nep-afr New Economics Papers
on Africa
Issue of 2016‒03‒17
eight papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Hybrid governance in mining concessions in Ghana By Sara Geenen
  2. The Political Economy of Deregulation Policy in the Downstream Sector of the Petroleum Industry in Nigeria (1999-2015) By Kenneth Nweke; Vincent Nyewusira
  3. The long run effects of labor migration on human capital formation in communities of origin By Dinkelman, Taryn; Mariotti, Martine
  4. Inequality of opportunity in Sub-Saharan Africa By Paolo Brunori; Flaviana Palmisano; Vito Peragine
  5. Exiting From Fragility in sub-Saharan Africa; The Role of Fiscal Policies and Fiscal Institutions By Corinne Deléchat; Ejona Fuli; Dafina Glaser; Gustavo Ramirez; Rui Xu
  6. The food-energy-water security nexus: Definitions, policies, and methods in an application to Malawi and Mozambique: By Nielsen, Thea; Schunemann, Franziska; McNulty, Emily; Zeller, Manfred; Nkonya, Ephraim M.; Kato, Edward; Meyer, Stefan; Anderson, Weston; Zhu, Tingju; Queface, Antonio; Mapemba, Lawrence
  7. Pesticide use in Sub-Saharan Africa: Estimates, Projections, and Implications in the Context of Food System Transformation By Snyder, Jason; Smart, Jennifer; Goeb, Joey; Tschirley, David
  8. Unintended Consequences; Spillovers from Nigeria’s Fuel Pricing Policies to Its Neighbor By Montfort Mlachila; Edgardo Ruggiero; David Corvino

  1. By: Sara Geenen
    Abstract: This report is part of my research project (FWO postdoctoral fellowship) on ‘hybrid governance in mining concessions in Ghana and the Democratic Republic of Congo (DRC)’, which proposes to study the impact of transnational mining companies’ activities in African mining areas in a novel fashion. It presents a lot of interview material that was collected in February and March 2015 in Ghana and heavily relies on this raw material to study hybrid governance in one particular mining concession. The findings remain rather descriptive, but will be further analyzed and developed in my upcoming papers.
    Keywords: Ghana; mining; hybrid governance
    Date: 2016–02
  2. By: Kenneth Nweke (Senior Lecturer, Dept. of Political Science, Faculty of Social Sciences, Ignatius Ajuru University of Education); Vincent Nyewusira (Ignatius Ajuru University of Education)
    Abstract: Successive governments in Nigeria since 1999 have faced the challenge of whether or not to adopt deregulation policy in the downstream sector of the petroleum industry. In fact, the decision of whether or not to adopt deregulation policy as a panacea for remedying the perennial fuel scarcity and arbitrary price increases in petroleum products has been an albatross around successive governments in Nigeria. This paper interrogates the political economy of deregulation policy in the downstream sector of the petroleum industry in Nigeria since the enthronement of democratic rule in 1999, hence contends that the subsidy regime of successive governments has not addressed the perennial scarcity and arbitrary price increases of petroleum products in the country. The paper maintains that the fuel subsidy regime has been an epitome of corruption as it has failed to address the original intentions of its founding fathers. It is the view of this paper, therefore, that a complete deregulation policy in the downstream sector that will ensure government’s outright removal of fuel subsidy, remains the only antidote to addressing the perennial scarcity and arbitrary price increases of petroleum products by ambitious petroleum marketers in Nigeria. It is by so doing that market forces shall become the major determinants of the prices and distribution of petroleum products for the teeming consumers in Nigeria. The paper concludes that savings that would accrue from fuel subsidy removal could be channelled into addressing the ailing infrastructure and human capital in the country.
    Keywords: Political economy, deregulation policy, down stream sector & petroleum industry
    JEL: A30
  3. By: Dinkelman, Taryn; Mariotti, Martine
    Abstract: We provide new evidence of one channel through which circular labor migration has long run effects on origin communities: by raising completed human capital of the next generation. We estimate the net effects of migration from Malawi to South African mines using newly digitized Census and administrative data on access to mine jobs, a difference-in-differences strategy and two opposite-signed and plausibly exogenous shocks to the option to migrate. Twenty years after these shocks, human capital is 4.8-6.9% higher among cohorts who were eligible for schooling in communities with the easiest access to migrant jobs.
    Keywords: Africa; human capital formation; labor migration; long run impacts; origin communities
    JEL: F22 F24 N37 O12 O15 O55
    Date: 2016–02
  4. By: Paolo Brunori (University of Bari, Italy); Flaviana Palmisano (University of Luxembourg); Vito Peragine (University of Bari, Italy)
    Abstract: In the last decades inequality of opportunity has been extensively studied by economists, on the assumption that, in addition to being normatively undesirable, it can be related to low potential for growth. In this paper we evaluate inequality of opportunity in 11 Sub-Saharan Africa countries. According to our results, the portion of total inequality which can be attributed to exogenous circumstances is between 30% and 40% for the generality of countries considered. We also find a positive association between total consumption inequality and inequality of opportunity and we study the different sources of unequal opportunities. Finally, we address a number of methodological issues that typically arise when measuring inequality of opportunity with imperfect data, which is the typical case in developing countries.
    Keywords: Consumption inequality, equality of opportunity, Sub-Saharan Africa.
    JEL: D63 E24 O15 O40
    Date: 2016–01
  5. By: Corinne Deléchat; Ejona Fuli; Dafina Glaser; Gustavo Ramirez; Rui Xu
    Abstract: This paper studies the role of fiscal policies and institutions in building resilience in sub-Saharan African countries during 1990-2013, with specific emphasis on a group of twenty-six countries that were deemed fragile in the 1990s. As the drivers of fragility and resilience are closely intertwined, we use GMM estimation as well as a probabilistic framework to address endogeneity and reverse causality. We find that fiscal institutions and fiscal space, namely the capacity to raise tax revenue and contain current spending, as well as lower military spending and, to some extent, higher social expenditure, are significantly and fairly robustly associated with building resilience. Similar conclusions arise from a study of the progression of a group of seven out of the twenty-six sub- Saharan African countries that managed to build resilience after years of civil unrest and/or violent conflict. These findings suggest relatively high returns to focusing on building sound fiscal institutions in fragile states. The international community can help this process through policy advice, technical assistance, and training on tax administration and budget reforms.
    Keywords: Zambia;Zimbabwe;Congo, Democratic Republic of the;Congo, Republic of;Uganda;Tanzania;Togo;Rwanda;Senegal;Seychelles;Sierra Leone;South Africa;Sub-Saharan Africa;Sudan;Swaziland;Comoros;Equatorial Guinea;Eritrea;Ethiopia;Djibouti;Benin;Botswana;Burkina Faso;Burundi;Cameroon;Central African Republic;Chad;Africa;Angola;Mozambique;Namibia;Niger;Nigeria;Kenya;Lesotho;Liberia;Madagascar;Malawi;Mali;Mauritania;Mauritius;Middle East;Fiscal policy;Gabon;Gambia, The;Ghana;Guinea;Guinea-Bissau;fragility, resilience, fiscal institutions, CPIA, revenue, taxes, tax, budget, Macroeconomic Analyses of Economic Development, Fiscal and Monetary Policy in Development, Institutions and Growth,
    Date: 2015–12–22
  6. By: Nielsen, Thea; Schunemann, Franziska; McNulty, Emily; Zeller, Manfred; Nkonya, Ephraim M.; Kato, Edward; Meyer, Stefan; Anderson, Weston; Zhu, Tingju; Queface, Antonio; Mapemba, Lawrence
    Abstract: This study summarizes the concept of the food-energy-water security nexus (FEW nexus). The aim is to create awareness about the importance of the nexus and to enable stakeholders to consider interconnections between the sectors in their work. The FEW nexus is discussed in the context of Africa south of the Sahara (SSA)—using Malawi and Mozambique as case studies. Even though analyzing food, energy, and water security issues simultaneously is critical given the interconnections, summarizing interventions with the FEW nexus approach in Malawi and Mozambique, we found that there are only a limited number of interventions in place. Additionally, this study reviews macro- and microeconomic models that are able to analyze the FEW nexus. On the macrolevel, especially general equilibrium models are discussed, because they show trade-offs and synergies of nexus interventions at all economic levels. These models can help guide policymakers’ understanding of nexus effects ex ante and convince them to think beyond their respective political departments. On the microlevel, the impact of nexus interventions can be assessed with qualitative and quantitative approaches. There are specific challenges for nexus interventions when it comes to aggregation and planning of the targeting. A secondary data analysis of nexus interventions shows that existing data is not sufficient to conduct research specifically related to the FEW nexus. The results of this study will help research programs to reflect the key questions required to enhance adoption of FEW technologies and inform policymakers as they formulate policies that will exploit the strong synergies of food security, energy, and water investments.
    Keywords: food, energy, water, macroeconomics, microeconomics, mathematical models, food policies, water policies, energy policies, nexus, interventions,
    Date: 2015
  7. By: Snyder, Jason; Smart, Jennifer; Goeb, Joey; Tschirley, David
    Abstract: Much of Sub-Saharan Africa (SSA) is urbanizing rapidly and the economy is growing at a robust pace. The overall demand for food is likely to increase dramatically over the next three decades and the composition of this demand is likely to shift away from staple grains and towards processed and fresh perishable foods, including horticultural products. Horticultural farmers will have increasing incentives to boost yields and minimize crop damage while also minimizing rising labor costs. Responding to these incentives in tropical/sub-tropical climates with high pest pressure will likely involve the substantial use of pesticides, herbicides, and fungicides, all in a lax regulatory environment where farmers may lack training in safe and effective pest control.
    Keywords: Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, Environmental Economics and Policy, Farm Management, Food Consumption/Nutrition/Food Safety, International Development,
    Date: 2015–11
  8. By: Montfort Mlachila; Edgardo Ruggiero; David Corvino
    Abstract: This paper examines the constraints that negative externalities (i.e., smuggling from a large neighbor) impose on the application of automatic fuel price adjustment mechanisms. It is often recommended to establish an automatic price adjustment mechanism to reduce fuel subsidy expenditures, but this approach may not work in the presence of these externalities. The paper illustrates the constraints by examining the case of Nigeria, a major oil exporter that subsidizes gasoline, and that of Togo, an oil importer and neighbor of Nigeria. It finds that the price differential between formal prices in Togo and Nigeria is the main driver of changes in formal sector gasoline consumption. Specifically, the lower the formal price in Nigeria, the higher is smuggling from Nigeria to Togo, and the lower the tax base in Togo. The econometric results suggest that, unless the real economy is performing very well, increases in pump prices in Togo are likely to erode the tax base, unless there are greater border controls. The unintended consequences of Nigeria’s pricing policies are the constraint they impose on fuel pricing policies of its neighbors and the subsidy Nigeria transfers to them (equivalent to at least 3 percent of Togo’s GDP in 2011), three-quarters of which was captured by smugglers in 2011, while one-quarter enhanced consumers surplus through lower gasoline prices.
    Keywords: Fuels;Nigeria;Togo;Energy prices;Energy pricing policy;Spillovers;Oil exporting countries;Cross country analysis;fuel pricing, smuggling, spillovers, optimal taxation
    Date: 2016–02–09

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