nep-afr New Economics Papers
on Africa
Issue of 2018‒01‒29
eight papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Impact of Taxation on Growth in Sub-Saharan Africa: New Evidence Based on a New Data Set By Andre Gbato
  2. You are what you eat: The role of oil price in Nigeria inflation forecast By Moses Tule; Afees A. Salisu; Charles Chimeke
  3. Which comes first: good governance or prosperity? A historical experiment from the South African Republic and the Orange Free State By Stan du Plessis; Sophia du Plessis
  4. The Determinants of External debt in Sub Saharan Africa By Adonia Chiminya; J. Paul Dunne; Eftychia Nikolaidou
  5. Are Poor Individuals Mainly Found in Poor Households? Evidence using Nutrition Data for Africa By Caitlin S. Brown; Martin Ravallion; Dominique van de Walle
  6. The economic impacts of a social pension on recipient households with unequal access to markets in Uganda By Kuss, Maria Klara; Llewellin, Patrick; Gassmann, Franziska
  7. Gold exploitation and socioeconomic outcomes: The case of Burkina Faso By Agn es Zabsonré; Maxime Agbo; Juste Somé; Ire ne Haffin
  8. Defying the odds? Nigerien responses to foreign and domestic security challenges By Sebastian Elischer

  1. By: Andre Gbato (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In this study, we empirically test impact of taxation on long-run growth of a sample of 32 countries in sub-Saharan Africa. The results indicate a zero effect of taxation on long-run growth. Moreover, the results suggest a significant negative effect of indirect taxes and taxes on individuals in short term. Consequently, the use of taxation as an instrument of intervention is not appropriate in the region. The countries of the region could therefore increase their growth, if the design of fiscal policy rests solely on logic of fiscal neutrality.
    Keywords: cross-sectional dependence,growth,taxation,heterogeneous panels
    Date: 2017
  2. By: Moses Tule (Monetary Policy Department, Central Bank of Nigeria Abuja); Afees A. Salisu (Centre for Econometric and Allied Research, University of Ibadan); Charles Chimeke (Monetary Policy Department, Central Bank of Nigeria Abuja)
    Abstract: In this study, we propose a supply-side augmented Phillips curve for the Nigerian economy, which significantly enhances its inflation forecasts. We argue for the role of oil price as a good proxy for the supply side of inflation given the structure of the Nigerian economy, which essentially relies on oil revenue. Thus, we compare the forecast results of the oil-based augmented Phillips curve with the traditional variant, as well as time series models such as ARIMA and ARFIMA. We also test for any probable asymmetric response of Nigeria inflation forecast to oil price changes. The forecast analyses are conducted for both in-sample and out-of-sample periods using alternative forecast measures. We also consider alternative estimators such as Lewellen (2004) [LW hereafter] and Westerlund and Narayan (2012, 2015) [WN hereafter] estimators which account for relevant statistical properties of the predictors and their results are compared with the standard OLS estimator. The results suggest that the choice of estimator does matter for accurate inflation forecast for Nigeria, whether for in-sample or out-of-sample forecast and the WN estimator is preferred particularly when compared with OLS estimator. Secondly, the augmented model outperforms its traditional version, as well as time series models for both forecast samples. However, oil price asymmetries become evident when large samples are used. Our results are robust to alternative oil price proxies and forecast measures.
    Keywords: OECD; Nigeria, Phillips curve, Oil price, Inflation forecasts, Forecast evaluation
    JEL: C53 E31 E37
    Date: 2018–01
  3. By: Stan du Plessis (Stellenbosch University); Sophia du Plessis (Department of Economics, Stellenbosch University)
    Abstract: Two neighbouring republics, with a common history and culture, followed very different paths of development in the second half of the nineteenth century. Extraordinary mineral wealth was discovered during this period in the South African Republic (ZAR), the neighbour where political and economic stability was fragile compared with the Republic of the Orange Free State (OFS). We connect these divergent development paths to the literature on the resource curse, especially the recent literature on the conditional resource curse where the quality of the institutional structure plays a crucial role in the outcomes of a large resource discovery. By introducing a new objective measure for the quality of institutions, namely the accuracy of boundaries on maps, we provide evidence of the institutional quality in the ZAR prior to the discovery of gold on the Witwatersrand. The statistical technique that we use, Procrustes analysis, is an innovation in economic analysis. The evidence supports Acemoglu and Robinson's account of the development path in the ZAR, and the later Union of South Africa, as compromised by the conditional resource curse.
    Keywords: Resources curse, Institutional Economics, South Africa
    JEL: N17 B15 O43
    Date: 2018
  4. By: Adonia Chiminya (School of Economics, University of Cape Town); J. Paul Dunne (School of Economics, University of Cape Town); Eftychia Nikolaidou (School of Economics, University of Cape Town)
    Abstract: Determining the factors that influence external indebtedness in developing countries became an important focus for research following the damaging external debt crises of the early 1970s. While the resulting research has provided valuable insights, there has been a tendency to rely solely on economic factors and surprisingly little concern has been given to political factors that may be important determinants of debt. This paper investigates the main contributing factors to debt accumulation using panel data methods and focusing on a group of 36 Sub Saharan Africa countries (SSA) over the period 1975 to 2012. Instead of relying only on economic variables, the paper introduces a number of political variables that are found to be important and show the need to nuance the economic arguments. Democratically administered governments in the region are found to accumulate more debt than autocratic ones and parliamentary systems seem to accumulate more debt than presidential democracies. Furthermore, countries with a constrained executive and countries with more open and competitive electoral systems tend to lead to the accumulation of less debt. Finally, countries that received debt relief seem to accumulate less debt relative to those that did not while economic activity and openness are important in reducing debt in the region.
    Date: 2018
  5. By: Caitlin S. Brown; Martin Ravallion; Dominique van de Walle
    Abstract: Antipoverty policies assume that targeting poor households suffices in reaching poor individuals. We question this assumption. Our comprehensive assessment for sub-Saharan Africa reveals that undernourished women and children are spread widely across the household wealth and consumption distributions. Roughly three-quarters of underweight women and undernourished children are not found in the poorest 20% of households, and around half are not found in the poorest 40%. Countries with higher undernutrition tend to have higher shares of undernourished individuals in non-poor households. The results are consistent with intra-household inequality but other factors also appear to be at work including common health risks.
    JEL: I14 I32 I38
    Date: 2017–11
  6. By: Kuss, Maria Klara (UNU-MERIT); Llewellin, Patrick (Maxwell Stamp PLC); Gassmann, Franziska (UNU-MERIT)
    Abstract: This paper analyses the differences in the economic impacts of social cash transfers (SCT) on recipients in remote and integrated areas. Using a mixed methods-research design and the case of Uganda's Senior Citizens Grant (SCG), the paper confirms that structural circumstances (such as market access) shape the economic outcomes of cash transfers for recipients. The findings of our case study show that there are vital differences in the dominant function of the SCG between recipient households living in areas with unequal structural circumstances. Recipient households in integrated areas are more likely to exploit the promotive potential of SCTs, while recipient households in remote areas utilise the SCT in a more protective manner. However, the findings also indicate that at times even recipient households in integrated areas are unable to tap into the promotive potential of SCTs given the limitations associated with their age and fragility.
    Keywords: Cash transfers, social pension, market access, livelihood outcomes, Uganda
    JEL: H53 H55 I38
    Date: 2018–01–24
  7. By: Agn es Zabsonré; Maxime Agbo; Juste Somé; Ire ne Haffin
    Abstract: Based on the 2013 Serbian Survey of Income and Living Conditions (SILC) and on the Serbian version of the EUROMOD platform, we evaluate the poverty and distributive effects on children of various reform (benefit and employment) strategies concerning the two major social benefit programs in Serbia: child allowance and social monetary assistance. Both the first and second-order effects of the proposed reforms are considered. For the second-round impacts, a structural labour supply model on parents has been estimated. Our results show that a benefit strategy (which also combats fiscal evasion) is preferred to an employment strategy which aims at raising the work incentives by parents
    Keywords: Gold mining, Poverty, Inequality, Schooling, Child labor, Burkina Faso
    JEL: D11 I32 O13 Q33
    Date: 2017
  8. By: Sebastian Elischer (University of Florida)
    Abstract: The objective of this paper is to identify the manifold security threats confronting the Republic of Niger. It examines if and how various domestic and external actors may exploit Niger’s adverse structural conditions to their benefit and derives possible future scenarios and recommendations for policymakers. Foreign-based jihadist groups such as Al Qaeda in the Islamic Maghreb (AQIM) and Boko Haram will continue to threaten Niger’s domestic stability. However, these groups are unlikely to make further inroads into Nigerien territory. The Tuareg community and conservative Sunni groups are unlikely to rise up against the state as both are well integrated into the political and societal landscape. The most viable threat to Niger’s stability is the continued inability of the current administration to translate macroeconomic gains and donor support into pro-poor growth and social inclusion. The increasing use of authoritarian measures against citizens and journalists has the potential to escalate further and to undermine the legitimacy of the government in the long-term.
    Keywords: Al-Quaeda in the Islamic Maghreb, jihadist groups, Niger, security, West Africa
    JEL: D74 F5 H56 N47 N57
    Date: 2018–01–26

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