nep-afr New Economics Papers
on Africa
Issue of 2014‒12‒29
eighteen papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Learning to export and learning by exporting: The case of Ethiopian manufacturing By Siba, Eyerusalem; Gebreeyesus, Mulu
  2. Measured as poor versus feeling poor: Comparing objective and subjective poverty rates in South Africa By Posel, Dorrit; Rogan, Michael
  3. Indices of social development and their application to Africa By de Haan, Arjan; Foa, Roberto
  4. Skills and youth entrepreneurship in Africa: Analysis with evidence from Swaziland By Brixiova, Zuzana; Ncube, Mthuli; Bicaba, Zorobabel
  5. When do relative prices matter for measuring income inequality? The case of food prices in Mozambique By Arndt, Channing; Jones, Sam; Salvucci, Vincenzo
  6. Multidimensional welfare in districts of Zambia: A first order dominance approach By Masumbu, Gibson; Mahrt, Kristi
  7. Understanding Chinese and Western development finance in Uganda, South Africa, and Zimbabwe By Muchapondwa, Edwin; Mukanjari, Samson
  8. The performance of the manufacturing sector in Tanzania: Challenges and the way forward By Wangwe, Samuel; Mmari, Donald; Aikaeli, Jehovanes; Rutatina, Neema; Mboghoina, Thadeus
  9. Is Information Power? Using Mobile Phones and Free Newspapers during an Election in Mozambique By Jenny C. Aker; Paul Collier; Pedro C. Vicente
  10. Return Migration, Self-Selection and Entrepreneurship in Mozambique By Catia Batista; Tara McIndoe-Calder; Pedro C. Vicente
  11. Is there any causality between inflation and FDI in an ‘inflation targeting’ regime? Evidence from South Africa By Valli, Mohammed; Masih, Mansur
  12. The politics of regional inequality in Ghana: State elites, donors and PRSPs By Abdul-Gafaru Abdulai; David Hulme
  13. The impact of oil price on South African GDP growth: A Bayesian Markov Switching-VAR analysis By Mehmet Balcilar; Reneé van Eyden; Josine Uwilingiye; Rangan Gupta
  14. Mine safety and Industrial accidents at the Générale des Carrières et des Mines, in Katanga, Democratic Republic of Congo By Kalenga, John Ngoy
  15. Strategic Assessment of the Ethiopian Mineral Sector : Final Report By World Bank Group
  16. Agricultural intensification : the status in six African countries By Binswanger-Mkhize, Hans P.; Savastano, Sara
  17. Local currency bond market development in Sub-Saharan Africa: A stock-taking exercise and analysis of key drivers By Essers, Dennis; Blommestein, Hans; Cassimon, Danny; Ibarlucea Flores, Perla
  18. Working Paper - 209 - What is driving the African Growth Miracle By AfDB AfDB

  1. By: Siba, Eyerusalem; Gebreeyesus, Mulu
    Abstract: In this study, we investigate the relationship between exporting and firm performance using a longer panel dataset of Ethiopian manufacturing firms for the period 1996?2009. We test two hypotheses regarding exporting: selection into exporting versus learn
    Keywords: exports, learning, African manufacturing
    Date: 2014
  2. By: Posel, Dorrit; Rogan, Michael
    Abstract: In this paper, we compare subjective and money-metric measures of poverty in South Africa using data collected in the 2008/09 Living Conditions Survey. In addition to collecting detailed information on expenditure, the survey asked respondents to provide
    Keywords: income poverty, subjective poverty, economies of scale, adult equivalence
    Date: 2014
  3. By: de Haan, Arjan; Foa, Roberto
    Abstract: This paper, using a new set of social development indices, explores the measurement of social development across Africa, and how this relates to broader development patterns and measurement. Development practitioners worldwide increasingly recognize the i
    Keywords: measurement, social development, well-being, indicators
    Date: 2014
  4. By: Brixiova, Zuzana; Ncube, Mthuli; Bicaba, Zorobabel
    Abstract: The shortages of entrepreneurial skills have lowered search effectiveness of potential young entrepreneurs and the rate of youth start-ups. Our paper contributes to closing the gap in the entrepreneurship and development literature with a model of costly
    Keywords: youth entrepreneurship, model of skills and structural transformation, policies, Africa
    Date: 2014
  5. By: Arndt, Channing; Jones, Sam; Salvucci, Vincenzo
    Abstract: Changes in the relative prices of commodities consumed in different shares across income groups are known to influence real measures of inequality. Using household budget survey and price data in Mozambique from 2002/03 and 2008/09, we show that accountin
    Keywords: relative price changes, price index, income inequality, Mozambique
    Date: 2014
  6. By: Masumbu, Gibson; Mahrt, Kristi
    Abstract: In this paper we make welfare comparisons among districts of Zambia using multidimensional well-being indicators observed at the household level using the first order dominance approach developed by Arndt et al. in 2012. This approach allows welfare compa
    Keywords: multidimensional poverty measurement, first order dominance, Zambia
    Date: 2014
  7. By: Muchapondwa, Edwin; Mukanjari, Samson
    Abstract: China.s importance as a major donor outside the traditional Western donors has been increasing and this has helped to bridge the funding gaps in developing countries. At the same time, South-South financial assistance still comes with less conditionality
    Keywords: Africa, aid, China, development finance, environmental aid, South-South co-operation
    Date: 2014
  8. By: Wangwe, Samuel; Mmari, Donald; Aikaeli, Jehovanes; Rutatina, Neema; Mboghoina, Thadeus
    Abstract: Tanzania.s industrial sector has evolved through various stages since independence in 1961, from nascent and undiversified to state-led import substitution industrialization, and subsequently to de-industrialization under the structural adjustment program
    Keywords: manufacturing; exports; emerging firms, Tanzania
    Date: 2014
  9. By: Jenny C. Aker; Paul Collier; Pedro C. Vicente
    Abstract: African elections often reveal low levels of political accountability. We assess different forms of voter education during an election in Mozambique. Three interventions providing information to voters and calling for their electoral participation were randomized; an SMS-based information campaign, an SMS hotline for electoral misconduct, and the distribution of a free newspaper. To measure impact, we look at official electoral results, reports by electoral observers, behavioral and survey data. We find positive effects of all treatments on voter turnout. We observe that the distribution of the newspaper led to more accountability-based participation and to a decrease in electoral problems. JEL codes: D72, O55, P16
    Keywords: voter education, political economy, cell phones, newspapers, randomized experiment, field experiment, Mozambique, Africa
    Date: 2013
  10. By: Catia Batista; Tara McIndoe-Calder; Pedro C. Vicente
    Abstract: Does return migration affect entrepreneurship? This question has important implications for the debate on the economic development effects of migration for origin countries. The existing literature has, however, not addressed how the estimation of the impact of return migration on entrepreneurship is affected by double unobservable migrant self-selection, both at the initial outward migration and at the final inward return migration stages. This paper uses a representative household survey conducted in Mozambique in order to address this research question. We exploit variation provided by displacement caused by civil war in Mozambique, as well as social unrest and other shocks in migrant destination countries. The results lend support to negative unobservable self-selection at both and each of the initial and return stages of migration, which results in an under-estimation of the effects of return migration on entrepreneurial outcomes when using a ‘naïve’ estimator not controlling for self-selection. Indeed, ‘naïve’ estimates point to a 13 pp increase in the probability of owning a business when there is a return migrant in the household relative to non-migrants only, whereas excluding the double effect of unobservable self-selection, this effect becomes significantly larger - between 24 pp and 29 pp, depending on the method of estimation and source of variation used. JEL codes: F22, L26, O15
    Keywords: international migration, return migration, entrepreneurship, selfselection, business ownership, migration effects in origin countries, household survey, Mozambique, sub-Saharan Africa
    Date: 2014
  11. By: Valli, Mohammed; Masih, Mansur
    Abstract: This paper attempts to examine whether a long-run theoretical relationship does indeed exist between the level of inflation in South Africa and the amount of FDI eventually received by the country. It also attempts to provide insight into the purported macroeconomic benefits of the policy of ‘inflation targeting’, by ascertaining whether any causality exists between stable inflation levels and improved FDI inflows from a South African perspective. Utilising annual data ranging from 1970 to 2012, we employ time series techniques to answer our research objectives. Our results indicate that there is a long-run inverse relationship between the level of inflation and FDI inflow in South Africa, implying that a rise in the level of inflation would have a negative impact on the amount of FDI received by South Africa. Furthermore, the paper successfully demonstrates that a degree of causality does exist between stable inflation levels and improved FDI inflows from a South African perspective, suggesting that the policy change that occurred with the adoption of ‘inflation targeting’ by the South African authorities did have a significant impact on the average level of FDI inflow to the country. Consequently, one of the implications of our findings is that the policy of ‘inflation targeting’, if well-implemented, actively managed and consistently applied, could represent a vital organ of the policy toolkit available to governmental authorities and policymakers in South Africa and indeed all developing countries, in their bid to enhance the inflow of FDI to their respective countries.
    Keywords: inflation; foreign direct investment (FDI); South Africa; timeseries techniques
    JEL: C22 C58 E44 G15
    Date: 2014–08–24
  12. By: Abdul-Gafaru Abdulai; David Hulme
    Abstract: Through an analysis of Ghana's HIPC Fund, which was established as part of the Poverty Reduction Strategy Papers (PRSP) process, this paper shows how aid-financed efforts to reduce regional inequality in Ghana have failed. Dominant political elites agreed to policies of regional inequality reduction to access aid funding, but, once approved, such funds were allocated on quite different criteria in ways that marginalised the poorest. Analyses here reinforce the growing recognition that developmental outcomes in most poor countries are not shaped so much by the design of 'good' policies per se, but more importantly by the power relationships within which policy-implementing institutions are embedded. Aid donors seem unable to fully grasp this important lesson, and so their capacity to contribute to reducing regional inequality remains limited.
    Date: 2014
  13. By: Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus , via Mersin 10,Turkey;Department of Economics, University of Pretoria, Pretoria, 0002, South Africa.); Reneé van Eyden (Department of Economics, University of Pretoria); Josine Uwilingiye (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: One characteristic of many macroeconomic and financial time series is their asymmetric behaviour during different phases of a business cycle. Oil price shocks have been amongst those economic variables that have been identified in theoretical and empirical literature to predict the phases of business cycles. However, the role of oil price shocks to determine business cycle fluctuations has received less attention in emerging and developing economies. The aim of this study is to investigate the role of oil price shocks in predicting the phases of the South African business cycle associated with higher and lower growth regimes. By adopting a regime dependent analysis, we investigate the impact of oil price shocks under two phases of the business cycle, namely high and low growth regimes. As a net importer of oil, South Africa is expected to be vulnerable to oil price shocks irrespective of the phase of the business cycle. Using a Bayesian Markov switching vector autoregressive (MS-VAR) model and data for the period 1960Q2 to 2013Q3, we found the oil price to have predictive content for real output growth under the low growth regime. The results also show the low growth state to be shorter-lived compared to the higher growth state. Length: 27 pages
    Keywords: Macroeconomic fluctuations, oil price shocks, Bayesian Markov switching VAR
    JEL: C32 E32 Q43
    Date: 2014–11
  14. By: Kalenga, John Ngoy
    Abstract: This paper focuses on the workplace accidents of Gecamines in a comparative perspective. Copper industry has been the cornerstone of Congolese economy since the colonial era. Katanga province is well known for its reserves of copper and cobalt. Many accidents occurred in mining operations of Gecamines. We collected data of accidents from 1957 to 2008 during the fieldwork at Gecamines. Data of this study included only the accidents that required the miner to be absent from work for at least four calendar days. This study aims to determine factors of the accidents at Gecamines in order to suggest the policy to prevent the occurrence of accidents. The results show that miners at Gecamines were more exposed to the risk of accidents than their colleagues of similar industries in Australia, Canada and the United States of America. The average frequency, severity and number fatalities per year of Gecamines were 48, 3, and 9, respectively. These statistics were higher than those of the aforementioned three countries. Gecamines cared for the injured miners thus increasing the operating cost. These results imply that mine safety and working conditions at Gecamines should be improved to reduce the occurrence of accidents. The reduction of accidents should be achieved by training of miners and instauration of inspectors in charge of safety.
    Keywords: Mine safety, accidents, Gecamines, Katanga, Copper industry, Autoregressive model,
    Date: 2014–11
  15. By: World Bank Group
    Keywords: Water Supply and Sanitation - Wastewater Treatment Oil Refining and Gas Industry Mining and Extractive Industry (Non-Energy) Transport Economics Policy and Planning Water Supply and Sanitation - Sanitation and Sewerage Transport Industry
    Date: 2014–07
  16. By: Binswanger-Mkhize, Hans P.; Savastano, Sara
    Abstract: The Boserup-Ruthenberg framework has long been used to explain and understand the determinants of agricultural growth, the nature of the intensification of farming systems, investment, and technology adoption. The literature has produced an extensive body of evidence that summarizes or tests the hypothesis in Africa and often found it confirmed. However, in the past two decades, rapid population growth has put African farming systems under stress. At the same time, there has been a sharp increase in urbanization and economic growth that is providing new market opportunities for farmers. It is therefore necessary to investigate whether this has resulted in rapid intensification of farming systems, permitting rapid agricultural growth and maintenance or increase in the incomes of the farming population. This paper describes the status of intensification in six African countries using the first round of data from the Living Standards Measurement Study-Integrated Surveys on Agriculture. In addition, the paper (i) develops internationally comparable measures of overall agro-ecological crop potential and urban gravity in the farmers'location and (ii) estimates the causal impact of agro-ecological potential and urban gravity on population density, infrastructure, and market access and on a range of agricultural intensification variables. The paper shows that the new measures have relevant explanatory power. The descriptive analysis shows that the patterns of intensification observed across countries suggest several inconsistencies with Boserup-Ruthenberg. The paper also finds that urban gravity, except for its impact on crop intensities, has little impact on other intensification indicators.
    Date: 2014–11–01
  17. By: Essers, Dennis; Blommestein, Hans; Cassimon, Danny; Ibarlucea Flores, Perla
    Abstract: This paper studies the current state and drivers of the development of government local currency bond markets (LCBMs) in Sub-Saharan Africa, a region whose progress in developing such markets has only recently received attention in the literature. We argue that well-developed LCBMs could reduce countries’ exposure to external shocks; help wash away or reduce ‘original sin’; facilitate the mobilisation of domestic savings; and may have important financial, macroeconomic and institutional spill-over effects. With detailed information collected from various sources the paper first shows that quite a number of African countries have made significant strides in this area. Increasingly, governments in the region issue fixed-rate local currency bonds with tenors of ten years and more on a regular basis. This does not imply all is well. We find that LCBMs in Africa often have low liquidity, feature very few corporate securities and generally have relatively narrow investor bases dominated by commercial banks. The second part of the study presents new results on the drivers of LCBMs based on an econometric analysis of new panel data collected by the OECD. Our results indicate that LCBM capitalisation in selected African countries is negatively correlated with governments’ fiscal balance and relatively high inflation, and positively related to common law legal origins, better institutional quality and strong democratic political systems.
    Keywords: public debt; local currency bonds; Sub-Saharan Africa
    JEL: H63 O16 O55
    Date: 2014–11
  18. By: AfDB AfDB
    Date: 2014–12–04

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