nep-afr New Economics Papers
on Africa
Issue of 2020‒12‒07
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. External and Internal Real Exchange Rates and the Dutch Disease in Africa: Evidence from a Panel of Nine Oil-Exporting Countries By Edouard Mien
  2. The politics and governance of informal food retail in urban Africa By Resnick, Danielle
  3. 2020 Annual trends and outlook report: Sustaining Africa's agrifood system transformation: The role of public policies: Synopsis By Resnick, Danielle, ed.; Diao, Xinshen, ed.; Tadesse, Getaw, ed.
  4. Do Governance Institutions Matter for Trade Flows between Sub-Saharan Africa and its Trading Partners? By Adeolu O. Adewuyi; Ebenezer Olubiyi
  5. Ethnic cooperation and conflict in Kenya By Barriga, Alicia; Ferguson, Neil T. N.; Fiala, Nathan; Leroch, Martin Alois
  6. Export Diversification and Sophistication and Industrial Policy in Tunisia By Sofiane Ghali; Mustapha K. Nabli

  1. By: Edouard Mien (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Despite a large number of empirical studies on Dutch disease in developing countries and the evidence that oil revenues tend to appreciate the real exchange rate, there remains little discussion about the definition of real exchange rates. This article intends to fill this gap by using four different proxies of the real exchange rate, differentiating the internal and the external real exchange rates for agricultural and manufacturing sectors. Using Pooled-Mean-Group and Mean-Group estimates on a panel of nine African net oil-exporting countries, results show a clear appreciation of the RER generated by oil revenues except for the internal real exchange rate for manufacturing goods. This could imply that oil revenues more clearly affect agricultural compared to manufacturing competitiveness in these African countries.
    Keywords: Dutch disease,Africa,Equilibrium real exchange rate,Pooled Mean Group Estimator,Oil revenues
    Date: 2020–11
  2. By: Resnick, Danielle
    Abstract: Rapid urbanization in Africa south of the Sahara continues to highlight the importance of informal retailers as a source of both food and employment for the urban poor. The most recent Africa Agriculture Status Report emphasizes that, due to demographic and socioeconomic transformation in the region, the center of gravity of Africa’s food system is shifting to urban areas (AGRA, 2020). Informal retailers—including those who vend in open-air wet markets and hawk on pavements and streets—provide a critical link between agricultural producers and consumers. While the COVID-19 pandemic has dramatically highlighted the vulnerability of this constituency (Resnick et al., 2020), informal traders have long been victims of other public health, economic, and climate shocks (Battersby & Watson, 2019). To build the resilience of informal traders and enhance their contributions to urban food security, fundamental governance issues need to be addressed. This brief synthesizes research on informal traders conducted under the “Economywide Factors Affecting Agricultural Growth and Rural Transformation†flagship of the CGIAR Research Program on Policies, Institutions, and Markets (PIM) led by IFPRI. The research spanned Ghana, Nigeria, Senegal, and Zambia and involved comparative analysis across capital cities based on media events data, surveys with traders, and interviews with urban bureaucrats. In this way, traders’ experiences could be complemented with policymakers’ insights about bottlenecks and opportunities for reform
    Keywords: AFRICA; AFRICA SOUTH OF SAHARA; CENTRAL AFRICA; EAST AFRICA; NORTH AFRICA; SOUTHERN AFRICA; WEST AFRICA; GHANA; ZAMBIA; NIGERIA; SENEGAL; trade; governance; urbanization; urban areas; politics; taxes; markets; informal trader; food retail; informal food retail
    Date: 2020
  3. By: Resnick, Danielle, ed.; Diao, Xinshen, ed.; Tadesse, Getaw, ed.
    Abstract: Sustained growth and improved governance in Africa’s agriculture sector are critical to meeting the continent’s development goals, including creating decent jobs for youth, nourishing growing cities with healthy foods, promoting resilience, and catalyzing domestic revenue mobilization. The 2020 Annual Trends and Outlook Report (ATOR) from the Regional Strategic Analysis and Knowledge Support System (ReSAKSS) focuses on the policies required to transform African agrifood systems to meet their potential. Chapters provide (1) an in-depth review of the evolution of agricultural sector policies over the last five decades; (2) a systematic analysis of traditional input constraints on agricultural productivity; (3) discussion of policies needed to bolster competitiveness along value chains; and of (4) factors that shape the broader enabling environment needed for agrifood system transformation. The report serves as the official M&E report for the Comprehensive Africa Agriculture Development Programme (CAADP), tracking progress on over 30 CAADP indicators.
    Keywords: AFRICA, AFRICA SOUTH OF SAHARA, CENTRAL AFRICA, EAST AFRICA, NORTH AFRICA, SOUTHERN AFRICA, WEST AFRICA, agrifood systems, policies, public policies, agriculture, seed, fertilizers, agricultural production, food systems, value chains, trade
    Date: 2020
  4. By: Adeolu O. Adewuyi; Ebenezer Olubiyi (University of Ibadan)
    Abstract: This study analyses the role of governance institutions in trade involving Sub-Saharan Africa (SSA) and its trading partners. Specifically, the objectives of this study are to: investigate the effect of institutions on trade between SSA and its trading partners; and examine whether governance institutions matter more for trade in SSA resourcepoor countries (or non-mineral products) than for trade in resource-rich countries (or mineral products). Based on a combination of strands of literature on the subject matter, we used a modified gravity model to analyse the objectives highlighted above. Using data spanning 1996 to 2014, empirical analysis involves estimating variants of gravity equations using the modified Poisson pseudo maximum likelihood estimation approaches. Empirical results show that not all governance variables matter for trade between SSA and its partners. Whether it matters or not depends on countries’ resource endowment, the pattern of trade and the direction of trade. Trade between SSA and developed countries (especially imports) is driven significantly by governance institutions, particularly the bureaucratic quality and compliance with law and order. Such importance of governance institutions could not be established in trade between SSA and Asia, which are both developing economies. Furthermore, governance institutions matter more for trade in non-mineral products than for trade in mineral products. The interaction of tariff with governance variables produced some results which suggest that inadequate governance institutions reflected in poor implementation of tariff policy may increase trade costs, thus reinforcing the negative effect of tariff on trade. Some policy recommendations were articulated to improve governance institutions in SSA to promote trade with its trading partners.
    Date: 2020
  5. By: Barriga, Alicia; Ferguson, Neil T. N.; Fiala, Nathan; Leroch, Martin Alois
    Abstract: There is growing evidence that ethnic divisions and conflict experience affect social capital and economic interactions, in both positive and negative ways. However, recent work has suggested that the experience of electoral violence in Kenya does not correlate with laboratory behavior between the two largest ethnic groups, the Luo and Kikuyu. We conduct a similar set of experiments measuring social capital and find the same results: altruism, trusting and trustworthy behavior, and cooperation between these two ethnic groups are not affected by priming people on the ethnic identity of their partners or on the salience of election conflict. Our findings suggest electoral violence does not necessarily lead to changes in behavior between ethnic groups and that cooperative failure across groups may be easily overstated or have other mechanisms.
    Keywords: ethnic cooperation,conflict,election violence,priming
    JEL: C90 H41 O43
    Date: 2020
  6. By: Sofiane Ghali (ESSECT-University of Tunis); Mustapha K. Nabli (North Africa Bureau of Economic Studies (NABES))
    Abstract: This paper explores the Tunisian experience of exports diversification and the role played by industrial policies. It describes the general trends and the dynamics of diversification using a very disaggregated data set on exports for the period 1995-2017, for both primary and resourcebased products and manufactured products. It has been generally recognized that openness and export promotion policies established since the early 1970s succeeded in allowing Tunisia to achieve significant export growth, especially in low-technology manufacturing. But, until recently, the general wisdom has been that the country has achieved limited success in moving up the technological ladder, with diversification, and sophistication of exports. In this paper we show that this view is not warranted, and that extensive diversification and sophistication has taken place over the last couple of decades, and more significantly the most recent period, in which Tunisia has been remarkably resilient, despite the political upheavals which have rocked the country. The paper highlights the successes and failures of the process of diversification and investigates the role of both the "horizontal" and "vertical" policies pursued. It focuses on the “how” issue and explores whether and how specific policies are successful or not in meeting their objectives. Most importantly it presents a novel approach to study the dynamics of diversification and tries to identify the basic reasons behind the success or failure of diversification. It shows that the dynamics of innovation is extremely rich and varied. Diversification may be successful with products becoming "mature" exports or "emerging" exports. But there may also be failures with products experiencing "stalled" exports or "episodic" exports processes. These empirical findings lead to a questioning of one major argument in the literature that the main constraint to diversification is a market failure due to the fact that innovators (who introduce new products or new markets in exports) bear the major cost of their innovation, but later entrants reap the benefits. Discovery and innovation seem to be very extremely common, but success and consolidation are much more difficult. The paper draws important conclusions about the effectiveness of “horizontal vs vertical policies”, “single vs packages of policies”, and the focus on spurring discovery and innovation per say vs supporting the growth of already emerged innovations.
    Date: 2020–11–20

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