nep-afr New Economics Papers
on Africa
Issue of 2023‒10‒23
five papers chosen by
Sam Sarpong, Xiamen University Malaysia Campus

  1. Responsible artificial intelligence in Africa: Towards policy learning By Plantinga, Paul; Shilongo, Kristophina; Mudongo, Oarabile; Umubyeyi, Angelique; Gastrow, Michael; Razzano, Gabriella
  2. Climate change's effects on food Security in Sub-Saharan Africa (SSA) By Rahal, Imen; Elloumi, Abdelkarim
  3. Explaining Urban Order: The Autocratic Origins of Africa's City Street Networks By Nathan, Noah
  4. Monetary Policy Effectiveness in the Face of Uncertainty: The Real Macroeconomic Impact of a Monetary Policy Shock in South Africa during High and Low Uncertainty States By Chevaughn van der Westhuizen; Renee van Eyden; Goodness C. Aye
  5. Informality, Labor Market Dynamics, and Business Cycles in North Africa By Olivier Bizimana; Shant Arzoumanian

  1. By: Plantinga, Paul; Shilongo, Kristophina; Mudongo, Oarabile; Umubyeyi, Angelique; Gastrow, Michael; Razzano, Gabriella
    Abstract: Several African countries are developing artificial intelligence (AI) strategies and ethics frameworks with the goal of accelerating responsible AI development and adoption. However, many of these governance actions are emerging without consideration for their suitability to local contexts, including whether the proposed policies are feasible to implement and what their impact may be on regulatory outcomes. In response, we suggest that there is a need for more explicit policy learning, by looking at existing governance capabilities and experiences related to algorithms, automation, data and digital technology in other countries and in adjacent sectors. From such learning it will be possible to identify where existing capabilities may be adapted or strengthened to address current AI-related opportunities and risks. This paper explores the potential for learning by analysing existing policy and legislation in twelve African countries across three main areas: strategy and multi-stakeholder engagement, human dignity and autonomy, and sector-specific governance. The findings point to a variety of existing capabilities that could be relevant to responsible AI; from existing model management procedures used in banking and air quality assessment, to efforts aimed at enhancing public sector skills and transparency around public-private partnerships, and the way in which existing electronic transactions legislation addresses accountability and human oversight. All of these point to the benefit of wider engagement on how existing governance mechanisms are working, and on where AI-specific adjustments or new instruments may be needed.
    Date: 2023–09–26
  2. By: Rahal, Imen; Elloumi, Abdelkarim
    Abstract: Climate change has a dual impact on food security, with direct consequences related to temperature levels and water availability in agriculture, and indirect effects stemming from its influence on disease vectors and pests. This research delves into the economic ramifications of climate change on food security within Sub-Saharan Africa (SSA). The study employs panel data encompassing all SSA nations to scrutinize the repercussions of temperature and precipitation on food security. Specifically, the analysis leverages the coefficient of variation to assess their influence on food security. The findings of this investigation reveal that variations in both temperature and precipitation have an adverse impact on food security. These climate-related variables affect food security by directly impinging on food production and indirectly affecting other indicators of food security. In light of these results, the study advocates for the implementation of ecosystem management and enhancements in production systems. Moreover, it underscores the significant detrimental effects of climate change on food security in the SSA region. To counter these impacts, the study proposes the development of effective land use policies, the conservation of natural resources, the adoption of optimal agronomic practices, and the maintenance of the population at an appropriate level within the region.
    Keywords: climate change, food security, Sub-Saharan Africa.
    JEL: C5
    Date: 2023–09
  3. By: Nathan, Noah
    Abstract: I connect the political incentives of state leaders to the physical geometry of urban built environments. Drawing on a novel combination of street network data, archival maps, and satellite imagery, I test and refine classic claims that autocratic regimes seek to order urban space, rendering society more legible through the production of gridded streets. Backdating the construction of 1.5 million streets across a sample of African cities, I show that more ordered, gridded urban neighborhoods emerge under more autocratic post-colonial regimes. But rather than a conscious effort to increase society’s legibility through urban design, evidence on mechanisms is more consistent with urban order emerging as a side-effect of more general patronage strategies autocrats use to placate critical subsets of the urban population. The paper demonstrates that efforts to intervene on the built environment represent an underexplored element of both autocratic and urban politics in the developing world.
    Date: 2023–09–11
  4. By: Chevaughn van der Westhuizen (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Renee van Eyden (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Goodness C. Aye (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa)
    Abstract: Economies all over the world operate monetary policy with the main objective to create stable macroeconomic environment for economic prosperity, with monetary policy typically the first line of defence against a number of internal and external shocks. This study addresses whether the effectiveness of monetary policy in South Africa is influenced by the prevailing degree of uncertainty in the domestic goods, stock and currency market as well as the degree of uncertainty in global markets. This is investigated through a Self-Exciting Interacted VAR (SEIVAR) methodology augmented with GARCH and EGARCH volatilities on monthly South African data, over the period 2000:02-2022:05 during which South Africa operated under an inflation targeting regime. Results point to the asymmetric effects of a monetary policy shock dependent on the uncertainty state and that monetary policy was less effective in the high uncertainty states. The results hold important policy implications for the policy makers, as it is imperative to understand how uncertainty alters the transmission of monetary policy through the economy.
    Keywords: Financial Markets, Generalized Impulse Response Function, Inflation, Monetary policy shocks, Non-Linear Self-Exciting Interacted Vector Auto-Regressions, Uncertainty
    JEL: C32 E32 E52
    Date: 2023–10
  5. By: Olivier Bizimana; Shant Arzoumanian
    Abstract: Employment informality is widespread across North Africa. This paper aims to shed light on the role played by the informal sector in labor market adjustments over the business cycle. It finds that the response of labor markets to output fluctuations is more muted in countries with higher informality levels, like the North African economies. The analysis also confirms that informal employment is countercyclical and acts as a buffer during economic downturns in countries with relatively higher informality. However, contrary to what took place in past recessions, informal employment contracted sharply during the 2020 pandemic recession in high informality economies, suggesting that it did not play its traditional countercyclical role. By contrast, employment informality tends to fall modestly or increase during economic upturns, including the post-pandemic recovery. This finding presages the persistence of a large informal sector in the post-covid era in medium- and high-informality countries.
    Keywords: Informality; Labor Markets; Business cycles; Okun’s Law
    Date: 2023–09–08

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