nep-afr New Economics Papers
on Africa
Issue of 2021‒03‒22
eight papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. The EU-Africa summit 2021 : Quo vadis, in the light of Brexit and Corona By Kohnert, Dirk
  2. The terrorism-finance nexus contingent on globalisation and governance dynamics in Africa By Simplice A. Asongu; Tii N. Nchofoung
  3. Differences in African Banking Systems: Causes and Consequences By Mutarindwa, Samuel; Schäfer, Dorothea; Stephan, Andreas
  4. When the Mob Goes Silent: Uncovering the Effects of Racial Harassment through a Natural Experiment By Mauro Caselli; Paolo Falco
  5. Mobile Internet Adoption in West Africa By Rodriguez Castelan, Carlos; Ochoa, Rogelio Granguillhome; Lach, Samantha; Masaki, Takaaki
  6. Crime, Inequality and Subsidized Housing: Evidence from South Africa By Roxana Manea; Patrizio Piraino; Martina Viarengo
  7. Environmental and Energy Implications of Meat Consumption Pathways in Sub-Saharan Africa By Falchetta, Giacomo; Golinucci, Nicolò; Noussan, Michel; Rocco, Matteo Vincenzo
  8. Constructing a nutrition deficiency index: Applications for the Democratic Republic of the Congo under a decade of humanitarian crises By Mirindi, Patrice L.; Das, Mousumi; Mirindi, Patrick N.; Babu, Suresh Chandra

  1. By: Kohnert, Dirk
    Abstract: Every three years, the AU-EU summit reunites African and EU leaders to outline the future direction of cooperation. The 6th summit had been to reaffirm and renew the partnership between the two blocks already in October 2020, but it was pushed back to the first quarter of 2021 or even later due to COVID-19 crisis. Besides, Brussels had to deal with its own post-Brexit situation and its repercussions on EU-Africa relations, excluding the UK. African states, for their part, wanted to renegotiate the EU-Africa partnership and to balance it with new promising Post-Brexit visions of the British premier Johnson about increased economic ties with the African Angloshere. China and other global players compete with the EU and its member states in the new scramble for African resources. Given that Africa is increasingly courted by other partners it could be inclined to successively limit its relations with the EU and see it as a mere provider of aid and security against Islamic terrorism. This trend was reinforced by the fact that the new EU-Africa strategy still hasn't been approved by EU member states. And a timely replacement of the Cotonou Agreement, which expires in November 2021, is open to question.
    Keywords: Corona, Brexit, Africa, UK, EU, international trade, economic recession, poverty, violence,
    JEL: F13 F35 F45 F63 G15 I1 I18 N17 N47 N67 O17 P16 Z13
    Date: 2021–03–04
  2. By: Simplice A. Asongu (Yaounde, Cameroon); Tii N. Nchofoung (Ministry of Trade, Yaoundé, Cameroon)
    Abstract: This study empirically verifies the effect of terrorism on financial development and how globalisation and governance modulate the incidence of terrorism on financial development in Africa. Two terrorism indicators are adopted for this study, namely, the: number of terrorism incidences and number of terrorism deaths. The methodology involves the pooled data technique running from 1996-2018 for 34 African countries. The results from the POLS, Driscoll-Kraay and the Newey-West standard error corrections show that terrorism is detrimental to financial development. From the interactive regressions, three major tendencies are apparent. First, terrorism dynamics consistently have an unconditional negative effect on financial development. Second, the globalization and government dynamics modulate the terrorism dynamics to broadly induce a negative net effect on financial development. Third, policy thresholds at which the modulating variables reverse the net effect on financial development from negative to positive are: (i) 71.61572 trade (% of GDP) and 13.97872 FDI (% of GDP) for the incidence of terror and (ii) 1.16201 trade (% of GDP) for terror deaths. The computed thresholds make economic sense and worthwhile in terms of policy implications because they are within statistical range. The result is robust to alternative measures of terrorism and financial development. Policy implications are discussed.
    Keywords: terrorism, financial development, globalisation, governance, Pooled data
    JEL: D74 G28 F65 P37 C52
    Date: 2021–03
  3. By: Mutarindwa, Samuel; Schäfer, Dorothea; Stephan, Andreas
    Abstract: This paper links banking system development to the colonial and legal history of African countries. Based on a sample of 40 African countries from 2000 to 2018, our empirical findings show a significant dependence of current financial institutions on the inherited legal origin and the colonization type. Findings also reveal that current financial legal institutions are not major determinants of banking system development, and that institutional development and governance quality are more important. A high share of government spending relative to GDP also positively affects banking system development in African countries.
    Keywords: Legal origin,colonial history,financial institutions,banking system,correlated random effects model
    JEL: G21 G38 G39 K15 K40
    Date: 2021
  4. By: Mauro Caselli; Paolo Falco
    Abstract: How does harassment impact the performance of discriminated minorities? Using a natural experiment induced by the COVID-19 pandemic, we test how the sudden absence of supporters at football games impacts the performance of players from minority groups in Italy. We find that players from Africa, who are most commonly targeted by racial harassment, experience a significant improvement in performance when supporters are no longer at the stadium. Using data on o
    Date: 2021
  5. By: Rodriguez Castelan, Carlos (World Bank); Ochoa, Rogelio Granguillhome (World Bank); Lach, Samantha (World Bank); Masaki, Takaaki (World Bank)
    Abstract: Mobile broadband internet is the main technology through which individuals access the internet in developing countries. Understanding the barriers to broadband adoption is thus a priority in designing policies aiming to expand access and close the digital divide across socioeconomic groups and territories. This paper exploits data from harmonized household expenditure surveys in seven countries in West Africa in 2018/19 — a subregion with one of the lowest levels of mobile internet penetration in the world — to identify the main factors that limit mobile broadband internet adoption. Results show that low levels of household consumption and prices of services are two key constraints. One standard deviation increase in household expenditure, about US$65 per capita per month, is associated with a 6.5 percentage point rise in the probability of adoption, while one standard deviation drop in the price of mobile internet services, about US$3.60, increases the probability of adoption by 2.4 percentage points. Other determinants include demographic characteristics (sex, age, language, urban location), socioeconomic features (educational attainment, sector of employment), and other factors linked to policy (access to electricity, ownership of assets, alternative means of internet access). Results are robust to specifications focusing only in areas with mobile internet coverage (3G).
    Keywords: internet adoption, mobile broadband, household consumption, West Africa
    JEL: C25 C52 D12 L86 O55
    Date: 2021–02
  6. By: Roxana Manea; Patrizio Piraino; Martina Viarengo
    Abstract: We study the relationship between housing inequality and crime in South Africa. We create a novel panel dataset combining information on crimes at the police station level with census data. We find that housing inequality explains a significant share of the variation in both property and violent crimes, net of spillover effects, time and district fixed effects. An increase of one standard deviation in housing inequality explains between 9 and 13 percent of crime increases. Additionally, we show that a prominent post-apartheid housing program for low-income South Africans led to a reduction in inequality and a decline in violent crimes. Together, these findings suggest the important role that equality in housing conditions can play in the reduction of crime in an emerging economy context.
    Keywords: inequality, crime, economic development
    JEL: D63 O10 K14
    Date: 2021
  7. By: Falchetta, Giacomo; Golinucci, Nicolò; Noussan, Michel; Rocco, Matteo Vincenzo
    Abstract: In sub-Saharan Africa (SSA) diets are largely based on cereal or root staple crops. Together with socio-cultural change, economic and demographic growth could boost the demand for meat, with significant environmental repercussions. We model meat consumption pathways to 2050 for SSA based on several scenarios calibrated on historical demand drivers. To assess the consequent environmental impact, we adopt an environmentally-extended input-output (EEIO) framework and apply it on the EXIOBASE 3.3 hybrid tables. We find that, depending on the interplay of resources efficiency and demand growth, by 2050 global greenhouse gases emissions could grow by 1.4 [0.9-1.9] Gt CO2e/yr (~175% of current regional agriculture-related emissions), cropping and grazing-related land may cover additional 15 [12.5-21] · 106 km2 (one quarter of today’s global agricultural land), blue water consumption could rise by 36 [29-47] Gm3 /yr (nearly doubling the current regional agricultural consumption), the eutrophication potential could grow by 7.6 [4.9-9.5] t PO4e/yr and additional 0.9 [0.5-1.4] EJ/yr of fossil fuels and 49 [32-73] TWh/yr of electricity may be consumed. These results suggest that – in the absence of drastic resource efficiency or technological improvements – meat demand in SSA is bound to become a major sustainability challenge. We show that a partial substitution of the protein intake with plant-based alternatives carries significant potential for mitigating these impacts. The policies affecting farming practices and dietary choices will thus have a significant impact on regional and global environmental flows.
    Keywords: Environmental Economics and Policy
    Date: 2021–03–16
  8. By: Mirindi, Patrice L.; Das, Mousumi; Mirindi, Patrick N.; Babu, Suresh Chandra
    Abstract: The Democratic Republic of the Congo (DRC) is perennially plagued by prolonged phases of poverty, conflict, and increased internal migration, as well as pandemic outbreaks such as Ebola and COVID-19, and limited livelihood opportunities. Such unexpected or catastrophic events have rendered households vulnerable and resulted in poor health outcomes. Given this background, we intend to analyze the nutritional profile of households for a period spanning almost a decade using the Household Consumption Expenditure Survey (HCES). We construct a composite nutrition deficiency index (NDI), capturing intake of 14 different macro- and micronutrients (which we refer to as dimensions)—namely, calories, protein, calcium, zinc, folate, thiamine, niacin, iron, vitamin A, vitamin B12, vitamin D, vitamin B6, vitamin C, and vitamin E—using the popular Alkire-Foster methodology. This methodology, usually used to construct multidimensional poverty indexes, in this case helps measure the incidence, intensity, and combined extent of multinutrient deprivation. DRC’s values on the multidimensional NDI vary regionally from 0.13 to 0.73. Urban DRC performs worse than rural DRC. Regions subject to the conflict and Ebola crises are the worst-affected of the nutritionally deprived regions. Deficiency in calorie and protein intake contributes to the highest values of the NDI, but we also find evidence of a double burden of malnutrition, with households lacking consumption of both macro- and micronutrients. South Kivu is the worst-performing of all regions and Mongala the best. The northern parts of DRC have fewer nutritionally deprived households, as compared with the central and southwestern parts. Our main policy recommendation is to help improve market access in urban areas so that people consume a more diverse diet. In rural areas, the government should support improving nutrition-sensitive agricultural production. Although the World Food Programme has a sustained presence in the country, uplifting households from severe hunger, active participation by the government and collaboration with multiple stakeholders is called for.
    Keywords: DEMOCRATIC REPUBLIC OF THE CONGO; CENTRAL AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; nutrition; nutritional status; households; household consumption; household expenditure; expenditure; surveys; crisis; humanitarian crises; nutrition deficiency index; Alkire-Foster methodology
    Date: 2021

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