nep-afr New Economics Papers
on Africa
Issue of 2015‒01‒14
eleven papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. The European Union Sanitary and Phytosanitary Measures and Africa’s Exports By Olayinka Idowu Kareem
  2. Trends in the distribution of multidimensional development indices in Sub-Saharan Africa By Daniel Bahyl; Katarzyna Ptasinska; Daniel Roos
  3. Determinants of Bank Profitability in Nigeria By Osuagwu, Eze
  4. South Africa: Selected Issues Paper By International Monetary Fund. African Dept.
  5. Improving the food policy process: Lessons from capacity strengthening of parliamentarians in Ghana: By Chhokar, Jagdeep S.; Babu, Suresh Chandra; Kolavalli, Shashidhara
  6. Business operations of agrodealers and their participation in the loan market in Nigeria: By Olomola, Aderbigbe
  7. Do girls pay the price of civil war? Violence and infant mortality in Congo: By Dagnelie, Olivier; De Luca, Giacomo; Maystadt, Jean-François
  8. Structure and performance of Ethiopia’s coffee export sector: By Minten, Bart; Tamru, Seneshaw; Kuma, Tadesse; Nyarko, Yaw
  9. Social networks and factor markets: Panel data evidence from Ethiopia: By Abay, Kibrom A.; Kahsay, Goytom A.; Berhane, Guush
  10. Household Migration and Children's Educational Attainment. The case of Uganda By Lucia Ferrone; Gianna Claudia Giannelli
  11. Ghana Economic Update, October 2014 By Felix Oppong; Dilek Aykut; Gregory Smith; World Bank

  1. By: Olayinka Idowu Kareem
    Abstract: Changes in tastes and preferences in importing countries as well as the need to keep the environment safe, especially in developed markets, has contributed to a rising trend in the demand for sanitary and phytosanitary measures for quality products. However, the stringency and the preponderance of these measures have effects on trade, particularly for the developing and least developed countries in Africa. The effects often influence the attainment of the development aspirations of these Africa countries, especially employment, poverty reduction and sustainable growth. To this end, this study investigates the export effects of the EU standards for Africa. It uses the two-step Helpman et al. (2008) extensive and intensive trade margins model for two high-value foods and two traditional products. The EU standard requirements for each product are called the ‘hurdle to pass’ before the product can gain access to the EU market. In all, 52 African countries are considered in an empirical analysis covering the period 1995 to 2012. The study finds that product standards for fish and cocoa are trade-enhancing at the extensive margins, but this is not the case at the intensive margins. However, the standards are trade-inhibiting at both the extensive and intensive margins of exports for vegetables, while the standards are trade-restrictive at the extensive margins and trade-enhancing at the intensive margins for coffee. Thus, the findings suggest that the impacts of standards on exports are commodity-specific due to the significant differences in the costs of compliance, the size of the exporting firms or countries, access to development assistance and the commodity-specific interests of countries. The study recommends development partnerships and alliance policies on the part of Africa, with the development of institutions that can improve the level of standard-compliance in all African exporting markets.
    Keywords: Technical Regulations, Food Exports, Africa, EU, Gravity Model
    JEL: C33 C87 F13 F42
    Date: 2014–10
  2. By: Daniel Bahyl; Katarzyna Ptasinska; Daniel Roos
    Keywords: Multidimensional Development Indices, Sub-Saharan Africa, Wellbeing
    JEL: I32
    Date: 2014–07
  3. By: Osuagwu, Eze
    Abstract: There are increasing scholarly debates on the direction of policy to effectively improve the performance of banks. Some scholars argue that bank performance is enhanced by improvements in the internal organization and managerial efficiency, others argue that industry wide factors are integral to bank performance. In recent times, the direction of literature has shown that macroeconomic factors play a significant role in determining bank profitability. This paper investigates the determinants of bank profitability in the light of bank specific variables, industry related factors and macroeconomic influences, using a panel of selected banks that account for over 60% of total bank assets in Nigeria. Findings show that bank profitability is largely determined by credit risk and other factors that relate to the internal organization of banking firms. Market concentration is significant as a determinant of bank profitability. There is no evidence of structure-conduct-performance hypothesis, however empirical results show that there is no collusive behavior amongst banks. Exchange rate is significant as a determinant of bank profitability through return on equity and non-interest margin, but not significant to return on asset as a measure of profitability.
    Keywords: bank profitability, concentration, market structure, panel data
    JEL: G18 G21 L1
    Date: 2014–12
  4. By: International Monetary Fund. African Dept.
    Abstract: Concluding Observations *Our estimates suggest that South Africa’s potential growth has declined postglobal financial crisis. Potential growth is estimated to have fallen from an average of 3½-4 percent during 2000-08 to 2¼-2½ percent in 2010-14, implying an output gap between -0.5 to -1.3 percent of GDP in 2014. Structural factors seem to account for the bulk of the decline in actual growth in recent years, with the decline in productivity growth playing an important role in the decline of both the actual and potential growth rates. *Uncertainties associated with estimates of potential growth are large. All estimates, even those with structural underpinnings, involve some filtering and require judgment to interpret the findings. In addition, while some methodologies (e.g., the multivariate filter) generally produce more robust results than others, data revisions or inclusion of new data often leads to revisions (sometimes large) to earlier estimates (see, e.g., Kramer and Farrell, 2014). Our estimation results therefore should be taken with caution. *An improvement in the electricity supply and other structural reforms would raise South Africa’s potential growth. Higher electricity availability would help alleviate electricity constraints. This is anticipated to happen slowly over the next few years because although Eskom’s two new large power plants are expected to come on line starting from 2015 and other capacity is being added, other parts of the system will have to be taken off for maintenance on the old system and grid upgrades may take time. Higher energy availability would lead to higher overall production capacity of the whole economy and likely an impact on private investment. Reducing days lost to strikes, and advancing structural reforms, especially in product and labor markets and addressing skill mismatches (see the Article IV consultation staff report for more discussions), would also help reduce structural unemployment and raise potential growth.
    Keywords: Economic growth;Interest rates;Bonds;Exports;Export performance;Fiscal consolidation;Selected Issues Papers;South Africa;
    Date: 2014–12–11
  5. By: Chhokar, Jagdeep S.; Babu, Suresh Chandra; Kolavalli, Shashidhara
    Abstract: In this paper, we document an approach to capacity strengthening of parliamentarians in Ghana and attempt to gauge to what extent and under what conditions such investments could lead to better debates and informed policymaking to promote growth and poverty reduction. We traced a group of Ghanaian parliamentarians to draw lessons after their study and exposure visit to India. Exposure visits changed participants’ knowledge, outlook, and thinking toward agricultural policies.
    Keywords: Agricultural policies, Capacity building, Governance, Agricultural development, Capacity strengthening, public policy, policy process,
    Date: 2014
  6. By: Olomola, Aderbigbe
    Abstract: This study employs primary data collected through structured questionnaires from 300 agrodealers and uses a Tobit type-II model for the analysis. The results show that interest rate, debt, value of asset, membership of trading association, and source of credit are major determinants of loan demand. Agrodealers need to organize themselves into input trading associations to enhance their creditworthiness and to unleash the inherent social capital and information advantages for improved agrodealership financing.
    Keywords: Finance, Credit, Markets, Investment policies, trade, Smallholders, credit rationing, value chains, agrodealers, loan demand,
    Date: 2014
  7. By: Dagnelie, Olivier; De Luca, Giacomo; Maystadt, Jean-François
    Abstract: This paper documents the impact of the violent civil war affecting the Democratic Republic of Congo in the period 1997–2004 on infant mortality. It adopts an instrumental variable approach to correct for the nonrandom timing and location of conflict events using mineral price index variations by district, taking account of the mineral locations and prices, as instrument. Strong and robust evidence, including mother fixed effects regressions comparing siblings, shows that conflict significantly increases girl mortality. The paper also examines the mechanisms explaining this phenomenon, with a focus on disentangling the behavioral from the biological factors. The analysis suggests that gender imbalances in infant mortality are driven by the selection induced by a higher vulnerability of boys in utero rather than by gender discrimination.
    Keywords: Gender, Children, Infant mortality rate, Conflict, civil war,
    Date: 2014
  8. By: Minten, Bart; Tamru, Seneshaw; Kuma, Tadesse; Nyarko, Yaw
    Abstract: We study the structure and performance of the coffee export sector in Ethiopia, Africa’s most important coffee producer, over the period 2003 to 2013. We find an evolving policy environment leading to structural changes in the export sector, including an elimination of vertical integration for most exporters. Ethiopia’s coffee export earn-ings improved dramatically over this period, i.e. a four-fold real increase. This has mostly been due to increases in international market prices. Quality improved only slightly over time, but the quantity exported increased by 50 percent, seemingly explained by increased domestic supplies as well as reduced local consumption. To further improve export performance, investments to increase the quantities produced and to improve quality are needed, including an increase in washing, certification, and traceability, as these characteristics are shown to be associ-ated with significant quality premiums in international markets.
    Keywords: trade, exports, coffee, Quality, Markets,
    Date: 2014
  9. By: Abay, Kibrom A.; Kahsay, Goytom A.; Berhane, Guush
    Abstract: We investigate the role of an indigenous social network in Ethiopia, the iddir, in facilitating factor market transactions among smallholder farmers. Using detailed longitudinal household survey data and employing a difference-in-differences approach, we find that iddir membership improves households’ access to factor markets.
    Keywords: social networks, iddir networks, factor market imperfections, factor market transactions, crowding-out,
    Date: 2014
  10. By: Lucia Ferrone (Dipartimento di Scienze per l'Economia e l'Impresa); Gianna Claudia Giannelli (Dipartimento di Scienze per l'Economia e l'Impresa)
    Abstract: In many Sub-Saharan African countries, a large number of people migrate internally or abroad because of demographic, economic and political factors. This pronounced mobility is likely to have consequences for children's education, still a matter of concern in the region. We study this issue for Uganda, investigating whether migration of household members affects children's primary education and in what direction. Using the Uganda National Panel Survey for 2005, 2009, 2010 and 2011, we estimate conditional fixed effects logit models of school attendance and primary school completion. We find that children's migration has a significant positive impact while adults' migration has a significant negative one on children's school attendance rates, while remittances have no influence. These findings suggest that children's migration is indeed beneficial, since it may contribute to match demand and supply of schooling. Adults' absence, instead, has controversial effects when children are left behind. In fact, lack of supervision and substitution of adults' tasks with child work might reduce the rate of school attendance. However, neither children's nor adults' migration seem to increase the rate of primary school completion, an evidence that points to the problem of the low quality of primary education in developing countries.
    Keywords: Migration, Schooling, Panel Data Models with Fixed Effects, Uganda
    JEL: I25 J13 J61 O15
    Date: 2014
  11. By: Felix Oppong; Dilek Aykut; Gregory Smith; World Bank
    Keywords: Poverty Reduction - Rural Poverty Reduction Finance and Financial Sector Development - Currencies and Exchange Rates Economic Theory and Research Macroeconomics and Economic Growth - Regional Economic Development Finance and Financial Sector Development - Debt Markets
    Date: 2014–10

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