nep-afr New Economics Papers
on Africa
Issue of 2020‒09‒14
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Culture and economic development in Africa – opportunities and challenges By John Kuada
  2. Intra-African Trade By William W. Olney
  3. High-Resolution Poverty Maps in Sub-Saharan Africa By Kamwoo Lee; Jeanine Braithwaite
  4. Multinational Corporation Affiliates, Backward Linkages, and Productivity Spillovers in Developing and Emerging Economies : Evidence and Policy Making By Jordaan,Jacob Arie; Douw,Willem; Qiang,Zhenwei
  5. Healing Rwanda’s Genocide Trauma: A Re-construction of Painful Oral Historical Narratives By Radoli Lydia Ouma
  6. Stock Exchange Fungibility and Exchange Rate Volatility in Zimbabwe By Sakarombe, Upenyu; Marimbe-Makoni, Rudo

  1. By: John Kuada (Aalborg University, Denmark)
    Abstract: This paper forwards the view that some aspects of African culture enhance economic development on the continent while other aspects tend to constrain development. By drawing on the extant literature on culture and development, the paper discusses the manner in which economic activities are organised in Sub-Saharan African countries and the impact of these processes on their overall development. We argue that insight into the development-constraining attributes of African culture will help policymakers and business people design policies and strategies that will improve the overall performance of African economies.
    Keywords: Culture, economic development, business development, entrepreneurship, Africa
    Date: 2020–09
  2. By: William W. Olney (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: intra-continental trade, exports, infrastructure, corruption, trade agreements, Africa
    JEL: F14 F15 O55
    Date: 2020–07
  3. By: Kamwoo Lee; Jeanine Braithwaite
    Abstract: Up-to-date poverty maps are an important tool for policymakers, but until now, have been prohibitively expensive to produce. We propose a generalizable prediction methodology to produce poverty maps at the village level using geospatial data and machine learning algorithms. We tested the proposed method for 25 Sub-Saharan African countries and validated them against survey data. The proposed method can increase the validity of both single country and cross-country estimations leading to higher precision in poverty maps of the 25 countries than previously available. More importantly, our cross-country estimation enables the creation of poverty maps when it is not practical or cost-effective to field new national household surveys, as is the case with many Sub-Saharan African countries and other low- and middle-income countries.
    Date: 2020–09
  4. By: Jordaan,Jacob Arie; Douw,Willem; Qiang,Zhenwei
    Abstract: Recent research on productivity spillovers from affiliates of multinational corporations in developing and emerging economies finds that backward linkages from affiliates of foreign-owned firms to local suppliers constitute the main channel transmitting productivity spillovers. This finding has important policy implications, given that host economy governments often spend considerable resources on attracting multinational corporation investments and promoting their impact on technological development and economic growth. This paper conducts a new and comprehensive survey of recent empirical studies that focus on the drivers and impacts of backward linkages between multinational corporation affiliates and their local suppliers. The literature survey reveals that several characteristics of multinational corporation affiliates and domestic firms, host economy conditions, and various mediating factors influence the level of use of local suppliers, the nature and degree of technology dissemination, and the materialization of productivity spillovers among domestic firms. These findings are used to identify the main areas where policy making can be effective. The paper discusses various types of soft or light-handed industrial policies that host economy governments can design and implement to foster the extent of linkages between multinational corporations and local suppliers, facilitate technology dissemination, and enhance productivity spillovers among domestic firms.
    Keywords: International Trade and Trade Rules,Macroeconomic Management,Economic Forecasting,Governance Diagnostic Capacity Building,Macroeconomics and Economic Growth,Economic Policy, Institutions and Governance,Access to Finance
    Date: 2020–08–24
  5. By: Radoli Lydia Ouma (Daystar University, Kenya,)
    Abstract: April to June every year, Rwandans commemorate the 1994 genocide. Extensive oral historical narratives are brought to life. Under the Aegis Trust for the prevention of genocide and crimes against humanity, stories are re-enacted and shared. Narratives of memories are seen as instruments to heal historical trauma. Rwanda has since moved from ravages of the genocide to political and economic stability. Although, Rwanda records a history of ethnic killings and near genocide from 1950s, it is the 1994 genocide that rocked its fabric of peace. Des Forges (2007) argues the genocide was not an outburst of uncontrolled rage of ethnic hatred, but a discontent to historical grievances and widening economic disparities between the Hutu elites and Rwandan poor. To suppress dissent, state and militia extremists planned and orchestrated the genocide. After the genocide, an International Criminal Tribunal for Rwanda was set up to try suspects. It was supplemented with Gacaca courts - a modified traditional conflict resolution system. In this paper, I aim to analyse oral history as a qualitative methodology. The narratives archived on video recount how Rwandans heal the genocide trauma through remembering. According to Moyer, 1993, oral history involves a systematic gathering of testimonies of people who have experienced a significant event. It is not based on non-factual information, rather on verifiable facts that can be analyzed and placed in accurate historical contexts. This paper will adapt an oral historical narrative analysis of video testimonies from the Aegis Trust.
    Keywords: oral history, narrative analysis, Rwandan genocide memories, trauma healing
    Date: 2020–06
  6. By: Sakarombe, Upenyu; Marimbe-Makoni, Rudo
    Abstract: Investors, policymakers, and Economists have debated whether high volatility in the parallel exchange rate in Zimbabwe was driven by stock exchange fungibility or not. This study investigated the interaction between the stock exchange fungibility market and the parallel exchange rate market. The study utilised the Granger Causality, Cointegration Test, and the Engle-Granger Error Correction Model to determine the short-run, long-run relationships and speed of adjustment between the variables. Stock exchange fungibility was found to granger-cause exchange rate volatility implying a Portfolio Balance Approach Model. The bearish market activities would chase away investors, so they would sell their shares, convert their monies into foreign currency to turn to the alternative bullish market where shares are fungible. This would lead to the depreciation of the local currency. The results also showed evidence of cointegration with a perfect long-run speed of adjustment towards the equilibrium.
    Keywords: stock market, fungibility, exchange rate volatility
    JEL: F21 F3 F31 F37 F38 F4 F42 G1 G11
    Date: 2020

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