nep-afr New Economics Papers
on Africa
Issue of 2018‒12‒24
five papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Brilliant Technologies and Brave Entrepreneurs: A New Narrative for African Manufacturing By Naudé, Wim
  2. Endogenous constraints, coefficients of economic distance, and economic performance of African countries – An exploratory essay By Amavilah, Voxi Heinrich
  3. Mobile Money and Money Demand in Kenya By Elizabeth Kasekende; Eftychia Nikolaidou
  4. Nigeria's Perspective on Total Official Support for Sustainable Development (TOSSD) By Guillaume Delalande; Friederike Rühmann; Aussama Bejraoui; Julia Benn
  5. Measuring Ethnic Stratification and its Effect on Trust in Africa By Hodler, Roland; Srisuma, Sorawoot; Vesperoni, Alberto; Zurlinden, Noemie

  1. By: Naudé, Wim (Maastricht University)
    Abstract: In this paper I argue that the manufacturing sector still has an important role to play in Africa's development. Despite failing to industrialize in the past, there may be a new window of opportunity. This is due to the convergence of what has been called 'brilliant' new technologies associated with the Fourth Industrial Revolution (4IR) and a resurgence of start-up entrepreneurship. In this light I (i) show why manufacturing is vital for African economies, (ii) critically analyse the nature and impact, both in terms of opportunities and risks, of the new technologies associated with the 4IR for Africa; (iii) describe the resurgence of technological start-up entrepreneurship in Africa and (iv) call for policy support in the form of complimentary investments and regulations to allow entrepreneurs to utilize opportunities and to minimize threats. In short, a new narrative for African manufacturing is possible.
    Keywords: technology, industry 4.0, entrepreneurship, development, Africa
    JEL: O33 O14 O55 L52 L26
    Date: 2018–11
  2. By: Amavilah, Voxi Heinrich
    Abstract: Existing literature has overstressed the importance of exogenous constraints in the economic performance of African countries at the expense of endogenous constraints, although the latter are longer-lasting and more self-propagating than the former. In this exploratory essay I put endogenous factors upfront, and introduce and define the concept of economic distance. I argue that the coefficient of economic distance is a better measure of what is going on than things like the Africa dummy, for example. The evidence I consider suggests that policy and future research will benefit from focused studies of endogenous constraints on economic performance. The essay is incomplete without its empirical complement, but it succeeds in holding up a mirror in front of these countries. The implication is that continued emphasis on exogenous constraints is a misallocation of scarce policy and research resources.
    Keywords: Endogenous constraints; Economic distance; coefficient of economic distance; endogenous growth; developing countries; African countries
    JEL: C19 C2 O1 O41 O47 O55 O57
    Date: 2018–11–15
  3. By: Elizabeth Kasekende (Bank of Uganda); Eftychia Nikolaidou (School of Economics, University of Cape Town)
    Abstract: Over the years, several countries have experienced a variety of financial innovations that can have implications for monetary policy. Kenya has been at the forefront of a unique type of financial innovation, mobile money (M-PESA), introduced in 2007. This paper re-estimates the Kenyan money demand including the country specific innovation, mobile money, using the ARDL approach to cointegration over the period 2000 Q1 to 2014 Q2. The results suggest that there is a positive relationship between mobile money and money demand and that the Kenyan demand for money is stable when mobile money is taken into consideration. These results are robust even with the use of alternative measures of mobile money. This finding has important implications for the effectiveness of monetary policy in Kenya and possibly in other countries that have seen developments in mobile money in recent years.
    Date: 2018
  4. By: Guillaume Delalande; Friederike Rühmann; Aussama Bejraoui; Julia Benn
    Abstract: The Working Paper summarises the main findings and recommendations of the pilot study, including first orders of magnitude of TOSSD flows to Nigeria. Estimated TOSSD flows to Nigeria in 2016 amounted to approximately USD 3 billion of official development finance and USD 1.9 billion of private finance mobilised through official development interventions. These first orders of magnitude have been estimated using OECD DAC Statistics. However, these figures are likely to be largely underestimated due to information gaps, notably on the People’s Republic of China (hereafter China) and emerging providers’ official support to Nigeria. The results of the pilot also indicate that the current organisational set up of Nigeria, both from an institutional and an IT system perspective, makes it challenging for the Government to access, collate, collect analyse and use data on external financing to the country using national data.The TOSSD pilot in Nigeria confirmed the usefulness of country pilots for testing the TOSSD methodology and for ensuring feedback by partner countries on TOSSD as a measurement framework. The findings also helped to ascertain that the International TOSSD Task Force developing the framework is in the right direction with regard to the main parameters of the measure. Findings contained in the present Working Paper will support the discussions to refine the emerging TOSSD Reporting Instructions in 2018 and 2019.
    Keywords: Development Finance, Economic Development, Nigeria, SDG, TOSSD, Transparency
    JEL: C4 F3 E44 O11
    Date: 2018–12–20
  5. By: Hodler, Roland; Srisuma, Sorawoot; Vesperoni, Alberto; Zurlinden, Noemie
    Abstract: We define and axiomatically characterize an index of ethnic stratification that measures the extent to which the hierarchy in socio-economic positions across the individuals of a society follows ethnolinguistic lines. This index generalizes the idea of between-group inequality to situations where data on economic and ethnolinguistic distances between pairs of individuals is available. We define an estimator of our index that takes the form of a second order U-statistic and has well-behaved statistical properties, and we show that ethnic stratification is empirically related to low levels of trust in other people and institutions at the local level in Africa.
    Keywords: ethnic diversity; ethnic fractionalization; inequality; Trust
    JEL: D31 D63 Z13
    Date: 2018–12

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