nep-afr New Economics Papers
on Africa
Issue of 2023‒11‒06
five papers chosen by
Sam Sarpong, Xiamen University Malaysia Campus

  1. Impact of Output Gap, COVID-19, and Governance Quality on Fiscal Space in Sub-Saharan Africa By Katuka, Blessing; Mudzingiri, Calvin
  2. Oil price shocks and energy transition in Africa By Tii N. Nchofoung
  3. Preparing for an Aging Africa: Data-Driven Priorities for Economic Research and Policy By Madeline E. Duhon; Edward Miguel; Amos Njuguna; Daniela Pinto Veizaga; Michael W. Walker
  4. FDI and economic growth in Africa : the case of Morocco By Walid Agrar; Mimoun Derraz
  5. Inherited inequality: a general framework and an application to South Africa By Brunori, Paolo; Ferreira, Francisco H. G.; Salas-Rojo, Pedro

  1. By: Katuka, Blessing; Mudzingiri, Calvin
    Abstract: This study examined the determinants of fiscal space within the Sub-Saharan Africa(SSA) region, utilising a panel of 33 countries from 2005 to 2021. The paper applied the panel threshold, difference, and system generalised method of moments (GMM) regression techniques. The empirical results found evidence of constrained fiscal space and poor governance in Central, Western, and Eastern Africa. The results further unveiled that an enhancement in governance indicators beyond −0.23 for the governance index, −0.15 for control of corruption, −0.98 for the rule of law, −0.37 for regulatory quality, −0.15 for voice and accountability, +0.36 for political stability, and −0.61 for government effectiveness, respectively, increase fiscal space. Moreover, the study concluded that the output gap, COVID-19, trade openness, and economic growth impact fiscal space availability in Central, Western, Southern, and Eastern Africa. The paper investigated whether the COVID-19 pandemic and governance quality significantly influenced fiscal space within SSA. We strongly recommend enhancement in all facets of governance through comprehensive restructuring of governance policies across all SSA countries. Another key recommendation is fostering trade openness to expand tax revenue generation and broaden the tax base, thereby providing the continent with greater fiscal space and improved resilience to unforeseen shocks.
    Keywords: de facto fiscal space; output gap; governance quality; COVID-19 pandemic; panel threshold regression; Hamilton regression filter
    JEL: E6 H3 H30
    Date: 2023–10–13
  2. By: Tii N. Nchofoung (University of Dschang, Cameroon)
    Abstract: When commodity prices rise in international markets, Africa's economic performance scarcely improves, and when commodity prices fall, its economic performance suffers substantially. This study examines the effect of oil price shocks on Africa’s energy transition (ET). Data is obtained for 53 African countries between 2000 and 2020, with the Driscoll and Kraay and Panel VAR regression procedures used. The results reveal that oil price shocks have an adverse influence on Africa's ET, with the findings being strong in both rural and urban contexts. Furthermore, the results expose that the adverse effect is visible only in net crude oil exporting countries, whereas net oil importing countries have no significant effect. Moreover, oil price shocks cannot explain Africa's urban-rural differences in clean energy access. As policy implications, African policymakers should reduce the rural-urban gap in clean energy by investing more in clean energy and technologies in rural areas, which help enhance the resilience of the energy sector to oil price shocks.
    Keywords: Crude oil price shocks, energy transition; Panel VAR, Africa
    Date: 2023–01
  3. By: Madeline E. Duhon; Edward Miguel; Amos Njuguna; Daniela Pinto Veizaga; Michael W. Walker
    Abstract: The over-60 population in Sub-Saharan Africa is expected to grow rapidly in the coming decades, tripling between 2020 and 2050. Despite this explosive projected growth, few countries in the region have implemented policies designed to support older populations. Further, little research in economics has specifically examined aging in Sub-Saharan Africa, though many opportunities exist for economists to generate research evidence to inform the design of effective policies in this area. This paper combines insights from a cross-disciplinary review with original data analysis to characterize the challenges and opportunities facing older Sub-Saharan Africans in domains such as health and financial security. Informed by these findings, the paper identifies directions for future economic research and discusses how research evidence can inform the design of health care systems, pensions, and other public support programs to prepare for an aging Africa.
    JEL: H51 H55 J14 O10 O55
    Date: 2023–10
  4. By: Walid Agrar (ENCGO - Ecole Nationale de Commerce et de Gestion); Mimoun Derraz (Université Mohammed Premier [Oujda])
    Abstract: From the beginning of the 1980s, Morocco, like other emerging countries, organized a set of measures and reforms working in favor of the attractiveness of FDI.FDI represents the "bridge" for African countries to integrate into and be part of the international financial and commercial sphere.Morocco is aware of the role of FDI in economic growth, it has embarked on a project of structural, institutional and regulatory reforms and changes in order to ensure their attractiveness.The presence of FDI in an economy symbolizes an open and efficient internationalized economic system and acts as an engine of economic growth.Through this study, we will demonstrate the effects of FDI on the economic and social growth of Morocco, via an analysis of macroeconomic indicators, to conclude with recommendations drawn on the basis of the practices of pioneering countries in the attraction of FDI. FDI remains a determining factor and a had a degree of influence on the economic growth of Morocco, which is positioned among others such as the promotion of local investment, the development of human capital, etc.
    Abstract: Dès le début des années quatre-vingt le Maroc à l'image d'autres pays émergents a organisé un ensemble de mesures et réformes jouant en faveur de l'attractivité des IDE.Les IDE représentent le « pont » pour les pays africains pour s'intégrer dans la sphère financière et commerciale internationale et d'en faire partie.Le Maroc est conscient du rôle des IDE dans la croissance économique, il s'est engagé dans un chantier de réformes et mutations structurelles, institutionnelles et réglementaires afin d'assurer leur attractivité.La présence des IDE dans une économie symbolise un système économique internationalisé ouvert et efficace et fait office d'un moteur de croissance économique.A travers cette étude, nous allons démontrer les effets des IDE sur la croissance économique et sociale du Maroc, par le biais d'une analyse des indicateurs macroéconomiques, pour conclure avec des recommandations tirées sur la base des pratiques des pays pionniers dans l'attraction des IDE. Les IDE restent un facteur déterminant et d'un degré d'influence sur la croissance économique du Maroc, qui se positionne parmi d'autres tels que la promotion de l'investissement local, le développement du capital humain, etc.
    Keywords: FDI, economic growth, attractiveness, Morocco, IDE, croissance économique, attractivité, Maroc
    Date: 2023–08
  5. By: Brunori, Paolo; Ferreira, Francisco H. G.; Salas-Rojo, Pedro
    Abstract: Scholars have sought to quantify the extent of inequality which is inherited from past generations in many different ways, including a large body of work on intergenerational mobility and inequality of opportunity. This paper makes three contributions to that broad literature. First, we show that many of the most prominent approaches to measuring mobility or inequality of opportunity fit within a general framework which involves, as a first step, a calculation of the extent to which inherited circumstances can predict current incomes. The importance of prediction has led to recent applications of machine learning tools to solve the model selection challenge in the presence of competing upward and downward biases. Our second contribution is to apply transformation trees to the computation of inequality of opportunity. Because the algorithm is built on a likelihood maximization that involves splitting the sample into groups with the most salient differences between their conditional cumulative distributions, it is particularly well-suited to measuring ex-post inequality of opportunity, following Roemer (1998). Our third contribution is to apply the method to data from South Africa, arguably the world’s most unequal country, and find that almost threequarters of its current inequality is inherited from predetermined circumstances, with race playing the largest role, but parental background also making an important contribution.
    Keywords: inequality; opportunity; mobility; transformation trees; South Africa
    JEL: D31 D63 J62
    Date: 2023–09–01

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