nep-afr New Economics Papers
on Africa
Issue of 2020‒02‒17
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Rural financial intermediation and poverty reduction in Ghana: A micro-level analysis By Danquah Michael; Iddrisu Abdul; Ohemeng Williams; Barimah Alfred
  2. Enterprising women in Southern Africa: When does land ownership matter? By Brixiová, Zuzana; Kangoye, Thierry; Tregenna, Fiona
  3. The Role of Historical Christian Missions in the Location of World Bank Aid in Africa By Alpino,Matteo; Hammersmark,Eivind Moe
  4. Trade Integration, Export Patterns, and Growth in Sub-Saharan Africa By Calderon,Cesar; Cantu Canales,Martha Catalina; Zeufack,Albert G.
  5. Free Primary Education, Fertility, and Women's Access to the Labor Market : Evidence from Ethiopia By Chicoine,Luke
  6. Adopting mobile money: Evidence from an experiment in rural Africa By Catia Batista; Pedro C. Vicente

  1. By: Danquah Michael; Iddrisu Abdul; Ohemeng Williams; Barimah Alfred
    Abstract: The financial sector in rural areas, where most of the poor people in sub-Saharan Africa are found, has transformed massively in recent times, notably through the increased penetration of several types of rural financial intermediaries in addition to rural and community banks and microfinance institutions.Using recent household survey data, we ascertain the access of rural populations to various types of financial services, and the influence of rural financial intermediation on poverty reduction, in Ghana. By accounting for the potential endogeneity of access to financial services, we show that rural households with access to basic financial services are significantly more likely to be non-poor than those without such access.In order to more sustainably tackle the goal, highlighted in the Sustainable Development Goals, of eliminating global hunger or extreme poverty, the poor must be allowed to obtain meaningful access to financial services through the design of efficient pro-poor financial products.
    Date: 2020
  2. By: Brixiová, Zuzana; Kangoye, Thierry; Tregenna, Fiona
    Abstract: Limited access to finance is one of the major barriers for women entrepreneurs in Africa. This paper presents a model of start-ups in which firms’ sales and profits depend on their productivity and access to credit. However, due to the lack of collateral assets such as land, female entrepreneurs have more constrained access to credit than do men. Testing the model on data from the World Bank Enterprise Surveys in Eswatini, Lesotho, and Zimbabwe, we find land ownership to be important for female entrepreneurial performance in terms of sales levels. This finding suggests that the small Southern African economies would benefit from removing obstacles to women’s land tenure and enabling financial institutions to lend against movable collateral. While land ownership is linked with higher sales levels, it seems less critical for sales growth and innovation where access to short term loans for working capital seems to be key.
    Keywords: entrepreneurial sales,innovation,credit,land,gender,Africa
    JEL: G21 L26 D24 O17
    Date: 2020
  3. By: Alpino,Matteo; Hammersmark,Eivind Moe
    Abstract: This article documents a positive and sizable correlation between the location of historical Christian missions and the allocation of present-day World Bank aid at the grid-cell level in Africa. The correlation is robust to an extensive set of geographical and historical control variables that predict settlement of missions. The study finds no correlation with aid effectiveness, as measured by project ratings and survey-based development indicators. Mission areas display a different political aid cycle than other areas, whereby new projects are less likely to arrive in years with new presidents. Hence, political connections between mission areas and central governments could be one likely explanation for the correlation between missions and aid.
    Date: 2020–02–12
  4. By: Calderon,Cesar; Cantu Canales,Martha Catalina; Zeufack,Albert G.
    Abstract: This paper examines systematically the growth effects of trade integration in Sub-Saharan Africa. It complements and improves upon the empirical literature in two aspects: first, it jointly estimates the impact of different dimensions of trade integration, namely, trade volumes, export/trade patterns by product (primary and manufacturing goods), and by destination (inter- and intra-regional). Second, it estimates the impact of trade integration on economic growth and its sources, that is, capital accumulation and total factor productivity growth. The analysis finds causal evidence that trade integration fosters growth. Additionally, manufacturing trade boosts growth and trade in primary goods hampers growth. Doubling the manufacturing trade share in Sub-Saharan Africa's gross domestic product would increase growth by 1.9 percentage points per year, while increases in primary trade reduce growth by 1 percentage point. This impact is mainly transmitted through lower capital accumulation. Finally, inter- and intra-regional trade have a positive impact on growth in Sub-Saharan Africa. Doubling inter-regional trade will increase growth by 1.9 percentage points, and the same increase for intra-regional trade enhances growth by 0.6 percentage points. The effects of inter-regional trade are transmitted primarily through capital accumulation, while those of intra-regional trade are channeled through enhanced total factor productivity growth.
    Date: 2020–01–29
  5. By: Chicoine,Luke
    Abstract: This article investigates the causal relationship between women's schooling and fertility by exploiting variation generated by the removal of school fees in Ethiopia. The increase in schooling caused by the reform is identified using both geographic variation in the intensity of its impact and temporal variation generated by the timing of the implementation. The model finds that the removal of school fees led to an increase in schooling for Ethiopian women and that each additional year of schooling led to a reduction in fertility. An investigation of the underlying mechanisms linking schooling and fertility finds that the decline in fertility is associated with an increase in labor market opportunity and a reduction in women's ideal number of children.
    Keywords: Educational Sciences,Health Care Services Industry,Primary Education,Economics of Education,Education Finance,Rural Labor Markets,Labor Markets
    Date: 2020–01–07
  6. By: Catia Batista; Pedro C. Vicente
    Abstract: Who uses mobile money? And what is mobile money used for? This paper describes the mobile money adoption patterns following the experimental introduction of mobile money services for the first time in rural areas of Southern Mozambique. In particular, we examine the individual characteristics of early and late adopters, as well as their mobile money usage patterns. For this purpose, we use a combination of administrative and household survey data to characterize the adoption of mobile money services in the three years following their initial introduction. We find that a large proportion of the individuals who were offered mobile money services adopted this technology. These users of mobile money (and early adopters in particular) are more educated than non-users, and they also are more likely to already hold a bank account. Positive-self-selection into mobile money usage raises the question of whether mobile money is an effective tool for financial inclusion.
    Keywords: Fintech, Mobile money, Technology adoption, Self-selection, Financial inclusion, Financial deepening, Mozambique, Africa.
    Date: 2020

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