nep-afr New Economics Papers
on Africa
Issue of 2023‒03‒27
eight papers chosen by
Sam Sarpong
Xiamen University Malaysia Campus

  1. FOREIGN AID AND ECONOMIC GROWTH IN SUB-SAHARAN AFRICAN COUNTRIES By Santos Bila; Mduduzi Biyase; Matias Farahane; Thomas Udimal
  2. Towards a Pan-African Approach to Food Security By Hafez Ghanem
  3. Estimating tax gaps in Zambia: A bottom-up approach based on audit assessments By Kwabena Adu-Ababio; Aliisa Koivisto; Eliya Lungu; Evaristo Mwale; Jonathan Msoni; Kangwa Musole
  4. Environmental perceptions and sustainable consumption behavior. The disparity among South Africans. By Frederich Kirsten; Mduduzi Biyase
  5. Private production or public project ownership to scale up the construction of photovoltaic power plants in Africa? By Nicolas Guichard,; Christian de Gromard,; Jérémy Gasc,; Étienne Espagne,; Martin Buchsenschutz,; Benoît Gars,; Laetitia Labaute.
  6. Gains from Variety: Refugee-Host Interactions in Uganda By Rama Dasi Mariani; Furio Camillo Rosati; Pasquale Scaramozzino; Marco d'Errico
  7. Government Enterprise and Empowerment Programme (GEEP) and Women’s Performance in Entrepreneurship Development in Nigeria By Elda N. Okolo-Obasi; Joseph I. Uduji
  8. Trust Institutions, Perceptions of Economic Performance and the Mitigating role of Political Diversity in Sub-Saharan Africa By Samba Diop; Simplice A. Asongu

  1. By: Santos Bila (College of Business and Economics, School of Economics, University of Johannesburg); Mduduzi Biyase (College of Business and Economics, School of Economics, University of Johannesburg); Matias Farahane (School of Economics, Eduadro Mondlhane University); Thomas Udimal (Southwest forestry University)
    Abstract: This study investigates the effect of Official Development Assistance (ODA) on economic growth in Sub-Saharan African (SSA) countries using a panel of 24 countries over 38 years, extracted from the World Development Indicators, African Development Bank and the Penn World Tables 9.0. (2006). We employ the moment moment quantile regression approach to establish whether the effect of ODA varies along the conditional economic growth distribution. Quantile estimates show that ODA is positively related to economic growth in the Sub-Saharan Africa (SSA) region. Moreover, our study finds that the positive impact of aid is bigger in the countries with high levels of economic growth-- the results show a positive statistically significant effect at 75th and 95% quantiles for 5% and 10%, respectively. Controlling for social infrastructures and institutions quality, the results also show a positive and statistically significant relationship between this control variable and economic growth in 50th quantile, 75th quantile and 95th quantile, suggesting that improvement in institutions quality brings much benefit to the countries within those quantiles compared to those in the lower quantiles. Incorporating institutions quality institutions variable and interaction terms into the model influences the effect of aid on economic growth. With those variables ODA is only effective in countries located within the 25th and 50th quantiles, implying that aid has significant effect on economic growth net of institutions quality and other control variables. The implication of our findings is that aid can be strategically employed as a central instrument for stimulating economic growth in SSA countries, particularly low-income countries.
    Keywords: Official Development Assistance, MM-QR, GDP
    Date: 2023
  2. By: Hafez Ghanem
    Abstract: This brief argues for a pan-African food security initiative that would: 1). encourage free trade in food products between African countries; 2). promote multi-country regional investments in infrastructure to enhance agricultural productivity and resilience to climate change; 3). support public-private partnerships to establish fertilizer factories across the continent; 4). create an African council responsible for coordinating and encouraging agricultural research and development; and 5). support a facility that would ensure vulnerable African countries can finance food imports in times of crisis.
    Date: 2022–11
  3. By: Kwabena Adu-Ababio; Aliisa Koivisto; Eliya Lungu; Evaristo Mwale; Jonathan Msoni; Kangwa Musole
    Abstract: Assessing tax gaps—the difference between the potential and actual taxes raised—plays a vital role in achieving positive domestic revenue objectives through improved and reformed taxation. This is particularly pertinent for growth outcomes in developing countries. This study uses a bottom-up approach based on micro-level audit information to estimate the extent of tax misreporting in Zambia.
    Keywords: Tax gap, Value-added tax, Bottom-up approach, Audits, Tax compliance, Tax administration, Zambia
    Date: 2023
  4. By: Frederich Kirsten (College of Business and Economics, School of Economics, University of Johannesburg); Mduduzi Biyase (College of Business and Economics, School of Economics, University of Johannesburg)
    Abstract: South Africa has the highest level of inequality globally and has been labeled a country of two nations. With a small share of highly affluent people and a mass at the bottom of society struggling to escape poverty, these two vastly different socioeconomic status groups have also been characterized by race, gender, and geographical location. However, very little evidence exists of the varying environmental perceptions among people in these different economic and social positions in South Africa. By using the International Social Survey Programme (ISSP) Environment III dataset for 2010, the study assessed the impact of sociodemographic factors on the environmental perceptions and sustainable consumption behavior of South Africans. The results show that environmental concerns are highest among those with low socioeconomic status and Africans. Since these individuals make up the majority of the most vulnerable in society, it supports the exposure to degradation hypothesis in a South African context. Contrastingly sustainable consumption behavior is highest among those with high socioeconomic status suggesting a strong post-materialist effect on pro-environmental consumption. From a policy perspective, environmental policymakers in South Africa could take note of the strong environmental concerns among those more vulnerable to daily environmental degradation and provide further incentives and support their transition to sustainable consumption behavior changes that would assist in environmental protection.
    Keywords: Sustainable consumption behavior, Behavioral intention, Environmental concern, Environmental risk perception, Environmental knowledge, South Africa.
    Date: 2023
  5. By: Nicolas Guichard,; Christian de Gromard,; Jérémy Gasc,; Étienne Espagne,; Martin Buchsenschutz,; Benoît Gars,; Laetitia Labaute.
    Abstract: Despite its abundant solar resources, Africa currently has low solar photovoltaic (PV) power generation capacities compared to other continents. Yet, the International Renewable Energy Agency (IRENA) projects a scale-up in coming years, with a sharp increase in the rate of construction of grid-connected PV power plants to align with the Paris Agreement pathways and the Sustainable Development Goals (SDGs).
    Keywords: Afrique
    JEL: Q
    Date: 2023–02–28
  6. By: Rama Dasi Mariani (Roma Tre & CEIS, Università di Roma ‘Tor Vergata’); Furio Camillo Rosati (CEIS, Università di Roma ‘Tor Vergata’); Pasquale Scaramozzino (CEIS, Università di Roma ‘Tor Vergata’ & SOAS University of London); Marco d'Errico (ESA, FAO)
    Abstract: Refugees are mainly hosted in low-income countries, where they often remain for a long time. Therefore, it is important to assess how they integrate with the local economy and to what extent their presence can contribute to the transition to a more dynamic economic environment. Proximity between refugees and hosts might improve the welfare of both groups by increasing opportunities for mutually beneficial economic exchanges. In particular, welfare gains might be generated through the availability of a greater variety of commodities. In this paper we propose a theoretical model that uses the love for variety to frame the possible benefits arising from the interaction between hosts and refugees facilitated by geographical proximity. We complement the conceptual framework with an empirical analysis that makes use of a unique dataset covering around 80% of the refugee population living in Ugandan settlements and the adjoining host households. The empirical results show that proximity between groups increases the food expenditure and the variety of food consumption of both groups. We also found that exposition to inter-group interactions rises the non-food expenditure, and the probability to run a farm and a non-farm enterprise by refugee households, while hosts are not crowding out from production.
    Keywords: Forced Migrations, Love of Variety, Inter-Group Exchange, Distance
    JEL: F12 F63 I30 O19 O55
    Date: 2023–02–23
  7. By: Elda N. Okolo-Obasi (University of Nigeria, Nsukka, Nigeria); Joseph I. Uduji (University of Nigeria, Nsukka, Nigeria)
    Abstract: This study examined the impact of the government enterprise and empowerment programme (GEEP) on women’s performance in entrepreneurship development in Nigeria. Results from the use of difference-in-difference (DiD) quasi-experimental design indicate that GEEP intervention has significant impacts on enterprise turnover, reduction in per unit cost of production, increase in profitability and return on investment (ROI). The results also show unequal access to resources and opportunities available in GEEP, between rural and urban residents. The findings suggest that if the rural women had equal access to the resources and opportunities available to their urban counterparts in GEEP, they would participate in traditional industries and build livelihoods in rural economies. This implies that embracing increased GEEP interventions with rural dwellers will enhance women’s entrepreneurship development, raise women’s economic status and deter aggression in Nigeria.
    Keywords: Women’s entrepreneurship development, government enterprise and empowerment programme (GEEP), rural and urban residents, sub-Saharan Africa
    Date: 2023–01
  8. By: Samba Diop (Alioune Diop University, Bambey, Senegal); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Several previous studies have explored the relationship between trust and socio-economic conditions but do not attempt to examine channels through which the relation operates. In this paper, we examine how political fractionalization mitigates the positive relationship between trust institutions and national economic performance in Sub-Saharan Africa. Using Round 7 data of Afrobarometer in over 1000 districts in 34 countries, we find that trust institutions positively and significantly affect economic performance. Nevertheless, the positive effect is attenuated in districts with a high level of political diversity. More specifically, a higher level of trust is associated with lower economic performance at a higher level of political fractionalization and vice versa, with a steady linear decrease of the estimated coefficients. Policy implications are discussed.
    Keywords: Trust institutions; economic performance; political diversity
    JEL: K00 O10 P16 P43 P50
    Date: 2023–01

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