nep-afr New Economics Papers
on Africa
Issue of 2021‒12‒13
seven papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. The Impact of Financial Inclusion on Household Health Expenditures in Africa By Ofeh M. Edoh; Tii N. Nchofoung; Ofeh E. Anchi
  2. Diaspora Income, Financial Development and Ecological footprint in Africa By Arogundade, Sodiq; Hassan, Adewale; Bila, Santos
  3. The Macroeconomic Impacts of Digitalization in Sub-Saharan Africa: Evidence from Submarine Cables By Felix F. Simione; Yiruo Li
  4. Financial Inclusion and Small Enterprise Growth in Africa: Emerging Perspectives and Research Agenda By John Kuada
  5. The Effect of Mobile Money on Borrowing and Saving: Evidence from Tanzania By Hisahiro Naito; Askar Ismailov; Albert Benson Kimaro
  6. Population Homeostasis in Sub-Saharan Africa By David de la Croix; Paula E. Gobbi
  7. Climate variability impacts on agricultural output in East Africa By Mubenga-Tshitaka, Jean Luc; Dikgang, Johane; Muteba Mwamba, John W.; Gelo, Dambala

  1. By: Ofeh M. Edoh (University of Dschang, Cameroon); Tii N. Nchofoung (University of Dschang, Cameroon); Ofeh E. Anchi (University of Bamenda, Cameroon)
    Abstract: This study examines the impact of financial inclusion on household health expenditure in 17 African countries. It argues that financial inclusion is an active influencer of individuals’ health demand and that Gross Domestic Product (GDP) per capita and voluntary health insurance schemes tend to be active transmission channels through which financial inclusion affects household health expenditures. The study used an instrumental variable (2SLS) technique for the analysis over a period from 2008 to 2017.Results from the study show that being financially included leads to increase household health expenditures. Suggestions for policy emerging from this study to governments in Africa are on the aspect of fostering financial inclusion to a wider population alongside enhancing the Universal Health Coverage (UHC) plan to ease the burden of out-of-pocket payments on households.
    Keywords: Financial inclusion, Health expenditure, Out-of-pocket (OOP) payments, 2SLS
    JEL: G15 I13 C23
    Date: 2021–01
  2. By: Arogundade, Sodiq; Hassan, Adewale; Bila, Santos
    Abstract: This study examines the impact of diaspora income on the ecological footprint of 22 countries African countries. Methodologically, we used the Driscoll-Kraay (1998) fixed-effect model, fixed effect instrumental variable regression, Machado and Silva (2019) panel quantile regression, and Dumitrescu and Hurlin (2012) causality test. There are four main important findings from this empirical study: (1) diaspora income has a negative and statistical impact on ecological degradation, (2) financial development plays a crucial role in mitigating the environmental impact of diaspora income, and African countries must achieve an annual estimated threshold of financial development before they could reap the environmental quality impact of diaspora income, (3) the role of financial development in reducing the environmental degradation impact of diaspora income is less for higher polluting countries in Africa, (4) unidirectional causality from diaspora income to ecological footprint. In ensuring a sustainable environment, we recommend that African governments provide a tax credit to the recipient of the diaspora income who invests in environment-friendly technologies.
    Keywords: Diaspora income, Driscoll-Kraay fixed-effect model, fixed effect instrumental variable regression, Machado and Silva (2019) MMQR, Dumitrescu and Hurlin (2012) causality test, Financial development, Ecological footprint, Africa
    JEL: F64 Q5 Q56
    Date: 2021–11–25
  3. By: Felix F. Simione; Yiruo Li
    Abstract: The Macroeconomic Impacts of Digitalization in Sub-Saharan Africa: Evidence from Submarine Cables
    Keywords: internet penetration; growth effect; macroeconomic impacts of digitalization; arrival IV; employment share; productivity database; Employment; Productivity; Digitalization; Estimation techniques; Labor productivity; Africa; Sub-Saharan Africa; Global
    Date: 2021–04–29
  4. By: John Kuada (Aalborg, Denmark)
    Abstract: Purpose – The purposes of this paper are to review the streams of studies that link financial inclusion to small enterprise growth in Sub-Sahara Africa (SSA), to identify the research gaps they provide, and to prepare an agenda for future research in the field. Design/methodology/approach – The study employs systematic literature search method to identify relevant literature from journals. It then adopts a narrative approach for the review, highlighting the findings from the prior studies and gaps requiring research attention. Findings – The discussions reveal that there is a need for future studies that can unpack small enterprise growth determinants, identify growth-enabling entrepreneurial characteristics and examine the contextual variabilities that shape their effectiveness. Originality/value – There is currently no comprehensive/integrated review exploring the link between financial inclusion and small enterprise growth in SSA. This review therefore provides insights that contribute to the development of this stream of research.
    Keywords: Financial inclusion, entrepreneurship, small businesses, enterprise growth, Africa
    Date: 2021–01
  5. By: Hisahiro Naito; Askar Ismailov; Albert Benson Kimaro
    Abstract: This study examines the effect of the use of mobile money services on borrowing and saving using data from Tanzania. We estimate the causal effect of the use of mobile money on borrowing, saving, and receiving remittances by applying a two-stage least squares estimation using the shortest distance to the border of the areas with multiple mobile networks, which is a proxy for accessibility to a mobile network, as an instrumental variable, while controlling for distance to financial institutions, population density of the residence, night light luminosity, and other important covariates. We find that when a household experiences a negative shock, mobile money non-users increase borrowing, while mobile money users do not. Further, the use of mobile money increases the probability of saving in mobile money savings accounts and receiving remittances, while it decreases the probability of saving in less liquid assets such as livestock. On the other hand, we find that the effect of the use of mobile money on receiving remittances is the same for those who experience a negative shock and those who do not. These results indicate that the use of mobile money increases the receipt of remittances regardless of negative shocks and changes the saving portfolio, allowing a household to prepare for negative shocks. Hence, a household that uses mobile money does not need to increase borrowing in the face of a negative shock. Consistent with this interpretation, we find that experiencing a negative shock does not decrease the livelihood of mobile money users, while it does reduce that of non-users.
    Date: 2021–07
  6. By: David de la Croix (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Paula E. Gobbi (ECARES, Université Libre de Bruxelles, Belgium and CEPR, London)
    Abstract: Global population growth remains one of the major challenges of the twenty-first century. This is particularly true for African countries which have been undergoing their demographic transitions. To investigate whether predicted increasing population density and urbanization can help to stabilize African population, we construct a database for 84 georeferenced Demographic and Health Survey (DHS) samples including 947,191 individuals in sub-Saharan Africa and match each location with gridded population density from NASA. We apply a proportional hazard model to evaluate the quantitative impact of local population density on the transitions from childlessness to motherhood, and from celibacy to marriage. Moving from the 5th to the 95th percentile of population density increases the median age at first birth by 2.2 years. This roughly decreases completed fertility by half a child. The same increase in population density increases the median age at first marriage by 3.3 years. These findings contribute to the understanding of why fertility has not dropped in Africa as fast as expected. One part of the answer is that population density remains low. Yet the total effect of increased density on fertility remains limited and counting on it to stabilize the population would be unrealistic.
    Keywords: Fertility, Homeostasis, Africa, Population density
    Date: 2021–11–15
  7. By: Mubenga-Tshitaka, Jean Luc; Dikgang, Johane; Muteba Mwamba, John W.; Gelo, Dambala
    Abstract: This paper investigates whether the effects of weather variability in temperature and precipitation on agricultural output are short- or long-run. In fact, the study addresses two policy-relevant questions: (1) Does temperature or precipitation variability affect agricultural output, and if so, is the effect short- or long-term? (2) Is the effect of weather variability on agricultural output homogenous across East Africa? However, there is clear evidence of cross-country dependency. If cross-sectional dependency exists among the cross-sectional countries under investigation, the first generation of panel data techniques is not applicable. We use data from the FAOSTAT for 1961 to 2016 for East African countries, while climate-related variables (temperature and precipitation) are from the Climate Research Unit (CRU). We find that variability in temperature has a long-run impact on agricultural output, while variability in precipitation has a short-run effect. However, after considering the heterogeneity among countries, there is evidence of the long-run effect of precipitation variability in some countries.
    Keywords: Climate variability, agricultural output, cross-sectional dependency, heterogeneity
    JEL: Q1 Q2 Q54
    Date: 2021–11–20

This nep-afr issue is ©2021 by Sam Sarpong. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.