nep-afr New Economics Papers
on Africa
Issue of 2016‒07‒02
ten papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. The Africa Rising Narrative - Whither development? By McKenzie, Rex A.
  2. Natural resource revenues and public investment in resource-rich economies in subSaharan Africa By Amin Karimu; George Adu; George Marbuah; Justice Tei Mensah; Franklin Amuakwa-Mensah
  3. A methodology to assess indicative costs of risk financing strategies for scaling up Ethiopia's productive safety net programme By Clarke,Daniel Jonathan; Coll-Black,Sarah; Cooney,Naomi Victoria; Edwards,Anna
  4. Macro and institutional determinants of domestic investment in Sub-Saharan African countries By Akanbi, Olusegun A
  5. Informal versus Formal: A Panel Data Analysis of Earnings Gaps in Madagascar By Nordman, Christophe Jalil; Rakotomanana, Faly; Roubaud, François
  6. The Competitiveness of Ports in Emerging Markets: The case of Durban, South Africa By OECD
  7. The Economic Partnership Agreement Between Ghana and the European Union: A Developmental Game Changer? By Acheampong, Theophilus; Omane-Achamfuor, Michael; Anang Tawiah, Nii
  8. Evaluating monetary policy options for managing resource revenue shocks when fiscal policy is laissez-faire : Application to Nigeria By Chuku Chuku
  9. Integrating clean energy use in national poverty reduction strategies Opportunities and challenges in Rwanda.s Girinka programme By Chika Ezeanya; Abel Kennedy
  10. Evaluating the productivity gap between commercial and traditional beef production systems in Botswana By Temoso, Omphile; Hadley, David; Villano, Renato

  1. By: McKenzie, Rex A. (Kingston University London)
    Abstract: Over the last ten years the mainstream press have put together an Africa Rising narrative which tells us that because of a series of “good” governance reforms and more responsible economic management (by technocratic and not ideological leaders), African countries have managed to transform their economies into growing vibrant engines of growth. Robust growth rates that averaged 5.8% a year between 2002 and 2012 formed the basis of expectations that there was more to come. In 2011 The Economist (Dec 3rd) reported that, after decades of slow growth ‘Africa now has the real chance to follow Asia in embarking on fast growth in a very short period.’ After years of repose - Africa was rising. Basing its predictions on data from the IMF, The Economist (ibid) declared that Ghana, Mozambique, Nigeria and Zambia would be among this decade’s star performers. Recent events (like Ghana’s 2015 IMF bailout) may have dented the narrative but it persists because although Africa’s 2015 GDP declined 1.2% to 3.4% from 4.6% in 2014, it is still among the fastest growing regions in world. There is clearly a huge disconnect between the narrative and the images of African migrants risking life and limb to get away from Africa and into Europe. This article explores the sources of the disconnect and evaluates the narrative. How and why did The Economist (and others in the media and the economics profession) manage to put forward the bold claim that the 21st Century belonged to Africa?
    Keywords: Africa; growth; development
    JEL: O10 O40 O55
    Date: 2016–06–16
  2. By: Amin Karimu; George Adu; George Marbuah; Justice Tei Mensah; Franklin Amuakwa-Mensah
    Abstract: The general policy prescription for resource-rich countries is that, for sustainable consumption, a greater percentage of the windfall from resource rents should be channelled into accumulating foreign assets such as a sovereign public fund as done in Norway and other developed but resource-rich countries. This might not be a correct policy prescription for resource-rich sub-Saharan African (SSA) countries, where public capital is very low to support the needed economic growth. In such countries, rents from resources serve as opportunity to scale-up the needed public capital. Using panel data for the period 1990.2013, we find in line with the scaling-up hypothesis that resource rents significantly increase public investment in SSA and that this tends to depend on the quality of political institutions. We also find evidence of a positive effect of public investment on economic growth, which also depends on the level of resource rents. Using some of the components of public investment, such as health and education expenditure, we find a negative effect of resource rents, suggesting among other things that public spending of resource rents is directed more to other infrastructure investments.
    Keywords: public investment, resource rents, growth, political institutions, sub-Saharan Africa
    Date: 2016
  3. By: Clarke,Daniel Jonathan; Coll-Black,Sarah; Cooney,Naomi Victoria; Edwards,Anna
    Abstract: This paper proposes and illustrates a methodology to assess the economic cost of the sovereign risk finance instruments available to the Government of Ethiopia and its development partners for financing the shock-responsive scalability component of the Productive Safety Net Programme. The methodology involves: (i) specifying rules for when additional expenditures would be triggered in each woreda; (ii) specifying alternative risk finance strategies; and (iii) analyzing the costs of each risk financing strategy, including sensitivity and scenario testing of the results. The methodology is applied to a hypothetical set of rules for drought-responsive scalability, and a range of potential risk finance strategies.
    Keywords: Debt Markets,Climate Change Economics,Access to Finance,Bankruptcy and Resolution of Financial Distress,Rural Poverty Reduction
    Date: 2016–06–21
  4. By: Akanbi, Olusegun A
    Abstract: This study examines the determinants of domestic investment in sub-Saharan African (SSA) countries with explicit focus on the role of governance/institutions. The literature has emphases more on the macroeconomic factors that explain investment, neglecting the non-economic causes that could be more important. A panel of 45 selected sub-Saharan African countries and the period 1996???2013 were considered in the estimations using the two-stage least-squares estimation techniques. The results are in line with the findings of existing literature. The study expands on the analysis that governance/institutions play an important role in explaining the long-term pattern of domestic investment in the region. In addition, the study identify that a sustainable level of domestic investment could be attained at a particular governance rating. Therefore, countries with better governance ratings will achieve higher investment levels and domestic investment tends to converge as poor governance is attained.
    Keywords: convergence, domestic investment, GDP, governance and institutions, sub-Saharan Africa
    Date: 2016–05
  5. By: Nordman, Christophe Jalil (IRD, DIAL, Paris-Dauphine); Rakotomanana, Faly (National Institute of Statistics (INSTAT)); Roubaud, François (IRD, DIAL, Paris-Dauphine)
    Abstract: Little is known about the informal sector's income structure vis-à-vis the formal sector, despite its predominant economic weight in developing countries. While most of the papers on this topic are drawn from (emerging) Latin American, Asian or some African countries, Madagascar represents an interesting case. So far, very few studies in general, even less so in Sub-Saharan Africa, used panel data to provide evidence of the informal sector heterogeneity. Taking advantage of the 1-2-3 Surveys in Madagascar, a four-wave panel dataset (2000-2004), we assess the magnitude of various formal/informal sector earnings gaps. Is there an informal sector job earnings penalty? Do some informal sector jobs provide pecuniary premiums and which ones? Do possible gaps vary along the earnings distribution? Ignoring distributional issues is indeed a strong limitation, given the compound question of how informality affects earnings inequality. We address heterogeneity issues at three different levels: the worker, the employment status (wage employment vs. self-employment) and the earnings distribution. Standard earnings equations are estimated at the mean and at various conditional quantiles of the earnings distribution. The results suggest that the sign and magnitude of the formal-informal sector earnings gaps highly depend on the workers' employment status and on their relative position in the earnings distribution. In the case of a poor and fragile country like Madagascar, these findings provide new and robust empirical backups for the existence of a mix between the traditional exclusion vs. exit hypotheses of the informal sector.
    Keywords: informal sector, earnings gap, transition matrix, panel data, Madagascar
    JEL: J21 J23 J24 J31 O17
    Date: 2016–05
  6. By: OECD
    Abstract: This paper outlines the competitiveness of ports in Durban, south Africa. It looks at port performance, impact, and policies and governance issues.
    Date: 2014–11–01
  7. By: Acheampong, Theophilus; Omane-Achamfuor, Michael; Anang Tawiah, Nii
    Abstract: In December 2007, Ghana and the EU initialled the interim Economic Partnership Agreement (iEPA), which provides a framework for trade. This followed the near expiration of the Cotonou agreement, which had been in existence since 2000. Regional body ECOWAS gave their backing to the full EPA in July 2014 following a review of issues raised by Nigeria. Though the objectives of the EPA are simple with regard to increasing productive investments and job creation in Ghana and West Africa, as well intensifying and facilitating trade between Ghana (and the ECOWAS region) and the EU towards a win-win developmental relationship; we conclude that the attainment of these noble objectives cannot be attained without serious commitment to reforming the business environment especially the supply side constraints many businesses grapple with on a day to day basis. The EPA would, in effect, provide free access to the EU market of 500 million people for all products from Ghana thus providing a lot of scope for economies of scale and scope. It also conforms to meeting WTO rules, unlike the system operating under the Cotonou agreement; therefore, would save all parties from unnecessary legal challenges.
    Keywords: Economic Partnership Agreements, Trade, EU, Africa, Ghana
    JEL: F1 F15 F16 L5
    Date: 2014–07–29
  8. By: Chuku Chuku
    Abstract: This study considers the implications of alternative monetary policy regimes to deal with a laissez-faire fiscal policy rule, where the government completely spends resource revenue windfall contemporaneously. A three sector dynamic stochastic general equilibrium model, which features key structural characteristics of resource-rich developing economies, such as; the Dutch disease, limited international capital mobility, credit constrained consumers, and limited labour mobility are core ingredients of the model. The model is calibrated to match the Nigerian economy.Three alternative mainstream monetary policy regimes are considered:i) a flexible exchange rate regime;ii) a crawling peg; andiii) a money growth target.The results show that the macroeconomic responses to these monetary policy regimes, depends on other auxiliary polices of the central bank, such as; sterilization policy, foreign reserve accumulation policy and openmarket operations. In particular, we find that a flexible exchange rate regime with full domestic absorption delivers the highest level of aggregate employment, though with higher volatility for other macroeconomic variables.The other policy rules deliver lower macroeconomic volatility but at the cost of crowding-out the private sector, depending on the mix of open-market operations. In welfare terms, policy regime (i) delivers the best outcome to economic agents.
    Keywords: Monetary policy
    Date: 2016
  9. By: Chika Ezeanya; Abel Kennedy
    Abstract: The disappearance of Rwanda. forests and attendant change in climatic conditions prompted the government to explore clean energy alternatives such as biogas. Unlike at any other time in Rwanda.s history, more and more Rwandans in rural areas are becoming owners of cattle because of Government of Rwanda.s agricultural direct assistance and poverty reduction programme known as Girinka.This paper focuses on the various strategies employed by the government of Rwanda in achieving increased biogas use among the rural poor Girinka beneficiaries who use cow dung for their domestic biogas plants. Conditions necessary for successful implementation of clean energy pro-poor reforms in rural communities are explored.
    Date: 2016
  10. By: Temoso, Omphile; Hadley, David; Villano, Renato
    Keywords: Agricultural and Food Policy, Farm Management,
    Date: 2016–02

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