nep-afr New Economics Papers
on Africa
Issue of 2020‒02‒10
five papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Artisanal or Industrial Conflict Minerals? Evidence from Eastern Congo By Stoop, Nik; Verpoorten, Marijke; van der Windt, Peter Cornelis
  2. Mining taxation in Africa: What recent evolution in 2018? By Yannick Bouterige; Céline de Quatrebarbes; Bertrand Laporte
  3. Legal History, Institutions and Banking System Development in Africa By Mutarindwa, Samuel; Schäfer, Dorothea; Stephan, Andreas
  4. Renewable Energy, Trade Performance and the Conditional Role of Finance and Institutional Capacity of sub-Sahara African Countries By Opeyemi Akinyemi; Uchenna Efobi; Simplice A. Asongu; Evans S. Osabuohien
  5. Resources and Governance in Sierra Leone’s Civil War By Voors, Maarten; van der Windt, Peter Cornelis; Papaioannou, Kostadis J.; Bulte, Erwin

  1. By: Stoop, Nik; Verpoorten, Marijke; van der Windt, Peter Cornelis
    Abstract: Existing research suggests a strong link between mining and local conflict but makes no distinction between artisanal and industrial mining. We exploit variation in mineral prices and the granting of industrial mining concessions to investigate how the mode of extraction affects conflict in Eastern Congo. Rising mineral prices increase battles over artisanal mines, indicating competition between armed groups. This effect is much less pronounced for industrial mining. Moreover, the expansion of industrial mining decreases battles, suggesting that companies can secure their concessions. Such expansion does, however, trigger riots, and, when it crowds out artisanal mining, also increases violence against civilians and looting. In line with case-study evidence, these negative effects only materialize when industrial mining companies expand their activities from the research to the production phase.
    Date: 2020–01–14
  2. By: Yannick Bouterige (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Céline de Quatrebarbes (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Bertrand Laporte (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The mining sector accounts for a significant share of tax revenues in many sub-Saharan African countries. Mining tax systems must then both attract investors and ensure sufficient revenues for governments. Following the increase in commodity prices in the second half of the 2000s, most African countries reformed their Mining Acts to increase the tax burden on mining companies. This study shows that this trend is still continuing in 2018. Mining royalty rates are rising, mineral resource rent taxes are reappearing and free equity for the States is increasing.
    Keywords: Mining code,tax
    Date: 2019–12–22
  3. By: Mutarindwa, Samuel; Schäfer, Dorothea; Stephan, Andreas
    Abstract: This paper links banking systems development to the colonial and legal history of African countries. Specifically, we investigate the impact of differing legal traditions on the development of existing investor and creditor protection, and on African banking systems. Based on a sample of 40 African countries from 2000 to 2016, our empirical findings show a significant dependence of current financial institutions on the legal origin and the colonization type. Findings also reveal that current legal financial institutions are not the major determinants of banking system development, whereas institutional and regulatory quality significantly matter for banking system development in both common and civil law countries. Strong creditor rights reduce the cost of banking in African countries.
    Keywords: Legal origins,colonial history,financial institutions,banking systems,Hausman-Taylor estimation
    JEL: G21 G38 G39 K40
    Date: 2020
  4. By: Opeyemi Akinyemi (CEPDeR, Covenant University, Ota, Nigeria); Uchenna Efobi (CEPDeR, Covenant University, Ota, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon); Evans S. Osabuohien (CEPDeR, Covenant University, Ota, Nigeria)
    Abstract: The paper investigates the dynamic relationship between renewable energy usage and trade performance in sub-Saharan Africa (SSA), while considering the conditioning role of corruption control, regulatory quality, and the private sector access to finance. Focusing on 42 SSA countries for the period 2004-2016, and engaging the System generalized method of moments (GMM) technique for its estimation, this study found a negative relationship between renewable energy usage and the indicators of trade performance. However, with corruption control, improved regulatory framework, and better finance for the private sector, there are potentials for a positive net impact of renewable energy usage on manufacturing export. For renewable energy and total trade nexus, we find that improved regulatory framework and better finance for the private sector are important conditioning structures. These findings are significant because they highlight the different important structures of SSA countries that improve the effect of renewable energy use on trade outcomes. For instance, the consideration of the financial, institutional and regulatory frameworks in SSA countries in conditioning the renewable energy-trade nexus stipulates a clear policy pathway for countries in this region as the debate for transition to the use of renewable energy progresses.
    Keywords: Environment; Green growth; Trade performance; Pollution; Renewable energy; sub-Saharan Africa
    JEL: C5 F1 Q4 Q5
    Date: 2019–01
  5. By: Voors, Maarten (Wageningen University); van der Windt, Peter Cornelis; Papaioannou, Kostadis J.; Bulte, Erwin
    Abstract: We empirically investigate the role of natural resources, and governance in explaining variation in the intensity of conflict during the 1991–2002 civil war in Sierra Leone. As a proxy for governance quality we exploit exogenous variation in political competition at the level of the chieftaincy. As a proxy for resources we use data on the location of pre-war mining sites. Our main result is that neither governance nor resources robustly explains the onset or duration of violence during the civil war in Sierra Leone.
    Date: 2020–01–14

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