nep-afr New Economics Papers
on Africa
Issue of 2020‒01‒06
five papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Tracking peace and security expenditures in support of the SDGs By Aussama Bejraoui; Valérie Gaveau; Julia Benn
  2. Dynamic Nexus between Government Revenues and Expenditures in Nigeria: Evidence from Asymmetric Causality and Cointegration Methods By Aminu, Alarudeen; Raifu, Isiaka Akande
  3. Enhancing Governance for Environmental Sustainability in Sub-Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo
  4. The Employment Effects of Ethnic Politics By Amodio, Francesco; Chiovelli, Giorgio; Hohmann, Sebastian
  5. Improving Access to Savings through Mobile Money: Experimental Evidence from African Smallholder Farmers By Batista, Catia; Vicente, Pedro C.

  1. By: Aussama Bejraoui; Valérie Gaveau; Julia Benn
    Abstract: This Working Paper presents the main findings and recommendations of the pilot study carried out on the treatment of peace and security expenditures in the statistical measure of total official support for sustainable development (TOSSD). The pilot study explored the relevance of including various peace and security expenditures in the TOSSD framework, and formulated recommendations to the International TOSSD Task Force on the eligibility criteria, the potential safeguards and the delineation between TOSSD pillar I and II for peace and security expenditures. On this basis, the Task Force adopted in June 2019 specific text on the treatment of peace and security in the TOSSD Reporting Instructions.The pilot study also allowed to derive first estimates of TOSSD flows for peace and security and a light assessment was carried out of the capacity of the organisations / countries met during the pilot to provide TOSSD data on peace and security.
    Keywords: development finance, peace and security, SDG 16, SDG financing, TOSSD
    JEL: O11 F5
    Date: 2019–12–20
  2. By: Aminu, Alarudeen; Raifu, Isiaka Akande
    Abstract: The incessant fiscal deficit being experienced in different countries across the world has raised concerns about the ability of government to properly manage its revenues and expenditures. This has necessitated a flurry of studies on the relationship between government revenues and government expenditures over time. However, empirical evidence appears to be mixed, even within a country, depending on the methodological approaches adopted by each researcher. In the light of this, this study examines the asymmetric causality and cointegration between revenues and expenditures using aggregated and disaggregated data. The results of linear causality tests of Granger (1969) and Toda-Yamamoto (1995) support fiscal synchronisation hypothesis while those of nonlinear causality test of Diks and Panchenko (2006) support revenue-spending hypothesis. The results further show the existence of asymmetric cointegration between revenues and expenditures in the short-run and the long-run. The final results obtained from the decomposition of revenues into the positive and negative components show that positive change in revenues has a positive effect on expenditures and vice versa for a negative change in revenues. Based on these findings, the panacea proposed to over-reliance in revenues, particularly oil revenues as a determinant of government expenditures, is the proper management of oil revenues and other sources of revenues. The government would also need to diversify the economy so that more revenues could be available to it from other sources to finance its expenditures.
    Keywords: Government Revenues, Government Expenditures, Asymmetries, Causality, Cointegration
    JEL: C20 C50 H27
    Date: 2018–12–12
  3. By: Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: This study assesses whether improving governance standards affects environmental quality in 44 countries in sub-Saharan Africa for the period 2000-2012. The empirical evidence is based on Generalised Method of Moments. Bundled and unbundled governance dynamics are used notably: (i) political governance (consisting of political stability and “voice & accountability”); (ii) economic governance (entailing government effectiveness and regulation quality), (iii) institutional governance (represented by the rule of law and corruption-control) and (iv) general governance (encompassing political, economic and institutional governance dynamics). The following hypotheses are tested: (i) Hypothesis 1 (Improving political governance is negatively related to CO2 emissions); (ii) Hypothesis 2 (Increasing economic governance is negatively related to CO2 emissions) and (iii) Hypothesis 3 (Enhancing institutional governance is negatively related to CO2 emissions. Results of the tested hypotheses show that: the validity of Hypothesis 3 cannot be determined based on the results; Hypothesis 2 is not valid while Hypothesis 1 is partially not valid. The main policy implication is that governance standards need to be further improved in order for government quality to generate the expected unfavorable effects on CO2 emissions.
    Keywords: CO2 emissions; Governance; Economic development; Sustainable development; Africa
    JEL: C52 O38 O40 O55 P37
    Date: 2019–01
  4. By: Amodio, Francesco (McGill University); Chiovelli, Giorgio (Universidad de Montevideo); Hohmann, Sebastian (Stockholm School of Economics)
    Abstract: This paper studies the labor market consequences of ethnic politics in African democracies. We combine geo-referenced data from 15 countries, 32 parliamentary elections, 62 political parties, 243 ethnic groups, 2,200 electoral constituencies, and 400,000 individuals. We implement a regression discontinuity design that compares individuals from ethnicities connected to parties at the margin of electing a local representative in the national parliament. We find that having a local ethnic politician in parliament increases the likelihood of being employed by 2-3 percentage points. We hypothesize that this effect originates from strategic interactions between ethnic politicians and traditional leaders, the latter retaining the power to allocate land and agricultural jobs in exchange for votes. The available evidence supports this hypothesis. First, the employment effect is concentrated in the historical homelands of ethnicities with strong pre-colonial institutions. Second, individuals from connected ethnicities are more likely to be employed in agriculture, and in those countries where customary land tenure is officially recognized by national legislation. Third, they are also more likely to identify traditional leaders as partisan, and as being mainly responsible for the allocation of land. Evidence shows that ethnic politics shapes the distribution of productive resources across sectors and ethnic groups.
    Keywords: ethnic politics, employment, democracy, traditional leaders, Africa
    JEL: J15 J70 O10 P26 Q15
    Date: 2019–12
  5. By: Batista, Catia (Universidade Nova de Lisboa); Vicente, Pedro C. (Universidade Nova de Lisboa)
    Abstract: Investment in improved agricultural inputs is infrequent for smallholder farmers in Africa. One barrier may be limited access to formal savings. This is the first study to use a randomized controlled trial to evaluate the impact of using mobile money as a tool to promote agricultural investment. For this purpose, we designed and conducted a field experiment with a sample of smallholder farmers in rural Mozambique. This sample included a set of primary farmers and their closest farming friends. We work with two cross-randomized interventions. The first treatment gave access to a remunerated mobile savings account. The second treatment targeted closest farming friends and gave them access to the exact same interventions as their primary farmer counterparts. We find that the remunerated mobile savings account raised mobile savings, but only while interest was being paid. It also increased agricultural investment in fertilizer, although there was no change in investment in other complementary inputs that were not directly targeted by the intervention, unlike fertilizer. These results suggest that fertilizer salience in the remunerated savings treatment may have been important to focus farmers' (limited) attention on saving some of their harvest proceeds, rather than farmers being financially constrained by a lack of alternative ways to save. Our results also suggest that the network intervention where farming friends had access to non-remunerated mobile money accounts decreased incentives to save and invest in agricultural inputs, likely due to network free-riding because of lower transfer costs within the network. Overall this research shows that tailored mobile money products can be used effectively to improve modern agricultural technology adoption in countries with very low agricultural productivity like Mozambique.
    Keywords: mobile money, social networks, savings and agricultural investment, randomized field experiment, Mozambique, Africa
    JEL: D14 D85 Q12 Q14
    Date: 2019–11

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