nep-afr New Economics Papers
on Africa
Issue of 2023‒04‒03
seven papers chosen by
Sam Sarpong
Xiamen University Malaysia Campus

  1. Changing local customs: Long-run impacts of the earliest campaigns against female genital cutting By Congdon Fors, Heather; Isaksson, Ann-Sofie; Annika, Lindskog
  2. Bank regulation, supervision and lending: empirical evidence from selected sub-Saharan African countries By Thamae, Retselisitsoe I; Odhiambo, Nicholas M
  3. The aftermath of Nigeria’s 2023 presidential elections and its impact on the sub-region By Kohnert, Dirk
  4. Child Fostering in a Changing Climate: Evidence from Sub-Saharan Africa By Ronnkvist, Sara; Thiede, Brian C.; Barber, Emma
  5. Macroeconomic determinants of fiscal policy in east Africa: a panel causality analysis By Mawejje, Joseph; Odhiambo, Nicholas M
  6. Patterns of global and regional value chain participation in the EAC By Krantz, Sebastian
  7. Global Supply Chain Disruptions: Challenges for Inflation and Monetary Policy in Sub-Saharan Africa By Marijn A. Bolhuis; Shushanik Hakobyan; Zo Andriantomanga

  1. By: Congdon Fors, Heather (Department of Economics, School of Business, Economics and Law, Göteborg University); Isaksson, Ann-Sofie (Department of Economics, School of Business, Economics and Law, Göteborg University); Annika, Lindskog (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper investigates the long-run impacts of Christian missionary expansion on the practice of female genital cutting (FGC) in sub-Saharan Africa. The empirical analysis draws on historical data on the locations of early European missions geographically matched with Demographic and Health Survey data on FGC practices of around 410, 000 respondents from 42 surveys performed over a 30-year period (1990-2020) in 14 African countries. The results suggest that historical Christian missions have impacted FGC practices today. The benchmark estimates imply that a person living 10 km from a historical mission is 4-6 percentage points less likely to have undergone FGC than someone living 100 km from a mission site. Similarly, having one more mission per 1000 km2 in one’s ancestral ethnic homeland decreases the probability of having undergone FGC by around 8 percentage points. The effect is robust across a large number of specifications and control variables, both modern and historic. We use ethnographic data on pre-colonial FGC to show that the location of missions was not correlated with the practice of FGC in the local population.
    Keywords: Female genital cutting; missions; norms; Africa
    JEL: D71 D91 I15 O55
    Date: 2023–03
  2. By: Thamae, Retselisitsoe I; Odhiambo, Nicholas M
    Abstract: This study investigates the impact of bank regulation and supervision on bank credit in 23 sub-Saharan African (SSA) countries and their low- and middle-income groups from 1995 to 2017. The long-run results indicated that stringent entry barriers and supervisory power reduced bank lending, but supervisory power mitigated the negative effect of entry barriers. Furthermore, positive shocks to entry barriers impacted negatively on bank credit, while negative shocks to capital requirements had an adverse impact on lending. In the short run, positive shocks to entry barriers, activity restrictions and capital regulations led to increases in bank credit, particularly in low-income SSA economies.
    Keywords: bank regulation; bank lending; common correlated effects; linear and nonlinear panel ARDL; sub-Saharan Africa
    Date: 2022–12
  3. By: Kohnert, Dirk
    Abstract: Presidential elections were held in Nigeria on 25 February 2023. The candidate of Nigeria's ruling All Progressives Congress (APC) party Bola Ahmed Tinubu won the election. He was known as a political 'godfather' in the South West. His major contender, Atiku Abubakar, 76, running on behalf of the major oppositional People's Democratic Party (PDP) lost, as well as the third, Peter Obi, 61, a candidate for the little-known Labor Party. He had hoped to break the two-party system that ruled the country since the end of military rule. But he failed despite enjoying passionate support on social media, especially among the Nigerian youth. Acting President Buhari, whose term has ended, had renewed his call for foreign powers not to interfere in Nigeria's internal affairs. Given the recent history of military coups in West Africa, including Russia's involvement, the military command again dismissed coup rumours. However, the latter were largely ignored by the general public anyway. Most people focused on more pressing concerns such as insecurity, fuel shortages and a shortage of new banknotes. Although Nigeria is a resource-rich country and oil and gas revenues have funded national budgets for decades, around 40% of Nigerians (83 million people) live below the poverty line while another 25% (53 million) are at risk. So far, Nigeria has not been able to benefit from rising global oil prices. Oil production has fallen to historic lows since 2021. Gasoline subsidies continue to consume too much of oil revenue. Nigeria's growth prospects are bleak due to further declines in oil production and heightened uncertainty. The new president has to cooperate closely with ECOWAS to tackle gang violence and insecurity in the West African region. The cooperation documents Nigeria's role as a political, economic and security policy hegemon in West Africa, often said ‘too big to fail’, as it is by far the largest and most powerful nation in sub-Saharan Africa alongside South Africa.
    Keywords: Nigeria; presidential election; governance; Military coup; conspiracy theory; deep state; Poverty; Boko Haram; international trade; migration; sustainable development; West-Africa; ECOWAS; WAEMU; Sub-Saharan Africa; African Studies;
    JEL: D31 D62 D63 D72 D74 E26 F15 F22 F35 F52 F63 N17 N37 N47 O17 O35 Z13
    Date: 2023–03–02
  4. By: Ronnkvist, Sara; Thiede, Brian C. (The Pennsylvania State University); Barber, Emma
    Abstract: An extensive social science literature has examined the effects of climate change on human migration. Prior studies have focused largely on the out-migration of working-age adults or entire households, with less attention to migration among younger and older individuals. In this study, we focus on the implications of climate variability for the movement of children by examining the association between climate exposures and the in- and out-fostering of children in sub-Saharan Africa. We link high-resolution temperature and precipitation records to data from the Demographic and Health Surveys for 26 sub-Saharan African countries. We fit a series of regression models to measure the overall associations between climate exposures and each outcome, and then evaluate whether these associations are moderated by socioeconomic status, the number of children in the household, and the prevalence of fostering in each country. We find that precipitation is positively associated with in-fostering overall, and that effects are especially strong among households who already have at least one child and in countries where child fostering is common. We find no overall relationship between either temperature or precipitation exposures and out-fostering, but we do detect significant effects among households with many children and those with more-educated heads. Overall, this study demonstrates that new attention to the links between climate variability, child fostering, and other understudied forms of spatial mobility is needed to fully understand the effects of climate change on human populations.
    Date: 2023–02–22
  5. By: Mawejje, Joseph; Odhiambo, Nicholas M
    Abstract: This study investigates the dynamic causality linkages between fiscal deficits and selected macroeconomic indicators in a panel of five East African countries. The research design is based on panel cointegration tests, panel cross-section dependence tests, panel error correction-based Granger causality tests, and panel impulse response functions. Results show that there is long run feedback causality among fiscal deficits and each of the variables that include: real GDP growth, current account balance, interest rates, inflation, grants, and debt service. Short run Granger causality dynamics indicate that there is feedback causality between fiscal deficits and GDP growth; no causality between fiscal deficits and inflation; no causality between fiscal deficits and current account; no causality between fiscal deficits and interest rates; feedback causality between fiscal deficits and grants; and no causality between fiscal deficits and debt service. Impulse response functions show positive and significant impacts of current account balance, inflation, and grants; negative and significant impacts of real GDP growth and lending rates; and insignificant effects of debt service. In the context of the East African Community?s aspirations to achieve convergence on key macroeconomic targets, including the fiscal deficit, this research provides novel insights on fiscal policy determinants and causality dynamics.
    Keywords: Fiscal deficits, Granger causality, impulse response; panel data, East Africa
    Date: 2022–12
  6. By: Krantz, Sebastian
    Abstract: Using global Multi-Region Input-Output (MRIO) data from 2005-2015, this paper empirically investigates the extent and patterns by which East African Community (EAC) countries have integrated into Global Value Chains (GVCs) and Regional Value Chains (RVCs). Results imply that the foreign content of exports (I2E) and the share of exports being re-exported (E2R) are stably between 10% and 20% in most EAC countries. Trade in intermediates with the rest of the world remains 12-14 times greater in value-added (VA) terms than the trade in intermediates inside the EAC. During 2005-2015, Kenya expanded its role as a regional supplier of manufactured inputs (higher E2R with EAC partners), and Uganda slightly increased its agricultural input to the Kenyan and Rwandan food processing sectors. Overall, however, a downstream shift is evident, by which more VA (both domestic and foreign) is used for the production of final goods while maintaining high levels of exports in primary agriculture and mining. This shift goes alongside a loss of comparative advantage in manufacturing in all EAC countries apart from Kenya. Econometric analysis suggests that higher I2E and E2R shares increase GDP with an average elasticity of Ï 0.25 over 2 years. Estimates for manufacturing sectors were slightly higher at elasticities Ï 0.3 in response to E2R shifts. These results imply that policy measures to increase manufacturing competitiveness and promote more horizontal RVCs would benefit EAC economic growth in the medium run.
    Date: 2023
  7. By: Marijn A. Bolhuis; Shushanik Hakobyan; Zo Andriantomanga
    Abstract: The Covid-19 pandemic has led to a large disruption of global supply chains. This paper studies the implications of supply chain disruptions for inflation and monetary policy in sub-Saharan Africa. Increases in supply chain pressures have had a sizeable impact on headline, food, and tradable inflation for a panel of 29 sub-Saharan African countries from 2000 to 2022. Our findings suggest that central banks can stabilize inflation and output more efficiently by monitoring global supply chains and adjusting the monetary policy stance before the disruptions have fully passed through into all inflation components. The gains from monitoring supply chain disruptions are particularly large for open economies which tend to experience outsized second-round effects on the prices of non-tradable goods and services.
    Keywords: Inflation; global supply chains; sub-Saharan Africa; shipping costs; monetary policy; core inflation; food prices; oil price
    Date: 2023–02–24

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