nep-afr New Economics Papers
on Africa
Issue of 2015‒10‒04
five papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. The Effects of the Tripartite Free Trade Area: Towards a New Economic Geography in Southern, Eastern and Northern Africa? By Andrew Mold; Rodgers Mukwaya
  2. Global Value Chains in Africa By Foster-McGregor N.; Kaulich F.; Stehrer R.
  3. Unconditional Government Social Cash Transfer in Africa Does not Increase Fertility By Sudhanshu Handa; David Seidenfeld; Amber Peterman; Tia Palermo; Leah Prencipe; UNICEF Innocenti Research Centre
  4. Mega-deals: What Consequences for sub-Saharan Africa? By H. Guimbard; M. Le Goff
  5. Temperature Changes, Household Consumption and Internal Migration: Evidence from Tanzania By Kalle Hirvonen

  1. By: Andrew Mold; Rodgers Mukwaya
    Abstract: This study evaluates the economic impact of the proposed COMESA-SADC-EAC Tripartite Free Trade Area (TFTA) on 26 African countries. It uses the global trade analysis project (GTAP) computable general equilibrium (CGE) model and database to measure the static effects of the establishment of the TFTA on industrial production, trade flows and consumption in the tripartite region. The results indicate a significant increase in intra-regional exports as a result of tariff elimination, boosting intra-regional trade by 29 percent. Particularly encouraging is the fact that the sectors benefiting most are manufacturing ones, such as light and heavy manufacturing, and processed food. Concerns have been raised that industrial production in the TFTA would concentrate in the countries with highest productivity levels - namely, Egypt and South Africa. Simulation results suggest that these fears are exaggerated, with little evidence of concentration of industries in the larger countries.
    Keywords: Tripartite free trade area, EAC, COMESA, SADC
  2. By: Foster-McGregor N.; Kaulich F.; Stehrer R. (UNU-MERIT)
    Abstract: This paper provides evidence on the extent of Global Value Chain GVC participation by Africa as a region and for individual African countries. We find that Africa as a whole is heavily involved in GVCs, being more engaged in GVCs than many developing country regions as well as developed countries such as the USA. This overall finding hides the fact that much of Africas participation in GVCs is in upstream production, with African firms providing primary inputs to firms in countries further down the value chain. The possibility of upgrading within GVCs in Africa is likely to be limited therefore, something which the current analysis suggests. Despite this, we observe a great deal of heterogeneity in terms of GVC participation and upgrading across African countries, with a number of African countries participating in GVCs to a relatively large extent.
    Keywords: Economic Integration; Multinational Firms; International Business;
    JEL: F15 F23
    Date: 2015
  3. By: Sudhanshu Handa; David Seidenfeld; Amber Peterman; Tia Palermo; Leah Prencipe; UNICEF Innocenti Research Centre
    Abstract: In Africa, one of the key barriers to the scale-up of unconditional cash transfer programmes is the notion held by politicians, and even the general public, that such programmes will induce the poor to have more children. The hard evidence on this question is scanty. The current study uses evaluation data from the Zambian Child Grant Programme (CGP), a large-scale UCT targeted to households with a child under the age of five at programme initiation and evaluates the impact of transfers on fertility and child-fostering decisions. The overall goal of the CGP is to reduce extreme poverty and break the intergenerational transmission of poverty. The results contribute to the small literature that rigorously documents the fertility impacts of unconditional cash transfer programmes in developing countries.
    Keywords: cash transfers; economic policy; fertility;
    Date: 2015
  4. By: H. Guimbard; M. Le Goff
    Abstract: The sub-Saharan African (SSA) countries are excluded from the mega-deals, free trade agreements (FTA) currently under negotiations between several large economies (European Union – United States, European Union - Japan, China-Japan-South Korea…). As Sub-Saharan African exports remain dependent on these large markets, sub-Saharan African countries could undergo important economic impacts. Using a dynamic Computable General Equilibrium Model (CGEM), we find that mega-deals would have a negative impact on the welfare of SSA countries. Regional integration strengthening limited only to the implementation of a “Tripartite” FTA gathering 26 African countries, might limit these losses but could not overcome them. A continental regional trade agreement (RTA) involving all SSA countries would slightly counterbalance the negative impacts of the mega-deals. We also show that openness of SSA countries towards Asia could be a potential solution to avoid trade diversion.
    Keywords: International trade, Mega-deals, Africa.
    JEL: F13 F15 O55
    Date: 2015
  5. By: Kalle Hirvonen (Development Strategy And Governance, International Food Policy Research Institute)
    Abstract: Large rural-urban wage gaps observed in many developing countries are suggestive of barriers to migration that keep potential migrants in the rural areas. Using long panel data spanning nearly two decades, I study the extent to which migration rates are constrained by liquidity constraints in rural Tanzania. The analysis begins by quantifying the impact of weather variation on household welfare. The results show how household consumption co-moves with temperature rendering households vulnerable to local weather events. These temperature induced income shocks are then found to inhibit long-term migration among men, and thus preventing them from tapping into the opportunities brought about by geographical mobility.
    Date: 2015–09

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