nep-afr New Economics Papers
on Africa
Issue of 2023‒04‒10
four papers chosen by
Sam Sarpong
Xiamen University Malaysia Campus

  1. Unbearable Costs: When Is Inflation Impeding Job Creation? Evidence from Sub-Saharan Africa By Rasmané Ouedraogo; Ibrahima Camara; Mr. Amadou N Sy
  2. India's development cooperation in Africa: The case of 'Solar Mamas' who bring light By Veda Vaidyanathan
  3. Domestic savings in sub-Saharan Africa: The case of Ghana By Charles Godfred Ackah; Monica P. Lambon-Quayefio
  4. Modeling Determinants of Private Banks Profitability in Ethiopia By mohammed, habib

  1. By: Rasmané Ouedraogo; Ibrahima Camara; Mr. Amadou N Sy
    Abstract: Covid-19 and war-induced commodity price fluctuations, and broadening price pressures have led to a surge in inflation in many sub-Saharan Africa (SSA) countries. To adjust to increasing costs, firms have resorted to several measures including shuttering offices, reducing businesses, laying off, and freezing hiring, thus putting at risk job creation and raising concerns of youth unemployment. This paper explores the effects of inflation on private employment growth in SSA using a large firm -level dataset from the World Bank’s Enterprise Surveys. We find a non-linear relationship between inflation and job creation in SSA, with job creation being negatively correlated with inflation rate when the latter is above 14 percent. This finding holds regardless of the sector of activities of firms and the exchange rate regime. In addition, the paper finds some differential effects based on the type of products. An increase in fuel prices tends to be more detrimental to job creation than food prices. The study also provides evidence that the state of implementation of structural reforms matters. The results show that inflation reduces job opportunities mostly in countries with bad or no structural reforms.
    Keywords: Inflation; Jobs; reforms; sub-Saharan Africa; broadening price pressure; evidence from Sub-Saharan Africa; Survey dataset; firm assessment; rising prices; Job creation; Exchange rate arrangements; Employment
    Date: 2023–03–03
  2. By: Veda Vaidyanathan
    Abstract: This paper examines multiple facets of New Delhi's development cooperation with countries in Africa and argues that grassroots organizations in India that find innovative, low-cost technological solutions to developmental challenges can help governments and multilateral agencies craft inclusive, sustainable policies. The aim of this paper is threefold.
    Keywords: India, Africa, development cooperation, Sustainability, Technology, Innovation
    Date: 2023
  3. By: Charles Godfred Ackah; Monica P. Lambon-Quayefio
    Abstract: One essential condition of economic progress in any society is an ample supply of savings, which depends on the growth of real capital. Economists agree that higher investment rates will lead to higher growth. Thus, domestic savings is considered an important determinant of growth in developing countries. However, Ghana has one of the poorest savings performances in the world. There are many reasons for the low savings rates in Ghana.
    Keywords: Domestic savings, Reforms, Time-series analysis, Finance, Ghana, Developing countries
    Date: 2023
  4. By: mohammed, habib
    Abstract: Profitability of financial institutions play a vital role in determining the effectiveness and efficiency of the financial system globally and it is dominated by the banking industry. These banks generates profits that results panel data that requires panel model to analyze and explore determinant factors associated with its profitability. The aim of this article to model determinants of private banks profitability in Ethiopia during 2012–2021 considering its dynamic nature. Return on assets, return on equity, and net interest margin were used as profitability indicators and analyzed using dynamic panel model estimation methods based on system generalized moment estimation techniques. The exploratory data analysis result showed the profitability; return on asset was seems stable while return on equity was decreased and net interest margin was increased with decreasing rate. The model specification result showed one-step system generalized moment method estimation was an appropriate estimation technique as model estimation result directs lagged profitability, capital adequacy, asset quality and branch of banks have positive significant effect on private banks profitability. Similarly inflation rate and economic growth rate have positively determine private banks profitability on macroeconomic side. Despite to this results liquidity was significant negative bank specific determinant of private banks profitability in Ethiopia. The study result recommends consideration on capital adequacy, asset quality, liquidity, branch of banks for the private banks profitability. In addition, this study will call upcoming research to include other financial determinants suggests such as credit risk and non-performing loan with improving the estimation method of panel autoregressive distributed lag models for modeling private banks profitability in Ethiopia.
    Keywords: Dynamic Panel Model, Ethiopia, Generalized Moment Method, Panel Data, Private Banks, Profitability
    JEL: C10
    Date: 2023–03–16

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