nep-afr New Economics Papers
on Africa
Issue of 2020‒02‒03
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Commodity dependence, global commodity chains, price volatility and financialisation: Price-setting and stabilisation in the cocoa sectors in Côte d'Ivoire and Ghana By Tröster, Bernhard; Staritz, Cornelia; Grumiller, Jan; Maile, Felix
  2. Corporate governance research in Nigeria: a review By Ozili, Peterson K
  3. The prospects for manufacturing-led growth in Africa’s cities By Kriticos, Sebastian; Henderson, J. Vernon
  4. Exporting out of China or out of Africa? Automation versus relocation in the global clothing industry By Altenburg, Tilman; Chen, Xiao; Lütkenhorst, Wilfried; Staritz, Cornelia; Whitfield, Lindsay
  5. Institutionalized Corruption and National Development Crisis in Nigeria By Kingsley Nnorom
  6. Poverty eradication by improving waste collection: an African case study By Anne Briand; Noukignon Kone

  1. By: Tröster, Bernhard; Staritz, Cornelia; Grumiller, Jan; Maile, Felix
    Abstract: Commodity price volatility remains a crucial development challenge of commodity-dependent countries of the Global South. Drawing on structural development economics' concerns with commodity price volatility and stabilisation, this article calls for the integration of price-setting into the analysis of governance in global commodity chains (GCCs). It argues that price-setting power and related uneven exposure to price instability and risks adds to other power dimensions in producing unequal distributional outcomes in GCCs. The paper assesses national price stabilisation in the top cocoa-producing countries Côte d'Ivoire and Ghana against changing inter-firm governance and price-setting institutions in the cocoa GCC. Based on over 50 interviews with commodity trading houses (CTHs) and cocoa sector actors in Côte d'Ivoire and Ghana, our analysis shows that national-level price stabilisation mechanisms address intra-seasonal producer price volatility, but have few possibilities to shield export and producer prices from inter-seasonal price variations. This is because both countries remain 'global price takers' with global prices set on financialized derivatives markets and transmitted along the GCC by CTHs, which limits possibilities for 'domestic price making'. This leaves the major burden of price risks between seasons with smallholder producers that have the least possibilities to deal with these risks.
    Keywords: Global Commodity Chains,Cocoa,Commodity Trading Houses,Price Setting,Financialisation,Côte d'Ivoire,Ghana
    Date: 2019
  2. By: Ozili, Peterson K
    Abstract: This paper analyzes the state of corporate governance (CG) research in Nigeria. It consolidates the literature to identify the current state of CG research in Nigeria and to identity opportunities for future research in the literature. Among other things, the review show that the Board of directors (BOD) is the most explored corporate governance mechanism in the Nigerian corporate governance literature. Secondly, most studies focus on some governance mechanisms but ignore other governance mechanisms in firms. Thirdly, there is some consensus that the corporate governance failures in Nigeria is caused by multiplicity of factors mainly, lack of political will by the government to enforce corporate governance laws, deliberate refusal to comply with existing CG laws by politically connected firms, weak compliance by firms, weak enforcement by regulators, and conflicting codes in the country’s corporate governance codes. Also, the review shows that current CG studies do not systematically build on previous Nigerian CG studies which indicates a lack of direction in the Nigerian corporate governance literature. Regarding methodology, the findings reveal that most Nigerian CG studies are merely experimenting different methods of analysis without necessarily advancing the literature in a significant way. These findings have implications.
    Keywords: Corporate governance, Nigeria, Africa, firm performance, ownership structure, Board size, gender diversity, bank profitability, tobin Q, audit committee
    JEL: A1 A12 G2 G3 G34 G38 M12 M2 M20
    Date: 2020–01–19
  3. By: Kriticos, Sebastian; Henderson, J. Vernon
    Abstract: Many African countries are urbanising rapidly despite limited growth in manufacturing. Although other sectors could spur job creation and development, much like manufacturing, they need active public policy to support urban connectivity and business scale. Although the growth of cities in Africa has been closely linked to rising incomes across the continent, many countries have rapidly urbanised without the same gains in economic growth and poverty reduction that have been seen elsewhere. One potential reason is that urbanisation in Africa has not promoted a sustained period of structural transformation: shifting from growth dominated by agriculture and small-scale local services towards growth led by manufacturing and knowledge-intensive industries. This has led some observers to question Africa’s long-term prospects for development. This growth brief explores the prospects for manufacturing-led growth in Africa’s cities
    JEL: R14 J01
    Date: 2019–11–01
  4. By: Altenburg, Tilman; Chen, Xiao; Lütkenhorst, Wilfried; Staritz, Cornelia; Whitfield, Lindsay
    Abstract: The Discussion Paper examines the opportunities that the rising industrial wages in China will bring for Africa. China has been the industrial workbench of the global economy for decades. However, its competitive advantages are waning, particularly for labour-intensive assembly activities in the clothing, shoe, electronics and toy industries. The Chinese government estimates that up to 81 million low-cost industrial jobs are at risk of relocation to other countries - unless China can keep the companies in the country through automation. Against this background, three complementary studies were carried out. The first examines where the automation technology for clothing and footwear production stands today; the second, how clothing companies in China deal with the cost pressure: to what extent they automate, relocate within China or abroad and how great is the interest in Africa as a production location. The third part is devoted to Africa's competitiveness in clothing assemly, with empirical findings from Ethiopia and Madagascar. The Discussion Paper shows that the manufacture of clothing can already be robotized today, but that for sewing, robotization will probably remain more expensive than manual labor in the next 15-20 years. China's companies are investing heavily in the automation of all other production processes and at the same time shifting production to neighbouring Asian countries. In Africa, only Ethiopia is currently competitive in the manufacture of clothing, and here too there are significant institutional difficulties in absorbing large amounts of direct investment.
    Date: 2020
  5. By: Kingsley Nnorom (Department of Sociology, Federal University Wukari, Nigeria)
    Abstract: Globally, corruption has become one of the major threats to development especially in developing societies that lack strong institutions capable of preventing or inhibiting the manifestations of corrupt acts. In Nigeria, corruption has been deeply rooted in virtually all spheres of national life. More worrisome is the degree of rot in many institutions saddled with the duty of combating corruption in Nigeria. The paper argues that the endemic corruption ravaging state institutions in Nigeria is a major threat to national development. We extracted some of the basic propositions of the elite theory as the theoretical guide while utilizing documentary method of data gathering. Its analytical rigour is anchored on qualitative descriptive analysis. It concludes that the elites who manage major state institutions and seem to shoulder the responsibility of anti-corruption fight have remained the major perpetrators of corruption in Nigeria. Hence, ending corruption becomes undeniably not feasible. The paper therefore recommends a paradigm change from the hitherto elitist driven corruption eradication programmes and agencies to more radically independent corrupt institutions that will be capable of penalising all involved in corrupt practices without fear or favour.
    Keywords: institution, corruption, national development, crisis
    Date: 2019–11
  6. By: Anne Briand (LASTA - Laboratoire d'Analyse des Sociétés, Transformations et Adaptations - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université); Noukignon Kone (LASTA - Laboratoire d'Analyse des Sociétés, Transformations et Adaptations - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)
    Abstract: The article analyzes data from a Contingent Valuation survey that we conduced in 2014 among 402 households in low-income settlements of Abidjan in order firstly, to identify the determinants of stated demand for an informal waste collection service and secondly, to evaluate the benefits of using this service on different impact variables linked to human development. Indeed, households are exposed to negative externalities (odours, insects, health risks, loss of quality of life) that could lead them wish to offset the loss of utility with an individual investment in the informal service. The article contributes to the academic literature and gives recommendations in terms of economic policy applied to the waste sector in Africa. Firstly, our study identifies the determinants of stated demand for the informal service and the ability of households to finance an improved service. Secondly, the article evaluates the beneficial effects of using the informal service by the propensy score method. We evaluate the impact of the use of the informal service on the monthly amount that households are willing to pay for the improved service. We quantify the benefits in terms of socioeconomic and human development.
    Date: 2020–01–10

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