nep-afr New Economics Papers
on Africa
Issue of 2020‒04‒06
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Pollution emission and institutions nexus in Africa By Mignamissi, Dieudonné
  2. Adoption and use of mobile banking by low-income individuals in Senegal By François-Seck Fall; Luis Orozco; Al‐mouksit Akim
  3. Democracy and Development in Africa By Augustin Kwasi Fosu
  4. Macroeconomic management on becoming an African oil exporter By Oliver Morrissey; Lars Spreng
  5. How indiscriminate violence fuels religious conflict: Evidence from Kenya By Schutte, Sebastian; Ruhe, Constantin; Linke, Andrew
  6. Customary Land Conversion and the Formation of the African City By M. Picard,Pierre; Selod,Harris

  1. By: Mignamissi, Dieudonné
    Abstract: This paper tests the pollution emissions and institutions quality nexus in Africa, through political regime and governance indicators. We apply the system GMM estimator on a dynamic panel of 50 African countries over the period 1990-2014. The key finding suggests that a reinforcement of legislation through the improvement of institutional quality has a negative and significant effect on pollution emissions. Moreover, the findings validate the Environmental Kuznets Curve hypothesis in Africa. The results call for some policy recommendations in environmental regulation for African economies, including strengthening of institutional quality, adoption of specialized investment promotion agencies on the attractiveness of green FDI, implementation of incentive mechanisms in favour of companies that have adopted greening program of their activities
    Keywords: Pollution emissions, institutions, Africa
    JEL: Q52 Q56
    Date: 2020–03
  2. By: François-Seck Fall (LEREPS - Laboratoire d'Etude et de Recherche sur l'Economie, les Politiques et les Systèmes Sociaux - UT1 - Université Toulouse 1 Capitole - UT2J - Université Toulouse - Jean Jaurès - Institut d'Études Politiques [IEP] - Toulouse - ENSFEA - École Nationale Supérieure de Formation de l'Enseignement Agricole de Toulouse-Auzeville); Luis Orozco (LEREPS - Laboratoire d'Etude et de Recherche sur l'Economie, les Politiques et les Systèmes Sociaux - UT1 - Université Toulouse 1 Capitole - UT2J - Université Toulouse - Jean Jaurès - Institut d'Études Politiques [IEP] - Toulouse - ENSFEA - École Nationale Supérieure de Formation de l'Enseignement Agricole de Toulouse-Auzeville); Al‐mouksit Akim (World Bank Group, LEDA-DIAL - Développement, Institutions et Modialisation - LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The wide use of mobile phones is increasing low-income individuals' access to a large range of services. One of these services is mobile banking (m-banking). Today, m-banking represents a key vector of financial inclusion in many countries in Sub-Saharan Africa, especially in Senegal. Based on technology adoption theories applied to households in developing countries, this paper studies the determinants of the adoption and use of m-banking. We distinguish between possession or adoption from actual use of m-banking and examine the interdependence between these two decisions by using a Heckman sample selection model, through a sample of 1052 individuals in the suburbs of Dakar. Our main results are that the two decisions (adoption and use) are not independent from each other. Individual characteristics, such as education, possession of a bank account, and family network effects, are determinants of the adoption, and age, gender, and being a member of a tontine are determinants of the use. A major result of this study concerns women's low propensity to adopt m-banking because of their low levels of education. However, compared with men, when women adopt m-banking, they have a stronger propensity to use it.
    Keywords: Mobile banking,mobile technologies,technology adoption,financial inclusion,individual characteristics,Senegal
    Date: 2020
  3. By: Augustin Kwasi Fosu (Institute of Statistical, Social and Economic Research (ISSER), University of Ghana, Legon, Ghana; Faculty of economic and Management Sciences (FEMS), University of Pretoria, Pretoria, South Africa; Centre for the Study of African Economies (CSAE), University of Oxford, Oxford, UK.)
    Date: 2020–03
  4. By: Oliver Morrissey; Lars Spreng
    Abstract: This paper provides analysis of the macroeconomic management implications of becoming an exporter of oil, taking the case of Ghana and applying to Uganda as a prospective exporter. The paper proceeds in two steps. First, we construct a Dynamic Stochastic General Equilibrium (DSGE) model of a primary commodity exporting developing country calibrated to Ghana and Uganda and simulate the impulse response to shocks to the oil price and oil production. Second, using parameters from the DSGE model to obtain priors for parameter values, we use a Structural Vector Autoregressive (SVAR) with monthly data over 2001 to 2019 to estimate the response to oil shocks as an importer for both countries and as an exporter for Ghana after 2010. The DSGE results suggest that although an oil price shock generates appreciation and initially output falls, there are reductions in interest rates and inflation and ultimately output increases. The larger the oil sector the greater the appreciation and inflationary effects, but output rises more quickly and there are larger increases in wages and taxes. The SVAR results for Ghana when exporting suggest an initial depreciation in response to an oil price shock, with a reduction in inflation, but the immediate negative output response slowly turns positive (and becomes consistent with the DSGE). When Ghana and Uganda are importers, oil price shocks generate appreciation, mild inflation and interest rate reductions, so although output declines initially it rises after a year and this persists. The analysis suggests that the adoption of inflation targeting, in conjunction with an improved monitoring of macroeconomic developments, has mitigated the effects of oil price shocks on domestic variables in Ghana and Uganda.
    Keywords: Oil, Exchange Rates, DSGE, SVAR, sub-Saharan Africa (Ghana, Uganda)
    Date: 2020
  5. By: Schutte, Sebastian; Ruhe, Constantin; Linke, Andrew
    Abstract: Armed conflicts frequently fuel tensions between groups. The underlying mechanisms remain understudied. The “cognitive perspective” of group identification offers a possible explanation, but is tacit on exact causal pathways. We predict that indiscriminate violence by armed actors induces fear of future attacks which in turn leads to prejudice, enhanced in-group cohesion, and calls for segregation. Selective violence that yields a lower probability of affecting bystanders does not contribute to fear and thereby does not foster prejudice, segregation, and cohesion. To test our predictions, we rely on large-scale, reimbursed, electronic panel surveys conducted in Nairobi and Mombasa during the violent Kenyan elections in the Summer of 2017. Relying on the same 2,109 respondents, we conducted interviews before, during, and after violence erupted. We find evidence for the predicted effects among Christians while accounting for individual and survey wave fixed effects and in an additional endorsement experiment.
    Date: 2020–03–25
  6. By: M. Picard,Pierre; Selod,Harris
    Abstract: As cities grow and spatially expand, agricultural land is converted into residential land. In many developing countries, especially in Sub-Saharan Africa, this process is accompanied by a change in land tenure, whereby plots held under traditional customary arrangements are sold to new urban residents, possibly with formal property rights. This paper studies joint land-use and land-tenure conversion in an urban economics model in which intermediaries purchase agricultural land from customary owners and attempt to transform it into residential plots with statutory property rights. The spatial equilibrium includes a mix of land uses and rights where statutory and non-statutory residential plots coexist with customary land that is mainly used for agriculture. Because customary ownership is subject to uncertainty (because of tenure insecurity), the conversion process includes a potential information asymmetry between customary owners and intermediaries. The analysis shows that a market failure may emerge whereby some customary owners prefer to continue farming their land rather than participate in the urban residential land market, which results in a city that is too small. Empirical analysis using Malian data validates the key features of the model captured by land price gradients, as well as the ranking and the variance of land prices, and is suggestive of the presence of information asymmetry.
    Date: 2020–03–23

This nep-afr issue is ©2020 by Sam Sarpong. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.