nep-afr New Economics Papers
on Africa
Issue of 2019‒03‒25
four papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Domestic Credit and Export Diversification: Africa from a Global Perspective By Augustin Kwasi Fosu; Abdul Fatawu Abass
  2. Income Changes and Intimate Partner Violence: Evidence from Unconditional Cash Transfers in Kenya By Johannes Haushofer; Charlotte Ringdal; Jeremy P. Shapiro; Xiao Yu Wang
  3. Digitalization for Energy Access in Sub-Saharan Africa : Challenges, Opportunities and Potential Business Models By Davide Mazzoni
  4. Regional Migration and Wage Inequality in the West African Economic and Monetary Union By Esther Mirjam Girsberger; Romuald Meango; Hillel Rapoport

  1. By: Augustin Kwasi Fosu (Institute of Statistical, Social and Economic Research (ISSER), University of Ghana, Legon, Ghana; Faculty of economic and Management Sciences (FEMS), University of Pretoria, Pretoria, South Africa; and Research Associate, Centre for the Study of African Economies (CSAE), University of Oxford, Oxford, UK.); Abdul Fatawu Abass (Department of Economics, and Institute of Statistical, Social and Economic Research (ISSER), University of Ghana, Legon)
    Abstract: As open economies, African countries need to diversify their exports for economic transformation, sustained growth, and development. Meanwhile, there has been increasing importance of development financing. Following the discussion of theoretical issues on the importance of domestic credit as a potential instrument for overcoming the liquidity constraint of developing countries, as in the case of Africa, this paper empirically explores the determinants of export diversification, with particular attention to domestic credit. The estimation is based on a five-year panel regression analysis for the 1962-2010 period involving 80 countries around the world, of which 62 are developing and 29 African countries, using as covariates variables that are traditionally viewed as affecting export diversification. System GMM estimates provide robust evidence supporting the importance of domestic credit for African countries, while its role in other countries seems rather marginal. In addition, human capital in the form of schooling, governance as measured by constraint on the chief executive of government, and being land-locked, all exert significant effects, as anticipated, on export diversification among African countries. However, except for governance, appropriately controlling for the interactive effect of domestic credit with ‘Africa’ yields generally insignificant impacts of these variables, together with domestic credit, on export diversification in non-African countries. These results point to the dominant role of domestic credit in Africa vis-à-vis other countries globally.
    Keywords: Export diversification, domestic credit, Africa, global perspective
    Date: 2019–03
  2. By: Johannes Haushofer; Charlotte Ringdal; Jeremy P. Shapiro; Xiao Yu Wang
    Abstract: We study the impact of randomized unconditional cash transfers to both men and women on intimate partner violence in Kenya. Transfers to women averaging USD 709 reduced physical and sexual violence (–0.26, –0.22 standard deviations). Transfers to men reduced only physical violence (–0.18 SD). We find evidence of spillovers: physical violence towards non-recipient women in treatment villages decreased (–0.16 SD). We show theoretically that transfers to both men and women are needed to understand why violence occurs. Our theory suggests that husbands use physical violence to extract resources, but dislike it, while the converse may be true for sexual violence.
    JEL: C93 D13 O12
    Date: 2019–03
  3. By: Davide Mazzoni (Fondazione Eni Enrico Mattei)
    Abstract: Innovative business models supported by digital technologies, together with the widening connectivity and data collection, are already giving a big contribution in fostering the access to electricity and clean cooking in Sub-Saharan Africa. This paper gives an overview on the actual state of energy access in Sub-Saharan Africa and the current technologies used to provide it, followed by a description of the key trends and drivers of the ongoing African digital transformation. A deep analysis of the Pay-as-you-go business model in the off-grid solar sector will shed light on how this transformation started some years ago and the way it is affecting society in many ways. Strengths and opportunities — as well as weaknesses and risks of the model — are provided through a screening of the most representative business experiences in East and West Africa, financial aspects and market analysis. The perspective of both companies and end-users have been considered here. The last section gives recommendations to policy-makers on how to ride the wave of digitalization to foster the access to clean and reliable energy, by acting on the electrification planning, regulations, business environment, distribution channels and mobile money environment.
    Keywords: Energy Access, Digitalization, PAYGO, Business Models, Africa, Digital Transformation
    JEL: O13 O33 O55 M13 Q40 Q48
    Date: 2019–03
  4. By: Esther Mirjam Girsberger (Economics Discipline Group, University of Technology Sydney); Romuald Meango (Max-Planck Institute for Social Law and Social Policy, Munich); Hillel Rapoport (Paris School of Economics, Universit´e Paris 1 Panth´eon-Sorbonne; CEPII; IZA)
    Abstract: This paper investigates the impact of regional migration on average wages and wage inequality in the West African Economic and Monetary Union (UEMOA). We exploit a unique data from a unified labour force household survey which covers natives and migrants in the seven economic capitals of the region. We estimate the counterfactual wage distributions of UEMOA migrants in absence of migration to evaluate the effect of regional migration. We find that regional migration increases the average wage by 1.8% and it entails a decrease in inequality in the UEMOA region between -1.5% (for the Gini coefficient) and -4.5% (for the interquartile ratio). The decrease in inequality in the UEMOA region is driven by a reduction in inequality between countries, while the migration effect on within-inequality differs across countries and remains overall small. When accounting for possible general equilibrium effects of migration on stayers’ wages, we find a similar or even stronger decrease in inequality, yet a smaller increase in the average wage. With general equilibrium effects, (negatively-) intermediately selected UEMOA migrants depress the average wage of natives in their host country and lead to a slight increase of the average wage among natives in the sending country, with the former effect dominating. Moreover, regional migration in the UEMOA mostly flows from countries with low wages to countries with higher wages. In combination with the general equilibrium effects described above this leads to a larger decrease in between-country inequality than in a setting with exogenous wages.
    Keywords: Migration; inequality; Gini index; West Africa
    JEL: F22 J61
    Date: 2019–02–21

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