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on Africa |
| By: | Marijn A. Bolhuis; Hamza Mighri; Henry Rawlings; Ivanova Reyes; Qianqian Zhang |
| Abstract: | This paper studies the potential effects of geoeconomic fragmentation (GEF) in the sub-Saharan Africa region (SSA) through quantifying potential long-term economic costs. The paper considers two alternative GEF scenarios in which trade relations are fully or partially curtailed across world economies. Our quantification relies on a multi-country multi-sector general equilibrium model and takes a deep dive into the impact across SSA’s oil-rich, other resource-rich and non-resource-rich countries. The results are based on a detailed dataset including information for 136 tradable primary commodity and 24 manufacturing and services sectors in 145 countries—32 of which are in SSA. We find that under GEF, SSA could experience long-term wellfare losses of approximately 4 percent of GDP, twice the losses of the rest of the world. This strong effect results from the large losses of other resource-rich and non-resource rich countries in SSA, given their high dependence on commodity trade. However, if the world experiences a less severe GEF-induced trade disruption—a strategic decoupling—SSA countries could derive minor gains from the re-shuffling of global market supply, specially in energy products. |
| Keywords: | Sub-Saharan Africa; geoeconomic fragmentation; trade; costs; global integration; commodities; trade diversion |
| Date: | 2024–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2024/083&r=afr |
| By: | Marcus Vinicius de Freitas |
| Abstract: | China is the largest developing country. Africa is the continent with the largest number of developing countries. The China-Africa economic relationship has developed rapidly over the last two decades. China has increased its investment in Africa over the last four decades. Flows surged from $75 million (2003) to $5 billion (2021). This has had both positive and negative impacts on Africa. Infrastructure improvement, job creation, and overall economic growth can be listed as positive results, leading to improved connectivity, trade, and transportation in a continent where infrastructure integration has always been challenging. Creating such opportunities in Africa has supported lower unemployment rates, particularly among young people, which is fundamental in a continent that enjoys a positive demographic bonus. |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb30-23&r=afr |
| By: | Simplice Asongu (Pretoria, South Africa); Nicholas M. Odhiambo (Pretoria, South Africa) |
| Abstract: | This study assesses the relevance of foreign aid in the incidence of capital flight on unemployment in 20 countries in sub-Saharan Africa. The study is for the period 1996-2018, and the empirical evidence is based on interactive quantile regressions in order to assess the nexuses throughout the conditional distribution of the unemployment outcome variable. From the findings, capital flight has a positive unconditional incidence on unemployment, while foreign aid dampens the underlying positive unconditional nexus. Moreover, in order for the positive incidence of capital flight to be completely dampened, foreign aid thresholds of 2.230 and 3.964 (% of GDP) are needed at the 10th and 25th quantiles, respectively, of the conditional distribution of unemployment. It follows that the relevance of foreign aid in crowding out the unfavorable incidence of capital flight on unemployment is significantly apparent only in bottom quantiles or countries with below-median levels of unemployment. Policy implications are discussed. The study complements the extant literature by assessing the importance of development assistance in how capital flight affects unemployment in sub-Saharan Africa. |
| Keywords: | foreign aid; capital flight; unemployment; Sub-Saharan Africa |
| JEL: | C50 D74 F23 N40 O55 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:24/007&r=afr |
| By: | OECD |
| Abstract: | This paper examines the interactions between the 2020-23 Sahelian coups and the trajectories of jihadism and insecurity, covering three countries: Burkina Faso, Mali and Niger. First, it examines pre-coup trends in violence. Second, the paper finds that coup-makers’ policy choices have accelerated the worsening of violence beyond the pre-coup baseline trend, especially when coup-makers authorise new actors to commit violence, although trends in violence remain somewhat erratic and are even more complex at the sub-national level. Third, it offers an ambivalent finding on the impact of the withdrawal of the French Operation Barkhane following Mali’s second coup in 2021. Finally, the paper discusses the apparent strategies of the region’s two main jihadist groups, which have largely continued their pre-coup strategies, but have also responded to new conflict actors and pursued certain opportunities for increased territorial influence. |
| Keywords: | Burkina Faso, coups, ECOWAS, jihadism, Mali, Niger, Sahel, violence |
| JEL: | D74 F50 F51 Q34 |
| Date: | 2024–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:oec:swacaa:43-en&r=afr |
| By: | Tendai Gwatidzo; Witness Simbanegavi |
| Abstract: | Using survey data from the World Banks Global Findex Database and a pseudo panel we investigate two pertinent issues pertaining to financial inclusion in South Africa. First, we consider the factors driving the likelihood of accessing financial services in South Africa. Second, we investigate the impact of banking sector competition on financial inclusion in South Africa essentially testing the information and market power hypotheses. Household head characteristics such as age, education and income are found to positively influence the likelihood of being financially included. Considering the relationship between financial inclusion and banking sector competition, evidence supports the information hypothesis rather than the market power hypothesis. That is, lower bank competition facilitates the formation of longer-lasting relationships between banks and their clients, which incentivises banks to invest in information generation and monitoring in previously unserved markets, thereby expanding financial inclusion. |
| Date: | 2024–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:rbz:wpaper:11061&r=afr |
| By: | Rose, Julian (RWI - Leibniz Institute for Economic Research); Ankel-Peters, Jörg; Hodel, Hanna; Sall, Medoune; Bensch, Gunther |
| Abstract: | Claims for removing fossil fuel subsidies in the Global South are based on climate and equity concerns, but they can be at odds with improving access to Liquefied Petroleum Gas (LPG) as a clean cooking fuel. We examine the case of urban Senegal where LPG usage rates were among the highest in sub-Saharan Africa in the late 2000s. Using Demographic and Health Survey (DHS) data, we show that LPG usage declined sharply following the removal of subsidies in 2009. Counterintuitively, the decline was not reversed when falling world market prices led to a local price decrease. To explore this puzzle, we use detailed cooking data from surveys we conducted in 2009 and 2019. We find that households change to charcoal after the subsidy removal, but they increasingly use newly promoted energy-efficient charcoal stoves. These stoves make charcoal cooking cheaper and hence the switch back to LPG less attractive. Our results underscore that the energy transition of the poor is highly price responsive – an important insight not only for the debate about fossil fuel subsidies but also carbon taxation. |
| Date: | 2024–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:6tgqs&r=afr |