nep-afr New Economics Papers
on Africa
Issue of 2018‒07‒23
four papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Identifying the Factors Driving West African Migration By Matthew Kirwin; Jessica Anderson
  2. Institutions and geography: A "two sides of the same coin" story of primary energy use in Sub-Saharan Africa. By Laté Ayao Lawson; Phu Nguyen-Van
  3. Unobserved structural shifts and asymmetries in the random walk model for stock returns in African frontier markets By David De Villiers; Natalya Apopo; Andrew Phiri
  4. Chicken now, not eggs later: short-termism, underdevelopment and regime stabilisation in the DRC’s oil governance By Edmond, Patrick; Titeca, Kristof

  1. By: Matthew Kirwin (US Department of State); Jessica Anderson (Institute for the Study of International Migration)
    Abstract: Since 2014 over 600 000 African migrants have arrived in Italy through the perilous Central Mediterranean route, and nearly 120 000 arrived in 2017. This paper is the first examination of migration motivations at the individual level using nationally representative surveys and focus group data collected in West Africa. Respondents in six West African countries cite economic factors as the reason for migrating and those who wish to stay claim family and love of country as the ties that bind. The study then specifically focuses on Nigeria, the country of origin for a quarter of all Africans traveling through the Central Mediterranean route. Half of the Nigerians were interested in leaving their country of origin if given the opportunity, well above the number in neighbouring countries. Evidence from the six-country survey suggests individuals are migrating for economic reasons but statistical analysis of the Nigeria data reveals a different set of push factors behind the desire to migrate. In fact, economic standing has a limited effect on Nigerians’ desire to leave their home. Instead, individual perceptions of the strength of Nigeria’s democracy are most strongly associated with Nigerians’ desire to migrate abroad, in addition to low levels of trust in local security institutions. Urban and more highly educated Nigerians, especially from Lagos, are also more likely to want to migrate abroad. These findings shed new light on domestic policy steps that could address the grievances and concerns of those who seek to migrate.
    Keywords: migrants, migration, Nigeria, smuggling, West Africa
    JEL: J11 O15 O20 R23
    Date: 2018–07–17
  2. By: Laté Ayao Lawson; Phu Nguyen-Van
    Abstract: Why do coastal located African countries seem more energies consuming? Do institutional and geographical factors matter to energy consumption as in the case of economic growth? Are there any spatial spillovers in primary energy use in Sub-Saharan Africa? To answer these questions which have been surprisingly few addressed in the existing literature, we empirically assess the link between energy use and economic growth in SSA, exploiting spatial data analysis methods. Our empirical results highlight the existence of positive spatial spillovers in primary energy use. We also derive factors (income, population dynamics and urbanization) explaining why coastal located countries are more energy intensive than inland ones. Furthermore, good political institutions encourage energy consumption, connoting a two side of the same coin phenomenon. Globally, our results impel African countries to develop alternative energies strategies and to deploy energy management policies, since increases in the demand for energies and related environmental consequences are expected in a near future.
    Keywords: Energy, institutions, locational and spatial effects, development.
    JEL: C23 O55 Q43 Q56
    Date: 2018
  3. By: David De Villiers (Department of Economics, Nelson Mandela University); Natalya Apopo (Department of Economics, Nelson Mandela University); Andrew Phiri (Department of Economics, Nelson Mandela University)
    Abstract: The purpose of this study is to examine the weak-form market efficiency hypothesis (EMH) for 8 African Frontier markets (Nairobi Securities Exchange of Kenya, the Nigerian Stock Exchange of Nigeria, Botswana Stock Exchange of Botswana, Zimbabwe Stock Exchange of Zimbabwe, Johannesburg Stock Exchange of South Africa, Egyptian Exchange of Egypt, Casablanca Stock Exchange of Morocco, the Tunis Stock Exchange of Tunisia). To achieve this purpose we employ unit root testing procedures which are robust to both nonlinearities and smooth structural breaks. To further allow for vigorousness in our empirical analysis we employ two time series datasets for each of the capital markets, namely daily and weekly time series. To the best of our knowledge, our study becomes the first, to investigate the weak-form EMH for all 8 African frontier markets whilst simultaneously accounting for asymmetries and smooth structural breaks. Our empirical findings suggest that most African frontier markets are not market efficient, in the weak sense form, with the exception of the Kenyan stock market and to a very much lesser extent the Botswana and South African stock series. Important policy and investor implications are drawn in our study.
    Keywords: Africa, efficient market hypothesis (EMH), unit roots, nonlinerities, Fourier approximation.
    JEL: C21 C22 C51 G14
    Date: 2018–07
  4. By: Edmond, Patrick; Titeca, Kristof
    Abstract: The DRC has major possibilities for oil development, but very little actual development. This paper aims to show why this is the case, demonstrating that the main function of the oil sector is regime stability, which manifests itself in various ways. First, the sector is a major source of patronage and rent-extraction. These rents are not created through the active production and development of the sector, but primarily through not developing the sector, which is much more interesting for short-term rent extraction for the concerned actors. Second, we show how there are political and social logics behind corruption, which are also related with regime-stability: rent extraction is allowed as a form of political reward, but this political logic equally means that it should not be overdone. Overdoing corruption brings unnecessary attention, which is detrimental for regime stability. Paradoxically, oil sector development is contrary to regime stability: internal geopolitics, regional relationships, and central control over major wealth are threatened by sector development. The importance of describing these dynamics goes beyond the oil sector: it allows for a better understanding of how political control and corruption function within the DRC, and how development becomes their victim.
    Keywords: DRC; DRCongo; oil
    Date: 2018–07

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