nep-afr New Economics Papers
on Africa
Issue of 2018‒09‒24
seven papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Revenue Sharing in Mining in Africa: Empirical Proxies and Determinants of Government Take By Lundstøl, Olav
  2. Measuring Urban Economic Density By J. Vernon Henderson; Sebastian Kriticos; Dzhamilya Nigmatulina
  3. Public Corporations in Africa - A Continental Survey on Stock Exchanges and Capital Markets Performance By Dirk Schiereck; Andreas Freytag; Maximilian Grimm; Wolfgang H. Bretschneider
  4. Liquidity Requirements and Bank Deposits: Evidence from Ethiopia By Nicola Limodio; Francesco Strobbe
  5. Oil price Fluctuation and Aggregate Output Performance in Nigeria By Ibrahim, Taofik
  6. Regulatory Burdens in Tax Administration and Firms’ Compliance Costs in Africa By Ali, Merima
  7. Orange Fanta vs orange fruit: A novel measure of nutrition knowledge and women’s diet quality in Malawi By Schneider, K.; Masters, W.A.

  1. By: Lundstøl, Olav
    Abstract: This ICTD Research in Brief is a two-page summary of ICTD Working paper 81 by Olav Lundstøl. This series is aimed at policy makers, tax administrators, fellow researchers and anyone else who is big on interest and short on time. The paper examines the resource rent literature and findit a complicated basis for assessing revenue sharing between government and companies. An alternative approach that compares the relative contribution of mining to government revenue and gross domestic product is utilised as a proxy for this purpose. Using a twenty-year data set for dominant mining countries in Sub Saharan Africa together with two benchmark global mining countries, we estimate foregone mining government revenue of 2–13 percent of GDP per year on average for countries such as Ghana, Tanzania and Zambia in particular.
    Keywords: Governance,
    Date: 2018
  2. By: J. Vernon Henderson; Sebastian Kriticos; Dzhamilya Nigmatulina
    Abstract: At the heart of urban economics are agglomeration economies, which drive the existence and extent of cities and are also central to structural transformation and the urbanization process. This paper evaluates the use of different measures of economic density in assessing urban agglomeration effects, by examining how well they explain household income differences across cities and neighborhoods in six African countries. We examine simple scale and density measures and more nuanced ones which capture in second moments the extent of clustering within cities. The evidence suggests that more nuanced measures attempting to capture within-city differences in the extent of clustering do no better than a simple density measure in explaining income differences across cities, at least for the current degree of accuracy in measuring clustering. However, simple city scale measures such as total population are inferior to density measures and to some degree misleading. We find large household income premiums from being in bigger and particularly denser cities over rural areas in Africa, indicating that migration pull forces remain very strong in the structural transformation process. Moreover, the marginal effects of increases in urban density on household income are very large, with density elasticities of 0.6. In addition to strong city level density effects, we find strong neighborhood effects. For household incomes, both overall city density and density of the own neighborhood matter.
    Keywords: cities, economic density, Africa
    Date: 2018–09
  3. By: Dirk Schiereck (Chair of Corporate Finance, Darmstadt University of Technology); Andreas Freytag (FSU Jena); Maximilian Grimm (Chair of Corporate Finance, Technische Universitaet Darmstadt); Wolfgang H. Bretschneider (Chair for Economic Policy, Friedrich-Schiller Universität Jena)
    Abstract: While mature capital markets in Western economies suffer from a significant drop in listed companies for two decades, the number of listings at stock exchanges on the African continent is increasing and the importance of stock exchanges for equity issues is growing. This not only raises questions about the future of stock exchanges as platforms to raise equity in different countries (Doidge et al., 2017; Kahle and Stulz, 2017). It also sheds light on the growing importance of African markets for Western actors. The capital markets in Africa, however, are dominated by a very few large stock exchanges while most of the markets are small and underdeveloped based on international standards. The paper serves the purpose of identifying the potential of African stock markets.
    Keywords: African capital markets, stock exchange, performance, listings
    JEL: G10 G23
    Date: 2018–09–10
  4. By: Nicola Limodio; Francesco Strobbe
    Abstract: Liquidity requirements can stimulate deposit growth by increasing depositor repayment in bad states, which can also promote lending and branching. We study an unexpected policy change which fostered the liquid assets of Ethiopian banks by 33% in 2011, and present three findings in line with this hypothesis. First, a panel of bank depositors shows deposit growth among wealthy and highly educated individuals. Second, a survey reports higher deposits in branches opened after the policy and in university cities. Third, bank balance sheets and two sources of bank exposure to the policy highlight an increase in deposits, loans and branches.
    Keywords: Banking, Liquidity Requirements, Financial Development
    JEL: G21 G38 O16
    Date: 2018
  5. By: Ibrahim, Taofik
    Abstract: This paper investigates the relationship between oil price fluctuation and output performance in Nigeria during the period 1970 to 2015. It synthesizes the standard neoclassical growth model and the Keynesian national income identity by augment the typical production function to include oil price as one of the factors of production and then super-impose the augmented production function on the Keynesian national income identity. The Two Stage Least Square (2SLS) estimation technique that accounts for the plausibility of endogeneity was adopted in the study. The ADF unit root and Johansen cointegration tests were used to determine the time series properties of the data used in the study. Findings suggest that oil price impacted positively on aggregate output but negatively on agricultural, manufacturing and service sector suggesting that fluctuation in oil price create uncertainty in the production capacity of the productive sectors and it also undermines the effectiveness of the government fiscal management of crude oil revenue. The study, therefore, recommends that the Nigerian government need to diversify its export revenue base in order to minimize the over reliance on crude oil. Also, the country needs to develop the local capacity of its refinery so as to reduce the importation of refined petroleum which serves as input to most productive sectors of the economy.
    Keywords: Oil Price, Aggregate output, Agricultural output, Manufacturing output, Service output, Nigeria, Two-Stage Least Square (2SLS)
    JEL: E32 O13 O40
    Date: 2018–01–10
  6. By: Ali, Merima
    Abstract: There is a growing interest among policy makers to cut red tape in government regulations in order to help improve the performance of businesses and create more jobs. However, most businesses, especially in Africa, still face challenges in meeting various government regulations that contributes to higher compliance costs. Compliance costs are the extra costs incurred by businesses in the process meeting various government regulations. Although previous studies looked at the effects of compliance costs on firms performance, little is understood to what extent the different regulatory burdens contribute to overall compliance costs.
    Keywords: Governance,
    Date: 2018
  7. By: Schneider, K.; Masters, W.A.
    Abstract: This paper uses a novel survey instrument to identify distinct components of nutrition knowledge, and test for links between knowledge and dietary choices in Southern Malawi. Our first aim is to distinguish respondents’ familiarity with recommended behaviors, such as when to start breastfeeding or introduce solid foods, from respondents’ factual knowledge about mechanisms, such as whether biscuits or papaya and orange fruit or orange Fanta contribute more to future health. We find knowledge of nutrition behaviors to be strongly associated with more schooling, older age and being female, while knowledge of mechanisms is associated only with training and employment as a health professional. We then test whether this expanded definition of nutrition knowledge is associated with dietary intake when controlling for other factors, and find only suggestive evidence for significant links interacting with age of respondents. These findings point to the need for knowledge surveys and public health behavior-change campaigns to address the kinds of information that might have the most influence on actual behavior, potentially including the mechanisms involved in food composition, food safety and disease transmission.
    Keywords: Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, International Relations/Trade
    Date: 2018–07

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