nep-afr New Economics Papers
on Africa
Issue of 2018‒03‒05
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Short- and Long-term Impact of Trade Openness on Financial Development in Sub-Saharan Africa By Ho, Sin-Yu; Njindan Iyke, Bernard
  2. Cross-Border Trade, Insecurity and the Role of Customs: Some Lessons from Six Field Studies in (Post-) Conflict Regions By Cantens, Thomas; Raballand, Gaël
  3. SDG 16 on Governance and its measurement: Africa in the Lead By Jean-Pierre Cling; Mireille Razafindrakoto; François Roubaud
  4. The Macroeconomic Effects of Public Debt: An Empirical Analysis of Mozambique By António Afonso; Yasfir Ibraimo
  5. Effects if Fertilizer Subsidies in Zambia: A Literature Review By Zinnbauer, Maximilian; Mockshell, Jonathan; Zeller, Manfred
  6. How Do We Measure Tax Expenditures? The Zambian Example By Sladoje, Miljan

  1. By: Ho, Sin-Yu; Njindan Iyke, Bernard
    Abstract: We extend a recently proposed index of trade openness to a panel data setting in order to investigate the short- and long-term impact of trade openness on financial development for a panel of 43 Sub-Saharan African (SSA) countries over the period 1996–2014. We found trade openness to enhance financial development in the long term. In the short term, the effect of openness is not clear but points to a negative one. When we divided the sample into low- and middle-income groups, we found that openness enhances financial development in the former group but hurts it in the latter group. This suggests a nonlinear relationship between financial development and openness. Among other factors that may be relevant in explaining the trade openness-financial development nexus, we examined the role of governance, human capital development, and infrastructural development. We found that governance, human capital and infrastructure development are critical to financial development, particularly in the long-term. Our findings have relevant policy implications, which we elaborate.
    Keywords: Financial Development; Trade Openness; Short- and Long-run Impact; SSA.
    JEL: F13 G21
    Date: 2018–01
  2. By: Cantens, Thomas; Raballand, Gaël
    Abstract: Africa, and especially the Sahel, has experienced frequent recurrences of armed conflicts and terrorist acts in the last decade. This paper is based on six field studies, in Chad, Mali, Sudan, Tunisia, Libya and the Central African Republic. It reflects on the governance of trade in border regions during a (post-)conflict situation, exploring the practices and strategies of customs officials operating at insecure borders. It demonstrates the unintended consequences of security policies – especially on trade, and consequently on revenue generation. It further shows how customs administrations de facto leave it to customs officers on the ground and importers to agree on an acceptable tax burden to prevent smuggling and a new upsurge in violence to a certain extent. Idiosyncratic and pragmatic approaches by customs seem to play a major role at the local level.
    Keywords: Taxation,
    Date: 2017
  3. By: Jean-Pierre Cling (IRD, UMR DIAL, Insee); Mireille Razafindrakoto (IRD, UMR DIAL, PSL, Université Paris-Dauphine); François Roubaud (IRD, UMR DIAL, PSL, Université Paris-Dauphine)
    Abstract: (english) This article provides some elements for reflection on an apparent paradox. On the one hand, Africa appears to be the continent most riddled by problems related to governance and conflict; on the other hand, it is at the forefront in both promoting the issue of governance at the international level and in implementing its statistical measurement, an observation that has gone largely unnoticed until now. Will Africa manage to maintain its lead following the adoption by all countries of Sustainable Development Goal 16 on governance, peace and security, to which the continent contributed greatly?_________________________________ (français) Cet article se propose d’apporter des éléments de réflexion sur un apparent paradoxe : alors que l’Afrique apparaît comme le continent où les questions de gouvernance et de conflits sont les plus problématiques, c’est également celui qui se montre le plus en pointe, à la fois dans la promotion de cette thématique au niveau international et dans la mise en oeuvre de sa mesure statistique, un constat passé largement inaperçu jusqu’ici. Cette avance pourra-t-elle se maintenir avec l’adoption par tous les pays de l’Objectif de Développement Durable 16 sur la gouvernance, la paix et la sécurité, auquel le continent a largement contribué ?e la société malgache. La faible organisation, tant du côté d’élites fragmentées que d’une population atomisée géographiquement et socialement, n’est pas propice à l’émergence de violences politiques. Mais c’est surtout la prégnance d’une violence symbolique systémique qui permet le maintien de l’ordre établi et freine l’émergence de mobilisations susceptibles de remettre en cause l’équilibre de la société. Faiblesse organisationnelle, normes sociales et violence symbolique se conjuguent pour une apparente paix sociale. Celle-ci reflète moins une solidité institutionnelle que la domination symbolique de la classe élitaire.
    Keywords: Governance, Peace, Security, SDGs, Statistical surveys, Political economy, Africa, Gouvernance, Paix, Sécurité, Objectif du Développement Durable, Enquête statistique, Economie politique, Afrique.
    JEL: C18 C81 C83 F5 O10 O55
    Date: 2018–01
  4. By: António Afonso; Yasfir Ibraimo
    Abstract: Public debt has been rising markedly over the years, which suggests an increase in public expenditure financed by debt instead of taxation. There is no consensus on the economic implications of borrowing to finance public expenditure. We assess empirically the macroeconomic effects of public debt for the case of Mozambique over the period of 2000Q1-2016Q4. We use a Vector Autoregression model to assess these effects through impulse response functions and variance decomposition. We conclude that debt service variables have much more negative effects on this economy than debt variables. Debt variables over the period of this study had no significant impact on the real output and the debt service component depressed the real output, increased the general price level and accounted for the depreciation on the domestic currency.
    Keywords: Economic growth, External Debt, Domestic Debt, Total Debt Service, Variance Decomposition, Vector Autogression, Mozambique
    JEL: C32 E62 H63 O11 O55
    Date: 2018–02
  5. By: Zinnbauer, Maximilian; Mockshell, Jonathan; Zeller, Manfred
    Abstract: Fertilizer subsidies are again part of the policy agenda in Sub-Saharan Africa since the 1990s. Governments spend large shares of their agricultural budgets and their means to fight poverty on such programmes, but economists formulated doubts whether these investments will pay off. This paper reviews the existing literature on effects of fertilizer subsidies in Zambia, presents an analytical framework on input subsidies and compares the empirical evidence to the goals of the fertilizer subsidy. Major findings are that the subsidy programme has failed to substantially reduce poverty and to improve food security via decreased maize prices. Farm incomes have increased moderately, but the overall costs exceed the benefits by far. Reasons for this are identified as poor targeting, diversion and leakage. The paper concludes with a review of policy recommendations, mainly focused on improved targeting and diversification away from pure fertilizer subsidies.
    Keywords: fertilisier subsidies, input subsidies, Zambia, food security
    JEL: Q01 Q12 Q13
    Date: 2018–01–25
  6. By: Sladoje, Miljan
    Abstract: The objective of this paper is to help inform future tax reforms related to tax expenditure provisions in Zambia. It sets out how tax expenditures can be categorised, measured and evaluated, and provides guidance on establishing a robust framework for monitoring and evaluating tax expenditures in Zambia.
    Keywords: Taxation,
    Date: 2017

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