nep-afr New Economics Papers
on Africa
Issue of 2022‒04‒11
six papers chosen by
Sam Sarpong
Xiamen University Malaysia Campus

  1. The Relevance of Financialization for African Economies: Lessons from South Africa By Sam Ashman; Ben Fine; Ewa Karwowski
  2. Effect of women’s political inclusion on the level of infrastructures in Africa By Tii N. Nchofoung; Simplice A. Asongu; Vanessa S. Tchamyou
  3. Digital Payments Taxation Factsheet: Tanzania By Olawole, Ifeoluwa; Lees, Adrienne; Abounabhan, Mary
  4. Pro-birth policies, missions and fertility : historical evidence from Congo By Catherine Guirkinger; Paola Villar
  5. Determinants of health insurance enrollment and health expenditure in Ghana: An empirical analysis By Kwame Adjei-Mantey; Charles Yuji Horioka
  6. Tax and Governance in the Context of Scarce Revenues: Inefficient Tax Collection and its Implications in Rural West Africa By Beach, Rachel; van den Boogaard, Vanessa

  1. By: Sam Ashman (School of Economics, University of Johannesburg); Ben Fine (Department of Economics, SOAS University of London); Ewa Karwowski (Department of International Development, King's College London)
    Abstract: While research has highlighted that financialization critically affects African economies and societies through its effect upon commodity prices, international value chain participation, and land, there are few accounts of the systemic and macroeconomic importance of financialization for African societies; the big exception being work on South Africa. The South African case, despite its historical peculiarities, has a broader relevance for African economies since the country combines many characteristics typical especially for the sub-Saharan region – including resource richness, a persistent trade deficit, and a volatile exchange rate – while its financialization trajectory is ahead of other African economies because financial liberalization was pioneered as early as the late 1970s. This article summarizes the effects of financialization on South Africa, holding a warning for other African countries which have increasingly engaged in financial liberalization since the 1990s. Furthermore, we detail how financialization has facilitated and furthered corruption in South Africa, in turn undermining democratic processes. Thus, we contribute to research on financialization on democracy, a field hardly considered in the context of developing countries.
    Keywords: financialization; neoliberalism; South Africa; State Capture
    JEL: G00 H11 O1 P10
    Date: 2021–11
  2. By: Tii N. Nchofoung (University of Dschang, Cameroon); Simplice A. Asongu (Yaoundé, Cameroon); Vanessa S. Tchamyou (Yaoundé, Cameroon)
    Abstract: The need for gender inclusion was highlighted as the fifth sustainable development goal (SDG) (i.e. SDG5) and policies have been gearing towards attaining this objective and its subsequent effect on macroeconomic outcome. Equally, the demonstrated trend of infrastructures in Africa in terms of stocks and future need is unique compared to the rest of the world. The objective of this study is therefore to empirically examine the effect of women’s political inclusion on infrastructural development in Africa. The results through the system GMM and Quantile Regression techniques show that women’s political inclusion enhances infrastructural development in Africa. The result is robust across different measures of infrastructures and political inclusion. Besides, the positive relationship is maintained across income groups, levels of political stability and export structure. However, the effect is non-significant in countries with infrastructural scores around the extreme quantiles. The results of the study recommend African policymakers to prioritise the inclusion of women in the political agenda as one of the strategies towards the development of infrastructures. This could come through the putting in place of laws that favour women’s participation in politics. Moreover, the countries should ratify international conventions that favour gender inclusion.
    Keywords: Infrastructures, Women’s political empowerment, Africa
    Date: 2022–01
  3. By: Olawole, Ifeoluwa; Lees, Adrienne; Abounabhan, Mary
    Abstract: Digital financial services in Tanzania have increased the efficiency of service delivery and lowered the cost of financial transactions, thereby increasing the financial inclusion of the poor.
    Keywords: Governance,
    Date: 2022
  4. By: Catherine Guirkinger (Center for Research in the Economics of Development, University of Namur); Paola Villar
    Abstract: Did colonial powers shape fertility patterns in their colonies? We investigate this question in the context of the Belgian Congo. Starting in the late 1920s, several colonial powers in Africa feared depopulation of their colonies and designed pro-birth policies. The Belgian state heavily relied on Catholic nuns to implement these policies in the Congo. Using a demographic survey conducted in the 1970s in seven major cities, we recovered the individual birth calendars of 30,000 women born between 1900 and 1948, under colonial rule. In addition we digitized high-quality territory level information on fertility by cohort in the 1950s. We rely on unique historical and archival material to reconstruct temporal and geographic heterogeneity in exposure to missionary presence and the type of activities performed at the station level. We find a positive effect of Catholic nuns on fertility. In contrast, Catholic male missionaries have no detectable impact on fertility and Protestant missionaries have a clear negative impact. In terms of mechanisms, we argue that progress in general health are unlikely to explain, alone, the rise in fertility. Another likely channel was the promotion of an ideal of domesticity where women are confined to their role of mother and wife. Finally, using Demographic and Health Survey data, we find some trace of colonial mission’s influence on fertility patterns today.
    Date: 2022–03
  5. By: Kwame Adjei-Mantey; Charles Yuji Horioka
    Abstract: This paper analyzes the determinants of health insurance enrollment and health expenditure in Ghana using micro data from wave 7 of the Ghana Living Standards Survey (GLSS 7) with emphasis on the role of risk preferences and the availability of health facilities in one’s own community, neither of which has been emphasized in the previous literature on this topic. It is possible to analyze the determinants of health insurance enrollment in Ghana because its public health insurance system (the National Health Insurance Scheme or NHIS) is, in theory, mandatory, but is, in actual practice, voluntary, with only about 40% of the population enrolled in the scheme. Our empirical findings show that risk preferences have a significant impact on health insurance enrollment, with risk averse individuals being significantly more likely than other households to enroll in health insurance, as one would expect. Moreover, our findings also show that very poor households are significantly more likely to enroll in health insurance than other households, perhaps because they are exempt from paying premiums for health insurance. This finding suggests that NHIS is achieving its intended objective of increasing the poor’s access to health care. Finally, our findings also show that the availability of health facilities in one’s own community significantly decreases expenditures on health care, which underscores the importance of ensuring an equitable spatial distribution of health facilities throughout the country.
    Date: 2022–02
  6. By: Beach, Rachel; van den Boogaard, Vanessa
    Abstract: In recent years, domestic and international policy attention has often focused on broadening the tax base in order to include a greater share of the population in the ‘tax net’. This is based, in part, on the hope that the expansion of taxation will result in positive ‘governance dividends’ for taxpayers. However, the implications of extending the tax base in rural areas in low-income countries has been insufficiently considered. Through the case studies of Togo, Benin, and Sierra Leone, we demonstrate that extending taxation to rural areas is often highly inefficient, leading to few, if any, revenue gains when factoring in the costs of collection. Where revenues exceed the costs of collection, they often only cover local government salaries with little remaining for the provision of public goods and services. The implications of rural tax collection inefficiency are thus significant for revenue mobilisation, governance and public service delivery, accountability relationships with citizens, and taxpayer expectations of the state. Accordingly, we question the rationale for extending taxation to rural citizens in low-income countries. Instead, we argue for a reconceptualisation of the nature of the fiscal social contract, disentangling the concept of the social contract from the individual. Rather, a collective social contract places greater emphasis on the taxation of wealth and redistribution and recognises that basic rights of citizenship are not, or should not, be contingent on paying direct taxes to the government. Rather than expanding taxation, we argue for the expansion of political voice and rights to rural citizens, through a ‘services-first’ approach.
    Keywords: Governance,
    Date: 2022

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