nep-afr New Economics Papers
on Africa
Issue of 2014‒10‒22
sixteen papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. CO2 emissions, output, energy consumption, and trade in Tunisia By Sahbi Farhani; Anissa Chaibi; Christophe Rault
  2. Business, Brokers and Borders: The Structure of West African Trade Networks By Olivier Walther
  3. Increasing Accountability through Budget Transparency at the Subnational Level in Cameroon By Martin Luis Alton; Sanjay Agarwal
  4. Climate change and economic growth in sub-Sahara Africa: A nonparametric evidence By Paul Alagidede and George Adu
  5. Errors in recalling childhood socio-economic status: the role of anchoring and household formation in South Africa By Dieter von Fintel; Dorrit Posel
  6. Guinea : Basic Agricultural Public Expenditure Diagnostic Review (2003-2012), Main Report By World Bank
  7. Institutional choices for low-income countries: state capacity, property rights and development paths in Tanzania By Martha Prevezer
  8. Morocco: Request for An Arrangement Under the Precautionary and Liquidity Line and Cancellation of the Current Arrangement-Staff Report; Press Release and Statement by the Executive Director for Morocco By International Monetary Fund. Middle East and Central Asia Dept.
  9. Rethinking Pro-Growth Monetary Policy in Africa: Monetarist versus Keynesian Approach By Christian Lambert Nguena
  10. Guinea: Fourth Review Under the Three-Year Arrangement Under the Extended Credit Facility, and Financing Assurances Review-Staff Report; Press Release; and Statement by the Executive Director for Guinea By International Monetary Fund. African Dept.
  11. Religion and polygamy : evidence from the livingstonia mission in Malawi By Kudo, Yuya
  12. Republic of Congo: 2014 Article IV Consultation-Staff Report; Press Release; and Statement by the Executive Director for the Republic of Congo By International Monetary Fund. African Dept.
  13. Service Delivery Indicators : Kenya By Gayle H. Martin; Obert Pimhidzai
  14. Togo: Poverty Reduction Strategy Paper-Joint Staff Advisory Note By International Monetary Fund. African Dept.
  15. Republic of Congo: Selected Issues By International Monetary Fund. African Dept.
  16. The African Middle Class in South Africa 1910-1994 By Roger Southall

  1. By: Sahbi Farhani; Anissa Chaibi; Christophe Rault
    Abstract: This article contributes to the literature by investigating the dynamic relationship between carbone dioxide (CO2) emissions, output (GDP), energy consumption, and trade using the bounds testing approach to cointegration and the ARDL methodology for Tunisia over the period 1971-2008. The empirical results reveal the existence of two causal long-run relationships between the variables. In the short-run, there are three unidirectional Granger causality relationships, which run from GDP, squared GDP and energy consumption to CO2 emissions. To check the stability in the parameter of the selected model, CUSUM and CUSUMSQ were used. The results also provide important policy implications.
    Keywords: CO2 emissions, Energy consumption, ARDL bounds testing approach
    JEL: Q56 Q43 C51
    Date: 2014–09–25
  2. By: Olivier Walther (Department of Border Region Studies, University of Southern Denmark)
    Abstract: Using social network analysis, this paper studies the structure of trade networks that developed across West African borders. The first part aims to understand the centralization of cross-border trade networks. In a business environment where transaction costs are extremely high, we find that decentralized networks are well adapted to the various uncertainties induced by long-distance trade. We also study the trade-offs faced by traders between embeddedness and brokerage and find that long-distance trade relies both on the trust and cooperation shared among local traders, and on the distant ties developed with foreign partners from a different origin, religion or culture. In the second part, we study the spatial structure of trade networks and the influence of national borders on the development of social ties. The paper shows that the spatial form of trade networks is constrained by the historical origin of the traders engaged in cross-border activities. In those markets where trade is recent and where most of the traders are not native of the region, national borders are likely to exert a greater influence than in those regions where trade has pre-colonial roots.
    Keywords: Social networks, trade, border markets, brokerage, West Africa
    JEL: D85 F14 L14 P25
    Date: 2014–05
  3. By: Martin Luis Alton; Sanjay Agarwal
    Keywords: Health Monitoring and Evaluation Public Sector Expenditure Policy Finance and Financial Sector Development - Debt Markets Governance - National Governance Governance - Governance Indicators Public Sector Development Health, Nutrition and Population
    Date: 2013–06
  4. By: Paul Alagidede and George Adu
    Abstract: Climate change has been classed as the greatest and urgent global issue facing humanity today, yet the empirics of the debate remain largely muted, more so with reference to sub-Saharan Africa (SSA), where the impact of warming global temperatures are forecasted to have the worst impact. This paper is a contribution to the empirics of climate change and its effect on sustainable economic growth in SSA using nonparametric regression techniques. We establish the following: the relationship between real GDP per capita on one hand and climate change on the other hand, is intrinsically linear and monotonically decreasing at a constant proportionate rate. This relationship holds for both temperature and precipitation.
    Keywords: climate change, Sub-Saharan Africa, Sustainable Growth, Nonparametric techniques
    JEL: C14 C23 O11 O13 O40 Q54
    Date: 2014
  5. By: Dieter von Fintel (Department of Economics, University of Stellenbosch); Dorrit Posel (School of Built Environment and Development Studies, University of KwaZulu-Natal)
    Abstract: In the absence of longitudinal data that track individuals over an extended period of time, information on childhood socio-economic status can be provided by questions that ask adults to recall their parents’ education or their economic status at childhood. The usefulness of these data, however, requires that people are willing to report this information, and that these reports do not vary systematically over time, for example in response to changes in current circumstances. In this paper, we evaluate recall data for South Africa, collected from the same adults in the first two waves of a national panel survey. We show that the data, particularly on parental education, are compromised by very low and selective response, reflecting the fragmented nature of many South African families. Among those who do provide information, parental education is reported more consistently over time than the subjective appraisals of childhood economic status. However, we find also that both sets of indicators are sensitive to changes in current income, which would be consistent with anchoring effects. Furthermore changes in subjective appraisals of the past are highly correlated with changes in subjective appraisals of the present. These findings cast doubt on the ability of recall data to capture the adult’s socio-economic status at childhood.
    Keywords: retrospective data, socio-economic status, childhood reach, anchoring
    JEL: J13 C83 D1
    Date: 2014
  6. By: World Bank
    Keywords: Finance and Financial Sector Development - Access to Finance Environmental Economics and Policies Rural Development Knowledge and Information Systems Finance and Financial Sector Development - Debt Markets Public Sector Expenditure Policy Public Sector Development Rural Development Environment
    Date: 2013–11
  7. By: Martha Prevezer
    Abstract: I am using the North Wallis Weingast (2009) framework to analyse the nature of the basic Limited Access Order (LAO) in Tanzania. Looking at Tanzania historically in terms of the creation of state capacity, I use Levy’s (2013) categorisations to place Tanzania in weighing up centralized state capacity vs strength of checks and balances and state dominance vs competitive clientelism models and identifying who the dominant elites have been, particularly since independence in 1961. Tanzania has strong state capacity compared with Zambia and various other Low Income countries but relatively weaker checks and balances to constrain state power; Tanzania fits better with a state dominance model than a competitive clientelism model in relation to dominant elites and nature of institutions. I combine this with an analysis of the history of property rights in Tanzania and following Boone (2007) outline the tensions between three types of property rights: communal, customary rights vs private individualized rights vs state user rights. Despite considerable debate within Tanzania (the Shivji Commission and other bodies), state user rights have won out over both customary and to a lesser extent private rights. I outline how the dominance of state user rights over property combined with strong centralized state capacity via its bureaucracy and patronage over jobs has underpinned Tanzania’s development path, in line with Bates (1982,2014) analysis for many SSAs. In the 1960s and 1970s this path was to redistribute resources away from small farmer agriculture towards a monopolistic nascent industrial sector in a push to develop industry, absorbing surpluses from agriculture in exportable crops (eg coffee, sisal) via state-controlled structures such as Marketing Boards. Other supports such as extension officers, inputs, training shaped which farmers were supported and controlled prices paid to farmers to subsidize urban wage goods and control urban unrest. Since liberalization in the 1990s constraints on agriculture have been loosened, but in practice the power of District Commissioners and Marketing Boards remain in force. Land, backed by state user rights, is redistributed for the purposes of urban and rural/industrial enterprise away from smallholder farming and away from communal rights. More recent enterprise development has been in agribusiness, manufacturing and construction, diversified across industries but concentrated in relatively few firms. (Sutton 2012). There is a tension between the combined forces of strong centralized state capacity, weaker checks on the state plus property rights that give the state ultimate power to determine land use, and the fostering of bottom-up agricultural enterprise, either through cooperatives or through individual private enterprise. Liberalization has favoured private industrial enterprise, although difficulties over clarity of land rights, availability of land and administrative issues over transferring land continue to be obstacles.
    Keywords: Institutions, Property rights, low-income countries, Tanzania, development
    JEL: P00 O1 O5
    Date: 2014–09
  8. By: International Monetary Fund. Middle East and Central Asia Dept.
    Abstract: EXECUTIVE SUMMARY Morocco’s economic track record was challenged in recent years by a series of exogenous shocks, to which the authorities responded vigorously. Facing a difficult international environment, the authorities adopted, with the support of the Fund’s Precautionary and Liquidity Line (PLL), a policy program aimed at restoring fiscal and external buffers while strengthening competitiveness and promoting higher and more inclusive growth. The program remained broadly on track and the authorities did not draw on the PLL. The outlook is improving but remains subject to significant downside risks. Growth will slow in 2014, but it is expected to accelerate over the medium term owing to structural reforms and improved global conditions. However, this outlook remains subject to major external risks. A protracted period of slower growth in Europe, a surge in global financial market volatility linked to the exit from unconventional monetary policies in large advanced economies, and higher oil prices resulting from geopolitical tensions could significantly degrade the balance of payments. The authorities are requesting a two-year successor PLL arrangement with a lower access (550 percent of quota) than the first arrangement. The current PLL has provided useful insurance against external risks while anchoring the authorities’ reform agenda and sending positive signals to markets. Given significant global risks, a successor arrangement, which the authorities intend to treat as precautionary, would continue to support their policies. The lower access reflects the strengthening of the economy in the past two years as well as a balance of risks lower than two years ago. Staff considers that Morocco continues to qualify for a PLL arrangement and recommends the approval of the authorities’ request. The proposed arrangement carries low risks to the Fund and would have minimal impact on the Fund’s liquidity were the authorities to draw on the full amount available. The authorities’ policy package provides reasonable prospects of exit at the end of this arrangement if external circumstances warrant.
    Keywords: Precautionary and Liquidity Line;Fiscal policy;Fiscal reforms;Monetary policy;Reserves;Economic indicators;Debt sustainability analysis;Staff Reports;Letters of Intent;Extended arrangement cancellations;Press releases;Morocco;
    Date: 2014–08–05
  9. By: Christian Lambert Nguena (Association of African Young Economists)
    Abstract: The relative positive economic growth experienced by most African countries in the recent decade has come with insufficient demand stimulation. The concern of poverty at the forefront of economic policy, the need for inclusive growth and sustainable development, inter alia, brings forward the inevitable question of the monetary policy responsibility. Accordingly, the monetarist theory that focuses on price stability inherently neglects the demand stimulation aspect of economic prosperity. Since the mid 1980s, the monetarist school driven by its central aim of fighting inflation and maintaining credibility in markets and economic agents has been priority for monetary authorities (especially in Africa). To this effect, while good results in terms of inflation targeting has been achieved in many African countries; economic growth has sometimes been low. Hence, in light of the above, using a statistical and theoretical debate method, the Credible Monetary Policy (CMP)1 paradox is traceable to Africa. Accordingly, with the promising economic environment in Africa, we recommend the promotion of a monetary policy oriented toward improving economic growth under the constraint of price stability. In light of the above view, there are some note worthy signs such the recent decision by the two CFA zone central banks to either maintain interest rates at a low level or reduce it despite tightening measures of monetary policy taken by the European Central Bank (ECB) earlier in the year. In the same vein, the central bank of South Africa has maintained its policy of low interest rates with an objective of economic expansion. Since, the 2008 financial crisis, the consolidation of the Federal Reserve’s declared final objective of lowering interest rates and making emergency loans is an eloquent example to reassure African central banks in the choice of the pro-growth monetary policy option.
    Keywords: Pro growth monetary policy, CMP paradox, Financing enterprises, African central bank
    JEL: C23 C33 E52 E58
    Date: 2013–05
  10. By: International Monetary Fund. African Dept.
    Abstract: EXECUTIVE SUMMARY Economic activity remained weak in early 2014. Activity was impacted by an outbreak of the Ebola virus since late 2013, but lagging structural reforms, energy shortages, and political uncertainty may also be at play. Economic growth is estimated to have been 2.3 percent in 2013, and is projected at 3.5 percent in 2014, supported by higher public investment and assuming a gradual start-up of new mining sector investment. Inflation fell to below 10 percent year-on-year in May 2014, international reserves covered 3.6 months of imports by end-2013, and the exchange rate has remained stable. Performance under the ECF-supported program remains broadly satisfactory, although progress with structural reform has been slow. All performance criteria for end-2013 were met as were all but one (the floor on priority sector spending) of the program’s indicative targets for March 2014. However, the structural benchmarks for the second half of 2013 and early-2014 could not be completed as planned. The policy discussions focused on (i) the growth outlook for 2014; (ii) a supplementary budget for 2014 in light of a shortfall in revenues and new spending needs; (iii) progress in implementing structural reforms; and (iv) debt management. Risks to the program largely stem from domestic factors. New cases of Ebola have surged and spread more widely in recent months, which could affect growth in the second half of the year. The recent approval of the investment framework for the large Simandou iron ore project augurs well for a gradual pick-up in mining activity. However, renewed political tensions and uncertainty in the run-up to presidential elections, due in the second half of 2015, could risk delaying new investment. Staff supports completing the fourth review under the ECF arrangement and the financing assurances review. Completion of the review will result in a disbursement of an amount equivalent to SDR 18.36 million under the ECF arrangement.
    Keywords: Extended Credit Facility;Economic growth;Fiscal policy;External debt;Debt management;Mining sector;Fiscal reforms;Monetary policy;Economic indicators;Staff Reports;Letters of Intent;Press releases;Guinea;
    Date: 2014–08–07
  11. By: Kudo, Yuya
    Abstract: In contrast to the prevailing preconception, Christian females engage in polygyny in most of sub-Saharan Africa. Based on individual-level data provided by the Demographic and Health Survey (2000, 2004, 2010) in Malawi, this study explores whether Christian identity reduces the likelihood that females enter into polygyny. To address the endogeneity associated with this identity, the analysis adopts an instrumental variable (IV) approach by exploiting the unique setting of a Christian mission dating back to the late 19th century. Exposure to the mission, measured by geographical distance to the influential mission station, Livingstonia, enabled the indigenous population to gradually convert to Christianity. This is particularly true for the local population not belonging to the Yao, an ethnic group that was largely proselytized into Islam because of their historical connection with the Arabs. Using the distance-ethnicity (non-Yao) interaction as an IV for women's Christian identity, with numerous historical, geographic, and climate controls, this study discovers that compared to those practicing other religions (Islam and other) or no religion, Christian females are indeed less likely to form polygynous unions. This study also provides some evidence suggesting that the Christianity effects are more evident in a society at a more primitive stage of development.
    Keywords: Malawi, Marriage, Christianity, Women, Gender, Religion, Culture, Mission, Polygyny
    JEL: J12 N37 Z12 Z13
    Date: 2014–09
  12. By: International Monetary Fund. African Dept.
    Abstract: KEY ISSUES Economic context. Growth has been strong, inflation low, and fiscal buffers and international reserves adequate. However, poverty and unemployment remain high, despite large government spending financed from oil revenue. The business climate is among the most challenging and the private credit-to-GDP ratio among the lowest in sub-Saharan Africa (SSA). Outlook and Risks. The economy is projected to expand by about 6 percent per annum between 2014 and 2019, as new oil fields come on stream and an ambitious public investment program is implemented to diversify the economy and make growth more inclusive. Oil production is expected to peak in 2017. The medium-term outlook for non-oil growth and poverty reduction hinges on progress addressing deep-seated structural weaknesses and fiscal adjustment. Risks to the outlook relate to oil price volatility and political instability. Policies. Macroeconomic policies should focus on meeting the economy’s social and development needs while mitigating risks to macroeconomic stability in the longer term. • The growth of government spending should be arrested and the 2014 budget should not be exceeded. Amid spending pressures related to the 2015 Africa Games and the 2016 presidential elections, new fiscal developments should be reflected in a supplementary budget in 2014 to enhance transparency. • In view of the limited remaining lifetime of oil reserves, a gradual fiscal consolidation should be targeted over the medium-term to safeguard fiscal and debt sustainability. Ongoing efforts to address implementation and absorptive capacity constraints need to be stepped up to maximize the benefits from public investments. • Consideration should be given to adopt the non-oil primary balance as the fiscal anchor. • The private sector’s supply response to public infrastructure spending should be maximized through implementation of reforms to improve the business climate, support private investment, and develop the financial sector. • The pilot project for cash transfers should be well-targeted and monitored to reduce poverty. • Compliance with reserves pooling requirements would insure the continued smooth operation of the BEAC and the exchange rate peg, which both continue to serve the Republic of Congo well.
    Keywords: Article IV consultation reports;Economic growth;Fiscal policy;Government expenditures;External borrowing;Financial management;Fiscal reforms;Banking sector;Economic indicators;Debt sustainability analysis;Staff Reports;Press releases;Republic of Congo;
    Date: 2014–09–04
  13. By: Gayle H. Martin; Obert Pimhidzai
    Keywords: Secondary Education Teaching and Learning Education - Education For All Education - Primary Education Tertiary Education
    Date: 2013–07
  14. By: International Monetary Fund. African Dept.
    Keywords: Poverty Reduction Strategy Papers;Economic growth;Agricultural sector;Education;Health care;Infrastructure;Transport;Electric power;Governance;Environment;Sustainable development;Togo;
    Date: 2014–07–23
  15. By: International Monetary Fund. African Dept.
    Keywords: Banking sector;Access to capital markets;Public investment;Natural resources;Debt sustainability;Fiscal consolidation;Government expenditures;Fiscal policy;Selected Issues Papers;Republic of Congo;
    Date: 2014–09–04
  16. By: Roger Southall
    Abstract: Alan Cobley (1990: 3) has argued that no sustained interest was taken in the subject of class in South Africa until the arrival of a generation of radical historians in the 1970s, and then the focus of concern was largely with the origins and development of a black working class in whose revolutionary potential the future was, by many, deemed to lie. In contrast, Jeremy Seekings (2009) has proposed that class was long a concern, if not necessarily the central one, of liberal scholars from the 1940s. Nonetheless, even though it is true that an emergent black middle class attracted considerable interest from liberal historians, anthropologists and social observers, it is fair to say that it was dealt with spasmodically, and then very often largely as a subordinated appendage of the black proletariat. Arguably, therefore, it is only now that the history of the African middle class, notably as it participated in and shaped the African National Congress (ANC), is beginning to receive its due. In part, this is because the lot of the middle class is often deemed in ‘struggle history’ to have been unheroic: indeed in some tellings, the only way for the bourgeoisie to contribute to liberation was by subjecting itself to the leadership of the working class! Yet even while, today, there is a growing interest in the multi-faceted nature of the struggle against apartheid, there has been a failure to trace the holistic evolution of the black middle class. In what follows I provide an overview of the development of the specifically ‘African’ segment of the ‘black middle class’ in the pre-democratic era, even while recognizing that this places severe limitations upon how we portray past struggles against racial oppression.
    Keywords: African, Middle class, South Africa
    Date: 2014

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