nep-afr New Economics Papers
on Africa
Issue of 2023‒04‒24
six papers chosen by
Sam Sarpong
Xiamen University Malaysia Campus

  1. Impact of the implementation of the ZLECAF on foreign trade, growth and well-being in Morocco: A computable general equilibrium approach By Attouch, Hicham
  2. (De facto) Historical Ethnic Borders and Land Tenure in Sub-Saharan Africa By Emilio Depetris-Chauvin; Ömer Özak
  3. Impacts of Trade Facilitation and Logistics Performance on Trade Flows: The Case of Landlocked African OIC Countries (Burkina Faso, Chad, Mali, Niger and Uganda) By Bagci, Kenan; Bakimli, Esat; Diallo, Abdouramane
  4. Strategic Investment Tax Incentives in Africa: The Case of Tax Holidays in Uganda By Waiswa, Ronald; Rukundo, Solomon
  5. European Exports of Poultry and Milk Products to Ghana and Senegal: A Blessing or a Curse? By Pelikan, Janine; Boimah, Mavis; Chibanda, Craig; Deblitz, Claus; Gunarathne, Anoma; Almadani, Isam Mohamad; Schott, Johanna; Thobe, Petra; Weible, Daniela; Zamani, Omid
  6. An empirical assessment of the role of trade in services in export diversification in Sub-Saharan Africa By Sawadogo, Bouraïma; Fouopi Djiogap, Constant; Ouedraogo, Idrissa; Takpara, Moukaila Mouzamilou

  1. By: Attouch, Hicham
    Abstract: Over the years, globalization and its corollary regionalization have only reinforced free trade trends. Indeed, free trade agreements have multiplied and with them hopes for greater mobility of goods, people and capital. It is within this framework that the implementation of the African Continental Free Trade Area "ZLECAF", which aims to be development and inclusive growth for all the countries of Africa. One of the essential steps for African integration and the achievement of Agenda 2063 is the strengthening of intra-continent trade. Such a strategic objective requires tariff and non-tariff liberalization. Using a computable general equilibrium approach, we analyzed, from the macroeconomic data of Morocco from 2015, the expected effects of a unilateral Morocco / rest of Africa tariff dismantling on foreign trade, growth and well-being. The results of our analysis show that imports from the rest of Africa will increase without the Moroccan economy being truly destabilized with some minor gains in certain sectors and also in household well-being.
    Keywords: International Relations/Trade, International Relations/Trade
    Date: 2022
  2. By: Emilio Depetris-Chauvin (Pontificia Universidad Católica de Chile); Ömer Özak (Southern Methodist University)
    Abstract: We study the role of proximity to historical ethnic borders in determining individual land ownership in Sub-Saharan Africa. Following an instrumental variable strategy, we document that individuals have a lower likelihood of owning land near historical ethnic borders. In particular, the likelihood of owning land decreases by 15 percentage points, i.e., about 1/3 of the mean rate of landownership, for rural migrants who move from 57km (90th percentile) to 2 km (10th percentile) from the border. This result aligns with the view that competition for land is stronger and property rights are weaker close to historical ethnic borders in Sub-Saharan Africa.
    Keywords: Borders, Conflict, Intra-State Conflict, Ethnic Borders, Non-Civil Conflict, Ethnic Conflict, Territory, Property Rights, Landownership, Population Pressure, Migration, Historical Homelands, Development, Africa, Economic Development, Economic Growth, Voronoi Diagram, Voronoi Tesselation, Thiessen Tesselation
    JEL: D74 N57 O13 O17 O43 P48 Q15 Q34
    Date: 2023–03
  3. By: Bagci, Kenan; Bakimli, Esat; Diallo, Abdouramane
    Abstract: This study investigates the impacts of alternative trade facilitation measures on trade flows with a special focus on five landlocked African OIC countries, namely Burkina Faso, Chad, Mali, Niger and Uganda. By employing a diverse set of data and methodology, it is found that there are significant gains from trade facilitation and improved logistics infrastructure. This benefit is significantly higher in the case of African countries. While infrastructure investments in logistics generate the largest gains, landlocked countries can attain additional gains from efficiency improvements in trade facilitation measures. Nevertheless, the aggregate impact of logistics performance remains significantly higher than the impacts of soft trade facilitation measures in both landlocked and coastal countries. This study also presents the potential gains for the five landlocked African OIC countries in case of a simulated improvement in their trade facilitation performance.
    Keywords: International Relations/Trade, Public Economics
    Date: 2022
  4. By: Waiswa, Ronald; Rukundo, Solomon
    Abstract: Tax incentives to attract foreign direct investment are common around the world, especially in Africa. Even though many commentators remain sceptical regarding their effectiveness, tax incentives remain popular policy tools for governments in low-income countries seeking to attract investors. Like many other countries in Africa, Uganda has attempted to use tax incentives to attract investors for decades. For many years these incentives took the form of statutory discretionary tax holidays issued by the Executive branch of government. These discretionary tax holidays were abolished in 1997 with the amendment of the Investment Code Act and the introduction of the Income Tax Act. However, over the years, non-statutory tax holidays issued by the Executive re-emerged taking the form of private agreements between the government and specific investors. In 2018 Parliament introduced an extensive non-discretionary statutory tax incentives regime which included a ten-year tax holiday for investors meeting criteria set out in statute. Discretionary tax holidays issued by the Executive were now supposed to be a thing of the past. Recent revelations that the country’s debt to GDP ratio had exceeded 50 per cent, pressure from the donor community and wider press coverage of tax holidays has led to greater scrutiny and public debate about tax incentives. This paper examines the statutory and non-statutory tax holidays in Uganda and generates recommendations for the way forward and for how the tax holiday regime can be improved. The research employed a mixture of methods including textual analysis, secondary data analysis, and interviews. The textual analysis covered both primary and secondary literature including court rulings, Parliament Hansards, the reports of Parliamentary committees, tax laws, newspaper reports, and tax expenditure reports. Lastly, we engaged in detailed interviews/discussions with officials from the Ministry of Finance, Planning and Economic Development and the Uganda Revenue Authority. The research found that tax holiday provisions in Ugandan statutes are ambiguous. They are applied in a discriminatory manner and generally lack transparency. Further, although Parliament has attempted to play an oversight role regarding tax holidays, this has largely been limited to making recommendations which have been ignored by the Executive. It is only in recent years that Parliament has taken positive steps to limit tax holidays by rejecting proposed amendments. The research recommends the elimination of tax holidays as the most suitable solution to the challenges posed. However, other recommendations include the use of non-discretionary holidays, making tax holidays more transparent, using reduced rates in lieu of tax holidays and vigilant monitoring by Parliament and civil society organisations.
    Keywords: Finance,
    Date: 2023
  5. By: Pelikan, Janine; Boimah, Mavis; Chibanda, Craig; Deblitz, Claus; Gunarathne, Anoma; Almadani, Isam Mohamad; Schott, Johanna; Thobe, Petra; Weible, Daniela; Zamani, Omid
    Abstract: Like many other African countries, Ghana and Senegal import large quantities of meat and dairy products from overseas. As this trend rises, together with critical discussions about the consequences for local producers and food security, the role of exports from Europe to African countries has become an intensively discussed topic. It is often argued that imported products are lowering or impeding domestic production due to increased competition in Africa. In this context, the EU agricultural and trade policies are often criticized. We aim to develop and evaluate measures to avoid or reduce the undesirable effects of these exports. In the group of livestock products, we focus on poultry meat and milk products. We investigate the above-mentioned issues in the areas of politics, trade, production technology, value chains, and consumer preferences.
    Keywords: International Relations/Trade, Food Security and Poverty
    Date: 2022
  6. By: Sawadogo, Bouraïma; Fouopi Djiogap, Constant; Ouedraogo, Idrissa; Takpara, Moukaila Mouzamilou
    Abstract: This paper identifies the dimensions of international trade in services that promote export diversification in an unbalanced panel of 48 countries in Sub-Saharan Africa over the period 1996 - 2020. Using the System-Generalized Method of Moments (GMM), the results show that tourism, services total export, export in transport services, travel services, insurances services, financial services, use of licenses services and other business services promote export diversification in SSA. Governments should improve their business environment and strengthen services sector liberalization to attract more foreign direct investments in services. They should also adopt policies and strategies to develop and orient the services sector towards more efficient and high-value-added services.
    Keywords: International Relations/Trade, International Relations/Trade
    Date: 2022

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