nep-afr New Economics Papers
on Africa
Issue of 2016‒03‒10
eight papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Crude oil dependence, deindustrialization and economic growth in Nigeria. By George Ike; Henry Okodua; Kemal Bagzibagli
  2. Oil Price shocks and theirs consequences on Sudan’s GDP growth and unemployment rates By Elsiddig Rahma; Noel Perera; Kian Tan
  3. Does Privatization Increase Firm Performance in Nigeria?: An Empirical Investigation By Abutu, Usman Ojonugwa
  4. Public Investment in a Developing Country Facing Resource Depletion By Adrian Alter; Matteo Ghilardi; Dalia Hakura
  5. Malaria infection and fetal growth during the war : evidence from Liberia By Kudo, Yuya
  6. Microfinance efficiency in the West African economic and monetary union: have reforms promoted sustainability or outreach? By Sandrine Kablan
  7. Cost-benefit analysis for identifying institutional capacity building priorities in LDCs: an application to Uganda By Roland Molerus; Namsuk Kim
  8. The Topology of African Exports: emerging patterns on spanning trees By Tanya Araújo,; Ennes Ferreira

  1. By: George Ike (Eastern Mediterranean University.); Henry Okodua (Covenant University); Kemal Bagzibagli (Eastern Mediterranean University)
    Abstract: Crude oil is a commodity of very great value. Its utility in almost all the sectors of 21st century economies is not substitutable as of yet. That is why its demand is relatively inelastic. Crude oil as a natural resource is supposed to stir economic growth and propagate overall development for countries that are lucky enough to be endowed with this commodity. However recent and past empirical research in this area has shown that resource rich countries develop slower than resource poor countries and that resource dependence has a negative relationship with economic growth. One of the mechanism of transmission is through the crowding out of the manufacturing and agricultural sectors through the process of direct and indirect de-industralization. In light of these developments this research primarily aims to capture the relationship between oil dependence the manufacturing sector and economic growth in Nigeria. Utilizing the Autoregressive distributed lag bounds testing cointegration techniques a model was constructed, oil dependence was proxied as the ratio of oil rents to GDP and it was discovered that oil dependence had a significant negative relationship with GDP which is robust to the 2 specified models . Also the manufacturing sector had no significant relationship with GDP in the long run but had a positive significant relationship with GDP in the short run. This gives ample evidence to the existence of the dutch disease in Nigeria. The study recommended the sterilization of oil revenues abroad and the development of Foreign Direct Investment through the fostering of Incentives to multinationals in order to reduce the negative impacts of crude oil instigated capital inflow and oil price shocks in the Nigerian economy.
    Keywords: Bounds Testing,Co-integration,Crude Oil, De-industrialization , Dutch disease, Economic growth.
    JEL: O13 O40 Q33
  2. By: Elsiddig Rahma (Northumbria University at Newcastle upon Tyne); Noel Perera (Northumbria University); Kian Tan (Northumbria University)
    Abstract: Since the advent of oil production and export in late 1999, Sudan economy became more reliant on oil exports proceeds. This situation has exposed the economy to the negative effect of oil price fluctuations. In general, oil exporting countries exhibit positive impact on their economy to oil price increase, while oil importing economies suffer. Unlike developing economies, there is paucity of research in developing countries with regards to the relationship between macro-economy and oil price shocks. In this regard, Sudan has been neglected from serious studies related to oil price shocks. This research attempts to contribute towards filling this gap. In doing so, Vector Auto-Regression model is employed to investigate the impact of oil price shocks on the real GDP growth and unemployment rates over the period 2000 - 2014. The Granger causality test suggests that unemployment has statistically and significantly influenced real GDP growth. Results from the Impulse Response Functions and Forecast Error Variance Decomposition analysis suggest that decrease in oil price has a greater influence on GDP growth. Interestingly, oil price decrease has a significant positive impact on unemployment rate.
    Keywords: VAR model, GDP growth, Unemployment rate, Sudan.
    JEL: C32 E00 F43
  3. By: Abutu, Usman Ojonugwa
    Abstract: The public enterprises have generally failed to provide the social and economic development sought by the post-independence era in African countries, hence privatization has been central to policy making in the recent times. This paper offers insight into the validity of the efficacy of privatization by investigating not only whether privatization has improved financial (profitability) performance of firms but also whether such improvement has impact on the operational efficiency of privatized firms for the period 1990-2001 in Nigeria. Using a panel data for a sample of 20 privatized firms obtained from the Nigerian Stock Exchange and Securities and Exchange Commission, the result shows an increase in all the profitability ratios after privatization. However, only the return on assets and return on sales are significant in explaining the difference between pre- and post-privatization performance of firms in Nigeria. The result of the operational efficiency shows a significant increase in the mean (median) values of sale efficiency and income efficiency. Interestingly, while output (real sales) and employee income of firm significantly increase after privatization, the number of employees insignificantly decreases after privatization. The paper concludes that privatization in Nigeria has worked in the sense that it improves the financial and operational efficiency performance of firms.
    Keywords: Privatization, Firm Performance, Operational Efficiency, Profitability, Nigerian Stock Exchange
    JEL: L33
    Date: 2015–10–03
  4. By: Adrian Alter; Matteo Ghilardi; Dalia Hakura
    Abstract: This paper analyzes the tradeoffs between savings, debt and public investment in the Republic of Congo, a developing country with looming oil exhaustibility concerns. Our results highlight the risks to fiscal and capital sustainability of oil exporting countries from large scaling-up in public investment and oil price volatility in view of a projected decline in the oil revenue to GDP ratio. However, structural reforms that improve the efficiency of public investment can allow for a relatively faster buildup of sustainable public capital and sustain higher non-oil growth without adversely affecting the debt ratio or savings. Moreover, we show that even if a government pursues prudent fiscal policy that preserves resource wealth and debt sustainability in the face of exhaustible and volatile resource revenues, low public investment quality in the form of a misallocation of resources can hinder attainment of sustainable public capital and positive non-oil growth.
    Keywords: Debt sustainability;Public Capital, Investment Efficiency, Project Selection, investment, public investment, debt, revenues, revenue, International Lending and Debt Problems, Exhaustible Resources and Economic Development, Government Policy, All Countries,
    Date: 2015–11–10
  5. By: Kudo, Yuya
    Abstract: This study investigates whether the Liberian civil war increased infant mortality by exposing pregnant women to a high risk of malaria infection, thus retarding fetal development. I find that the war-induced, one-percent increase in maternal infection risk resulted in a 0.44 percent increase in one-year mortality. This mortality effect gradually increased following childbirth as maternal passive immunity waned. The consequences were pronounced for infants conceived in rainy seasons by young mothers residing in rural, battle-intensive areas, with no gender difference detected. I also provide evidence suggesting the wartime culling of the weakest infants associated with maternal malaria infection.
    Keywords: Liberia, Diseases, Maternal and infant welfare, Health and hygiene, Internal conflicts, Armed conflict, Fetal development, Infant mortality, Malaria in pregnancy
    JEL: I15
    Date: 2016–02
  6. By: Sandrine Kablan
    Date: 2016–02–18
  7. By: Roland Molerus; Namsuk Kim
    Abstract: Institutional constraints prevent the Least Developed Countries from fully utilizing the trade-related International Support Measures provided by development partners. A cost-benefit analysis has been developed as a methodology to identify institutional constraints and prioritize support measures comparing benefits with costs, based on survey data. Applied in Uganda, it identified critical institutional constraints: limited knowledge on how to access most of the assistance; inadequate institutional arrangements; ineffective communications regarding the use of support measures. International support measures related to sanitary and phytosanitary issues, among others, are expected to increase the trade value in Uganda.
    Keywords: cost-benefit analysis, Least Developed Countries, International Trade, Export Promoting, Uganda
    JEL: D61 F14 O19 O24 O55
    Date: 2016–02
  8. By: Tanya Araújo,; Ennes Ferreira
    Abstract: This paper is a contribution to interweaving two lines of research that have progressed in separate ways: network analyses of interna- tional trade and the literature on African trade and development. Gathering empirical data on African countries has important limi- tations and so does the space occupied by African countries in the analyses of trade networks. Here, these limitations are dealt with by the de?nition of two independent bipartite networks: a destination share network and a commodity share network. These networks - together with their corresponding minimal spanning trees - allow to uncover some ordering emerging from African exports in the broader context of international trade. The emerging patterns help to understand important characteristics of African exports and its binding relations to other economic, geographic and organizational concerns as the recent literature on African trade, development and growth has shown. Key Words : Trade networks, African exports, Spanning trees, Bipartite graphs
    Date: 2016–02

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