nep-afr New Economics Papers
on Africa
Issue of 2022‒02‒07
four papers chosen by
Sam Sarpong
The University of Mines and Technology

  1. Institutions and African Economic Development By Augustin Kwasi Fosu
  2. Financing renewable energy generation in SSA: Does financial integration matter? By Herve Kaffo Fotio; Tii N. Nchofoung; Simplice A. Asongu
  3. Digital Financial Services and Digital IDs: What Potential do They Have for Better Taxation in Africa? By Santoro, Fabrizio; Munoz, Laura; Prichard, Wilson; Mascagni, Giulia
  4. What are the correlates of childhood undernutrition? An analysis of DHS data from Africa South of the Sahara By Haile, Beliyou; Ru, Yating; Ahn, Hee Eun

  1. By: Augustin Kwasi Fosu (Institute of Statistical, Social, and Economic Research (ISSER), University of Ghana, Legon, Ghana; College of Business and Economics, University of Johannesburg; Johannesburg, South Africa; Faculty of Economic and Management Sciences, University of Pretoria, Pretoria, South Africa; Centre for the Study of African Economies (CSAE), University of Oxford, Oxford, UK)
    Abstract: In the light of the increasing importance of institutions in economic development and Africa's desire to catch up, the present paper provides an account of this crucial subject, `Institutions and African Economic Developmentâ€'. First, adopting the usual definition of `institutions' as `rules of the game', the paper shows that improvements in economic institutions, such as economic freedom, had begun by the early 1990s, and accelerated about the mid-1990s, consistent with observed improvements in economic and development outcomes. Also improved are measures of political institutions: an index of electoral competitiveness, constraint on the executive branch of government, and polity 2 as an indicator of the level of democracy, beginning in the late 1980s or early 1990s. Second, based primarily on a review of the extant literature, the paper observes that these improvements in the measures of economic and political institutions are positively associated with the increasing economic development in Africa. Third, indicators of institutional instability, measured by the frequency of civil wars and the incidence of coups d'etat, have been diminishing since the early 1990s, with implications for improved growth and human development. Fourth, some evidence is provided in support of the notion that African countries with better performance on institutional quality during the period of growth resurgence have also exhibited greater progress on poverty reduction. Finally, the paper concludes by flagging the potential risk of African countries backtracking on their respective trajectories toward achieving the democratic consolidation required to sustain the gains in growth and development.
    JEL: O11 O15 O43 O55
    Date: 2022–01
  2. By: Herve Kaffo Fotio (University of Maroua, Cameroon); Tii N. Nchofoung (University of Dschang, Cameroon); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Despite growing attention on the role of renewable energy in promoting economic growth and environmental sustainability, its adoption rate remains uncomfortably low, especially in developing countries. This study attempts to explore the ways to extend the installed capacity of renewable energy in 16 sub-Saharan African (SSA) countries over the period 1980-2017. The results from panel cointegration econometric techniques suggest that policies to enhance financial integration should increase the installed capacity of renewable energy in SSA, though the beneficial effect is only statistically significant in the long run. This effect holds, although disproportionately when the financial integration index is disaggregated into its de facto and de jure aspects. Moreover, the quantile regression analysis reveals that the effect of financial integration on renewable energy capacity is positive but heterogeneous across the conditional distribution of renewable energy capacity. However, the positive effect of financial integration is not enough to ensure the diversification of the energy mix, measured as the share of renewable installed capacity in the total installed capacity. The results show that economic growth is positively linked to renewable energy generation capacity while financial development is negatively associated with renewable energy production. Overall, these findings suggest that policies to increase the openness to foreign capitals are welcomed as far as renewable energy generation is concerned.
    Keywords: Financial integration, Renewable energy, Sub-Saharan Africa, Cointegration
    Date: 2022–01
  3. By: Santoro, Fabrizio; Munoz, Laura; Prichard, Wilson; Mascagni, Giulia
    Abstract: New digital technologies are now being widely used in Africa and lower-income countries (LICs). This has had an impact on tax administration, which has been increasingly digitised. Specifically Digital Financial Services (DFS) and digital IDs can improve tax administration. They have the potential to identify taxpayers more easily, communicate with them better, enforce and monitor compliance, and reduce compliance costs. While the potential is clear, existing literature indicates some of the barriers. Take-up of digital technology is still low due to barriers. Also, when taking up the technology, taxpayers often tend to adopt various measures to minimise tax payments. Within tax administrations there are challenges to accessibility and use of quality data. Mistakes can be made when launching digitisation, and there are regulatory and political barriers for effective use of digital technology. Given this context, this paper summarises key questions that are relevant for research and policy development to make more effective use of digital technology in tax administration in Africa and LICs
    Keywords: Governance,
    Date: 2022
  4. By: Haile, Beliyou; Ru, Yating; Ahn, Hee Eun
    Abstract: Despite progresses made over the last several decades, the prevalence of child malnutrition re-mains alarmingly high. About 149 million children under the age of five years old were stunted (too short for their age) in 2018, of which 55% and 39% lived in Asia and Africa, respectively. Malnourished children, especially stunted ones, may never achieve their full cognitive and non-cognitive potential with implications for their educational and labor market performance among other things. Malnutrition results from several interlinked factors operating at child, parental, household, and landscape level such as inadequate maternal nutrition before and during pregnancy and at the time of lactation, suboptimal breastfeeding practices, lack of nutritious complementary foods, and unhealthy living environments. This study analyzes the correlates of child undernutrition in rural Africa South of the Sahara (SSA) – a region with the least progress in tackling undernutrition.
    Keywords: AFRICA SOUTH OF SAHARA, AFRICA, agriculture, investment, income, economic growth, nutrition, child nutrition, child health, malnutrition, stunting,
    Date: 2021

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