nep-afr New Economics Papers
on Africa
Issue of 2020‒03‒30
five papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. No gender please, we're central bankers: Distributional impacts of quantitative easing By Metzger, Martina; Young, Brigitte
  2. Political Economy of Reform and Regulation in the Electricity Sector of Sub-Saharan Africa By Imam, Mahmud I.; Jamasb, Tooraj; Llorca, Manuel
  3. Inclusive Human Development in Sub-Saharan Africa By Simplice A. Asongu; Joseph Nnanna
  4. A mobile revolution in sub-Saharan Africa? By Jean-Philippe Berrou; Kevin Mellet
  5. Urban Agglomerations and Employment Transitions in Ethiopia By Kamei,Akito; Nakamura,Shohei

  1. By: Metzger, Martina; Young, Brigitte
    Abstract: This paper first explores the role of digital financial services, e.g. mobile money systems and cryptocurrency-based systems, and their impact on the choice of migrants to send remittances. Secondly we discuss whether alternative remittances sending channels increase access to financial services for remittance-sending and remittance-receiving households. Africa, and in particularly Kenya, arepioneers in alternative money transfer systems and of tailor-made regulatory initiatives to address digital financial services. Thus,our paper focuses on the technologies of the Kenyan mobile money system, M-Pesa, and the major cryptocurrency, Bitcoin,and based on that takes into account selected experiences of other Sub-Saharan African countries. We find that in comparison to traditional remittances sending channels, mobile money transfer channels are often superior in terms of service-related features as costs of transfers for sending and receiving households, speed of delivery, availability and access to the remittances by receiving households or security of transactions. More importantly,mobile cash systems can fulfil the SDG goal of the 3 per cent fee more than 10 years earlier than envisaged in 2030. On the other side, the choice to use a specific transfer channel might be restricted by the lack of physical and technological availability of providers and means, and technological illiteracy. In addition, sending and receiving households might be cautious to use mobile cash system due to a lack of trust in the system, the providersor regulatory authorities. Accordingly, financial inclusion beyond e-payments and outreach to the poor is not an automatism. In contrast, the use of Bitcoin-based transfer systems is more ambivalent; these systems are technically more challenging both in terms of infrastructure and literacy and more vulnerable to fraud. Some findings also indicate that Bitcoin is anincompleteand inferior substitute to which migrants refer to if their first option is not available or suffers from severe deficiencies. Future research also needs to differentiate sending and receiving households stronger according to personal features in order todeepen our understanding about the choices of and restrictions of vulnerable groups who would benefit the most from using mobile cash systems.
    Keywords: Remittances,Financial Inclusion,Bitcoin,Alternative Money,Financial Technology,Africa,Mobile Cash
    JEL: F24 G23 G28 O16 O19
    Date: 2020
  2. By: Imam, Mahmud I. (Durham University Business School, Durham University, UK); Jamasb, Tooraj (Department of Economics, Copenhagen Business School); Llorca, Manuel (Department of Economics, Copenhagen Business School)
    Abstract: As part of electricity sector reforms, Sub-Saharan African countries have established independent regulatory agencies to signal legal and political commitment to end selfregulation and provision of service by the state. The reforms aimed to encourage private investments, improve efficiency, and extend the service to the millions who lacked the service. However, after nearly two and half decades of reforms, these expectations have not been met and the electricity sectors of these countries remain undeveloped. There are anecdotes that these outcomes are due to poor design, non-credible, unpredictable regulations, and political interference. This paper studies the performance of the reforms in the context of government political ideology. We use a dynamic panel estimator and data from 45 Sub-Saharan African countries to investigate ideological differences in the effect of independent sector regulation on access to electricity and installed capacity. We find negative impact from independent regulation on installed capacity in countries with leftwing governments while we find a positive effect in countries with right-wing governments. Moreover, we find negative impact on electricity access in countries with left-wing governments. These results have interesting policy implications for attracting private sector participation to increase generation capacity and access rates especially in countries with left-wing governments.
    Keywords: independent regulation; electricity sector reform; government ideology; dynamic GMM; Sub-Saharan Africa
    JEL: D73 L51 L94 O55 P16 Q48
    Date: 2020–02–01
  3. By: Simplice A. Asongu (Yaounde, Cameroon); Joseph Nnanna (The Development Bank of Nigeria, Abuja, Nigeria)
    Abstract: This study assesses the role of income levels (low and middle) in modulating governance (political and economic) to influence inclusive human development. The empirical evidence is based on interactive quantile regressions and forty-nine countries in sub-Saharan Africa for the period 2000-2002.The following main findings are established. First, low income modulates governance (economic and political) to positively affect inclusive human development exclusively in countries with above-median levels of inclusive human development. It follows that countries with averagely higher levels of inclusive human development are more likely to benefit from the relevance of income levels in influencing governance for inclusive development. Second, the importance of middle income in modulating political governance to positively affect inclusive human is apparent exclusively in the median while the relevance of middle income in moderating economic governance to positively influence inclusive human development is significantly apparent in the 10th and 75th quantiles. Third, regardless of panels, income levels modulate economic governance to affect inclusive human development at a higher magnitude, compared to political governance. Policy implications are discussed in the light of the post-2015 agenda of sustainable development goals and contemporary development paradigms. This study complements the extant sparse literature on the inclusive human development in Africa.
    Keywords: Sustainable development; Income levels; Governance; Sub-Saharan Africa
    JEL: D31 I10 I32 K40 O55
    Date: 2020–01
  4. By: Jean-Philippe Berrou (LAM - Les Afriques dans le monde - CNRS - Centre National de la Recherche Scientifique); Kevin Mellet (SENSE - Sociology and Economics of networks and Services - France Telecom R&D)
    Abstract: The rapid growth of mobile phones in Africa has generated widespread enthusiasm. This is evidenced by the reports and programmes of development aid institutions and by the recent creation of a "community" bringing together researchers, NGOs, donors and companies around new technologies for development (Information and Communication Technologies for Development or ICTD). In the first article of this issue of Réseaux devoted to recent research on the use of mobile technologies in sub-Saharan Africa, we review the situation. Has the mobile kept its promises? What do we know about its actual uses in sub-Saharan Africa? The article reports on a significant gap between the promises of international programmes or economic forecasts, and the reality of practices and usage. It presents the articles in the special issue, which highlight the importance of mobile phones in the daily lives of populations, as well as the plurality and complexity of the actual take up of this technology and its significance for the continent.
    Abstract: L'essor du mobile en Afrique a suscité un enthousiasme fort, dont témoignent tant les rapports et programmes des institutions de l'aide au développement, que la constitution récente d'une « communauté » rassemblant chercheurs, ONG, bailleurs et entreprises autour des nouvelles technologies pour le développement (Information and communication technologies for development ou ICTD). En ouverture de ce numéro qui rassemble des recherches récentes sur les usages des technologies mobiles en Afrique subsaharienne, nous proposons un état des lieux. Le mobile a-t-il tenu ses promesses ? Que sait-on de ses usages concrets en Afrique subsaharienne ? L'article rend compte d'un décalage important entre les promesses des programmes internationaux ou des prévisions économiques, et la réalité des pratiques et des usages. Il introduit les articles du dossier qui mettent en évidence tant l'importance qu'occupe le téléphone mobile dans le quotidien des populations, que la pluralité, et la complexité, des modalités d'appropriations effectives et des enjeux qu'il soulève pour le continent.
    Keywords: usages,analyses d'impact,ICTD,Mobile,Afrique subsaharienne,Nouvelles technologies pour le développement
    Date: 2020
  5. By: Kamei,Akito; Nakamura,Shohei
    Abstract: Agglomeration boosts economic growth. A vast literature has empirically assessed the effects of agglomeration by estimating the city population elasticity on wages. This conventional approach is not necessarily suitable for analyzing urbanization at the early stage in developing countries, where a majority of urban workers engage in self-employment and/or informal jobs. Focusing on one of the poorest and largest among those countries, this paper sheds light on an aspect of urbanization and agglomeration: the transition in the mode of labor from self-employment/informal jobs to wage employment/formal jobs. Applying the instrumental variable approach to national labor force survey data sets, the analysis underscores several labor market transitions across space in urban Ethiopia. First, the town population size and the share of workers with wageemployment are strongly correlated. The probability of engaging in wage work increases by 4.5 percentage points with a log increase in population size. Second, this relationship is particularly strong among disadvantaged workers, such as the female, young, and/or less educated population. Finally, the study documents higher labor force participation and lower underemployment in larger towns.
    Keywords: Employment and Unemployment,Educational Sciences,Labor Markets,Inequality,Wages, Compensation&Benefits
    Date: 2020–03–13

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