nep-afr New Economics Papers
on Africa
Issue of 2022‒07‒11
five papers chosen by
Sam Sarpong
Xiamen University Malaysia Campus

  1. Remittances and Income Inequality in Africa: Financial Development Thresholds for Economic Policy By Isaac K. Ofori; Emmanuel Gbolonyo; Marcel A. T. Dossou; Richard K. Nkrumah
  2. Comparative Analysis of the Growth Impact of Pollution and Energy Use in Selected West African Nations By Ekundayo Peter Mesagan; Emeka Osuji; Hope Agbonrofo
  3. Composite effects of human, natural and social capitals on sustainable food-crop farming in Sub-Saharan Africa By Tuan Nguyen-Anh; Chinh Hoang-Duc; Tuyen Tiet; Phu Nguyen-Van; Nguyen To-The
  4. Industrial Parks in Africa: Building Nests for the Chinese Phoenix By Thierry Pairault
  5. Exchange rate pass-through to Inflation: Symmetric and Asymmetric Effects of Monetary Environment in Nigeria By Tiamiyu, Kehinde A.

  1. By: Isaac K. Ofori (University of Insubria, Varese, Italy); Emmanuel Gbolonyo (University of Cape Town, South Africa); Marcel A. T. Dossou (Chengdu, Sichuan, China.); Richard K. Nkrumah (University of Cape Coast, Cape Coast, Ghana)
    Abstract: The study employs macro data on 42 African countries to examine whether remittances and financial development (including its sub-components of access, depth and efficiency) contribute to the equalisation of incomes across the continent. Robust evidence from the dynamic GMM estimator shows that: (i) remittances heighten income inequality in Africa, (ii) Africa’s financial system is not potent enough for repacking remittances towards the equalisation of incomes, and (iii) vis-Ã -vis financial access and depth, inefficiencies characterising Africa’s financial institution is the main reason remittances contribute to the widening of the income disparity gap. Nonetheless, the optimism which we provide by way of threshold analysis shows that channelling efforts into the development of Africa’s financial sector could yield shared income distribution dividends. In particular, efforts should be made to achieve a minimum of 23.05 per cent of financial access, and 3.02 per cent for that of efficiency of financial institutions if Africa’s financial sector is to repackage external finance towards the equalisation of incomes. A few policy recommendations are provided in the end.
    Keywords: Africa, Financial Development, Financial Sector Efficiency; Income Inequality, Remittances
    JEL: F22 F24 G21 I3 N37 O11 O55
    Date: 2022–01
  2. By: Ekundayo Peter Mesagan (Pan Atlantic University, Lagos, Nigeria); Emeka Osuji (Pan Atlantic University, Lagos, Nigeria); Hope Agbonrofo (Pan Atlantic University, Lagos, Nigeria)
    Abstract: We adopt the FMOLS and Granger causality technique to analyse the effect of energy use and carbon emissions on output growth in selected West African economies, which includes Nigeria, Gambia and Ghana, from 1970 to 2019. Findings confirm that energy use enhances growth in the three selected West African economies. But in terms of significance, energy consumption is significant in Nigeria and Gambia at a 1% level of significance while it is insignificant for the Gambia. CO2 emission positively and significantly propels economic growth for the three selected West African economies. For Nigeria, causality evidence shows no direct influence among the variables. For Ghana, we find a bi-causal association between output growth and carbon emissions and a unidirectional causality from pollution to energy consumption. For Gambia, economic growth causes CO2 emissions. We recommend that the West African government reinforce their stand on a sustainable growth path through energy conservation.
    Keywords: Energy Use, Pollution, Output Growth, West Africa
    JEL: O44 O55 Q40 Q53
    Date: 2022–01
  3. By: Tuan Nguyen-Anh; Chinh Hoang-Duc; Tuyen Tiet; Phu Nguyen-Van; Nguyen To-The
    Abstract: This study analyzes the spontaneous impact of human, social and natural capital on food crop technical efficiency (TE) in Sub-Saharan Africa (SSA). Our study contributes to the literature by adopting the meta-analysis method to investigate the relationship between TE and the three groups of capitals to better shed light on the TE in SSA regions. Our results highlight that social capital is the most critical factor among the three groups of capitals in promoting farming productivity. In particular, agriculture efficiency benefits from increasing people’s trust in institutions and the frequency of extension visits. Natural capital like temperature and elevation is essential in determining the farming TE in SSA regions. Outstandingly, our results also indicate that calorie intake, a proxy of labor quality, should be improved to achieve better productivity.
    Keywords: Farming technical efficiency; Human capital; Meta-analysis; Natural capital; Social capital; Sub-Saharan Africa
    JEL: D91 Q12 Q18
    Date: 2022
  4. By: Thierry Pairault (CECMC-CCJ - Centre d'études sur la Chine moderne et contemporaine - CCJ - Chine, Corée, Japon - EHESS - École des hautes études en sciences sociales - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This essay examines the impact and consequences of the promotion in Africa of China's experience with special economic zones (SEZs), how these zones could enable African countries to emulate the "Chinese miracle," and how they will serve China's ambition to pursue its economic goals. There is evidence that Chinese industrial parks in Africa, which China refers to as overseas economic and commercial cooperation zones (OECCZs), are not replicating the experience of SEZs in China. While an SEZ is a zone created by a host country on its own territory to attract foreign investors and to promote its own development, an OECCZ is an enclave designed by a Chinese company appointed by China to create a Chinese ecosystem in a host country's territory to accommodate Chinese companies. OECCZs are de facto subject to Chinese law and thus boost Chinese economic development. While China is forging such economic dependence of African countries on its own economy, it is also building a political clientele to serve its power assertion.
    Keywords: SEZ,China,Africa,ZES,Chine,Afrique
    Date: 2022–05–03
  5. By: Tiamiyu, Kehinde A.
    Abstract: Abstract: This study investigates symmetric, asymmetric, and structural models of exchange rate pass-through to inflation in Nigeria over the monthly period of 2000: Month 01- 2021: Month 05. The percentage change in the price of import-competing goods (traded goods) that is ascribed to a particular percentage change in the exchange rate (which is the price of one country's currency in terms of another country's currency) is referred to as exchange rate pass-through. This paper is set out to examine the impact of monetary environment in exchange rate pass-through to inflation in Nigeria using monthly time series data. The method adopted included inter-alia the use of both the Augmented Dickey-Fuller (ADF) unit root test and the Breaking point unit root test for relative comparison. The results of unit root tests from both ends indicate the existence of both stationary and non-stationary variables which made adoption of bounds cointegration test plausible and Nonlinear Autoregressive Distributed Lag(NARDL) methodologies applicable, this method allows the incorporation of possible asymmetric effects of positive and negative changes in explanatory variables on dependent variable unlike the conventional Autoregressive Distributed Lag (ARDL) models where the possible impact of explanatory variable changes remain unaccounted for on dependent variable. Further, the results from cointegration test confirm the existence of short-run situations among the variables of interest in all the models considered. Also, three models were estimated under the framework of linear and nonlinear Autoregressive Distributed Lag (ARDL) models. The model estimate findings revealed that inflation modeling in Nigeria is both autoregressive and adaptive in character. In the short run, pass-through estimates are larger, though declining, due to asymmetric behaviours of exchange rate changes as confirmed by Wald test. This justifies the existence of asymmetric effect in the behavour of exchange rate over times. It was also discovered that inflation is seldom a monetary phenomenon in this new normal as industrial production index was found to reduce consumer prices drastically and exchange rate found to explain inflation better than money supply. However, structural policy of land border closure exerts positive but insignificant pressure on inflation in Nigeria during the period under investigation, this may be because of lag effect between the policy stance and reaction of economic agents in the economy. Finally, by policy recommendation, Nigerian government is thus advised to invest heavily in productive sectors of economy, specifically, by building capacities of local producers.
    Keywords: Exchange rate pass-through; Inflation; Money supply; Land border closure; Non-linear ARDL
    JEL: E31 E42 E51 F0
    Date: 2022–03–08

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