nep-afr New Economics Papers
on Africa
Issue of 2021‒10‒25
six papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Glimpses of fiscal states in sub-Saharan Africa By Mick Moore
  2. One year after: Has the COVID-19 pandemic increased violence in sub-Saharan Africa? By Basedau, Matthias; Deitch, Mora
  3. The rise and fall of the energy-carbon Kuznets curve: Evidence from Africa By Olatunji A. Shobande; Simplice A. Asongu
  4. Environmental performance in the West African economy: MM-quantile and 2SLS approach By Musibau, Hammed; Yanotti, Maria; Vespignani, Joaquin; Rabindra, Nepal
  5. Debt-financed fiscal stimulus in South Africa By Hylton Hollander
  6. Refugees and local power dynamics: The case of the Gambella Region of Ethiopia By Hagos, Samuel Zewdie

  1. By: Mick Moore
    Abstract: There is a widespread perception that taxing in sub-Saharan Africa has been and remains fraught with problems or government failure. This is not generally true. For more than a century, colonial administrations and independent states have steadily developed the capacity to routinely collect more substantial revenues than one might expect in a low-income region. The two main historical dimensions of this collection capacity were (a) powerful, centralized bureaucracies focused on achieving revenue collection targets and (b) large, taxable international trade sectors.
    Keywords: Tax, Revenue, Sub-Saharan Africa, Tax reform, Tax administration, Customs
    Date: 2021
  2. By: Basedau, Matthias; Deitch, Mora
    Abstract: In spring 2020, observers and practitioners warned that COVID-19 would increase violence in sub-Saharan Africa by creating an economic shock that would lead to distributional conflicts and government repression. Compared to before the pandemic, violence did increase in 2020, rising by 40 and 60 per cent in terms of fatalities and events, respectively. Controlling for important confounders, COVID-19 proves significant to the increase in violence in many models; however, a robust effect can be found only for "COVID-19 unrest," which forms a fraction of the violence and stems from the stringency of government reactions rather than the pandemic itself. Pre-pandemic fragility accounts best for the region's rise in violence. Expert assessments confirm these findings but also yield evidence warning against prematurely announcing an all-clear. The fallout of the pandemic on conflict is likely to have a longer period of incubation, and there are initial indications that conditions will worsen.
    Keywords: COVID-19,armed conflict,fragility,sub-Saharan Africa,unrest,restrictions
    Date: 2021
  3. By: Olatunji A. Shobande (University of Aberdeen, UK); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Purpose – This paper provides an analysis of the energy-carbon Kuznets curve hypothesis (CKC) using a second-generation panel methodology. Design/methodology/approach – Specifically, we investigate whether energy consumption, natural resources, and governance explain the CKC proposition. Our empirical strategy is based on the Westerlund panel cointegration test, augmented mean group (AMG), and vector autoregressive (VAR) panel Granger-causality tests. Findings – The results suggest that the CKC hypothesis is incomplete without these mechanisms, as they play a critical role in reducing carbon emissions in Africa. We recommend improving the environmental standards and proper regulatory and monitoring systems to reduce carbon emissions and promote sustainable development in the continent. Originality/value –The study revisits the CKC hypothesis with particular emphasis on governance and more robust empirical estimation techniques.
    Keywords: carbon cuts; Energy consumption; Governance; Climate crisis; Panel analysis; Africa
    Date: 2021–01
  4. By: Musibau, Hammed (Tasmanian School of Business & Economics, University of Tasmania); Yanotti, Maria (Tasmanian School of Business & Economics, University of Tasmania); Vespignani, Joaquin (Tasmanian School of Business & Economics, University of Tasmania); Rabindra, Nepal (School of Business, Faculty of Business and Law, University of Wollongong)
    Abstract: The 2019 World Bank report on West Africa's coast indicates that over $3.8 billion is lost annually due to environmental issues, like erosion, flooding, and pollution. In this paper, the newly introduced environmental performance index (EPI) is incorporate into the neoclassical growth model to empirically address the impact of environmental performance on economic growth for the Economic Community of West African States (ECOWAS). Using the novel Method of Moments-Quantile Regression methodology and 2SLS models, the empirical investigation finds a positive relationship between environmental performance and economic growth across quantiles for ECOWAS. Empirical results provide evidence supporting bidirectional relationship running from environmental performance to economic growth; from government size to economic growth; and from trade openness to economic growth across all quantiles. Results show that environmental performance, government size, labour, and capital stock have a positive impact on West African Economic Growth, while trade openness decreases economic growth. We find a 48% optimal threshold of environmental performance index (EPI) on economic Growth for ECOWAS countries. Based on the findings, policies to encourage improved environmental performance above the threshold estimated will go a long way to enhance West African economies.
    Keywords: economic growth, environmental performance, ECOWAS, Moment of Method-QR estimator
    JEL: F43 F64 C31
    Date: 2021
  5. By: Hylton Hollander
    Abstract: Debt-financed fiscal stimulus programmes directly stimulate aggregate demand through government expenditure or tax cuts, but their effectiveness is highly dependent on direct crowding out of private sector expenditure, spillover effects to the private sector through a higher risk premium on interest rates, and the interaction between fiscal policy and monetary policy.
    Keywords: Public debt, Interest rate, Fiscal sustainability, Fiscal policy, Monetary policy
    Date: 2021
  6. By: Hagos, Samuel Zewdie
    Abstract: The Gambella Region is one of the marginalised and most conflict-ridden regions in Ethiopia. Recently, violent clashes between the two largest ethnic groups in the region - the host communities, the Anywaa, and the South Sudanese Nuer refugees - have reignited the debate on refugee integration in the region. In fact, the roots of the Anywaa-Nuer conflict can be traced back to the imperial regime of Ethiopia at the end of the 19th century. In the early 1960s however, the arrival and spontaneous integration of Nuer refugees was peaceful and relations between both ethnic groups were harmonious. During this time, refugee management was organised locally. Against this background, the focus of the present paper is to understand the nature, context and evolution of the long-standing conflict between the Anywaa and refugees from the Nuer ethnic group in the Gambella Region. Beyond that, the paper explores the Anywaa-Nuer conflict within the context of the political power dynamics of the last two decades. Thereby, the paper reveals that the disputes between the Anywaa and the Nuer have taken on a new dimension since the early 1990s.
    Date: 2021

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