SBs manage and utilize MFI credits, and the challenges both face in dealing with each other. The study revealed that MFIs provide loans to businesses and create enabling environment to save. The study further showed that SBs use greater portion of their profit to service the loan due to high interest rate and short repayment period. The study therefore recommends that MFIs should give flexible terms of repayment of loan to enable SBs raise the capital needed. The government should provide funds to SBs at no or reduced borrowing cost. It is also recommended that Microfinance Institutions initiate insurance schemes for SBs. SBs should keep proper financial records to enable them measure the growth of their businesses using profitability ratios. Finally SBs should fully implement the advices MFIs offer to them to promote their business growth.
    Keywords: Microfinance, Small business, Growth and development, paradigm shift, impact analysis
    JEL: M1
    Date: 2014–06–15
  25. By: Mark Purdon; Razack Lokina
    Abstract: This study presents findings from a systematic comparative research effort to investigation the additionality claims of CDM afforestation projects in Tanzania, Uganda and Moldova.Using what we refer to as an ex-post comparative baseline approach that accounts for how project financing and background economic conditions evolve over a CDM project’s implementation and crediting periods, we demonstrate that the projects in Uganda and Moldova are very likely to be fully additional while only approximately one-quarter of carbon credits resulting from the Tanzania project are genuine. The conditions of additionality can change significantly over the course of a CDM project in a way that undermines project environmental integrity because the CDM rules do not accommodate changing baseline conditions. Rather, current CDM rules allow initial baseline conditions to be frozen over a project’s crediting period. We recommend that a reformed CDM, REDD, NAMA or other new market mechanism adopt some of the elements of our approach including use of comparative performance benchmarks, an additionality risk management tool and engaging donors in the development of “ODA-baselines” for climate mitigation projects which combine carbon finance and development assistance.
    Date: 2014–02
  26. By: Waais Idriss Okiye (CRESE - Centre de REcherches sur les Stratégies Economiques - Université de Franche-Comté : EA)
    Abstract: L'éradication de l'extrême pauvreté, un des piliers des objectifs millénaires de développement (OMD) est loin d'être atteint actuellement. Le défi majeur étant de construire un cadre économique multidimensionnelle tels que la santé, l'éducation, les conditions de vie etc. Cet article vise à effectuer une analyse de la pauvreté en plusieurs dimensions sur Djibouti. Il a le mérite d'être le premier travail dans ce pays. L'analyse unidimensionnelle (analyse traditionnelle) de la pauvreté suppose que seul le revenu est une bonne prédiction du statut pauvre ou non pauvre de l'individu. Une telle analyse est donc insuffisante parce qu'elle ne permet pas d'étudier la pauvreté dans sa globalité. L'analyse multidimensionnelle, en se basant sur la méthodologie d'Alkire et Foster (2007) nous a paru indispensable dans la mesure où elle tient compte non seulement le revenu, mais d'autres facteurs socio-économiques comme la santé, l'éducation, les conditions de vie ... . Et dans ce sens elle permet de mieux appréhender la notion de pauvreté dans son ensemble. Les analyses statistiques multidimensionnelles ont été effectuées sur les données de la troisième enquête Djiboutienne auprès des ménages pour les indicateurs sociaux (EDAM3-IS) réalisée en avril 2012. Les résultats fournis nous ont permis de construire un indice composite de la pauvreté multidimensionnelle à Djibouti, puis une ventilation par dimension et par milieu de résidence a été opéré pour montrer la disparité de la pauvreté multidimensionnelle, qui est plus accentuée dans les zones rurales et touche plus particulièrement les ménages souffrant de privation de l'accès aux service de santé et dont le chef de ménage n'est pas alphabétisé et qui sont en temps en manque des certains bien matériels facilitant les conditions de vie.
    Keywords: pauvreté multidimensionnelle, indice de pauvreté, structure axiomatique, décomposabilité, pauvreté à Djibouti
    Date: 2014–04–18
  27. By: Mintah, Emmanuel Kofi; Osei, Samuel
    Abstract: The Operation of Distance Education has become a major mode of education because the conventional education is unable to meet the growing demand for admission into tertiary institutions. Through application of purposive sampling technique (procedure) this research brings to light the operations of Distance Education in Ghana at the tertiary level. In establishing this, literature covering different aspects of operational challenges is reviewed. Both qualitative and quantitative analyses were applied. The results from the respondents denote ´´good´´ impression about the operation of Distance Education in that the students can add more academic and professional value to their careers while working. However, socio-economic and financial factors posed problems for Distance Education participants. Combination of work and studies identified as major challenge in pursuing Distance Education. The use of electronic media, employing more tutors, ensuring relatively permanent teaching- learning venues and other factors facilitate efficacy and considerable improvement of Distance Education operation in Ghana. To make distance education more effective, the following recommendations are made: modern I.C.T. tools must be used in the operation Distance Education; institutions and organizations should be made to accept Distance Education Certificates; more lecturers/instructors should be employed; study leave for Distance Education students to solve financial difficulty the students face; and the scope of Distance Education should be widen to cover many subjects taught.
    Keywords: Distance Education, Operations, Tertiary Level of Education, Opening Learning, Socio-economic background.
    JEL: I2
    Date: 2014–03–31
  28. By: Makosana, Musa
    Abstract: The advent of electronic banking offers banking firms a new frontier of opportunities and challenges. This study investigates how social factors, awareness, consumer perceptions and attitudes towards electronic banking influence the adoption of electronic banking in Zimbabwe. In Zimbabwe little is known and understood about the emergence of electronic banking, this is because electronic banking is new, and so consumer acceptance and use of electronic banking is still limited. This study has reviewed current literature and opinions about factors influencing electronic banking, thus including consumer perceptions towards electronic banking characteristics and social influences that affect consumer adoption of this mode of banking. This study also explains the methodology used in conducting interviews to obtain primary information for this study. This study presents both the results of the interviews and the analysis of these results, with figures to determine the extent that the factors studied influence customer adoption of electronic banking. Psychological factors including, compatibility, complexity, risk, convenience, security, privacy and cost were found to influence the adoption of electronic banking. The theoretical contributions and the practical implications of the findings are discussed and suggestions for future research are presented.
    Keywords: electronic banking, consumer awareness, consumer perceptions, adoption
    JEL: M31
    Date: 2014–07–01

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