nep-afr New Economics Papers
on Africa
Issue of 2020‒08‒17
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Estimating the effect of Democracy, Governance and Militarisation on Peace in Africa By Chimere O. Iheonu; Kingsley O. Odo; Davidmac O. Ekeocha
  2. The Openness Hypothesis in the Context of Economic Development in Sub-Saharan Africa: The Moderating Role of Trade Dynamics on FDI By Simplice A. Asongu; Joseph Nnanna; Paul N. Acha-Anyi
  3. Mobile Money and Investment by Women Businesses in Sub-Saharan Africa By Islam,Asif Mohammed; Muzi,Silvia
  4. Intra-African Trade By William W. Olney
  5. Electoral Administration in Fledgling Democracies:Experimental Evidence from Kenya By J. Andrew Harris; Catherine Kamindo; Peter van der Windt
  6. Impact of Energy Consumption on Industrial Growth in a Transition Economy: Evidence from Nigeria By Kassim, Fatima; Isik, Abdurrahman

  1. By: Chimere O. Iheonu (University of Nigeria, Nsukka, Nigeria); Kingsley O. Odo (University of Nigeria, Nsukka, Nigeria); Davidmac O. Ekeocha (University of Nigeria, Nsukka, Nigeria)
    Abstract: Peace has been deemed paramount to socioeconomic progress and economic development across nations. It is for this reason nations strive to improve the peaceful coexistence of citizens. This study investigates the effect of democracy, governance and militarisation on peace in 43 African countries for the year 2018 in a cross sectional framework. The Ordinary Least Square (OLS), the Tobit regression and the Quantile Regression (QR) were employed as estimation strategies. The empirical results firstly reveal that democracy increases peace in Africa, particularly in countries where the initial level of peace is at its highest level. Secondly, militarisation of Africa reduces peace in the region only in countries where the initial level of peace is at its highest level. Thirdly, the influence of governance on peace in Africa depends majorly on the measure of governance utilised. The control of corruption, government effectiveness and regulatory quality increase peace where the initial level of peace is at its lowest level. Political stability increases peace across the entire quantiles utilised while rule of law increases peace in countries where the initial level of peace is low. In conclusion, governance in general increases peace in the countries where initial level of peace is very low. Policy recommendations based on these findings are discussed.
    Keywords: Democracy; Governance; Militarisation; Peace; Africa
    Date: 2020–01
  2. By: Simplice A. Asongu (Yaounde, Cameroon); Joseph Nnanna (The Development Bank of Nigeria, Abuja, Nigeria); Paul N. Acha-Anyi (Walter Sisulu University, South Africa)
    Abstract: This study investigates the simultaneous openness hypothesis by assessing the importance of trade openness in modulating the effect of foreign direct investment (FDI) on economic dynamics of gross domestic product (GDP) growth, real GDP and GDP per capita. The focus of the study is on 25 countries in Sub-Saharan Africa over the period spanning from 1980 to 2014. First, trade imports modulate FDI to induce net positive effects on GDP growth and GDP per capita. Second, trade exports moderate FDI to generate overall positive impacts on GDP growth, real GDP and GDP per capita. Implications of the study are discussed, inter alia: (i) both FDI and trade infrastructures are necessary for FDI-focused measures to engender positive economic development outcomes in host communities and countries. (ii) Macroeconomic conditions that are relevant for promoting economic development are necessary for the interactions between trade openness and FDI to generate favorable outcomes in terms of GDP growth, real GDP and GDP per capita.
    Keywords: Economic Output; Foreign Investment; Sub-Saharan Africa
    JEL: E23 F21 F30 L96 O55
    Date: 2020–01
  3. By: Islam,Asif Mohammed; Muzi,Silvia
    Abstract: This study connects two important findings in Sub-Saharan Africa. First, digital technologies such as mobile money have become widespread and have increased investment by businesses, especially in East Africa. Second, women-owned business in the region significantly lag their male counterparts in capital investments. Using data for 16 Sub-Saharan African economies, the study connects the two findings by exploring whether mobile money use by women-owned firms increases their investment. The findings indicate that the positive relationship between mobile money use and investment is largely driven by women-owned firms and is statistically insignificant for men-owned firms. Potential channels of these effects are explored. Women-owned firms that use mobile money to transact with suppliers are more likely to invest. Mobile money also seems to facilitate greater provision of customer credit and generally greater demand for more credit by women-owned firms. Such patterns are not observed for men-owned firms.
    Keywords: Financial Sector Policy,Gender and Development,Access to Finance,International Trade and Trade Rules
    Date: 2020–07–27
  4. By: William W. Olney (University of Hawaii; Williams College)
    Abstract: This paper examines why the intra-continental trade share in Africa is only 12%, compared to 47% in North America, 53% in Asia, and 69% in Europe. Results show that exports to other African countries decrease more quickly with distance and increase less quickly with economic size, than exports to non-African countries. The analysis investigates possible explanations and identifies factors that promote trade between African countries. Intra-African exports are found to disproportionately increase with infrastructure (especially roads), trade agreements, and a more efficient customs clearing process. Diversifying the domestic economy away from agriculture and towards services is also associated with more intra-African trade. These results can guide efforts to promote African economic integration.
    Keywords: COVID-19; CO2 emissions; fuel consumption; Global VAR (GVAR); conditional forecasts
    JEL: C33 O50 P18 Q41 Q43 Q47
    Date: 2020–06
  5. By: J. Andrew Harris; Catherine Kamindo; Peter van der Windt (Division of Social Science)
    Abstract: We examine the effects of national voter registration policies on voting patterns with a large-scale experimental study. Together with Kenya’s electoral commission, we designed an experiment in which 1,674 communities were randomized to a status quo or treatment group, receiving civic education on voter registration, SMS reminders about registration opportunities, and/or local registration visits by election commission staff. We find little evidence that civic education improves registration. Local registration visits improve voter registration, a relationship that increases in poorer communities. Moreover, local registration increased electoral competition and vote preference diversity in down-ballot contests in the 2017 Kenyan elections. Our results suggest that status quo voter registration policies constrain political participation and competition, and that inexpensive policy changes may attenuate the effects of such constraints.
    Date: 2020–01
  6. By: Kassim, Fatima; Isik, Abdurrahman
    Abstract: This research investigates the impact of energy consumption on industrial growth. Variables used are; manufacturing vale added (dependent variable, electricity consumption, per capita income, exchange rate, import, and export by using yearly time series data from 1985 through 2017 in Nigeria. The OLS method of egression was used to estimate the equation in the period under review. Unit root test, Co-integration test and Granger causality were carried out to test for stationarity, long run relationship, and causal relationship, respectively. Results show a negative and insignificant relationship between electricity consumption and industrial growth. The unit root test shows that all variables are integrated of order one except for the exchange rate, which is stationary at level. The Co-integration test indicates that there exists the presence of long-run relationships. The granger causality indicates the growth hypothesis from industries in Nigeria. Generally, this paper stresses the dangers of inadequate electricity supply in the functioning of industries and businesses, which further worsens overall growth in the Nigerian economy.
    Keywords: Transition, Energy, Industry, OLS, Growth.
    JEL: L5 L6 Q43 Q5
    Date: 2020–07–10

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