nep-afr New Economics Papers
on Africa
Issue of 2019‒07‒29
five papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Evaluating the impact of global oil prices on the SADC and the potential for increased trade in biofuels and natural gas within the region By Moyo Alfred
  2. Is Favoritism a Threat to Chinese Aid Effectiveness? A Subnational Analysis of Chinese Development Projects By Axel Dreher; Andreas Fuchs; Roland Hodler; Bradley C. Parks; Paul A. Raschky; Michael J. Tierney
  3. Reforms and revenue mobilization in Africa: Are semi-autonomous revenue authorities (SARAs) effective? By Andre Gbato; Falapalaki Lemou; Jean-François Brun
  4. Towards a borderless Africa? Regional organisations and free movement of persons in West and North-East Africa By Dick, Eva; Schraven, Benjamin
  5. Have economic growth and the quality of governance contributed to poverty reduction and improved well-being in African countries? By Aloui, Zouhaier

  1. By: Moyo Alfred
    Abstract: This paper investigates whether Southern African Development Community countries that are vulnerable to changes in oil prices could instead substitute oil and petroleum products with biofuels and gas from within the region.A pooled mean group estimator was used to determine the impact of oil prices on the gross domestic product of 15 Southern African Development Community countries. Results indicate that Mauritius, Mozambique, Tanzania, and Zambia would be negatively affected by oil price changes. Next, two gravity models capturing bilateral trade between South Africa and Zambia and those countries identified as being vulnerable were estimated using pseudo-Poisson maximum likelihood.The main finding, based on the gross domestic products of the exporter and importer countries, is that potential for trade is higher with South Africa than Zambia. This implies that these countries are more likely to import gas and biofuels from there. Transport costs are the main impediments to importing from Zambia.
    Keywords: oil prices,Panel data analysis,Regional integration,SADC,Economic growth
    Date: 2019
  2. By: Axel Dreher; Andreas Fuchs; Roland Hodler; Bradley C. Parks; Paul A. Raschky; Michael J. Tierney
    Abstract: Chinese aid comes with few strings attached, allowing recipient country leaders to use it for domestic political purposes. The vulnerability of Chinese aid to political capture has prompted speculation that it may be economically ineffective, or even harmful. We test these claims by estimating the effect of Chinese aid on subnational economic development - as measured by per-capita nighttime light emissions - and whether this effect is different in politically favored jurisdictions than in other parts of the country. Contrary to the conventional wisdom, we do not find that the local receipt of Chinese aid undermines economic development outcomes at either the district level or provincial level. Nor does political favoritism in the allocation of Chinese aid towards the home regions of recipient country leaders reduce its effectiveness. Our results -from 709 provinces and 5,835 districts within 47 African countries from 2001-2012 - demonstrate that Chinese aid improves local development outcomes, regardless of whether such aid is allocated to politically consequential jurisdictions.
    Keywords: foreign aid, development finance, aid effectiveness, favoritism, economic growth, Africa, China
    Date: 2019
  3. By: Andre Gbato (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Falapalaki Lemou (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Jean-François Brun (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We study effect of semi-autonomous revenue administration reform on tax revenues in sub-Saharan Africa. From a set of data collected on 40 countries between 1980 and 2010, we find a diversified effect on total non-resource tax revenue. In medium term, semi-autonomous revenue authorities don't collect more revenue than traditional administrations and their efficiency diminishes over time. The main conclusion is that semi-autonomous revenue administrations are not a panacea for improving revenue mobilization in Sub-Saharan African countries.
    Abstract: Nous étudions l'effet de la réforme des administrations de recettes semi-autonomes sur les recettes fiscales en Afrique subsaharienne. A partir d'un ensemble de données collectées sur 40 pays entre 1980 et 2010, nous constatons un effet diversifié sur le total des recettes fiscales hors ressources naturelles. A moyen terme, les administrations de recettes semi-autonomes ne mobilisent pas plus de recettes que les administrations traditionnelles et leur efficacité s'amenuise avec le temps. La principale conclusion est que les administrations de recettes semi-autonomes ne sont pas une panacée pour améliorer la mobilisation des recettes dans les pays africains.
    Keywords: Tax reforms,Africa,Revenue mobilization,Synthetic control,Réformes fiscales,Afrique,Mobilisation des recettes,Contrôle synthétique
    Date: 2019–06–13
  4. By: Dick, Eva; Schraven, Benjamin
    Abstract: The vision of a united Africa and the rejection of the arbitrary borders created by European colonial powers have for decades been at the heart of pan-African endeavours. Achieving the free movement of persons on the continent was a key aim of the 1991 Abuja Treaty, which established the African Economic Community (AEC). And in the ensuing decades, this goal was under¬scored in agreements on African economic integration and in the African Union (AU)’s Agenda 2063. In January 2018, the member states of the AU finally agreed on the Protocol to the Treaty Establishing the African Economic Community Relating to Free Movement of Persons, Right of Residence and Right of Establishment. The continental agendas state that the process of implementing free movement must begin with Africa’s sub-regions. This is not least due to historical reasons. The Economic Community of West African States (ECOWAS) was a pioneer in this regard, with its Free Movement Protocol dating back to 1979. The years that followed saw the free movement of persons integrated into other African regionalisation processes as well. The East African Community (EAC), for instance, has agreed, at least in part, on far-reaching steps; other sub-regions (such as the North African Intergovernmental Authority on Develop¬ment (IGAD)) are currently working towards relevant accords. The present analysis of ECOWAS (West Africa) and IGAD (North-East Africa) shows that both regional organisa¬tions face difficulties with their free movement policies, though the respective challenges emerge in different phases of the political process. In the IGAD region, member states have so far been unable to agree on any free movement treaty, while the ECOWAS region is experiencing delays in the national and subnational implementation of established legislation. These differences can primarily be explained by historic path dependencies, divergent degrees of legalisa¬tion, and differing interests on the part of subregional powers. Finally, regional free movement is being hampered in both regions by internal capacity issues and growing external influences on intra-African migration management and border control. From the perspective of development policy, it is expedient to support free movement at subregional level in Africa. The following recommendations arose from the analysis: Promote regional capacities: Personnel and financial support should be provided to regional organisations to assist them with formulating free movement standards and implementing them at national and subnational level. Harmonise security and free-movement policies: European initiatives on border control and migration management must provide greater support for free movement rather than inhibit intraregional migration and free movement policies. Offer cross-sectoral incentives: The German Government and the European Union should encourage progress with the regionalisation of free movement regimes in related areas of cooperation. In order to effectively implement the recommendations, it is also important to recognise and flesh out the role of regional organisations at global level as well.
    Keywords: Flucht und Migration,Governance
    Date: 2019
  5. By: Aloui, Zouhaier
    Abstract: This study examines the impact of economic growth and quality of governance on poverty and well-being in African countries for the period 1996-2016. The static panel estimation method is used to estimate the equations. Although economic growth does not seem to have an effect on poverty, the results confirm that this growth leads to improved well-being in West Africa. Although corruption and the quality of regulation have been found to increase poverty, improving government efficiency appears to reduce levels of poverty. Similarly, the results also show that corruption and government effectiveness are associated with a deterioration of welfare, but the rule of law and the way and responsibility seem to improve well-being. This study shows that governance indicators in African countries address the issues of poverty and improving well-being. Economic growth has been cited as one of the main drivers of poverty reduction, and the persistent problem of poverty in African countries has raised doubts about the effectiveness of economic growth. Recent evidence has shown that growth in Africa has been accompanied by an increase in poverty. Increasing poverty can slow the improvement of well-being and create social unrest. The quality of governance can also influence the extent to which economic growth reduces poverty. This study shows that improvements in these institutional (government efficiency) and legal (rule of law) measures tend to decrease levels of poverty and increase well-being.
    Keywords: Economic growth, Governance indicators, Poverty, Well-being, Regional economic integration, Africa
    JEL: I31 I32 O43 R11
    Date: 2019–07–15

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