nep-afr New Economics Papers
on Africa
Issue of 2020‒11‒30
five papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Economic Assessment of the Igbo Entrepreneurship Model for Entrepreneurial Development in Nigeria: Evidence from Clusters in Anambra State By Chukwunonso Ekesiobi; Stephen K. Dimnwobi
  2. Commodity Shocks, Factor Intensity and Conflicts in Africa By Gantier Mita, Marcelo
  3. Public Debt-Investment Nexus: the Significance of Investment-Generation Policy in West Africa By Fisayo Fagbemi; Opeoluwa A. Adeosun
  4. Social Institutions and Gender-Biased Outcomes in sub-Saharan Africa By Tendai Zawaira; Matthew W. Clance; Carolyn Chisadza
  5. Heterogeneous effect of health insurance on financial risk: Evidence from two successive surveys in Ghana By Samuel Ampaw; Simon Appleton; Xuyan Lou

  1. By: Chukwunonso Ekesiobi (Anambra state, Nigeria); Stephen K. Dimnwobi (Anambra state, Nigeria)
    Abstract: Purpose – This study presents an economic investigation of the entrepreneurship practise of the Igbos of South-Eastern Nigeria. It is intended to deepen entrepreneurial development and employment generation in the country. This study also provides empirical support to situate the Igbo entrepreneurship model (IEM) among existing entrepreneurship literature, particularly for research in developing countries. Design/methodology/approach – The study adopts a quantitative approach to examine 1187 responses carefully drawn from the Onitsha and Nnewi business clusters in Anambra state. In addition to descriptive demonstrations, the Propensity Score Matching (PSM) technique is employed to estimate the effects of treatment on the treated by pairing treatment and control units with similar attributes on the propensity score and other likely covariates. Specifically, the PSM is used to perform a counterfactual analysis of the effect of the entrepreneurship model on business outcomes by examining participants and non-participants in the IEM. Findings – The key findings of the study indicate that entrepreneurs who participated in the IEM have higher business survival rate, business growth rate and access to trade and informal credit, while non-IEM entrepreneurs have better access to formal credit source than the IEM graduates. Research Limitations/Implications – Generalisation of results can be limited since the study is based on responses of samples drawn from two clusters (Onitsha and Nnewi) in Anambra State, South-East Nigeria. The clusters, though situated in Igbo land, are not the only Igbo business locations in the South-East region and the rest of the country. However, with the larger number of the respondents and synchronisation with existing literature in this subject area guarantee the robustness and applicability of the study findings. Originality/value – The novelty of this study rests on its pioneering attempt to empirically examine how the IEM can drive entrepreneurial development in Nigeria. We also distil lessons for evidenced-based replication of the model to provide a sustainable employment channel for the country. The study posits, among other things, that the IEM can be a veritable approach for enterprise development and youth employment in Nigeria.
    Keywords: Igbo Entrepreneurship Model, Business outcomes, Clusters, Nigeria
    Date: 2020–01
  2. By: Gantier Mita, Marcelo (IISEC, Universidad Católica Boliviana)
    Abstract: Natural resources are often related to conflicts. The Dal Bó & Dal Bó (2011) theory states that income shocks affect capital- and labor-intensive sectors differently. Using sub-national cells covering the African continent for 1997-2010, I find that conflicts react differently to positive commodity price shocks depending on their factor intensity. The results show that a positive shock in the capital-intensive mining sector increases conflict likelihood, whereas a positive shock in the labor-intensive agricultural sector reduces it. These impacts are higher for sub-Saharan Africa. When testing heterogeneous effects for the degree of commodity appropriability, historical African-specific factors, and quality of institutions, I find that easily taxed crops behave differently to an increase in international crop prices. In the same vein, I find that neither historical African-specific factors nor the quality of institutions seem to induce differential responses in conflicts to commodity price shocks.
    Keywords: Recursos Naturales; Conflictos; Commodity Shocks; Instituto de Investigaciones Socio-Económicas; IISEC.
    Date: 2020–11–17
  3. By: Fisayo Fagbemi (Obafemi Awolowo University, Ile-Ife, Nigeria); Opeoluwa A. Adeosun (Obafemi Awolowo University, Ile-Ife, Nigeria)
    Abstract: The study examines the long run relationship and interconnections between public debt and domestic investment in 13 West African countries from 1986-2018. Using panel Panel Dynamic Least Squares (DOLS) and Panel Fully Modified Least Squares (FMOLS), debt (% of GDP) and external debt have an insignificant effect on investment in the long run, suggesting the negligible effect of public debt on the level of investments. But domestic investment Granger causes public debt indicators, implying that there is unidirectional causality. This suggests that any investment-generation policy could engender a rise in public borrowing, although such public loans might not be effective when there is pervasive mismanagement of public funds, as public debts need to be well managed for ensuring improved investment. Thus, the study suggests that maintaining a strong and effective debt-investment nexus requires fiscal consolidation efforts across countries, as such could lead to enhanced institutional capacity and sustainable investment-generation policy.
    Keywords: Public debt, investment, fiscal policy, cointegration analysis, West Africa
    JEL: H63 E22 H30
    Date: 2020–01
  4. By: Tendai Zawaira (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Matthew W. Clance (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Carolyn Chisadza (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa)
    Abstract: Using data on historical homelands of ethnicities from the Ethnographic Atlas (Murdock, 1959, 1967) and World Values Survey (WVS) data, we analyse how social institutions perpetuate social attitudes that legitimise gender inequality in the labour market, specifically on female labour force participation in sub- Saharan Africa. We find that patriarchal systems in general such as patrilineal kinship, patrilineal land inheritance and patrilocal residence upon marriage reduce female labour force participation, whilst matriarchal systems have the opposite effect. These results are partly influenced by unequal gender attitudes towards women and their work. The findings suggest that social institutions are an important element in understanding gender dynamics in sub-Saharan Africa because they have over time informed on gender identification and appropriate gender roles in most societies.
    Keywords: Gender, Africa, Institutions, Culture
    JEL: J16 O11
    Date: 2020–11
  5. By: Samuel Ampaw; Simon Appleton; Xuyan Lou
    Abstract: This paper evaluates the heterogeneous effect of health insurance on out-of-pocket healthcare expenditure (OOPHE), using merged data from the Ghana Living Standards Survey and Ghana Health Service reports. It applies conditional-mixed process and censored quantile instrumental variable estimators to tackle censoring and endogeneity. We instrument household insurance rate with community insurance rate (exclusive of the observed household) and control for community unobservables. The quantile regression allows the insurance effect to differ across the distribution of OOPHE. We further perform separate analyses by the types of OOPHE and selected covariates. The results show that insurance reduced OOPHE and the incidence of catastrophic OOPHE in 2013, but not in 2017. Besides, households in the higher expenditure quantiles benefitted more from coverage than those in the median and lower quantiles did in 2013. Also, the insurance benefits accrued exclusively to the wealthiest households, households with older heads, and users of outpatient services in 2013. Lastly, the 2013 survey reveals that families with female heads and those whose heads had primary education benefitted more from health insurance than their counterparts in the other subgroups did. The paper concludes that same health insurance can have varied financial risk implications at different periods, across the distribution of OOPHE, and among various household categories.
    Keywords: health insurance, financial risk protection, out-of-pocket healthcare expenditure, catastrophic healthcare expenditure, quantile regression, Ghana
    Date: 2020

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