nep-afr New Economics Papers
on Africa
Issue of 2016‒09‒18
seven papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. The Impact of the BRICS alliance on South Africa economic growth - a VECM approach By Ncube, Prince; Cheteni, Priviledge
  2. Service Delivery and Customer Satisfaction in Nigerian Banks By FARAYIBI, Adesoji
  3. Reconciliation of the Washington Consensus with the Beijing Model in Africa By Asongu, Simplice; Nwachukwu, Jacinta
  4. Malaria Risk and Civil Violence By Cervellati, Matteo; Esposito, Elena; Sunde, Uwe; Valmori, Simona
  5. Investigating the Application of Queue Theory in the Nigerian Banking System By FARAYIBI, Adesoji
  6. Political Regimes and Stock Market Performance in Africa By Asongu, Simplice; Nwachukwu, Jacinta C.
  7. After blood diamonds: The moral economy of illegality in the Sierra Leonean diamond market By Engwicht, Nina

  1. By: Ncube, Prince; Cheteni, Priviledge
    Abstract: This paper examines the impact of the BRICS alliance on South Africa’s economy and the impact that trade openness in the alliance has on South Africa’s economy. The study uses series data from 1980 to 2012 and employs up to date econometric methodologies- unit root and vector error correction model estimates to achieve its aims. The empirical result reveals that international trade has contributed a lot to the high economic growth rates experienced by the BRICS economies during the recent decades. However, it is also found that international trade is not the only contributing factor. Human Capital formation, Gross Domestic Capital Formation and Real Effective Exchange Rate appreciation are equally important contributors. Results of the study however reveal that South Africa’s trade openness in the alliance has detrimental long run effects for the economy. The study also reveals that despite the growth experienced overall in the alliance, South Africa’s economic participation is limited due to unfair trade practices amongst the members of the alliance. The findings provide an insight of the policies to be adopted to achieve higher growth rates in South Africa within BRICS alliance.
    Keywords: Keywords: Trade openness, Growth, BRICS, Unit Root, Vector Error Correction Model.
    JEL: E2 E22 E6 G2
    Date: 2015
  2. By: FARAYIBI, Adesoji
    Abstract: The study examined the impact of the quality of service delivery on customer satisfaction in the Nigerian banks using Ordinary Least Square (OLS) methodology. The study established a relationship between better banks performance in service delivery and customer satisfaction through effective customer relationship management (CRM). Findings revealed that increase in the number of working days and number of bank branches led to better levels of customer satisfaction. Empirical evidence also revealed that increase in PROFIT margin is a function of improved level of customer satisfaction while number of bank branches (NNB) has a positive but insignificant relationship with customer satisfaction because the spread of branch networks or channels has better effects on customer satisfaction than number of banks. It also emphasized the role of the number of working days in achieving better bank services and profitable customer relationship management. The study thus recommends that the Nigeria banking industry should improve the quality of service delivery as it is a prerequisite for achieving a high level of customer satisfaction.
    Keywords: Service Delivery, Customer Satisfaction, Nigerian Banks, Bank Branches, Profit Margin.
    JEL: L80 L89
    Date: 2016–09–06
  3. By: Asongu, Simplice; Nwachukwu, Jacinta
    Abstract: In this study, we argue that an approach which will reconcile the two opposing camps in Sino-African relations and bring the most progress is a “middle passage” that greases contradictions and offers an accommodative, balanced and pragmatic vision on which Africans can unite. We present a case under which countries can substantially enhance the prospect of development if an African consensus builds on a merger between the Western and Chinese models. We balance national interest with human rights, sovereign authority with individual rights and economic goals with political rights. The chapter presents arguments on the need for a development paradigm in Africa that reconciles the Washington Consensus with the Beijing Model. The analytical framework is organised in three main strands, notably: (i) historical perspectives and contemporary views; (ii) reconciliation of dominant schools of thought and paradigms surrounding Sino-African relations and (iii) practical and contemporary implications. Reconciled schools of thought are engaged in four main categories: optimists versus (vs.) pessimists; preferences in rights (human vs. national, idiosyncratic vs. sovereign and political vs. economic) and the Beijing model vs. the Washington Consensus.
    Keywords: Economic relations; China; Africa
    JEL: F19 F21 O10 O19 O55
    Date: 2016–03
  4. By: Cervellati, Matteo; Esposito, Elena; Sunde, Uwe; Valmori, Simona
    Abstract: Using high-resolution data from Africa over the period 1998-2012, this paper investigates the hypothesis that a higher exposure to malaria increases the incidence of civil violence. The econometric identification exploits exogenous monthly within-grid-cell variation in weather conditions that are particularly suitable for malaria transmission and compares the effect across cells with different latent malaria exposure, which affects the resistance and immunity of the population. By conditioning on cell-year and month fixed effects, the empirical specification accounts for most complementary determinants of violence that have been identified in the existing literature. The results document a robust effect of the occurrence of suitable conditions for malaria on civil violence. The effect is shown to be highest in areas with low levels of immunity and to affect unorganized violence in terms of riots and protests and confrontations between militias and civilians, instead of geo-strategic violence. The effect spikes during short harvesting periods of staple crops that are particularly important for the subsistence of the population. The paper ends with an exploration of the role of anti-malarial policies.
    Keywords: Malaria Risk; Civil Violence; Weather Shocks; Immunity; Cell-level Data; Africa
    Date: 2016–09
  5. By: FARAYIBI, Adesoji
    Abstract: This study examined the application of queue theory in the banking system in Nigeria, with particular reference to GTBank and Ecobank Idumota branch, Lagos, Lagos state. The queuing characteristics of the banks were analyzed using a Multi-Server Queuing Model. The performance measures analysis including the waiting and operation costs for the banks were computed with a view to determining the optimal service level. Findings revealed that the traffic intensity was higher in GTbank with p =0.98 than in Ecobank with p= 0.78. Also, the potential utilization showed that Ecobank was far below efficiency compared to GTBank. Looking at the waiting time of customers in line and the time spent in the system, that is (Wq + Ws), we discovered that customers in Ecobank spent more time before being served both on queue and in the system than that of GTBank bank. The study concluded by emphasizing the relevance of queuing theory to the effective service delivery of the banking sector in Nigeria and strongly recommends that for efficiency and quality of service delivery to customers, the management of GTBank and Ecobank should adopt a 13-server model and 10-server model respectively to reduce total expected costs and increase customer satisfaction.
    Keywords: Queue Theory, Banking System, Multi-Server Model, Traffic Intensity, Waiting Cost
    JEL: C0 C1 C18
    Date: 2016–09–06
  6. By: Asongu, Simplice; Nwachukwu, Jacinta C.
    Abstract: This paper assesses the effect of political institutions on stock market performance in 14 African countries for which stock market data is available for the period 1990-2010. The estimation technique used is a Two-Stage-Least Squares Instrumental Variable methodology. Political regime channels of democracy, polity and autocracy are instrumented with legal-origins, religious-legacies, income-levels and press-freedom qualities to account for stock market performance dynamics of capitalization, value traded, turnover and number of listed companies. The findings show that countries with democratic regimes enjoy higher levels of financial market development compared to their counterparts with autocratic inclinations. As a policy implication, the role of sound political institutions has important effects on both the degree of competition for public office and the quality of public offices that favour stock market development on the African continent.
    Keywords: Financial Markets; Government Policy; Development
    JEL: G10 G18 G28 P16 P43
    Date: 2016–01
  7. By: Engwicht, Nina
    Abstract: While the role of illegal markets in contemporary inner-state wars has drawn considerable attention from both researchers and policy makers, very little is known about the fate of these "war economies" after the end of violent conflict. This paper aims to contribute to an understanding of the functioning of illegal markets under the condition of limited statehood by examining what has become of a notorious war economy: the illegal diamond market in Sierra Leone. Drawing on extensive field research, this analysis of the social order of the illegal diamond market in post-conflict Sierra Leone shows that while illegal activities are still widespread, the illegal diamond economy has largely been peacefully integrated into the social and economic order of the post-conflict society. In contrast to the violent and conflict-fueling war economy, the post-conflict illegal diamond economy is surprisingly benign. I argue that the illegal Sierra Leonean diamond market today can be understood as a moral economy of illegality, since economic action in this market is decisively shaped and regulated by widely held social norms about legitimate and illegitimate practices. It is highly interwoven with both the state and the legal markets, and has thus become part of the "peace economy."
    Abstract: Während die Rolle illegaler Märkte in zeitgenössischen innerstaatlichen Kriegen erhebliche Beachtung in der Politikforschung und -praxis erfahren hat, ist nur sehr wenig über das Schicksal dieser "Kriegsökonomien" nach dem Ende gewaltsamer Konflikte bekannt. Dieses Diskussionspapier will zu einem Verständnis der Funktionsweise illegaler Märkte unter der Bedingung schwacher Staatlichkeit beitragen. Dazu wird ein illegaler Markt untersucht, der als typische Kriegsökonomie Berühmtheit erlangte: der illegale Diamantenmarkt in Sierra Leone. Basierend auf umfangreicher Feldforschung zeigt diese Analyse der sozialen Ordnung des illegalen Diamantenmarktes in der sierra-leonischen Postkonfliktgesellschaft, dass illegales Handeln auf dem sierra-leonischen Diamantenmarkt zwar immer noch weit verbreitet ist, sich die illegale Diamantenökonomie jedoch weitgehend friedlich in die soziale und ökonomische Ordnung der Postkonfliktgesellschaft integriert hat. Im Gegensatz zur gewaltsamen und Gewalt verstetigenden Kriegsökonomie ist der illegale Diamantenmarkt in der Nachkriegsgesellschaft überwiegend gewaltfrei. Der illegale Diamantenmarkt im heutigen Sierra Leone kann als "moralische Ökonomie der Illegalität" verstanden werden, da ökonomisches Handeln auf diesem Markt entscheidend durch soziale Normen der Legitimität und Illegitimität geprägt und reguliert wird. Indem der illegale Markt eng mit dem legalen Markt und dem Staat verwoben ist, wird er zum Teil der "Friedensökonomie".
    Date: 2016

This nep-afr issue is ©2016 by Sam Sarpong. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.