nep-afr New Economics Papers
on Africa
Issue of 2022‒05‒02
six papers chosen by
Sam Sarpong
Xiamen University Malaysia Campus

  1. Young adults and labor markets in Africa By Bandiera, Oriana; Elsayed, Ahmed; Smurra, Andrea; Zipfel, Céline
  2. (Mis-)information technology: Internet use and perception of democracy in Africa By Joël Cariolle; Yasmine Elkhateeb; Mathilde Maurel
  3. The reckoning of sexual violence and corruption: A gendered study of sextortion in migration to South Africa By Bicker Caarten, Asleigh; Van Heugten, Loes; Merkle, Ortrun
  4. Long-run impacts of the conflict in Ukraine on food security in Africa By Balma, Lacina; Heidland, Tobias; Jävervall, Sebastian; Mahlkow, Hendrik; Mukasa, Adamon N.; Woldemichael, Andinet
  5. Profit shifting by multinational corporations in Kenya: The role of internal debt By Roseline Misati; Kethi Ngoka; Anne Kamau; Maureen Odongo
  6. Firm-specific, and institutional determinants of corporate investments in Nigeria By M.Ajide, Folorunsho

  1. By: Bandiera, Oriana; Elsayed, Ahmed; Smurra, Andrea; Zipfel, Céline
    Abstract: Every year, millions of young adults join the labor market in Africa. This paper harmonizes surveys and censuses from 68 low- and middle-income countries to compare their job prospects to those of their counterparts in other low-income regions. We show that employment rates are similar at similar levels of development but that young adults in Africa are less likely to have a salaried job, especially when the size of their cohort is large. Building on existing evidence on the impacts of interventions targeting both the demand and supply sides of the labor market, we discuss policy priorities for boosting the growth of salaried job creation in the region.
    JEL: D31 J13 J22 J23 J31 O15
    Date: 2022–02–01
  2. By: Joël Cariolle (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Yasmine Elkhateeb (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Cairo University); Mathilde Maurel (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique, FERDI - Fondation pour les Etudes et Recherches sur le Développement International)
    Abstract: This paper investigates the impact of internet use as a means of accessing news on African citizens' demand for and perception of the supply of democracy. This question is addressed using cross-sectional data from the last three rounds of the Afrobarometer survey for a sample of 25 African countries between 2011 and 2018. Using an instrumental variable approach to control for the possible endogeneity bias between internet use and citizens' perceptions, we found that using the internet to get news has a negative and significant effect on the demand for and on the perceived supply of democracy. The negative effect is channeled through two main factors. The first factor is the confidence in governments and governmental institutions, which is undermined by the use of the internet. In particular, we find that this internet-induced lower confidence translates into a higher probability of engaging in street protests instead of increased political participation. The second driving factor is the (mis-)information channel. On the one hand, we show that internet users' perception of the supply of democracy negatively diverges from experts' ratings. On the other hand, we document further that internet use increases the likelihood of incoherence in the respondent's stance about her demand for democracy. Finally, we show that the negative effect we found is mitigated when the internet is complemented by traditional media sources, especially the radio, to get informed. The findings of this study suggest that internet use is not neutral and tends to undermine citizens' preferences for democracy and alter perceptions about the functioning of political institutions.
    Keywords: Internet news,democracy,Africa
    Date: 2022–03
  3. By: Bicker Caarten, Asleigh (UNU-MERIT, Maastricht University); Van Heugten, Loes (UNU-MERIT, Maastricht University); Merkle, Ortrun (UNU-MERIT, Maastricht University)
    Abstract: This research seeks to understand experiences of sextortion of African migrants migrating to South Africa and how these are gendered. This research is interesting and relevant both for academic and policy discussion, for two reasons. For one, sextortion is an emerging concept that has not been sufficiently studied and for another, South-South migration is still frequently forgotten in studies about migration. This paper analyses and discusses the 16 semi-structured interviews with experts in migration, corruption and gender as a first scoping study looking at migrants' experiences with sextortion in the South African context. The results have highlighted that women are most vulnerable to sextortion and that migrants not only encounter sextortion during their journeys, but also after arriving in South Africa. This can be explained referring to South Africa's culture where both gender-based violence and xenophobia are deeply rooted, making up for an "ideal" environment for sextortion to take place. At last, this paper discusses the different consequences that surviving sextortion has, which are, among others, the spread of STIs, unwanted pregnancies, shame, stigmatisation, and normalisation.
    Keywords: Sextortion, Migration, Corruption, Gender-based violence, Sexual violence, Sexual transactions, South-South migration, Intra-Africa migration, South African migration
    JEL: D73 F22 F59 O15
    Date: 2022–03–15
  4. By: Balma, Lacina; Heidland, Tobias; Jävervall, Sebastian; Mahlkow, Hendrik; Mukasa, Adamon N.; Woldemichael, Andinet
    Abstract: Many African countries heavily rely on imports of agricultural commodities and agricultural inputs from Ukraine and Russia, for example wheat, other grains, and fertilizer. Russia's invasion of Ukraine has disrupted global access to grains due to reduced production, exports, and increased trade costs. This policy brief investigates the possible long-term consequences of the conflict on food security in Africa. We use a long-run general equilibrium trade model and study three scenarios that may evolve as a consequence of the conflict: 1) Ending exports of Ukrainian wheat and other cereals for food production, such as corn or sorghum. 2) Russia's potential ban on exports of grains and fertilizers, and 3) The impact of increased trade costs due to disrupted trade routes in the Black Sea. The model simulations show the conflict will severely compromise food security in Africa. We document important cross-country heterogeneity in the severity of impacts.
    Keywords: Food security,Grains,Fertilizers,Africa,Ukraine conflict,General equilibrium trade model,Ernährungssicherheit,Getreide,Dünger,Afrika,Ukraine-Konflikt,Allgemeines Gleichgewichtsmodell
    Date: 2022
  5. By: Roseline Misati; Kethi Ngoka; Anne Kamau; Maureen Odongo
    Abstract: Illicit financial flows directly impact a country's ability to raise, retain, and mobilize its own resources to finance sustainable development. Against a backdrop of a weak public financial position attributed to capital flight, tax avoidance, and dependence on corporate income taxes, governments in Africa face impediments to their efforts to widen the tax base. Using firm-level annual data from 2015-19 from multinational corporations' audited financial statements, we assess the scale of profit shifting by those corporations with a presence in Kenya.
    Keywords: Profit shifting, Corporate tax, Multinational firms
    Date: 2022
  6. By: M.Ajide, Folorunsho (Southwestern University, Nigeria)
    Abstract: We examined the effect of institutional quality and firm-specific factors on corporate investment in Nigeria using fifty-four (54) quoted non-financial firms within the period of 2002–2012. We applied dynamic panel estimator proposed by Arellano–Bond (1991). The results showed that regulatory quality, corruption, political stability and control of corruption have insignificant effect in determining corporate investments in Nigeria. Our results also confirmed that firms’ firm-specific factors influenced corporate investment in Nigeria. While firms’ cash flow displayed positive and significant effect on investment other factors had negative effects oninvestment. Our results showed that investment is constrained to internally generated fund, despite the existence of capital market. In addition, the spill over effect of tightening monetary policy during the period of study had increased the cost of borrowing thereby having a negative effect on investment in the real sector. Were commended that when the monetary authorities are focusing on inflation targeting, they should also not lose sight of its impact on corporate investment and other productivity growth of firms; which is the source of long terms ustainable growth and development of economies. & 2017 Faculty of Commerce and Business Administration, Future University.Production and Hosting by Elsevier B.V..
    Keywords: Institution; Nigeria; GMM; Firm-specific; Investment
    Date: 2022–03–24

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