nep-afr New Economics Papers
on Africa
Issue of 2023‒06‒26
seven papers chosen by
Sam Sarpong
Xiamen University Malaysia Campus

  1. Services Trade Policy and Industry Performance in African Economies By Bernard Hoekman; Matteo Fiorini; Dennis Quinn
  2. Post-colonial Citizenship and Decolonisation as a Turning Point: Continuities and Discontinuities in African states By Bronwen Manby
  3. Foreign Direct Investment and Structural Transformation in Africa By Bernard Hoekman; Marco Sanfilippo; Margherita Tambussi
  4. Authority and power in local orders: customary authorities, the state, and jihadist insurgency in Mali By Ladini, Gianfabrizio
  5. What determines demand for digital community currencies? OurVillage in Cameroon By Pédussel Wu, Jennifer; Metzger, Martina; Neira, Ignacio Silva; Farroukh, Arafet
  6. The Dilemma between the Pursuit of Sustainability and the Cultural Heritage of Moroccan Family Businesses: A Contextualization Study By Azzeddine Allioui; Badr Habba; Taib Berrada El Azizi
  7. Taxpayer response to greater progressivity: Evidence from personal income tax reform in Uganda By Maria Jouste; Tina Kaidu Barugahara; Joseph Okello Ayo; Jukka Pirttilä; Pia Rattenhuber

  1. By: Bernard Hoekman; Matteo Fiorini; Dennis Quinn
    Abstract: This paper assesses the potential impacts of services trade liberalization for a sample of African countries. The focus is on the relationship between labour productivity of manufacturing sectors and two types of services trade-related policies – restrictions on foreign direct investment (FDI) in services and restrictions on international payments for invisibles. The analysis takes in account differences across manufacturing sectors in the intensity of use of different services as inputs into production as well as difference in the quality of economic governance across countries. We find that services trade liberalization may have substantial positive impacts on the performance of manufacturing sectors, and increase with services input intensity and the quality of governance.
    Keywords: Services trade policy, services input use, manufacturing productivity, Africa, regional integration
    Date: 2022–12
  2. By: Bronwen Manby
    Abstract: This paper considers decolonisation as a turning point, or moment of change, in the history of the legal regulation of belonging and membership, with a particular focus on Africa. The papercompares the evolution of concepts of citizenship when African states gained independence with other decolonisations—of the Americas, South Asia, and former Soviet Union. It explores the manysimilarities between Africa and other post-colonial geographies, especially the frequent resilience of colonial institutions and the resentment of those whose presence in a territory is the result ofpopulation movements within the former empires. Yet it also shows how the particular experience of European imperial oppression in Africa created continental dynamics in the imagination and regulation of citizenship that are different from other regions. Finally, however, the paper warns against overemphasizing the differences from the debates over citizenship in Europe. Europe, after all, is also a post-colonial space: European borders established at the break-up of the Austro-Hungarian and Russian empires were equally viewed as artificial; while the legacy of European imperialism lives on in contemporary European immigration and citizenship policies. Although the challenges of imagining the community in Africa’s post-independence states are obvious, the boundaries of community are as mutable as they are in other continents, and concepts of citizenship thus not so dissimilar to those in Europe or elsewhere.
    Keywords: Citizenship, decolonisation, Africa, borders
    Date: 2023–01
  3. By: Bernard Hoekman; Marco Sanfilippo; Margherita Tambussi
    Abstract: This paper analyzes the relationship between inward FDI and structural transformation of local labour markets in Africa. We combine geolocalized information on the distribution of FDI with a noveldatabase that provides information from 40, 665, 627 individuals in 2, 570 subnational units over the period 1987-2019. Results are suggestive of a positive effect of FDI on structural transformation.FDI contributes to an increase in employment, and shifts of workers towards modern industries and higher-skilled occupations. No effects are found on self-employment. Results are heterogeneous, reflecting the characteristics of the foreign investor and of the business activity undertaken by foreign firms in the local market. Geospatial analysis of changes in performance of domestic firms exposed to nearby FDI projects provides evidence of horizontal spillovers and inter-industry linkages, suggesting a complementary mechanism through which FDI drives structural change.
    Keywords: FDI, Jobs, Structural Transformation, Africa
    Date: 2023–01
  4. By: Ladini, Gianfabrizio
    Abstract: Mali is mired in conflict and instability since 2012, when a coalition of secular and Islamist insurgents came close to overtaking the capital Bamako. The magnitude and rapidity of the crisis, together with its ongoing and expanding repercussions, laid bare institutional weaknesses, begging the questions of how governance was delivered before the crisis, and how it has evolved ever since, especially on a local level. The paper traces the evolution of state-customary authorities interaction towards tentative forms of cooperation. It examines how persistent insecurity after 2012, in a context of an ongoing insurgency, put customary authorities in fragile positions in processes and outcomes of local governance. In fact, the crisis brought armed groups as new prominent actors in local negotiations of stability and peace. The role of customary authorities expanded by filling the void left by the state, but it also eroded against the power of armed groups. Customary authorities face peculiar challenges from jihadist insurgents: these actors’ revolutionary project aims at replacing the state with alternative forms of order and governance, also by co-opting customary authority in their political strategies through violence and negotiation.
    Keywords: conflict, governance, institutions, security and development, jihadism, Mali
    Date: 2023–05
  5. By: Pédussel Wu, Jennifer; Metzger, Martina; Neira, Ignacio Silva; Farroukh, Arafet
    Abstract: Community currency systems are now turning to digital methods to increase the social outreach of member households in remote areas, mitigate detrimental effects in times of crises, and promote community social cohesion. The resilience of digital community currency systems depends on a set of decisive factors including stability, sustainability, and technical functionality. OurVillage in Cameroon is a socio-economic project that aims to increase and promote economic activity through the introduction of a blockchain-based local community currency system. This paper explores the potential of electronic complimentary payment systems by examining the underlying motivations for consumer use based on their socio-economics characteristics. We develop a demand estimate for the community currency, concentrating on the underlying environmental conditions of the target population. A demand study is helpful in order to observe the optimal conditions for goods' consumption, in this case the community currency system. The resulting estimation provides fundamental insights into the quality of the project and the determinants for successful implementation. Our findings have important policy implications, particularly for communities intending to introduce their own digital community currency systems.
    Keywords: demand estimates, community currency, socio-economic development projects
    JEL: B4 C10 D02 E42 O12
    Date: 2023
  6. By: Azzeddine Allioui (ESCA Ecole de Management, Morocco); Badr Habba (ESCA Ecole de Management, Morocco); Taib Berrada El Azizi (ESCA Ecole de Management, Morocco)
    Abstract: The objective of this research is to explore the relationship between the cultural specificities of governance in the Moroccan context and the sustainability of unlisted Moroccan family businesses in times of crisis. To produce our results, we opted for a qualitative approach based on semi-directive interviews with 20 CEOs of unlisted Moroccan family businesses, 6 of which are large companies, 8 are SMEs, and 6 are VSEs. Our results explain that the search for sustainability by family governance in times of crisis is dependent on three cultural specificities, explicitly: family reputation, religiosity norms, and the logic of strategic imitation. These specificities drive the governance of Moroccan family businesses in terms of internal sustainability, external sustainability, family-enterprise interactions, emotional involvement, risk aversion, and innovation in times of crisis.
    Keywords: Family governance, sustainability, culture, innovation, family reputation, business imitation
    Date: 2023–04
  7. By: Maria Jouste (UNU-WIDER, Helsinki, Finland); Tina Kaidu Barugahara (Uganda Revenue Authority, Kampala, Uganda); Joseph Okello Ayo (University of Helsinki, Finland); Jukka Pirttilä (University of Helsinki, Finland; and VATT Institute for Economic Research, Helsinki, Finland); Pia Rattenhuber (UNU-WIDER, Helsinki, Finland)
    Abstract: We evaluate a major personal income tax reform in Uganda that came into effect in 2012–13, contributing to the scarce literature on the effects of personal income tax reform on employees’ income in a low-income country in Africa. The reform increased the tax-free lower threshold, increased tax rates for higher incomes, and introduced an additional highest tax band for top 1% of income earners. Using the universe of pay-as-you-earn (PAYE) administrative data from the Uganda Tax Authority, we analyse the impact of the reform on reported labour incomes. In the preferred specification, we find very limited support for behavioural reactions. However, heterogeneity analysis reveals that top-income workers in firms handled by ordinary (as opposed to medium or large taxpayer) offices report lower incomes after the reform. We also find suggestive evidence that part of the response may arise from income shifting. The reform managed to raise more revenue and it also led to a limited reduction in after-tax income inequality.
    Keywords: personal income tax, Uganda, administrative data, tax reform
    JEL: C31 H24 O23
    Date: 2023–06

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