nep-afr New Economics Papers
on Africa
Issue of 2015‒01‒09
twenty-two papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Socio-economic inequality in South Africa according to different disparity indices By Jean-Mari Hakizimana; Hermanus Geyer
  2. Regulatory reform for closing Africa.s competitiveness gap By Kessides, Ioannis N.
  3. Incomes, inequality, and poverty in Kenya: A long-term perspective By Bigsten, Arne; Manda, Damiano Kulundu; Mwabu, Germano; Wambugu, Anthony
  4. From productivity to exporting or vice versa? Evidence from the Tunisian manufacturing sector By Ayadi, Mohamed; Mattoussi, Wided
  5. Industrial policy in practice: Africa.s Presidential Investors. Advisory Councils By Page, John
  6. Varieties of capitalists? The middle class, private sector and economic outcomes in Africa By Handley, Antoinette
  7. The idea of economic development: Views from Africa By Fofack, Hippolyte
  8. Young people, agriculture, and employment in rural Africa By Sumberg, James; Anyidoho, Nana Akua; Chasukwa, Michael; Chinsinga, Blessings; Leavy, Jennifer
  9. Tenure insecurity, climate variability, and renting-out decisions among female small-holder farmers in Ethiopia By Akpalu, Wisdom; Bezabih, Mintewab
  10. Supply-side constraints, capital goods imports, and the quality of Sub-Saharan African countries exports By Co, Catherine Y.
  11. Understanding crude oil import demand behaviour in Ghana By Marbuah, George
  12. How Basis Risk and Spatiotemporal Adverse Selection Influence Demand for Index Insurance: Evidence from Northern Kenya By Jensen, Nathaniel; Mude, Andrew; Barrett, Christopher
  13. The impact of conflict induced exile on entitlement of food: Evidence from rural Liberia By Kibriya, Shahriar; Xu, Zhicheng; Ghimire, Narishwar
  14. Regional Economic Integration in Africa By Marinov, Eduard
  15. Internet use, welfare and well-being : Evidence from Africa By James, M.J.
  16. Innovation systems, saving, trust, and economic development in Africa By Pamuk, H.
  17. Economic Implications of Business Dynamics for KE-Associated Economic Growth and Inclusive Development in African Countries By Simplice Asongu; Voxi Amavilah; Antonio Andrés
  18. Software piracy and scientific publications: knowledge economy evidence from Africa By Asongu Simplice
  19. Boosting scientific publications in Africa: which IPRs protection channels matter? By Simplice Anutechia Asongu
  20. The Evolving Debate on the Effect of Foreign Aid on Corruption and Institutions in Africa By Simplice Anutechia Asongu
  21. Health information, treatment, and worker productivity : experimental evidence from malaria testing and treatment among Nigerian sugarcane cutters By Dillon, Andrew; Friedman, Jed; Serneels, Pieter
  22. Long-run growth in Ghana : determinants and prospects By Herrera, Santiago; Aykut, Dilek

  1. By: Jean-Mari Hakizimana; Hermanus Geyer
    Abstract: The purpose of the paper is to identify areas in South Africa where social-economic disparity exists using 2011 census data. Different indices are used to measure spatial disparity with the aim of finding the most appropriate approach for measuring disparities under different circumstances. The following measures were used in the study: the multidimensional composite index of deprivation; range ratio; relative mean deviation; standard deviation of logarithms; Gini coefficient; Kuznets ratio; Theil inequality index, mean logarithmic deviation, and the Atkinson index. In the study settlements are either regarded as individual settlements or contiguous settlements as delimited at the main place level in the census. Due to the fragmenting impact of apartheid on the South African society, different measures tend to be the most appropriate in different parts of the country. This implies that different policy interventions are needed to address area-specific challenges.
    Keywords: Spatial disparity; Poverty; Deprivation; Inequality; Indices; South Africa
    JEL: D63 I32
    Date: 2014–11
  2. By: Kessides, Ioannis N.
    Abstract: Over the past decade, Africa has been experiencing an economic resurgence. Yet, the continent is facing several difficult challenges and many economies of the region continue to be among the least competitive in the world. Africa.s competitiveness is adve
    Keywords: regional integration, regulatory reform, competitiveness, Africa
    Date: 2014
  3. By: Bigsten, Arne; Manda, Damiano Kulundu; Mwabu, Germano; Wambugu, Anthony
    Abstract: This paper seeks to measure and explain changes in incomes, inequality, and poverty in Kenya. It starts from a very long-term perspective covering the last century, but then focuses on a more detailed analysis of the recent period for which data from hous
    Keywords: endowments, employment, growth inequality, Kenya, poverty
    Date: 2014
  4. By: Ayadi, Mohamed; Mattoussi, Wided
    Abstract: In this paper, we explore the link between firm productivity and exporting using three firm level datasets of 1323 Tunisian manufacturing firms from 2004 to 2006. In particular, we examine whether more productive firms self-select into export markets, and
    Keywords: manufacturing industry, learning by exporting, self-selection, innovation, Tunisia
    Date: 2014
  5. By: Page, John
    Abstract: Recent writing on industrial policy stresses the need for coordination between the public and private sectors. This paper examines the performance of one such coordination mechanism, Presidential Investors. Advisory Councils, in Ethiopia, Senegal, Tanzani
    Keywords: aid, Africa, industrial policy, institutions, political economy
    Date: 2014
  6. By: Handley, Antoinette
    Abstract: Political scientists have generally seen two key features of African political economies.a relatively small or absent middle class, and a middle class that is unusually embedded in the key explanations of the troubled political and economic traje
    Keywords: Africa, middle class, private sector
    Date: 2014
  7. By: Fofack, Hippolyte
    Abstract: Although development generally refers to a broad concept, the quest for development in Sub-Saharan Africa has been biased by ideological considerations which made abstraction of local conditions and people.s aspirations. The prevalent development models h
    Keywords: aspirational goals, balanced growth, self-reliance, structural transformation
    Date: 2014
  8. By: Sumberg, James; Anyidoho, Nana Akua; Chasukwa, Michael; Chinsinga, Blessings; Leavy, Jennifer
    Abstract: This paper examines the current interest in addressing the problem of young people's unemployment in Africa through agriculture. Using notions of transitions and mobilities we set out a transformative work and opportunity space framework that privileges d
    Keywords: young people, transformation, agriculture, entrepreneurialism
    Date: 2014
  9. By: Akpalu, Wisdom; Bezabih, Mintewab
    Abstract: Land tenure arrangements in Africa are generally skewed in favour of males. Compared to males, female plot owners face complex sets of constraints and systemic high tenure insecurity which culminate in low yields. In order to obtain better returns, some f
    Keywords: climate variability, female-headed households, productivity, tenure insecurity
    Date: 2014
  10. By: Co, Catherine Y.
    Abstract: In the last decade, a large portion of capital goods imports of Sub-Saharan African countries is telecommunications equipment, and China is now the main source of equipment for 30 Sub-Saharan African countries. A connection between specific types of equip
    Keywords: capital goods, product quality, Sub-Saharan Africa, African Growth Opportunity Act
    Date: 2014
  11. By: Marbuah, George
    Abstract: Crude oil importation is a major drain on the economy of Ghana, yet no study has attempted to analyse the determinants of crude oil imports. This paper brings to the fore an understanding of the key drivers of crude oil import demand. Using the autoregressive distributed lag modelling framework (ARDL), we estimate variant short-run and long-run import demand models for crude oil using time series data over the period 1980-2012. The results show that demand for crude oil is price inelastic in both the long and short term. Other important drivers of crude oil import are the real effective exchange rate, domestic crude oil production and population growth. Furthermore, real economic activity is found to be the most robust and dominant driver of crude oil demand with mixed estimates of inelastic and elastic coefficients in the short-run and long-run, respectively. Policy implications of our results are discussed.
    Keywords: Crude oil demand, import, determinants, cointegration, Ghana
    JEL: F10 F31 F41 Q11 Q48
    Date: 2014–10–24
  12. By: Jensen, Nathaniel; Mude, Andrew; Barrett, Christopher
    Abstract: Basis risk – the remaining risk that an insured individual faces – is widely acknowledged as the Achilles Heel of index insurance, but to date there has been no direct study of its role in determining demand for index insurance. Further, spatiotemporal variation leaves open the possibility of adverse selection. We use rich longitudinal household data from northern Kenya to determine which factors affect demand for index based livestock insurance (IBLI). We find that both price and the non-price factors studied previously are indeed important, but that basis risk and spatiotemporal adverse selection play a major role in demand for IBLI.
    Keywords: Pastoralists, Index Insurance, Uptake
    JEL: D81 O16 Q12
    Date: 2014–12–08
  13. By: Kibriya, Shahriar; Xu, Zhicheng; Ghimire, Narishwar
    Abstract: This article is a unique attempt to discover the impact of exile on the most basic human necessity, food entitlement. We argue that exile from society followed by reintegration attempts cause mental and physical trauma, emotional distress, cultural shock, depletion of technical skills, political oppression, loss of social cohesion and articulation. We use survey data randomized on levels of conflict and propensity of migration from 312 rural households in 22 Liberian villages from Loma, Nimba, and Grand Bassa counties. Our findings suggest that accounting for household demographics, farm size, attributes, and income; duration of exile increases the probability of food entitlement failure.
    Keywords: Food entitlement; Exile; Migration; Conflict; Social reintegration
    JEL: R22 R23 Z13
    Date: 2014
  14. By: Marinov, Eduard
    Abstract: State and Government leaders of the African Union adopt and implement efforts for regional integration as a common strategy for the development of the continent. The objective at continental level is the establishment of the African Economic Community as the last of six consecutive stages, including the strengthening of inter-sectoral cooperation and the establishment of regional free trade areas, monetary union, common market, monetary and economic union, covering the entire continent. Currently there are 15 Regional economic communities in Africa and 7 of them are officially recognized as the foundation for the development of the African economic community. Reviewed are their goals, their main achievements and issues. The study analyses the progress made in the integration process as well as the challenges it faces.
    Keywords: Economic integration, Regional economic communities, African economy
    JEL: F00 F55 N77
    Date: 2014
  15. By: James, M.J. (Tilburg University, School of Economics and Management)
    Abstract: Traditional consumer theory assumes that welfare is derived at the point where goods are purchased. More recent theories however argue that what matters is dependent on what happens after goods are purchased. Such information requires surveys that are specifically designed for the purpose. Accordingly, Internet use data are few and far between in developing countries. Recently, however, such data have become available for II African countries and my intention in this article is to use them to assess welfare more realistically across the countries in question. Among the questions asked are do the patterns of use favor one set of countries over others or are the observations more random in character? Which use mechanisms are most important across the sample and why? How do these results compare with those of a developed country such as the United States?
    Date: 2014
  16. By: Pamuk, H. (Tilburg University, School of Economics and Management)
    Abstract: The five essays in the dissertation explore the interaction between economic development in Africa and three economic concepts from different fields: decentralized agricultural innovation systems, trust and saving practices. A relatively new view to boost agricultural growth is the implementation of the innovation system approach. The Sub Saharan African Challenge Program adopted this approach through the development of local decentralized Innovation Platforms (IPs) in eight African countries. The first and the second essay respectively evaluate the impact of those platforms, on poverty and the adoption of agricultural technologies. The studies reach to mixed results concerning average impact on poverty and technology adoption. Some platforms promote the adoption of some innovations and reduce poverty level, and others do not (yet). The third essay complements these studies and investigates whether this difference in IP performance is because they may not have equally implemented the principles of the approach. The essay shows that IPs which performed better in human capacity development at the field, ceteris paribus, are more successful. Theory suggests that trust fosters economic development via reduced transaction costs and increased specialization. A vicious cycle may materialize if increased specialization, via increased market integration, also fosters trust. To shed light on the latter, the fourth essay studies whether increased market integration fosters trust by using a comprehensive survey of households living in West Africa in the early stages of market integration. The study identifies a negative and causal relationship between market integration and trust, which is contradictory to the theory. Having limited access to finance, entrepreneurs in developing countries have to utilize business profits or save in order to invest in their businesses. At the same time they keep their savings in multiple practices (e.g bank account, moneylender, etc.), which potentially may have different efficiency levels, and therefore may have varying effects on business investments. The fifth essay studies how different saving practices affect the likelihood of business profit reinvestment. The study shows that the practice of saving in a deposit account of a formal financial institution is more likely to facilitate reinvestment compared to the practice of keeping savings within the household.
    Date: 2014
  17. By: Simplice Asongu (Yaoundé/Cameroun); Voxi Amavilah (Phoenix AZ, USA); Antonio Andrés (Madrid, Spain)
    Abstract: This paper develops an empirically-relevant framework (a) to examine whether or not the African business environment hinders or promotes the knowledge economy (KE), (b) to determine how the KE which emerges from such an environment affects economic growth, and (c) how growth in turn relates to the ‘inclusive development’ of 53 African countries during the 1996-2010 time period. The framework provides a modest guide to policymaking about, and further research into, such relationships. We implement the framework by building a three-stage model and rationalizing it as five interrelated hypotheses. To allow greater concentration on the issues that are themselves already complex, our model is very simple, but clear. For example, we make neither an attempt to evaluate causality nor to test for it, even though we suspect the links to be multi-directional – opportunity costs are everywhere. Instead we focus on fundamental relationships between the dynamics of starting business and doing business as expressed in the state of KE, and through it to the inclusive development via the economic growth of those countries. Estimation results indicate that the dynamics of starting and doing business explain strongly a large part of variations in KE. The link between KE and economic growth exists, but it is weak, and we provide plausible reasons for such a result. Despite the weak association between KE and economic growth, KE-influenced growth plays a very important role in inclusive development. In fact, growth of this kind has stronger effects on inclusive development and by implication on poverty reduction, than some of conventional controls in this study such as FDI, foreign aid, and even private investment. There is clearly room for further research to improve the results, but just as clearly practical policy is best served by not neglecting the relationships examined in this paper.
    Keywords: Business Dynamics; Knowledge Economy; Development; Africa
    JEL: L59 O10 O30 O20 O55
    Date: 2014–12
  18. By: Asongu Simplice (Yaoundé/Cameroun)
    Abstract: This paper is an extension of the debate on the nexus between the strength of IPRs and prospects for knowledge economy. It assesses the relationships between software piracy and scientific publications in African countries for which data is available. The findings which reveal a positive nexus are broadly consistent with the school of thought postulating that, the East Asian miracle has been largely due to weaker IPRs regimes at the early stages of development. As a policy implication, less stringent IPRs regimes on scientific-related software (at least in the short-run) will substantially boost contributions to and dissemination of knowledge through scientific and technical publications in Africa. IPRs laws (treaties) on scientific-oriented software should be strengthened in tandem with progress in: scientific and technical publications and; knowledge spillovers essential for economic growth and development. More policy implications are discussed.
    Keywords: Publications; Piracy; Intellectual property rights; Governance; Africa
    JEL: A20 F42 O34 O38 O55
    Date: 2014–08
  19. By: Simplice Anutechia Asongu (Association of African Young Economists)
    Abstract: This paper examines how Africa’s share in the contribution to global scientific knowledge can be boosted with existing Intellectual Property Rights (IPRs) mechanisms. The findings which broadly indicate that tight IPRs are correlated with knowledge contribution can be summarized in two main points. First, the enshrinement of IPRs laws in a country’s Constitution is a good condition for knowledge economy. Secondly, while Main IP laws, WIPO treaties and bilateral treaties are positively correlated with scientific publications, the IPRs law channel has a negative correlation. Whereas the study remains expositional, it does however offer interesting insights into the need for IPRs in the promotion of knowledge contribution within sampled countries of the continent. Other policy implications are discussed.
    Keywords: Publications, Intellectual property rights, Governance, Africa
    JEL: A20 F42 O34 O38 O55
    Date: 2014–10
  20. By: Simplice Anutechia Asongu (Association of African Young Economists)
    Abstract: This policy chapter summarises an evolving debate on the effect of foreign aid on corruption and institutions. It entails a series of publications that have been successively motivated by feedbacks from academic and policy making circles. The plethora of papers explores debates sustaining the direct, conditional and indirect effects of foreign aid on institutions. Moreover, another debate on the incidence of foreign aid distortions on corruption is also assessed in light of a recently celebrated literature on development assistance. Overall, the findings show that the effects of foreign aid on corruption and institutions are: directly positive; conditionally positive with a magnitude dependent on initial institutional capacity levels; contingent on fundamental characteristics of development due to heterogeneity and; indirectly positive or negative depending on the transmission mechanism. While the impact of foreign aid uncertainty on corruption is also positive, the sign on governance could change in light of governments’ commitment to increase its dependence on local tax revenues.
    Keywords: Foreign Aid, Corruption, Development, Africa
    JEL: B20 F35 F50 O10 O55
    Date: 2014–09
  21. By: Dillon, Andrew; Friedman, Jed; Serneels, Pieter
    Abstract: Agricultural and other physically demanding sectors are important sources of growth in developing countries but prevalent diseases such as malaria adversely impact the productivity, labor supply, and choice of job tasks among workers by reducing physical capacity. This study identifies the impact of malaria on worker earnings, labor supply, and daily productivity by randomizing the temporal order at which piece-rate workers at a large sugarcane plantation in Nigeria are offered malaria testing and treatment. The results indicate a significant and substantial intent to treat effect of the intervention -- the offer of a workplace-based malaria testing and treatment program increases worker earnings by approximately 10 percent over the weeks following the offer. The study further investigates theeffect of health information by contrasting program effects by workers'revealed health status. For workers who test positive for malaria, the treatment of illness increases labor supply, leading to higher earnings. For workers who test negative, and especially for those workers most likely to be surprised by the healthy diagnosis, the health information also leads to increased earnings via increased productivity. Possible mechanisms for this response include selection into higher return tasks within the plantation as a result of changes in the perceived cost of effort. A model of the worker labor decision that allows health expectations partly to determine the supply of effort suggests that, in endemic settings with poor quality health services, inaccurate health perceptions may lead workers to suboptimal labor allocation decisions. The results underline the importance of medical treatment, but also of access to improved information about one's health status, as the absence of either may lead workers to deliver lower effort in lower return jobs.
    Keywords: Health Monitoring&Evaluation,Disease Control&Prevention,Labor Markets,Labor Policies,Work&Working Conditions
    Date: 2014–11–01
  22. By: Herrera, Santiago; Aykut, Dilek
    Abstract: Ghana's economic growth picked up in the early 2000s and has been exceptionally strong over the past few years, with price booms of its main commodity exports, gold and cocoa, and the initiation of commercial oil production in 2011. This paper examines recent econometric evidence on Ghana's long-term growth and evaluates its sustainability. The empirical evidence surveyed finds that Ghana's main growth drivers were investment, oil, and mineral rents, while government consumption acted as a growth retardant. Based on various scenarios for its determinants, per capita GDP growth rates are predicted to be between 3.5 and 4.5 percent for 2014-34. Nevertheless, the predictions are subject to considerable uncertainty associated with the expected trends and volatility of the drivers of growth, particularly to sustaining investment levels and external factors such as commodity prices and international capital flows. A growth decomposition exercise shows that Ghana's past growth was led by capital accumulation, which will be difficult to sustain given the high current account deficits and the volatility of capital flows. Hence, a switch toward a productivity-based growth strategy, instead of the investment-led growth strategy of the past, is the only viable alternative to sustain the recent high growth rates. For that, Ghana needs focus on policies that enhance government effectiveness and public spending efficiency. To mitigate the risk of falling into the so-called growth traps like many other countries, Ghana must resolve its macroeconomic imbalances and resume the institutional reform to enhance the quality of institutions and make growth more inclusive.
    Date: 2014–11–01

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