nep-afr New Economics Papers
on Africa
Issue of 2023‒08‒28
seven papers chosen by
Sam Sarpong, Xiamen University Malaysia Campus

  1. 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
  2. Taking Stock of Organizations with Impact Evaluation Capacity Headquartered in sub-Saharan Africa: A New Database and Landscaping Analysis By Julia Kaufman; Justin Hurley; Janeen Madan Keller; Erin Collinson
  3. Behavioral drivers of cashless payments in Africa By Batiz-Lazo, Bernardo; Maixe-Altes, J Carles; Peon, David
  4. Violent conflict and hostility towards ethno-religious outgroups in Nigeria By Daniel Tuki
  5. Manufacturing in Sub-Saharan Africa: Deindustrialisation or a Renaissance? By François Steenkamp; Haroon Bhorat; Zaakhir Asmal; Christopher Rooney
  6. La CEDEAO, autrefois puissance affirmée en Afrique de l'Ouest réduite à un tigre de papier ? By Kohnert, Dirk
  7. Access to electricity in Sub-Saharan Africa: the regressive effect of tariff structures on urban and rural on-grid households By Sandrine Michel; Alexis Vessat

  1. 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
  2. By: Julia Kaufman (Center for Global Development); Justin Hurley (Center for Global Development); Janeen Madan Keller (Center for Global Development); Erin Collinson (Center for Global Development)
    Abstract: The evidence-informed policy ecosystem has evolved significantly over the past two decades. Alongside an increase in the number of impact evaluations, the community of researchers and organizations in low- and middle-income countries conducting these studies continues to grow. Locally immersed researchers can help increase the policy use and utility of impact evaluation and related evidence, bringing critical insight on the priorities of policymakers and windows of opportunity to inform decision-making. Still, despite their vital role, many locally immersed research organizations encounter chronic funding challenges and other institutional and professional barriers. CGD conducted a landscaping exercise to better understand the current landscape of organizations headquartered in sub-Saharan Africa that boast impact evaluation capacity. The resulting database is intended as a resource for funders looking to advance locally led development; to help facilitate coordination and networking; and to advance opportunities for collaboration among researchers, program implementers, policymakers, and funders. We found that the number of organizations headquartered in sub-Saharan Africa with impact evaluation capacity has increased over recent years. We identified 181 unique African organizations with impact evaluation capacity, representing a 26 percent increase since 2019. These organizations are distributed across the region, with the largest concentration in East Africa. A significant portion has received or currently receives US government support, though often indirectly, providing potential openings for deepening partnerships with locally led organizations. Finally, a wide range of types of organizations have impact evaluation capacity—independent think tanks/NGOs, academic institutions, and government-embedded or adjacent entities.
    Date: 2023–08–07
  3. By: Batiz-Lazo, Bernardo; Maixe-Altes, J Carles; Peon, David
    Abstract: We explore the potential of different behavioral drivers for people to use cash when presented with digital payment alternatives in retail transactions. Behavioral finance traits in our study include the otherwise neglected emotional drivers. We conducted an online survey targeting university educated adults in sub-Saharan African countries, a continent characterized by lower levels of banking penetration, intensive use of cash, and increased popularity of mobile money accounts to reduce financial exclusion. We obtain robust evidence that the affect heuristic is the only relevant behavioral trait determining the use of cash and of payments with credit cards, while there is no evidence of behavioral drivers influencing the overall decision to use of electronic payments. However, in specific payment contexts cognitive traits, such as mental accounting, fungibility bias, and habit, do mediate in determining the choice of payment method. We found robust evidence that a higher value of our personal income proxy is associated with a reduction in the intention to use electronic payments. All results are robust to alternative econometric specifications: multinomial logistic, ordered logistic, and logit regressions. Our research provides a clear policy message, namely for authorities to promote a variety of payment alternatives, including cash, and ensure they are available in retail transactions.
    Keywords: FinTech, Cash, Digital Payments, Behavioral Finance (Affect Heuristic), Africa (Ghana, Kenya, Nigeria, South Africa).
    JEL: E4 E5 G1 G2 L8 O3
    Date: 2023–07
  4. By: Daniel Tuki (Research Fellow, WZB Berlin Social Science Center, Germany/Department of Social Sciences, Humboldt University, Berlin, Germany)
    Abstract: This study examined the effect of exposure to violent conflict on hostility towards ethnic and religious outgroups among Nigeria’s population and among its two major religious groups (Christians and Muslims). Violent conflict had a robust positive effect on outgroup hostility among the Nigerian population and among Christians. A plausible mechanism behind this finding is that the threat posed by violent conflict strengthens ingroup cohesion, erodes trust in outgroup members, and makes intergroup boundaries salient. This is especially so when the opposite party to the conflict constitutes a distinct cultural outgroup. The main conflict affecting Christians involves nomadic pastoralists of Fulani ethnicity, who are Muslims. Although both Christians and Muslims associate Muslims with extremism, Christians are more likely to do so. Among Muslims, violent conflict rather had a weak positive effect on outgroup hostility that was not robust to alternative model specifications. The null effect might be because the main conflict affecting Muslims – the Boko Haram insurgency – does not involve Christians. A significant number of Muslims are also affected by conflicts involving nomadic Fulani pastoralists.
    Keywords: Violent conflict, Conflict exposure, Outgroup hostility, Ethnicity, Religion, Nigeria
    JEL: D74 J15 N37
    Date: 2023–07
  5. By: François Steenkamp; Haroon Bhorat; Zaakhir Asmal; Christopher Rooney (Development Policy Research Unit, University of Cape Town)
    Abstract: Past empirical evidence suggests that industrialisation is key to a country’s development trajectory. In SubSaharan Africa (SSA) a narrative has emerged that suggests the region has experienced premature deindustrialization (Rodrik, 2016). However, this narrative has been challenged in recent studies by Kruse, Mensah, Sen & de Vries (2022) and Nguimkeu & Zeufack (2019) who find evidence of a manufacturing renaissance in SSA. The comparability of these conflicting studies is limited due to differing country samples, estimation techniques, econometric specifications and time periods. In this study, we reconcile these conflicting results by using a common dataset over a defined period, 1990-2018, using two estimators and model specifications applied in the literature, to allow us to test whether the premature deindustrialization thesis is model dependent and time-specific. Our study finds that SSA’s manufacturing sector has experienced deindustrialisation, or at best remained stagnant, over the 2000s aand 2010s – thus confirming the more pessimistic Rodrik (2016) view of premature deindustrialisation in SSA. The implications of our results suggest that SSA countries may be required to seek alternative growth pathways to structurally transform their economies. More generally, our findings suggest that replicating the industrialisation experience of other regions is difficult. Not only is a detailed understanding of the factors which led to regions industrialising required, but a coherent implementation of policies for countries trying to replicate that success is necessary as well.
    Keywords: Industrialisation, Manufacturing, Structural change, Africa
    JEL: O14 L16 N17 N67
    Date: 2023–04
  6. By: Kohnert, Dirk
    Abstract: Economic integration among West African member states was the original mandate of ECOWAS. Threats to development, peace and security led the community to expand its mandate to include conflict management. ECOWAS has established a commendable record in peacekeeping. Its intervention in Liberia ended the conflict. In Sierra Leone, it provided the necessary support to the legitimate government, but in Guinea Bissau, it failed to stop the violence. In 2004, ECOMOG was replaced by the ECOWAS Standby Force (ESF), made up of military, police and civilian personnel. As part of its missions, ECOWAS has implemented conflict prevention and resolution mechanisms outlined in its Conflict Prevention Framework (ECPF). However, the organisation relies on its member states to achieve its objectives. Unfortunately, the latter are mostly characterised by a lack of political and financial commitment. In recent years, ECOWAS has focused on counter-terrorism strategies. However, these too have been hampered by capacity constraints, the persistence of a socio-economic environment increasingly conducive to religious fundamentalism and extremism, and varying levels of political will and commitment. The ECOWAS institution's conflict prevention tools are currently stronger than its conflict management tools. At present, the ESF lacks the logistical and financial capacity for military deployment. Nigeria, the main troop and financial contributor, was supposed to provide more than half of the pledged ESF troops. But it has internal security challenges of its own. It is therefore doubtful that it could spare its pledged troops for an ESF mission. All this suggests that ECOWAS, once a force to be reckoned with in West Africa, has been reduced to a paper tiger. It's warning to intervene, by military force if necessary, in the current conflict in Niger, where a coup has overthrown the legitimate government, was reckoned as an empty threat. Especially since the coup leaders in Mali, Niger and Guinea have been backed by Russia.
    Keywords: CEDEAO; Force en attente de la CEDEAO; coup d'État; gouvernance; développement durable: post-colonialisme; secteur informel; APD; Afrique subsaharienne; Afrique de l'Ouest; Mali; Niger; Guinée; Nigeria; Études africaines;
    JEL: F15 F35 F51 F52 F54 H12 H56 K42 N47 Z13
    Date: 2023–08–04
  7. By: Sandrine Michel (UMR ART-Dev - Acteurs, Ressources et Territoires dans le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - CNRS - Centre National de la Recherche Scientifique - UM - Université de Montpellier); Alexis Vessat (UMR ART-Dev - Acteurs, Ressources et Territoires dans le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - CNRS - Centre National de la Recherche Scientifique - UM - Université de Montpellier)
    Abstract: In sub-Saharan Africa (SSA), the energy access gap between urban and rural populations remains considerable, even among households and businesses with potential access to the grid. As the interface between electricity generation conditions, the end user and public energy-access policy, tariff structures are the major instrument of access. This article evaluates how electricity tariff structures contribute to the continued existence of the energy access gap and looks at whether this gap is primarily between rural and urban populations. Using a dynamic panel model with random effects (1990-2012; 33 countries divided into 4 groups; 17 variables related to residential and non-residential consumption, production and share of income spent on electricity), the article shows the systematically regressive effect of electricity pricing on access to both residential and non-residential consumption. We find that electricity pricing fails to provide reduced rates that enable access to the poor, neglects households that have passed the threshold of the first consumption block and is ineffective at addressing energy poverty in both urban and rural households. For households to access a centralised power grid, we find that the criterion of location is less important than the economic conditions of the customers served.
    Keywords: Power tariff structures, Electricity access, Urban on-grid access, Rural on-grid access, Rural electrification, Sub-saharan africa, JEL Q48, JEL I38, JEL N17, JEL O11
    Date: 2023–07–10

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