nep-afr New Economics Papers
on Africa
Issue of 2018‒09‒17
five papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Britain & Africa: heading for the Brexit rocks By Kohnert, Dirk
  2. Road to Industrialized Africa: Role of Efficient Factor Market in Firm Growth By Manabu Nose
  3. Coheisive Institutions and Political Violence By Thiemo Fetzer; Stephan Kyburz
  4. Dollarization and the “Unbundling” of Globalization in sub-Saharan Africa By Kazeem B. Ajide; Ibrahim D. Raheem; Simplice A. Asongu
  5. Using Trust Agent as Strategy by Retailers to Investigate Potential and Existing Customers in Nigeria E-Commerce Industry. By Johnson Wewinghipere Kenigua

  1. By: Kohnert, Dirk
    Abstract: High-flying illusions on the part of the proponents and grim predictions of the sceptics characterize the controversy about Brexit. The article analyses five issues at stake for the Post-Brexit relationships between Britain, the EU and Africa with a focus on the Commonwealth Sub-Saharan Africa: market access, FDI, aid, security and partnership . The British government’s vision of a ‘Global Britain’ relies heavily on a reinforced co-operation with Commonwealth nations. However, most likely this would be possible only at the expense of the poor in Africa and elsewhere. Concerning security cooperation with Africa, London apparently exaggerated its defence input in order to enhance its bargaining position with the EU. It will be crucial for both the EU and the UK to find post-Brexit agreements to stem irregular migration and the growth of jihadist groups and terrorism. In a nutshell, the analysis of these different policy fields shows that expectations of Brexiteers and African politicians alike concerning an enhanced, partner-like Post-Brexit Commonwealth relationship are largely unfounded.
    Keywords: Brexit,UK,Africa,EU,tariff policy,international trade,security,partnership
    JEL: F13 F2 F35 F54 F36 G15 G2 H26 N17 N47 N77 O17 P16 Z13
    Date: 2018
  2. By: Manabu Nose
    Abstract: After a decade of rapid growth, industrialization has lost ground with shrinking manufacturing sector and high informality in Sub-Saharan Africa (SSA). This paper explores how land market and labor regulations affect factor allocative efficiency and firm performance in SSA. Using pooled data on firm balance sheets for 40 countries in SSA, the results identify significant land and labor misallocations due to limited market allocation of land and inappropriate regulatory policies. Using variations in ethnic diversity and the intensity of regulatory actions to peer firms at subnational level as instrumental variables, local average treatment effects show large productivity gains from factor reallocations, especially for marginally productive firms. Panel data results for Nigerian firms confirm factor market inefficiency as a principal driver of declining productivity, while showing that the 2011 minimum wage reform increased firm size. The results imply that improving formal regulation is critical to support firm growth at the stage of weak legal capacity, while informal sector monitoring gets effective as legal capacity develops.
    Keywords: Africa;Firm growth, misallocation, land market, labor regulations, Labor Economics Policies, Labor Force and Employment, Size, and Structure, Labor Standards: Public Policy
    Date: 2018–08–06
  3. By: Thiemo Fetzer; Stephan Kyburz
    Abstract: Can institutionalized transfers of resource rents be a source of civil conflict? Are cohesive institutions better in managing distributive conflicts? We study these questions exploiting exogenous variation in revenue disbursements to local governments together with new data on local democratic institutions in Nigeria. We make three contributions. First, we document the existence of a strong link between rents and conflict far away from the location of the actual resource. Second, we show that distributive conflict is highly organized involving political militias and concentrated in the extent to which local governments are non-cohesive. Third, we show that democratic practice in form having elected local governments significantly weakens the causal link between rents and political violence. We document that elections (vis-a-vis appointments), by producing more cohesive institutions, vastly limit the extent to which distributional conflict between groups breaks out following shocks to the available rents. Throughout, we confirm these findings using individual level survey data.
    Keywords: conflict, ethnicity, natural resources, political economy, commodity prices
    JEL: Q33 O13 N52 R11 L71
    Date: 2018
  4. By: Kazeem B. Ajide (University of Lagos, Nigeria); Ibrahim D. Raheem (University of Kent, Canterbury, UK); Simplice A. Asongu (Yaoundé/Cameroon)
    Abstract: This study contributes to the dollarization literature by expanding its determinants to account for different dimensions of globalization, using the widely employed KOF index of globalization. Specifically, globalization is “unbundled” into three different layers namely: economic, social and political dimensions. The study focuses on 25 sub-Saharan African (SSA) countries for the period 2001-2012.Using the Tobit regression approach, the following findings are established. First, from both economic and statistical relevance, the social and political dimensions of globalization constitute the key dollarization amplifiers, while the explanatory power of the economic component is weaker on dollarization. Second, consistent with the theoretical underpinnings, macroeconomic instabilities (such as inflation and exchange rate volatilities) have the positive expected signs. Third, the positive association between the accumulation of international reserves and dollarization is also apparent. Policy implications are discussed.
    Keywords: Dollarization; Globalization; sub-Saharan Africa; Tobit regression
    JEL: E41 F41 C21
    Date: 2018–01
  5. By: Johnson Wewinghipere Kenigua (Ritsumeikan Asian Pacific University)
    Abstract: The trend in technology has shifted to internet base whereby the majority of activities take place ranging from government data storage, educational portal, medical, banking, online retail shopping etc. are all the talk of the century with the digital age. This trend comes with its own advantages and disadvantages facing it and there is no actual framework to curtail its excesses and check irregularities. Nigeria has become a phenomenon character when it comes to online crimes and other fraudulent activities causing damages to her wellbeing among the community of nations even with her vast human resources and natural resources surplus in the country but due to various situations like corruption and lack of infrastructure has caused brain drain and others into various illegal activities. This research investigates trust building ?Using Trust Agent as Strategy by Retailers to Investigate Potential and Existing Customers in Nigeria E-commerce Industry?. Various factors were considered in trust building not just human perspectives, they are; Infrastructure; Security, Fraud and Hacking; National Culture; Consumer Perspective; Perceived Quality; Critical Success Factor; Delivery System. The integration of both ITC and management/marketing concept was looked upon to find the out the growth of e-commerce and to build trust among consumers in the industry in Nigeria. A model was developed and with the help of a questionnaire, we were able to analyze using SPSS tool to validate the theoretical model. The study found out the main issue of trust depends on the factors on grounds not the consumers but how good infrastructures that burst the e-commerce industry are put in place by both vendors and government agencies by protecting consumers and vendors in the industry which can freely access any website by using their credit cards, debit cards etc. knowing they are well protected without any fear or doubt. Further studies are suggested in the area of payments and delivery issues by introducing more technological innovation in Nigeria to burst the growth of e-commerce.
    Keywords: E-commerce, Consumer Trust-building, Technology Acceptance Model (TAM), Theory of Reason Action (TRA)
    JEL: O32
    Date: 2018–06

This nep-afr issue is ©2018 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.