nep-afr New Economics Papers
on Africa
Issue of 2022‒12‒05
five papers chosen by
Sam Sarpong
Xiamen University Malaysia Campus

  1. Public bank lending in Africa in times of crisis By Florian Léon
  2. Financial development and human capital thresholds for the infrastructure development-industrialization nexus in Africa By Guivis Zeufack Nkemgha; Tii N. Nchofoung; Fabien Sundjo
  3. Bribing to escape poverty in Africa By Simplice A. Asongu; Samba Diop
  4. Recognizing Local Leaders as an Anti-Corruption Strategy: Experimental and Ethnographic Evidence from Uganda By Buntaine, Mark T; Bagabo, Alex; Bangerter, Tanner; Bukuluki, Paul; Daniels, Brigham
  5. Is the 0.7% goal of ODA/GNI still adequate for the recipients? An overview of the recipients’ situation with a focus on Africa By Manuel Ennes Ferreira; Bárbara Muniz

  1. By: Florian Léon (FERDI - Fondation pour les Etudes et Recherches sur le Développement International)
    Abstract: This paper examines public bank lending in Africa in times of crisis. To do so, we exploit an original data set covering all banks operating in eight West African countries. The final sample considers 112 banks, including 24 public banks, over the period 2000-2019. We focus on how public banks react during and in the three years after macroeconomic shocks. Our empirical analysis provides the following results. First, lending activity is reduced in the wave of a crisis. Second, public and private banks do not differ in their lending decisions during a downturn. However, public banks do not reduce their activity in years following a crisis, contrary to domestic private banks. Third, the most probable explanation of the previous finding is the stability of the resources of public banks, especially deposits. Finally, the countercyclicality of public banks does not come at the expense of the degradation of public banks' health.
    Keywords: Public banks,Lending,Countercyclicality,Africa
    Date: 2022–09–30
  2. By: Guivis Zeufack Nkemgha (University of Bamenda, Bamenda, Cameroon); Tii N. Nchofoung (University of Dschang, Cameroon); Fabien Sundjo (University of Bamenda, Bamenda, Cameroon)
    Abstract: Examining the value-added link between infrastructure and industrialization is fundamental to achieving Sustainable Development Goal (SDG) 9, which consists of building resilient infrastructure, promoting inclusive and sustainable industrialization and fostering innovation. The objectives of this paper are to analyse the effect of infrastructures on industrialisation and how financial development and human capital modulate this effect in 33 African countries during the period 2003-2019 through the system GMM methodology. The results show that infrastructural development has a direct enhancing effect on industrialisation in Africa. When the indirect effect regressions through the modulating effects of financial development and human capital are considered, the net effects are equally positive though the results vary across the different specifications of infrastructure and the specific transmission channel considered. For instance, the indirect effect through the interaction of electricity and transport infrastructures with financial development and human capital produced a negative net effect. The thresholds of financial development and human capital required to nullify these negative effects are provided and practical policy implications are discussed.
    Keywords: infrastructures, industrialization, financial development, human capital
    JEL: H54 L60 O55
    Date: 2022–01
  3. By: Simplice A. Asongu (Yaounde, Cameroon); Samba Diop (Alioune Diop University, Bambey, Senegal)
    Abstract: This study assesses the nexus between bribery and poverty, contingent on the macroeconomic environment within the remit of inflation in Africa. The Afrobarometer survey is used. Our data cover 38 countries consisting of three rounds of survey and a sample of 151,345 individuals. The empirical strategy is based on multi-level mixed-effects ordered logit regression. The results reveal that while poverty has a positive effect on the spread of bribery, inflation can mitigate the impact. The impact is stronger for people living without basic necessities such as food, water and medical care. In other words, the attendant results indicate that the impact of poverty on bribery becomes negative when inflation increases. The findings are robust to inter alia: (i) multi-level mixed effects ordered logistic models for fragile and conflict-affected countries with the food price index at a market level as the mitigating variable and (ii) estimations with the continuous indicator of bribery and experienced poverty at the country level. Policy implications are discussed.
    Keywords: Inclusive development; Poverty; Bribery; Africa
    JEL: D31 I10 I32 K40 O55
    Date: 2022–11
  4. By: Buntaine, Mark T; Bagabo, Alex; Bangerter, Tanner; Bukuluki, Paul; Daniels, Brigham
    Abstract: Conventional anti-corruption approaches focus on detecting and punishing the misuse of public office. Recognizing that these approaches are often ineffective in settings where social norms do not support reporting on and punishing corruption, we implemented a field experiment in Uganda that offered elected, local leaders the chance to earn positive, public recognition for overseeing development projects according to legal guidelines. We then conducted a second field experiment that informed other leaders and members of the public about the award winners. Offering leaders the chance to earn recognition did not improve the management of public projects or change leaders' norms about corruption. Informing other leaders and residents about the award winners also did not change behaviors or attitudes related to corruption. A paired ethnographic study shows that the possibility for recognition generated excitement, but was not able to overcome constraints on local leaders' ability to manage public projects. Our study provides some of the first experimental evidence about using non-financial incentives to improve the performance of public officials. The results imply that non-financial incentives are at best complementary to systemic changes in public financial management, particularly in settings with pervasive corruption and governance challenges.
    Date: 2022–10–14
  5. By: Manuel Ennes Ferreira; Bárbara Muniz
    Abstract: This paper aims to verify if the international aid target of 0.7% of the rich countries’ national income destined to development aid is still adequate in the current world conditions. Hence, it investigates the target’s origins, the main economic theories and the political context that underpinned it. The theoretical review showed that the economic theories and models that supported the target and its aid rationale are mostly considered outdated in the academic field. The empirical analysis used the Two-Gap Model methodology - with the same assumptions made to create the target in the 1960s but using current data - to estimate the target's values for the years 2014-2019. The results showed that on almost all assumptions, the amount of aid needed for the development of poor countries would be less than the target suggests. Moreover, when analyzing different regions, distinct figures were found for the target, which reveals that the 0.7% target has wrongly generalized the developing countries’ needs.
    Keywords: Aid; ODA/GNI; DAC-OECD; dual-gap model; development. JEL Classification: F35; F63; O21; O47
    Date: 2022–11

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