nep-afr New Economics Papers
on Africa
Issue of 2024‒03‒11
six papers chosen by
Sam Sarpong, Xiamen University Malaysia Campus

  1. Misinformation technology: Internet use and political misperceptions in Africa By Joël Cariolle; Yasmine Elkhateeb; Mathilde Maurel
  2. On the edge: Delays in election results and electoral violence in Sub-Sahara Africa By Saibu, Ghadafi
  3. Contextualising social cohesion I: An overview of concepts in Africa By Wortmann-Kolundžija, Eli
  4. Are Trade Rules Undermining Taxation of the Digital Economy in Africa? By Banga, Karishma; Beyleveld, Alexander
  5. Unlocking economic prosperity in the Zambian Copperbelt By Mulder, Niels; Bryan, Gharad; Lee, Neil; Oliveira Cunha, Juliana; Shawa, Benjamin; Wani, Shahrukh; Werker, Eric
  6. The Financial Development, Savings and Economic Growth Nexus Empirical Evidence from Ethiopia By Anulo, Olkamo, Degefe

  1. By: Joël Cariolle (FERDI - Fondation pour les Etudes et Recherches sur le Développement International, CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Yasmine Elkhateeb (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Department of Economics, Faculty of Economics and Political Science, Cairo University); Mathilde Maurel (FERDI - Fondation pour les Etudes et Recherches sur le Développement International, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The use of the Internet to access news has an impact on African citizens' perceptions of democracy. Using repeated cross-sectional data from the Afrobarometer survey across 35 African countries over the period 2011-2018, along with an instrumental variable approach, allows addressing potential endogeneity bias between Internet use and citizens' perceptions. The results indicate that using the Internet to obtain information has a significant negative effect on both the preference for and the perception of the extent of democracy. This negative effect is due to several factors. First, Internet use erodes trust in government institutions, mainly in the parliament and the ruling party. It increases the perception that parliament members are involved in corruption. In addition, the erosion of trust is correlated with more political mobilization, in the form of greater participation in demonstrations and voting. These results echo the existing literature and, in particular, hint at the risks of reversal of nascent democratization processes. Finally, the Internet seems to act as a misinformation channel. On the one hand, Internet users' perception of the extent of democracy and perception of the corruption of legislators diverge from experts' assessments. On the other hand, Internet use increases the likelihood of inconsistency in respondents' stances on their preference for democracy. The Internet is not a neutral information channel: it tends to undermine citizens' preference for democracy while also altering perceptions about political institutions.
    Keywords: Internet, Democracy, Misinformation, Africa, Media & democracy
    Date: 2024–01–29
  2. By: Saibu, Ghadafi
    Abstract: Does the length of time passing between elections and the announcement of elections results increase the risk of post-election violence? The declaration of official election results is a crucial moment in the electoral cycle. When electoral management bodies (EMBs) take longer than expected to announce official election results, it can signal to the opposition that the election is being stolen. Following this logic, this paper argues that the length of time between elections and the announcement of the official results acts as a signal of possible voter fraud, thereby increasing incentives for post-election violence. Hence, the paper hypothesises that a long length of time between elections and the announcement of official results increases the risk of post-election violence. This hypothesis is examined with an original dataset of election results declarations in African countries from 1997 to 2022. After controlling for important confounders that could influence delays in reporting and violence, the article empirically demonstrates that a longer length of time between elections and the announcement of official election results increases the risk of post-election violence. In doing so, this paper makes a significant contribution to studies of elections, and electoral violence. Its provision of a new dataset on election results declarations in African countries is also a significant contribution.
    Keywords: Election violence, delayed elections, post-election violence, elections results declarations, announcement of elections results, Africa
    Date: 2023
  3. By: Wortmann-Kolundžija, Eli
    Abstract: The social fragmentation of societies is one of the greatest challenges for peace, democracy and human rights worldwide. For some years now, observers have been witnessing ever-stronger tendencies towards social division, also in Western societies, which had been believed to be united for so long. Rising inequality, the rejection of previously shared values and growing scepticism towards public institutions suggest that social cohesion is at risk. Against this background, it seems more important than ever to understand what factors hold a society together - and when such cohesion is most vulnerable. Protecting and strengthening social cohesion has therefore become an objective of many activities at the local, national and international levels, and academics have started to develop methodologies on how to measure social cohesion (see, with further references: Leininger et al., 2021). This paper aims: • to give a systematic overview of the literature on African concepts of social cohesion; • to introduce the discourse around African concepts and to see which relevant concepts of social cohesion can be located in African societies; • to analyse in more detail some key African concepts and their core elements and to see which conceptual dimensions and insights on determinants of social cohesion differ from the mainstream, while inviting scholars to add further to this listing; and, in particular • to gain a better understanding of the academic discourse on social cohesion in Africa by analysing the concepts, determinants, origins and context of social cohesion theories as well as the risk of Western bias in identifying concepts for social cohesion in the African context. One of the questions that inspired the present research project is how we could better understand which relevant concepts of social cohesion in African societies are particularly emphasised by African scholars and how 'Western' concepts of social cohesion relate to the various African academic approaches to the topic. Further research questions that were raised in the context of the present paper are: • How can traditional knowledge and African social theories contribute towards contextualising the debate on social cohesion in Africa? • What are the key aspects of the concepts of social cohesion in selected African countries, and how can these be analysed? • How did pre-colonial societies in Africa understand social cohesion, and what insights can be gained from this? Methodologically, we identify and analyse concepts within the African context in order to gain insights into basic elements of social cohesion. This literature review draws on different sources such as ethnophilosophy, political philosophy, religion, culture, economics and international discourses. This literature review is the first part of an assessment of concepts of social cohesion in Africa. It is followed by a systematic comparison of social cohesion concepts in specific African countries. The academic benefit is to identify the current state of research on social cohesion in Africa, to identify the need for further research and to deepen the understanding of the phenomenon of social cohesion. In addition, we aim to deliver developmental value through these publications by helping decision-makers come to evidence-based decisions and synthesise as well as make use of scientific evidence for development practice.
    Keywords: Social cohesion dynamics, ethnophilosophical perspectives, cultural-historical contexts, societal fragmentation challenges, inequality and shared values, Western conceptual bias, communalism and consensus decision-making, relational interaction categories, post-colonial ideological impact, empirical and theoretical synthesis
    Date: 2023
  4. By: Banga, Karishma; Beyleveld, Alexander
    Abstract: African countries are currently considering provisions in the AfCFTA and at the WTO to liberalise digital trade. As they face mounting fiscal pressures, it is imperative that they beware the implications of digital trade provisions for their ability to tax their digital economy. In this paper, we develop a comprehensive framework for analysing the impact of trade rules on tax regimes in the digital economy, with a focus on Kenya, Rwanda, and South Africa. We explore how trade rules ostensibly shape tax policies and their implications for revenue generation. By examining rules regulating trade in services and the imposition of customs duties on electronic transmissions, we identify how these rules may directly impact tax policies and limit revenue generation possibilities. Moreover, digital trade rules, such as those related to data flows, localisation, and source code sharing, have the capacity to produce both indirect and administrative effects on tax measures. These rules can alter tax structures, taxation rights, data collection, and the capacity to monitor and implement tax measures. Our findings shed light on the complex interplay between trade rules and tax measures, highlighting potential challenges and opportunities for revenue generation from the digital economy in African countries.
    Date: 2024
  5. By: Mulder, Niels; Bryan, Gharad; Lee, Neil; Oliveira Cunha, Juliana; Shawa, Benjamin; Wani, Shahrukh; Werker, Eric
    Abstract: The Copperbelt province has been the growth engine of Zambia since independence. It was the nation’s mining and industrial hub, accounting for all of Zambia’s large-scale copper mining in the early 2000s. It continues to account for nearly a quarter of national GDP, and per capita GDP is the 3rd highest in the country. However, from 2015 to 2022, the Copperbelt’s economy has contracted, averaging a real GDP growth rate of -1.0% – four percentage points below the national average – ranking lowest out of all provinces. Moreover, over the same period, poverty increased by 17% – seven percentage points above the national average. Despite the growth challenges, the Copperbelt harbours significant potential to drive Zambia’s economic transformation. The global energy transition has reinvigorated interest in the province’s copper mines, and there is potential to increase what the Copperbelt – and Zambia, more generally – get out of their operational mining base. The province also boasts the country’s highest urbanisation and education rates, and has infrastructural and geographical advantages, positioning it well to reclaim its status as an industrial hub. However, unlocking this potential will be challenging. While Zambia relies heavily on natural resources, especially copper, this reliance is heightened in the Copperbelt, where mining represented nearly 40% of GDP in 2013, and continues to account for one-third of national copper production. While resource rents can contribute to economic growth, overreliance on natural resources creates a myriad of challenges. These include, among others, revenue volatility, rent-seeking, institutional weaknesses and corruption, and the so-called Dutch Disease – where natural resource revenues can hurt other sectors by causing inflation and/or currency appreciation. Consequently, regions with abundant natural resources tend to have unequal patterns of growth, worse development outcomes than their non-resource-rich neighbours, and poor development in non-resource sectors. Given the substantial challenges and opportunities that the province presents to propel Zambia to middle-income status, the government of Zambia has requested the IGC to summarise key economic trends in the region and outline policy options on how to approach regeneration.
    Keywords: copper; Zambia
    JEL: R14 J01 N0
    Date: 2024–02–16
  6. By: Anulo, Olkamo, Degefe
    Abstract: Ethiopia has experienced substantial growth in per capita income, domestic savings, and financial sector developments over the past four decades. This paper aims to examine the causal relationship between certain variables in Ethiopia from 1981 to 2023. The variables considered in this paper include per capita income, private sector credit, domestic savings, and the rate of change in the consumer price index. Per capita income and private sector credit are used as proxies to measure real economic growth and financial sector development, while the inflation rate plays a crucial role in controlling these variables. The study used the bounds cointegration test within the Autoregressive Distributive Lag (ARDL) model framework to investigate the existence of long-run integration among series. The ADF unit root test was employed to determine whether variables remained stationary. This paper used the Granger causality test to determine causal influences in the Ethiopian economy. The vector error correction model was employed for this purpose. The study also aimed to identify hypotheses that support these causal influences. The findings affirm the existence of bidirectional causal relationships among the variables. Thus, the Ethiopian economy adheres to a feedback hypothesis, which suggests that an expansion of real economic growth will favour efficient financial development and stimulate savings. Similarly, having a well-functional financial sector development and steadfast domestic resources plays a crucial role in promoting economic growth.
    Keywords: Testing hypotheses, domestic savings, private sector credit, and Real economy growth
    JEL: E6
    Date: 2024–02–15

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