nep-afr New Economics Papers
on Africa
Issue of 2019‒02‒18
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Can one improve now-casts of crop prices in Africa? Google can. By Weber, Regine; Lukas, Kornher
  2. Remittances, Finance and Industrialisation in Africa By Uchenna R. Efobi; Simplice A. Asongu; Chinelo Okafor; Vanessa Tchamyou; Belmondo Tanankem
  3. The growth effect of trade openness on African countries: evidence from using an Instrumental Variable Panel Smooth Transition Model By Bonga-Bonga, Lumengo; Kinfack, Emilie
  4. Contemporary Civil-Military Relations in the Sahel By Sebastian Elischer
  5. Intelligence and Slave Exports from Africa By Simplice A. Asongu; Oasis Kodila-Tedika
  6. Electricity Outages and Firm Performance Across the Six Geo-Political Zones in Nigeria: The Role of Corruption By Adewuyi, Adeolu; Emmanuel, Zachariah

  1. By: Weber, Regine; Lukas, Kornher
    Abstract: With increasing Internet user rates across Africa, there is considerable interest in exploring new, online data sources. Particularly, search engine metadata, i.e. data representing the contemporaneous online-interest in a specific topic, has gained considerable interest, due to its potential to extract a near real-time online signal about the current interest of a society. The objective of this study is to analyze whether search engine metadata in the form of Google Search Query (GSQ) data can be used to improve now-casts of maize prices in nine African countries, these are Ethiopia, Kenya, Malawi, Mozambique, Rwanda, Tanzania and Uganda, Zambia and Zimbabwe. We formulate as benchmark an auto-regressive model for each country, which we subsequently augment by two specifications based on contemporary GSQ data. We test the models in in-sample, and in a pseudo out-of-sample, one-step-ahead now-casting environment and compare their forecasting errors. The GSQ specifications improve the now-casting fit in 8 out 9 countries and reduce the now-casting error between 3% and 23%. The largest improvement of maize price now-casts is achieved for Malawi, Kenya, Zambia and Tanzania, with improvements larger than 14%.
    Keywords: Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies
    Date: 2019–02–12
  2. By: Uchenna R. Efobi (Covenant University, Ota, Ogun State, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon); Chinelo Okafor (Covenant University, Ota, Ogun State, Nigeria); Vanessa Tchamyou (University of Antwerp, Antwerp, Belgium); Belmondo Tanankem (MINEPAT, Cameroon)
    Abstract: The paper assesses how remittances directly and indirectly affect industrialisation using a panel of 49 African countries for the period 1980-2014. The indirect impact is assessed through financial development channels. The empirical evidence is based on three interactive and non-interactive simultaneity-robust estimation techniques, namely: (i) Instrumental Fixed Effects (FE) to control for the unobserved heterogeneity; (ii) Generalised Method of Moments (GMM) to control for persistence in industrialisation and (iii) Instrumental Quantile Regressions (QR) to account for initial levels of industrialisation. The non-interactive specification elucidates direct effects of remittances on industrialisation whereas interactive specifications explain indirect impacts. The findings broadly show that for certain initial levels of industrialisation, remittances can drive industrialisation through the financial development mechanism. Policy implications are discussed.
    Keywords: Africa; Diaspora; Financial development; Industrialisation; Remittances
    JEL: F24 F43 G20 O55
    Date: 2019–01
  3. By: Bonga-Bonga, Lumengo; Kinfack, Emilie
    Abstract: This paper assesses the relationship between trade openness and economic growth in Africa by accounting for the heterogeneity of African countries. In addition, the paper contributes to the literature of trade openness and economic growth nexus by applying the instrumental variable panel smooth transition regression (IVPSTR), a methodology that accounts for nonlinearity and endogeneity in the relationship between the two variables. The results of the empirical analysis reveal that the level of investment is a channel through which trade openness affects economic growth in the African continent. In addition, the relationship between trade openness and economic growth varies according to the degree of a country’s development in Africa. For low-income countries, the study finds no significant relationship between openness and growth. Conversely, for middle and upper-income countries, the coefficients of trade indicators are positive and statistically significant. The results indicate that African countries are not homogenous, especially with regard to trade openness and economic growth nexus.
    Keywords: economic growth, trade openness, non-linearity, instrumental variable panel smooth transition
    JEL: C23 C26 F13 F14 F15
    Date: 2019
  4. By: Sebastian Elischer (University of Florida)
    Abstract: The paper examines the evolution and the contemporary state of civil-military relations in the francophone Sahel (Burkina Faso, Chad, Mali, Mauritania, Niger, and Senegal). In a first step, the paper traces the emergence of excessive political influence of the armed forces (praetorianism) in the Sahel. Out of these, only Senegal has remained under civilian rule since independence. The other countries have experienced military dictatorship at some point. Over the last thirty years, the Sahel has seen a shift toward more civilian oversight in political affairs. In Chad and Mauritania, however, the armed forces remain the pre-eminent political actor. In Burkina Faso, Mali and Niger, sections of the armed forces refuse to accept civilian rule. The second part examines the various challenges and tasks the armed forces in all six countries have been involved in over the last two decades. Although these challenges differ substantially across the six individual countries, the Sahel as a whole continues to struggle primarily with domestic security threats. The paper concludes with guidelines designed to foster civilian oversight and democratic reform.
    Keywords: armed forces, civilian-military relations, dictatorships, praetorianism, Sahel, West Africa
    JEL: D74 F5 N47
    Date: 2019–02–12
  5. By: Simplice A. Asongu (Yaoundé/Cameroon); Oasis Kodila-Tedika (Department of Economics, The DRC)
    Abstract: This article examines the role of cognitive ability or intelligence on slave exports from Africa. We test a hypothesis that countries which were endowed with higher levels of cognitive ability were more likely to experience lower levels of slave exports from Africa probably due to comparatively better capacities to organise, corporate, oversee and confront slave traders. The investigated hypothesis is valid from alternative specifications involving varying conditioning information sets. The findings are also robust to the control of outliers.
    Keywords: Intelligence; Human Capital; Slavery
    JEL: I20 I29 N30
    Date: 2019–01
  6. By: Adewuyi, Adeolu; Emmanuel, Zachariah
    Abstract: This paper provides evidence on the role of corruption in mitigating the effect of electricity outages on firm performance across the six geo-political zones in Nigeria. In addition, this study also assessed effect of self-generation on firm performance across the six geo-political zones and comparison were made as to whether it is more profitable for firms to self-generate electricity during outage periods or bribe electricity officials to mitigates the effect of electricity outages on their performance. Using the World Bank Enterprise Survey (WBES), the study employed a cross sectional Ordinary Least Squares (OLS) and Two-Stage Least Squares (2SLS) techniques and the results of the findings indicate that, bribery does not mitigate the effect of electricity outages on firms across all the geo-political zones in Nigeria with exception of the North-East and the South-East geo-political zones. Although, electricity outage is relatively low in the North-East region, further findings revealed that; firms in the south-east region experience the highest outage intensity of an average of 122.025 times in a typical month, while those in the South-South region experience the lowest outage intensity of an average of 25.845times in a typical month. Lastly, contrary to the arguments in the literature that self-generation during power holidays improves firm performance, evidence from this study suggests otherwise for some geo-political zones in Nigeria. For instance, this study discovered that self-generation is a form of indirect tax which has a negative effect on firm performance especially the North-West, South-West and South-South geo-political zones. Also, while it is more profitable for firms in the North-Central, North East, and South-East regions to self-generate during power holidays, the findings for North-West, South-West and South-South geo-political zones reveal that firms in the zones are better off by relying on electricity supply from the public grid.
    Keywords: Electricity Outages; Bribery; Self-Generation; Firm Performance
    JEL: D20 L10 Q41
    Date: 2018–12–21

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