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on Africa |
| By: | Kruger, Wikus; Cassimon, Danny |
| Abstract: | Achieving Africa’s energy and infrastructure goals requires unprecedented investment, but foreign currency reliance in project finance exposes governments and utilities to systemic currency risk. This working paper explores the structural, financial, and political economy dimensions of currency mismatch in African power projects, and those executed by so-called (private sector) Independent Power Producers (IPPs) in particular, where revenues are in local currency but debt obligations are in hard currency. It argues that traditional solutions - such as sovereign guarantees and hard currency Power Purchase Agreements (PPAs) - are increasingly unsustainable, exacerbating fiscal vulnerabilities and undermining long-term resilience. The paper examines the state of local capital markets across Africa, the evolution of PPA structures, and the consequences of unmanaged foreign exchange risk on utilities, consumers, and governments. Through detailed case studies, it illustrates the limitations of prevailing models and highlights emerging alternatives - including local currency PPAs, partial indexation mechanisms, and innovative risk mitigation tools. Focusing in particular on TCX (The Currency Exchange Fund), the study evaluates its potential to scale hedging solutions across frontier markets, and outlines how procurement reform and blended finance can integrate FX risk management into project design. The paper concludes with a set of actionable recommendations for governments, donors, DFIs, and domestic financial actors to enable a shift toward a new investment architecture - one that is locally anchored, fiscally responsible, and better aligned with the goals of universal access and a just energy transition. |
| Keywords: | currency risk, de-risking, currency hedging, renewable energy finance, TCX, Africa |
| JEL: | G11 G32 H63 O22 O55 Q2 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iob:wpaper:2025.12 |
| By: | Plantinga, Paul; Ayodele, Odilile; Sanchez, Diana Carolina; Daniels, Chux; Davids, Yul Derek; Dlamini, Simangele; Mosiea, Tshepang |
| Abstract: | In South Africa, e-participation initiatives tend to be localised to individual municipality departments and units, often for a short time period and with limited influence on policymaking. Ensuring these initiatives are more impactful and sustaining them over a longer duration is usually seen as an issue of institutionalisation. However, meaningful e-participation involves a more fundamental reconfiguration of relationships between citizens and governments which suggests a narrow institutionalisation lens may underplay the depth of changes that are involved. For this reason, we look to an emerging body of research on ‘transformative innovation policy’ (TIP) which has explored the ways in which innovations are nurtured and scaled as part of a systemic change process. By mapping key literature on e-participation institutionalisation and diffusion against the twelve TIP sub-processes, with a specific consideration of African and developing country issues, we identify potential opportunities for directing e-participation implementation and governance towards impactful outcomes. This mapping is to be used for an in-depth analysis of e-participation pilot projects currently being implemented in South Africa. |
| Date: | 2025–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:j5s6w_v1 |
| By: | Ahlback, Johan; Yeandle, Alexander |
| Abstract: | International donors have invested heavily in strengthening electoral administration in low-income democracies, aiming to reduce irregularities and build trust. However, we know little about whether these interventions actually improve public perceptions. Using a conjoint choice experiment in Malawi, randomising organisational features of polling stations and their potential for political bias, we examine the determinants of public trust in a low-income setting. Voters are more trusting of stations with well-trained polling staff, independent monitors, security personnel, and transparency measures, effects driven by sanctioning the absence of these basic requirements. Respondents also prioritise procedurally fair measures over those that exclusively benefit their own party or ethnic group, challenging assumptions about the dominance of partisanship and ethnicity in African elections. We contribute to the literature on election administration and public opinion in low-income settings, while highlighting ways in which resource-constrained election bodies can build and maintain public support. |
| Date: | 2025–08–20 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:xhuz5_v1 |
| By: | Iimi, Atsushi |
| Abstract: | Many African countries are experiencing rapid urbanization. However, job creation has not kept pace, resulting in persistently high urban unemployment rates. Based on basic job search theory, the paper revisits the relationship between employment and transport connectivity at various levels, using data from Dar es Salaam, one of Africa’s fastest-growing developing cities. It shows that those who commute longer distances tend to earn higher wages. Therefore, enhancing the efficiency of urban transport systems is crucial. The paper also identifies variations in the relationship between wages and commute times across different transport modes. Commuters using motorized transportation, particularly private cars and taxis, generally earn more than those using nonmotorized transport. Hence, there is a potential risk associated with the overreliance on private transport modes. The gender wage gap persists in Dar es Salaam, but the positive effect of commuting on wages is greater for women, which can contribute to reducing the gap. |
| Date: | 2025–08–18 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11186 |
| By: | Johanna Tiedemann; Olivier Bizimana; Shant Arzoumanian |
| Abstract: | This paper assesses the stance of monetary policy in eleven Sub-Saharan African (SSA) emerging and frontier market economies. We estimate neutral real interest rates using a range of methodologies, and find a broadly declining trend in most economies since the Global Financial Crisis, consistent with patterns observed in advanced and major emerging market economies. We document significant heterogeneity in monetary policy stances—measured by the interest rate gap—even during common global shocks. We also examine the consistency between signals from the intended monetary policy stance and broader financial conditions. To this end, we construct financial conditions indices (FCIs) and analyze their relationship with interest rate gaps. We find that this relationship strengthens during periods of highly accommodative or restrictive monetary stances, particularly in economies that have adopted or are transitioning to inflation-targeting frameworks. Moreover, contractionary monetary shocks tighten financial conditions more in these economies than in those operating under other regimes. |
| Keywords: | Neutral Interest Rate; Monetary Policy Stance; Financial Conditions; Monetary Policy Transmission; SSA |
| Date: | 2025–08–15 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/160 |