nep-afr New Economics Papers
on Africa
Issue of 2018‒11‒26
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. The impact of e-wallet on informal farm entrepreneurship development in rural Nigeria By Joseph I. Uduji; Elda N. Okolo-Obasi; Simplice A. Asongu
  2. Does financial development reduce the size of the informal economy in Sub-Saharan African countries? By Njangang, Henri
  3. How Should Rural Financial Cooperatives Be Best Organized? Evidence from Ethiopia By Aga, B.K.; Tesfay, G.B.
  4. An assessment of social and economic factors for broadband penetration in Southern Africa Development Community (SADC) By Karikoga Gorejena
  5. Really too risk averse and too impatient to escape poverty? Insights from a field experiment in West Africa By Liebenehm, S.; Waibel, H.
  6. Times have changed. Using a Pictorial Smartphone App to Collect Time Use Data in Rural Zambia. By Daum, T.; Birner, R.; Buchwald, H.; Gerlicher, A.

  1. By: Joseph I. Uduji (University of Nigeria, Nsukka, Nigeria); Elda N. Okolo-Obasi (University of Nigeria, Nsukka, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Transforming agriculture from a largely subsistence enterprise to a profitable commercial venture is both a prerequisite and a driving force for accelerated development and sustainable growth in sub-Saharan Africa. The objective of this investigation is to assess the impact of the Federal Government of Nigeria (FGN) e-wallet programme on informal farm entrepreneurship development in rural Nigeria. Informal sector farmers are those that are not legally registered at the national level though could be connected to a registered association. The research is motivated by the absence of literature focusing on the problem statement or objective of study. One thousand, one hundred and fifty-two rural farmers were sampled across the six geo-political zones of Nigeria. Results from the use of a bivariate probit model indicate that the mobile phone-based technology via the e-wallet programme is a critical factor that has enhanced farm entrepreneurship in rural Nigeria. However, results also show that the impact of mobile phones (as a channel to accessing and using modern agricultural inputs) is contingent on how mobile networks are able to link farmers who live in rural areas and work mainly in farming. The results suggest that increasing mobile phone services in rural Nigeria enhances farmers’ knowledge, information and adoption of improved farm inputs and by extension, spurs rural informal sector economic activities in sub-Saharan Africa. Implications for practice, policy and research are discussed.
    Keywords: Informal sector’s adoption, electronic wallet technologies, rural farmers’ entrepreneurship
    JEL: Q10 Q14 L96 O40 O55
    Date: 2018–01
  2. By: Njangang, Henri
    Abstract: This paper contributes to the understanding of the other neglected effects of financial development by investigating the relationship between financial development and the size of the informal economy using an unbalanced panel data of 41 Sub Saharan African countries over the period 1991-2015. Empirical evidence is based on Ordinary Least Squared, Fixed effects and system Generalized Method of moment. The results show that financial development measured by broad money and domestic credit to private sector have a negative and statistically significant effect on the informal economy. This clearly suggests that financial development reduces the size of the informal economy.
    Keywords: Financial development, the informal economy, panel data, SSA
    JEL: G20 O17 O55
    Date: 2018–11–04
  3. By: Aga, B.K.; Tesfay, G.B.
    Abstract: What is the optimal size and composition of Rural Savings and Credit Cooperatives (RuSACCOs)? With these broader questions in mind, we characterize alternative formation of RuSACCOs and their implications in improving rural households access to financial services, including savings, credit and insurance services. We find that some features of RuSACCOs have varying implications for delivering various financial services (savings, credit and insurance). We find that the sizes of RuSACCOs have nonlinear and varying implications across the various financial services that RuSACCOs provide. We also show that compositional heterogeneity among members (including diversity in wealth) is associated with higher access to credit services, while this has little (no) implication on households savings behavior. Similarly, strong social cohesion among members is strongly associated with higher access to financial services, particularly savings and credit access. These empirical characterizations suggest that the optimal size and composition of RuSACCOs may vary across the domains of financial services they are meant to provide. The results provide some insights into rural microfinancing operations and saving cooperatives which are striving to satisfy members demand for financial services. Acknowledgement : The authors gratefully acknowledge the financial support from the International Growth Center (IGC) through the Ethiopian country program. We also appreciate the support and comments from the IGC Ethiopia team. All remaining errors are ours
    Keywords: Financial Economics
    Date: 2018–07
  4. By: Karikoga Gorejena (North West University)
    Abstract: The transformative benefits of broadband on economic and social variables have led governments to set ambitious targets for its deployment. In making a case for public policy on broadband, many studies have sought to identify and measure broadband economic benefits. Such benefits have not been fully realized in Third World economiesIn an increasingly integrated global economy, broadband is central in providing economic growth and competitiveness to any organisation, country or region. In spite of this competitive advantage of broadband, in the last four years Africa had mobile cellular penetration of 63% and penetration rate flattened at 5.2%. Social and economic factors have been cited as major contributors to this undesirable phenomenon. This papers assays to identify these factors, rank them and suggest possible remedies in the context of Southern Africa Development Community (SADC). The main research question this paper attempts to answer therefore is: how can broadband penetration within SADC region be improved?A confirmatory factors Analysis (CFA) was used to ascertain the conformity of these factors as obtained from raw data to what is given by literature. The weighting of these factors and policy interventions were then discussed as possible solutions for decision makers within the region.
    Keywords: Broadband, Penetration, Policy, CFA and Factors
    JEL: A14 A12
    Date: 2018–10
  5. By: Liebenehm, S.; Waibel, H.
    Abstract: In this paper, we analyze risk and time preferences as factors related to technology adoption. In the context of West African small-scale cattle farm households, we examine why the adoption of prophylactic drugs as an ex-ante risk management strategy to protect cattle from tsetse-transmitted African Animal Trypanosomosis (AAT) despite experts recommendation is low. To do so, we conducted two types of economic field experiments: (i) to elicit farmers risk and time preferences, considering additional behavioral information beyond standard economic theory and (ii) to observe farmers adoption decision of alternative drug treatments to manage the risk of AAT. Results show that loss aversion and high discount rates are associated with low prophylaxis take-up. More specifically, farmers value losses of animals that are infected with AAT larger than gains from healthy animals and short-term benefits from therapeutic treatment over long-term benefits from prophylactic treatment. As a consequence, a loss averse and impatient farmer that is less likely to apply AAT prophylaxis forgives chances of higher and sustainable returns, thereby deteriorates risk management abilities and likely perpetuates poverty. We suggest that the consideration of farmers risk and time preferences can help improving the effectiveness of livestock extension and veterinary services in West Africa. Acknowledgement : This work was supported by the German Research Foundation (DFG) [grant number WA 1002/8-1].
    Keywords: Food Security and Poverty
    Date: 2018–07
  6. By: Daum, T.; Birner, R.; Buchwald, H.; Gerlicher, A.
    Abstract: One challenge of collecting socioeconomic data, such as data on time use, is recall biases. While time use researchers have continuously developed new methods to make data collection more accurate and easy, these methods are difficult to use in developing countries where study participants may have low literacy levels and no clock -based concepts of time. To contribute to the closing of this research gap, we developed a picture-based smartphone-app called Time-Tracker that allows the recording of data in real time to avoid recall biases. We pilot-tested the app in rural Zambia, collecting 2790 data days. In this paper, we compare the data recorded with the app to data collected with 24-hours-recall-questions. The results confirm the literature on recall biases, suggesting that using the app leads to valid results. We conclude that smartphone-apps using visual tools provide new opportunities for researchers collecting socioeconomic data in developing countries. Acknowledgement : We are especially grateful to all the farm families participating in the study. We are also grateful for the financial support from the Program of Accompanying Research for Agricultural Innovation , which is funded by the German Federal Ministry of Economic Cooperation and Development.
    Keywords: Research and Development/ Tech Change/Emerging Technologies
    Date: 2018–07

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