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on Africa |
| By: | Hammed Adededji Adetokunbo; Blaise Gnimassoun; Anthony Simpasa |
| Abstract: | Contrary to popular belief, the majority of Africans who leave their country remain in Africa and contribute to shaping the economic performance of the continent. This paper investigates the effects of intra-African immigration on the current account in African countries over the past thirty years. To this end, we use a panel data approach and a gravity-based 2SLS estimation strategy to overcome the potential endogeneity bias. We find that intra-African immigration has a positive, strong and robust impact on the current account of African countries. In particular, intra-African immigration contributes to significantly improve the trade balance of African countries, including inside and outside the continent. Further investigations reveal that the strengthening of intra-African trade or the reduction of trade extroversion as well as the demographic vitality favoured by intra-African immigration are the mechanisms behind these results. Thus, full implementation of the African Union protocol on free movement of people between countries can deepen regional integration and help reduce structural current account deficits that countries face. |
| Keywords: | international migration, current account, trade, Africa. |
| JEL: | F14 F22 F32 O55 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ulp:sbbeta:2025-03 |
| By: | Florian Léon (FERDI - Fondation pour les Etudes et Recherches sur le Développement International) |
| Abstract: | In Africa, small and medium-sized enterprises (SMEs) face a chronic financing gap that hinders their growth and the continent's economic development. Development Finance Institutions (DFIs) are often seen as a solution to bridge this gap, particularly through indirect support to local banks. However, an in-depth analysis of their impact reveals mixed results. While targeted beneficiaries benefit from these programs, it is at the expense of other borrowers. There is a need to rethink the support for these DFI-intermediated financing schemes aimed at supporting the SME sector. |
| Keywords: | DFI, Development Finance Institutions, Africa, Small and medium-sized enterprises SMEs |
| Date: | 2025–04–08 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05026886 |
| By: | Johannes Gallé; Rodrigo Oliveira; Daniel Overbeck; Nadine Riedel; Edson Severnini |
| Abstract: | This paper provides the first comprehensive analysis of how firms in emerging economies respond to carbon taxation, leveraging detailed administrative data from South Africa—a potential trailblazer for other developing countries with limited state capacity amid the growing global push for carbon pricing. We examine the dynamic impacts of the carbon tax on firm-level outcomes—such as profits, sales, capital, and labour inputs—across manufacturing and mining firms, which are key sectors in the context of the carbon tax. |
| Keywords: | Carbon pricing, Carbon tax, Firm performance, Employment |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-33 |
| By: | Ochenge, Rogers |
| Abstract: | This study investigates the demand for government securities by Kenyan banks using annual data from 2005 to 2022. Employing a fixed-effects panel regression model, the research examines the factors influencing banks' sovereign debt holdings and their implications for systemic risk. Key findings reveal that fiscal deficits, attractive bond yields, and capital adequacy requirements significantly drive banks' appetite for government securities. Over time, the similarity in sovereign holdings across banks has increased, raising concerns about systemic risk due to potential correlated exposure to sovereign debt shocks. The study also identifies a negative relationship between private sector lending and sovereign debt holdings, highlighting potential "crowding out" effects. These insights are critical for informing regulatory policies aimed at mitigating systemic risks in the Kenyan banking sector |
| Keywords: | Government paper, Bank, Systemic risk, Kenya |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:kbawps:316414 |
| By: | Cheruiyot, Kiplangat Josea; Osoro, Jared |
| Abstract: | This paper seeks to determine the interaction mechanism between the domestic imbalance and the external imbalance in Kenya and why it matters for banks. Whenever an economy has is on a path of soaring fiscal and current account deficits like Kenya has been over the past decade, concerns on the implication in stability is palpable. The influence of the imbalance on banks' behaviour crucially depends on whether one deficit occasions the other in short order, hence the twin moniker, or not. If the two are twins, then the interaction between them has an influence on economic growth and consequently bank profitability. We demonstrate that the two deficits not only exert a direct influence on the economy but also indirectly affect financial sector performance via their impact on growth. While this finding endears itself to the twin deficit conclusion, the channel of influence is through the implication of the imbalances on stability more than it is through growth. We argue that while banks seldom miss the opportunity to maximise earnings from positions they take in both money and foreign exchange markets on the back of the twin deficits, policy makers ought to maintain a focus on how financial stability could be assured through regulation at the first level and pursuit of sustainability in each of the imbalances. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:kbawps:316417 |
| By: | Juergen Bitzer (University of Oldenburg, Department of Economics); Bernhard C. Dannemann (University of Oldenburg, Department of Economics); Erkan Goeren (University of Oldenburg, Department of Economics) |
| Keywords: | Geo-Referenced Aid Projects, Geo-Referenced Conflicts, Africa, Sub-Annual Analysis, Grid-Cell Analysis, GIS Data, ACLED, World Bank |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:old:dpaper:452 |
| By: | Kodongo, Odongo |
| Abstract: | ypical debt sustainability metrics characterize Kenya's sovereign debt as "unsustainable" since around 2019. Further, the data show that, over time, commercial banks' private sector lending has declined while lending to the government has grown. Given these observations, this study examines whether sovereign debt has a discernible relationship with private sector credit growth and documents a characteristic negative relationship between sovereign debt and private credit growth; the negative relationship is stronger during periods when sovereign debt is arguably unsustainable. Informed by this finding, the study tests for the possible moderating influence of financial conditions on the established empirical relationship. Financial conditions have worsened considerably since around 2013 when our construct turns positive, or "restrictive". The tests show that financial conditions have a significant adverse moderating effect on the relationship between (domestic) sovereign debt and private sector credit growth. Informed by these findings, the study also tests for the possible existence of a threshold level of sovereign debt at which the negative relationship between sovereign debt and credit growth worsens: the results are inconclusive. Guided by these findings, the paper proffers several policy recommendations. |
| Keywords: | Public debt, Debt management, Lending, Private sector, Kenya |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:kbawps:316416 |