nep-afr New Economics Papers
on Africa
Issue of 2023‒09‒25
six papers chosen by
Sam Sarpong, Xiamen University Malaysia Campus

  1. Energising Environmental Sustainability in Sub-Saharan Africa: the role of Governance Quality in Mitigating the Environmental Impact of Energy Poverty By Stephen K. Dimnwobi; Kingsley I. Okere; Favour C. Onuoha; Benedict I. Uzoechina; Chukwunonso Ekesiobi; Ebele S. Nwokoye
  2. Decode China's Economic Engagement in Africa: Evolving Policies, Investment and Trade Trends, and Implications By Zhang, Yuhan; Mekonnen, Shimelse
  3. City shapes and climate change in Africa By Brilé Anderson; Rafael Prieto Curiel; Jorge Eduardo Patiño Quinchía
  4. Digitalisation and Subnational Tax Administration in Nigeria By Mas’ud, Abdulsalam; Mohammed, Sani Damamisau; Gimba, Yusuf Abdu
  5. Time-varying fiscal multipliers for South Africa: A large time-varying parameter vector autoregression approach By Gideon du Rand; Hylton Hollander; Dawie van Lill
  6. Understanding inequality and its evolution in Kenya: The contribution of the UNU-WIDER World Income Inequality Database initiative By Damiano Kulundu Manda; Germano Mwabu; Martine Oleche; Moses Kinyanjui Muriithi

  1. By: Stephen K. Dimnwobi (Nnamdi Azikiwe University, Awka, Nigeria); Kingsley I. Okere (Gregory University, Uturu, Nigeria); Favour C. Onuoha (Evangel University Akaeze, Nigeria); Benedict I. Uzoechina (Nnamdi Azikiwe University, Awka, Nigeria); Chukwunonso Ekesiobi (Chukwuemeka Odumegwu Ojukwu University, Nigeria); Ebele S. Nwokoye (Nnamdi Azikiwe University, Awka, Nigeria)
    Abstract: The Sub-Saharan Africa region is disproportionately affected by energy poverty and is considered highly vulnerable to the impacts of climate change. Therefore, addressing the pressing challenges of energy poverty and promoting environmental sustainability in this region is of paramount importance. Consequently, this study appraises the relationship between energy poverty and ecological preservation in Sub-Saharan Africa from 2005 to 2020, using government effectiveness and regulatory quality as moderating variables. A combination of energy poverty indicators and an index of energy poverty computed via the principal component analysis method were applied to identify the link between energy poverty and ecological sustainability. The instrumental variable generalized method of moment technique was applied to address the likelihood of endogeneity issues, and the Driscoll-Kraay approach was employed to check the consistency of the instrumental variable generalized method of moment method. Key findings indicate that energy poverty expands the ecological footprint in Sub-Saharan Africa, leading to ecological deterioration, while the interaction with government effectiveness and regulatory quality further deteriorates the environment. Subsequently, the study provides several recommendations to mitigate the influence of energy poverty on the environment.
    Keywords: Energy Poverty, Environmental Sustainability, Government Effectiveness, Regulatory Quality, Sub-Saharan Africa
    Date: 2023–01
  2. By: Zhang, Yuhan; Mekonnen, Shimelse
    Abstract: This working paper systematically analyzes the dynamic commercial relationship between China and Africa. Utilizing Natural Language Processing and content analysis of meticulously collected policy documents, this study finds that the Belt and Road Initiative (BRI) and other proposals by President Xi have shaped the policy direction of China-Africa collaborations, highlighting areas like industrial evolution, infrastructure synergies, agricultural modernization, and sustainable development. By exploring historical economic data, this study also finds that the BRI has significantly influenced Chinese financial commitments to Africa, with investment benefiting 30 distinct African countries, spanning sectors beyond natural resources, and involving both state-owned and private entities. Trade data suggests emerging signs of diversification and reveals China's consistent trade surpluses with Africa, influenced by significant Chinese capital outflows. While Africa's emerging signs of diversification are encouraging, it needs to further diversify into manufacturing and services to avoid mirroring past trade patterns with the West. Our machine learning analysis anticipates China-Africa trade to surpass $300 billion by 2025-6. In light of evolving policies and economic trajectories, this study identifies burgeoning opportunities in sectors like e-commerce, fintech, and agritech, underlying the immense potential of China-Africa commercial ties. However, it is important to acknowledge that China-Africa commercial cooperation is not without challenges. Disparities in trade balances, concerns about debt sustainability, and local economic impacts have sometimes strained relations, which require continuing attention and further research.
    Keywords: Machine Learning, Economic Policy, China, Africa, Belt and Road Initiative (BRI), Investment, Trade, Commercial Opportunities
    JEL: A1 A12
    Date: 2023
  3. By: Brilé Anderson; Rafael Prieto Curiel; Jorge Eduardo Patiño Quinchía
    Abstract: Africa is undergoing an unprecedented urban and climate transition; yet, given the right conditions, compact urban forms can encourage greater sustainability, resilience and liveability in the coming decades. Using novel techniques and newly available data, this report fills in existing data gaps by producing measures of compactness for 5 625 urban agglomerations, along with other urban form attributes. Even though urbanisation is often unplanned and uncoordinated, a promising trend has emerged: very large cities (of over 4 million inhabitants) are more compact, discounting the population effect, on average, than larger (1 million to 4 million inhabitants) and intermediate cities (50 000 to 1 million inhabitants). Moreover, less compact agglomerations tend to have smaller buildings, flat, low skylines, less complete centres (reflecting a less optimal use of space) and polycentric patterns (i.e. multiple centres, rather than a single, monocentric city). This report analyses the consequences of less compact agglomerations for sustainability and liveability. The disadvantages include higher energy demand, less accessibility to services and opportunities, less walkable urban landscapes and greater car dependency, in addition to higher outdoor air pollution. It also considers the potential trade-offs with resilience; for example, compactness can lead to a loss of green space and an increase of urban heat island effects. The report offers opportunities in the coming years to single out potential areas of action for resilience, as well as for monitoring and evaluating progress.
    Keywords: Africa, cities, compactness, spatial data, sustainability
    JEL: Q24 Q47 Q56 Q58 R58
    Date: 2023–09–08
  4. By: Mas’ud, Abdulsalam; Mohammed, Sani Damamisau; Gimba, Yusuf Abdu
    Abstract: Recently, there has been an expansion in the deployment of digital systems and digital IDs among taxing authorities. However, little is known about the extent to which such technologies are being adopted, or about whether the data from them is being used strategically to improve tax administration. Even less is known about this in the context of subnational tax administration, although this could be very relevant in some contexts, such as Nigeria. This study investigates the extent of the adoption and strategic usage of data from e-tax systems and digital IDs among state internal revenue services (SIRSs) in Nigeria. Data was collected through qualitative interviews conducted within the SIRSs – one from each of the country’s six geopolitical zones, and within the Federal Inland Revenue Service (FIRS). The qualitative data from the interviews was evaluated using thematic analysis. The findings revealed that there is scope for improvement in the adoption and usage of data from e-tax systems and digital IDs among the SIRSs. It was also found that the extent of adoption and strategic data usage from e-tax systems by SIRSs likely improves states’ per capita internally generated revenue (IGR), but similar insights on the impact of digital IDs have not been obtained. Lastly, it was found that there are some lessons SIRSs could learn from FIRS in terms of strategic use of data from e-tax systems and digital IDs. Specifically, SIRSs need to integrate an audit risk engine and machine learning for performing analytics into their e-tax systems, and also automate the estimation of annual credits for withholding tax suffered, tax refunds and penalties, as well as tax audit management including case selection, allocation of auditors and generating audit reports. Some policy recommendations are offered that are consistent with these findings.
    Keywords: Finance,
    Date: 2023
  5. By: Gideon du Rand; Hylton Hollander; Dawie van Lill
    Abstract: A critical requirement for efficient fiscal policy is a reliable understanding of its impact on the aggregate economy for different policy instruments and under different economic conditions. Indeed, there is strong evidence to suggest that fiscal multipliers vary with economic conditions, the components of government decision-making that are considered, and the identification strategy and modelling approach used.
    Keywords: Fiscal multipliers, Bayesian estimation
    Date: 2023
  6. By: Damiano Kulundu Manda; Germano Mwabu; Martine Oleche; Moses Kinyanjui Muriithi
    Abstract: Globally, there are several initiatives being undertaken to ensure the availability of information across countries that can be used to analyse the inequality phenomenon in and among countries. The data are easily accessible for use in comparative research on inequality across regions and countries, especially those covered by the UNU-WIDER World Income Inequality Database (WIID) initiative. This initiative is among the leading data innovations in the field of inequality research.
    Keywords: Inequality measurement, Data, WIID, Kenya
    Date: 2023

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