nep-afr New Economics Papers
on Africa
Issue of 2023‒08‒21
five papers chosen by
Sam Sarpong
Xiamen University Malaysia Campus

  1. Mineral resources and the salience of ethnic identities By Nicolas Berman; Mathieu Couttenier; Victoire Girard
  2. Towards a Green Future for Sub-Saharan Africa: Do electricity access and public debt drive environmental progress? By Stephen K. Dimnwobi; Kingsley I. Okere; Bernard C. Azolibe; Kingsley C. Onyenwife
  3. Can Information and Alternatives to Irregular Migration Reduce "Backway" Migration from The Gambia? By Bah, Tijan L.; Batista, Catia; Gubert, Flore; McKenzie, David
  4. Sub-Saharan Africa’s Risk Perception Premium: In the Search of Missing Factors By William Gbohoui; Rasmané Ouedraogo; Yirbehogre Modeste Some
  5. Bipolarisation measurement: A two-income approach with an application to nine Sub-Saharan African countries By Florent Bresson; Marek Kosny; Gaston Yalonetzky

  1. By: Nicolas Berman (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Mathieu Couttenier (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Victoire Girard (NOVA SBE - NOVA - School of Business and Economics - NOVA - Universidade Nova de Lisboa = NOVA University Lisbon, LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne)
    Abstract: This paper shows how ethnic identities may become more salient due to natural resources extraction. We combine individual data on the strength of ethnic—relative to national—identities with geo-localised information on the contours of ethnic homelands, and on the timing and location of mineral resources exploitation in 25 African countries, from 2005 to 2015. Our strategy takes advantage of several dimensions of exposure to resources exploitation: time, spatial proximity and ethnic proximity. We find that the strength of an ethnic group identity increases when mineral resource exploitation in that group's historical homeland intensifies. We argue that this result is at least partly rooted in feelings of relative deprivation associated with the exploitation of the resources. We show that such exploitation has limited positive economic spillovers, especially for members of the indigenous ethnic group; and that the link between mineral resources and the salience of ethnic identities is reinforced among members of powerless ethnic groups and groups with strong baseline identity feelings or living in poorer areas, or areas with a history of conflict. Put together, these findings suggest a new dimension of the natural resource curse: the fragmentation of identities, between ethnic groups and nations.
    Keywords: identity, ethnicity, natural resources
    Date: 2023–07
  2. By: Stephen K. Dimnwobi (Nnamdi Azikiwe University, Awka, Nigeria); Kingsley I. Okere (Gregory University, Uturu, Nigeria); Bernard C. Azolibe (Nnamdi Azikiwe University, Awka, Nigeria); Kingsley C. Onyenwife (Igbariam, Nigeria)
    Abstract: The combination of rising debt levels, poor electricity access, and environmental deterioration could threaten the attainment of the Sustainable Development Goals (SDGs). Hence, this inquiry examined the implications of public borrowing and access to electricity on environmental sustainability (proxied by ecological footprint (ECOL) and carbon dioxide (CO2) emissions) in Sub-Saharan Africa (SSA), largely overlooked in the literature. In addition to pre-estimation, diagnostic and robustness checks utilized in the study, the instrumental variable generalized method of moment (IV-GMM) approach is employed to examine annual data from 39 SSA economies between 2005 and 2018. The key findings indicate that public debt negatively influences environmental sustainability in the region, while access to electricity exerts a positive and significant impact on environmental sustainability. The study provides recommendations for SSA policymakers to significantly reduce pollution and protect the environment which is vital for sustainable development.
    Keywords: Environmental sustainability, SSA, Public debt, Electricity access, Ecological Footprint, Carbon Emission
    Date: 2023–01
  3. By: Bah, Tijan L. (World Bank); Batista, Catia (Nova School of Business and Economics); Gubert, Flore (IRD, DIAL, Paris-Dauphine); McKenzie, David (World Bank)
    Abstract: Irregular migration from West Africa to Europe across the Sahara and Mediterranean is extremely risky for migrants and a key policy concern. A cluster-randomized experiment with 3, 641 young men from 391 settlements in The Gambia is used to test three approaches to reducing risky migration: providing better information and testimonials about the risks of the journey, facilitating migration to a safer destination by providing information and assistance for migration to Dakar, and offering vocational skill training to enhance domestic employment opportunities. Current migration to Senegal was increased by both the Dakar facilitation and vocational training treatments, partially crowding out internal migration. The vocational training treatment reduced intentions to migrate the backway and the number of steps taken toward moving. However, the backway migration rate from The Gambia collapsed, even in the control group, resulting in no space for a treatment effect on irregular migration from any of the three interventions.
    Keywords: cash transfer, vocational training, information interventions, migration deterrence, irregular migration, randomized experiment
    JEL: O15 F22 J61
    Date: 2023–07
  4. By: William Gbohoui; Rasmané Ouedraogo; Yirbehogre Modeste Some
    Abstract: Policymakers from the sub-Saharan Africa (SSA) region often flag a mispricing of their sovereign debt presumably originating from a perception risk by international investors that lead to "unjustifiably" high borrowing costs. Against this background, this paper explores the extent to which a potential SSA premium exists in the financial markets following a broader two-fold approach. Firstly, using a sample of 1592 international primary sovereign fixed coupon bonds issued between 2003-2021 from Bond Radar by 89 countries, we find that SSA countries pay significantly higher coupon at issuance compared to their peers from other regions. Secondly, we assess whether there is any bias against SSA countries in the secondary market that would result in higher refinancing cost. Based on an unbalanced panel of quarterly data covering 107 countries over 1990 – 2022, we find that SSA countries pay higher refinancing costs in the secondary market. The paper further explores whether there are other factors overlooked by the literature that matter for the risk pricing by international investors. In that respect, we explore the sensitivity of spreads to some structural dimensions where SSA countries face acute challenges―the transparency of budget process, the importance of the informal sector, the level of financial development, and the quality of public institutions. The results show that the excess premium estimated for SSA countries vanishes when these structural factors are accounted for in the regressions.
    Date: 2023–06–23
  5. By: Florent Bresson (CERDI, Université Clermont Auvergne, CNRS, IRD); Marek Kosny (Wroclaw University of Economics and Business); Gaston Yalonetzky (University of Leeds, OPHI, III)
    Abstract: This paper introduces and axiomatically characterises new classes of bipolarisation indices based on the equivalent representation of observed distributions with the help of two-income distributions. This representation makes it possible to interpret the suggested indices either as I) the representative income gap between individuals from the top part of the distribution and those from the bottom part, orii) the excess representative income share of the top part compared against its population share.The proposed bipolarisation indices show additional appealing features. First, they can handle any population partition between the p percent poorest individuals and the (1-p) richest individuals (including the popular p=50% choice). Secondly, they can be easily decomposed into spread and clustering contributions toward total bipolarisation. Finally, they relate to familiar inequality indices so that bipolarisation levels can easily be connected to the average income and inequality levels relating to each part of the income distribution. The new classes include some prominent rank-dependent bipolarisation indices from the literature as special cases, together with numerous novel proposals for both absolute and relative approaches to bipolarisation. An illustration is given using consumption data from nine Sub-Saharan African countries.
    Keywords: Bipolarisation, inequality, two-income distribution
    JEL: D31 D63 O15
    Date: 2023–08

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