nep-afr New Economics Papers
on Africa
Issue of 2023‒05‒08
five papers chosen by
Sam Sarpong
Xiamen University Malaysia Campus

  1. Africa's Industrialization Prospects: A Fresh Look By Naudé, Wim; Tregenna, Fiona
  2. Tax and sustainable development in sub-Saharan Africa: Beyond accountability and responsiveness By Alex Adegboye; Abrams M.E. Tagem
  3. Microfinance institutions and female entrepreneurship in Sub-Saharan Africa: avoidable female unemployment thresholds By Simplice A. Asongu; Nicholas M. Odhiambo
  4. Towards sustainability: The relationship between foreign direct investment, economic freedom and inclusive green growth By Isaac K. Ofori; Francesco Figari; Nathanael Ojong
  5. Social Protection Program Spending and Household Welfare in Ghana By Raju, Dhushyanth; Younger, Stephen D.; Dadzie, Christabel Ewuradjoa

  1. By: Naudé, Wim (RWTH Aachen University); Tregenna, Fiona (University of Johannesburg)
    Abstract: This paper identifies the determinants of industrialization in 18 African countries, 1965 to 2018, using various estimators and applying a battery of robustness checks. Industrialization in Africa is driven by historical legacies such as colonialism; geographical factors such as rainfall and distance from international markets; economic factors such competition from China, market size and urbanization; and technological factors such as digital technology adoption. An inverse U-shape relationship between industrialization and GDP per capita is consistent with (premature) de-industrialization. Technological change and adoption of digital technologies are found to have an ambiguous relationship with industrialisation in Africa. The establishment of the AfCFTA is timely, but its benefits will only be realised if countries also improve infrastructure to overcome the negative consequences of adverse geography, improve trade facilitation to exploit learning-by-exporting from intra-African trade, and facilitate urbanization.
    Keywords: industrialization, development, employment, technology, trade, Africa
    JEL: O47 O33 J24 E21 E25
    Date: 2023–03
  2. By: Alex Adegboye; Abrams M.E. Tagem
    Abstract: This paper establishes how accountability quality might mediate the effect of tax revenue on sustainable development in 41 sub-Saharan African countries for the period 1990-2019. The empirical evidence is based on three empirical strategies: generalized method of moments, instrumental variable Tobit, and quantile regressions. The following findings are revealed. First, accountability dynamics influence tax revenue in ways that have favourable net effects on sustainable development.
    Keywords: Sub-Saharan Africa, Accountability, Revenue mobilization, Tax revenue, Sustainable development
    Date: 2023
  3. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: The present study contributes to the extant literature by assessing how microfinance institutions (MFIs) affect female entrepreneurship, contingent on female unemployment levels. The study focuses on 44 countries in sub-Saharan Africa (SSA) for the period 2004 to 2018. The empirical evidence is based on interactive quantile regressions, which put emphasis on nations with high, low and intermediate levels of business constraints. The analysis is tailored to provide avoidable female unemployment levels in the implementation of policies designed for MFIs to promote female business ownership. The hypotheses that MFIs are favorable for female business owners and some critical rates of female unemployment should be avoided in order for the favorable incidence to be maintained is exclusively valid in the 10th quantiles of the cost of business by females and time to start-up a business by females. Policy implications are discussed. This study has complemented the extant literature by providing actionable female unemployment critical masses that governments can act upon in tailoring the nexus between the relevance of MFIs in the doing of business by females.
    Keywords: Africa; Microfinance; Gender; Inclusive development
    JEL: G20 I10 I32 O40 O55
    Date: 2023–01
  4. By: Isaac K. Ofori (University of Insubria, Varese, Italy); Francesco Figari (Novara, Italy); Nathanael Ojong (York University, Toronto, Canada)
    Abstract: This study contributes to the environmental and socioeconomic sustainability literature by examining three important issues. First, the study examines the effects of foreign direct investment (FDI) and economic freedom on inclusive green growth (IGG) in sub-Saharan Africa (SSA). Second, we investigate whether economic freedom interacts with FDI to promote IGG. Third, we identify minimum the thresholds required for economic freedom to cause FDI to foster IGG. The findings are based on macro data for 20 SSA countries. Evidence, based on instrumental variable regression, show that, unconditionally, FDI is not statistically significant for promoting IGG. Second, the study finds that SSA’s ‘Mostly unfree’ economic architecture conditions FDI to reduce IGG. Third, results from our threshold regression reveal that the minimum threshold required for economic freedom to cause FDI to foster IGG is 66.2% (Moderately free). The study sheds new light on investments necessary for SSA’s economic architecture to form relevant synergies with FDI to promote IGG.
    Keywords: Economic Freedom; FDI; Government Integrity; Inclusive Green Growth; Sustainable Development; sub-Saharan Africa
    JEL: F21 F6 H1 P1 O55 Q01 Q56
    Date: 2023–01
  5. By: Raju, Dhushyanth; Younger, Stephen D.; Dadzie, Christabel Ewuradjoa
    Abstract: : Ghana administers multiple social protection programs. One, pensions provided by the SocialSecurity and National Insurance Trust, has a long history, but the rest of the programs have been introduced andexpanded over the past two decades. This study assesses the performance of the government of Ghana’s main socialassistance and social insurance programs. It discusses the main design and implementation parameters of the programsand summarizes existing evaluative and operational research. The study also examines patterns and trends in programbenefit spending, based on government administrative data, and the coverage rates of the programs, their incidence, andtheir effectiveness in reducing poverty and inequality, based on recent national household sample survey data.Further, the study examines the relationship between household participation in social assistance programs andexposure to adverse covariate shocks, specifically, possible weather-related shocks, based on high-resolution climaterisk maps for the country
    Date: 2023–04–20

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