nep-afr New Economics Papers
on Africa
Issue of 2020‒06‒29
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Understanding the greater diffusion of mobile money innovations in Africa By Simplice A. Asongu; Nicholas Biekpe; Danny Cassimon
  2. Lagging behind? German Foreign Direct Investment in Africa By Glitsch, Julian; Godart, Olivier N.; Görg, Holger; Mösle, Saskia; Steglich, Frauke
  3. Macroeconomic determinants of Household Consumption in selected West African Countries By Chimere O. Iheonu; Tochukwu Nwachukwu
  4. The impact of Brexit on Africa in times of the Corona Crisis By Kohnert, Dirk
  5. Sierra Leone; Request for Disbursement under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Sierra Leone By International Monetary Fund
  6. Technology Transfer Strategy: A Neglected Approach in Tanzania By Mwabukojo, Edson

  1. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas Biekpe (Cape Town, South Africa); Danny Cassimon (University of Antwerp, Belgium)
    Abstract: The present research extends Lashitew, van Tulder and Liasse (2019, RP) in order to understand the greater diffusion of mobile money innovations in Africa. To make this assessment, a comparative analysis is engaged between sampled African countries and the corresponding sampled developing countries. Three main types of predictor groups are used for the study, namely: demand, supply and macro-level factors. The empirical evidence is based on Tobit regressions. The tested hypothesis is confirmed because from a comparative analysis between African-specific estimates and those of the sampled countries, not all factors driving mobile money innovations in Africa are apparent in the findings of Lashitew et al. (2019). An extended analysis is also performed to take on board the concern of multicollinearity from which, the best estimators from the study are derived. Comparative findings from correlation analysis show that an African specificity is largely traceable to the ‘unique mobile subscription rate’ variable. An in-depth empirical analysis further confirms an African specificity in the outcome variables (especially in the mobile used to send/receive money) which, may be traceable to informal sector variables not documented in Lashitew et al. (2019). Scholarly and policy implications are discussed.
    Keywords: Mobile money; technology diffusion; financial inclusion; inclusive innovation
    JEL: D10 D14 D31 D60 O30
    Date: 2020–01
  2. By: Glitsch, Julian; Godart, Olivier N.; Görg, Holger; Mösle, Saskia; Steglich, Frauke
    Abstract: German Foreign Direct Investment (FDI) in Africa is lagging behind China, France, the Netherlands, the UK, the US, and other economies. It represented only 1 percent of the German total FDI stock abroad in 2018 and is concentrated in few African countries. Overall, around 850 German firms have roughly 200,000 employees on the African continent (as of 2017). Compared with the main sending countries, German FDI is more concentrated in manufacturing as opposed to the natural resources sector. Germany has engaged in various proactive policies to encourage FDI, including in Africa. For example, the Federal Government offers investment guarantees to German firms to cover political risks, which are often high in developing and emerging countries. German Chambers of Commerce abroad provide information on the local business environment, local investment opportunities and partners and thus aim to bridge information gaps often hindering FDI. More recently, new initiatives such as "German Desks" and "AfricaConnect" were introduced. They rely on private-public partnerships to facilitate access to local business opportunities but also to third markets in neighboring countries. Based on an analysis of German FDI in 115 countries since 2010, we confirm that German Chambers of Commerce are related to a higher German FDI stock in their country of location. Moreover, we find that German investment guarantees help to reduce negative effects of low institutional quality. They are nevertheless only a second best option as compared to improving the national institutional environment. This is particularly true in the African context if the goal is to increase significantly the number of German firms active on the continent. Recipient countries have also developed tools to attract FDI including "Investment Promotion Agencies" (IPAs) and "Special Economic Zones" (SEZs), aiming at compensating for weaknesses in the national business environment. While there is some evidence in the literature about IPAs as investment facilitators, the evidence is rather mixed concerning SEZs. In our analysis of German FDI, we do not find a significant correlation between the presence of SEZs and the German FDI stock. Assessing the impact of very recent initiatives such as the "German Desks" and "AfricaConnect" is less straightforward as they are still in their infancy. They have the potential to reduce costly information barriers to FDI. Nevertheless, their beneficial effect on German FDI may take time to materialize and depends strongly on a business friendly institutional environment and cross border openness between African countries to FDI and trade.
    Keywords: Africa,Foreign Direct Investment,Investment Promotion
    Date: 2020
  3. By: Chimere O. Iheonu (University of Nigeria, Nsukka); Tochukwu Nwachukwu (Abuja, Nigeria)
    Abstract: This study investigates the macroeconomic determinants of household consumption in selected West African countries. The study employed the panel augmented mean group procedure which accounts for heterogeneity and cross sectional dependence in the modelling exercise for the period 1989 to 2018. Empirical results reveal that “gross domestic product per capita” and “domestic credit to the private sector” significantly improve household consumption in the selected West African countries as a whole. However, country-specific results show differences in terms of the magnitude of the coefficients, the significance and even the signs of the regressors. Policy recommendations based on these findings are discussed.
    Keywords: Household consumption; West Africa
    JEL: E21 O10
    Date: 2020–01
  4. By: Kohnert, Dirk (GIGA - German Institute of Global and Area Studies, Hamburg)
    Abstract: ABSTRACT & RÉSUMÉ: Despite the Corona crisis, London is pushing ahead with the implementation of Brexit. This will have a profound impact not only on the EU but also on Africa. The British government's vision of a reinvigorated 'Global Britain' relies heavily on a reinforced cooperation with Commonwealth Sub-Saharan Africa. Already the temporary closure of manufacturing supply chains between China and the rest of the world because of the pandemic seriously affected economic activity in GB and the EU. However, African commodity exporters such as Nigeria, South Africa, and Kenya will likely bear the brunt of both the direct and indirect effects of this weaker demand. This will add up to the economic effects of the spread of Corona in Africa. Most likely the vulnerable and the poor in Africa's informal sector will have to suffer the most by both health hazards and the economic decline. RÉSUMÉ: Malgré la crise de Corona, Londres poursuit la mise en œuvre du Brexit. Cela aura un impact profond non seulement sur l'UE mais aussi sur l'Afrique. La vision du gouvernement britannique d'une «Grande-Bretagne mondiale» revigorée repose largement sur une coopération renforcée avec l'Afrique subsaharienne du Commonwealth. Déjà, la fermeture temporaire des chaînes d'approvisionnement manufacturières entre la Chine et le reste du monde en raison de la pandémie a sérieusement affecté l'activité économique en GB et dans l'UE. Cependant, les exportateurs africains de matières premières tels que le Nigeria, l'Afrique du Sud et le Kenya supporteront probablement le poids des effets directs et indirects de cette demande plus faible. Cela s'ajoutera aux effets économiques de la propagation de Corona en Afrique. Les personnes vulnérables et pauvres du secteur informel africain devront très probablement souffrir le plus des risques sanitaires et du déclin économique.
    Date: 2020–06–16
  5. By: International Monetary Fund
    Abstract: The COVID-19 pandemic is severely impacting the Sierra Leonean economy, threatening to wipe out the hard-won gains since the Ebola health crisis just five years ago. The sharp contraction in external demand, and disruptions to mining production and exports are straining the external and fiscal accounts. Proactive measures vital to contain the spread of the crisis are dampening economic activity. The already tight financing situation and fragile health sector, and vast development needs, limit the authorities’ ability to reallocate resources within and across sectors.
    Keywords: Rapid Credit Facility (RCF);
    Date: 2020–06–10
  6. By: Mwabukojo, Edson
    Abstract: Despite technology capacity being low in Tanzania, technology transfer strategy is limited applied in the country. Inadequacy of political will, lack of adequate of technology transfer institutions and lack of readiness be among the main factors that had hindered the applicability of technology transfer approach in Tanzania. Despite the fact that technology transfer approach is not adequately applied in Tanzania, the strategy is still potential not only in Tanzania but in the Sub Sahara African region. Since, least developed countries are in advantage position to access technologies from the rich countries, it will be a mistake to continue to ignore the strategy despite the fact that the approach is proven to be profitable.
    Keywords: Technology Transfer Strategy,Technology Information Institute, foreign Instruments, Tanzania
    JEL: O21 O3 O31 O32 O33 O34 O35 O38
    Date: 2020–05–23

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