nep-afr New Economics Papers
on Africa
Issue of 2024‒05‒27
five papers chosen by
Sam Sarpong, Xiamen University Malaysia Campus

  1. Extractive industries: recognizing and managing the risks in resource-dependent economies By Tony Addison; Alan R. Roe
  2. The impact of liquidity on bank lending in South Africa By Barbara Casu; Laura Chiaramonte; Doriana Cucinelli
  3. Household Electricity Consumption Inefficiency and Poverty: Evidence from Ghana By Twerefou, Daniel Kwabena; Abeney, Jacob Opantu; Toman, Michael; Turkson, Festus Ebo; Baffour, Priscilla Twumasi
  4. (De facto) Historical Ethnic Borders and Contemporary Conflict in Africa By Depetris-Chauvin, Emilio; Özak, Ömer
  5. Fiscal policy, interest rate and the manufacturing sector performance in Nigeria By Edem Effiong, Ubong; Justin Ukere, Idongesit; Polycarp Ekpe, John

  1. By: Tony Addison; Alan R. Roe
    Abstract: This paper analyses the risks facing resource-dependent countries. These include: (i) economic mismanagement (the 'resource curse'); (ii) political mismanagement; (iii) environmental damage (climate change and the destruction of natural capital). It distinguishes 'risk' (which can be addressed probabilistically) from 'uncertainty' (infrequent unpredictable events). Mozambique, with its large natural gas resource, provides examples of all the component risks and uncertainties.
    Keywords: Africa, Extractive industries, Debt crisis, Mining, Natural gas, Oil
    Date: 2024
  2. By: Barbara Casu; Laura Chiaramonte; Doriana Cucinelli
    Abstract: This study investigates the effect of the introduction of the net stable funding ratio (NSFR) on South African domestic banks lending. We decompose total lending by customer type (corporate vs household) and by loan categories (instalments, mortgages, credit cards, overdrafts and other loans) to account for different risk profiles and maturities (short-, medium- and long-term lending). Our results show that NSFR regulations in South Africa are largely compliant with Basel III standards. While total lending does not appear to have been affected, our results indicate that the introduction of the NSFR has influenced loan composition and maturity profiles. We find that South African banks have increased the proportion of short-term lending in their loan portfolios, decreasing long-term lending, especially in residential mortgages. This effect aligns with the NSFRs aim to reduce maturity transformation but could nonetheless impact households ability to obtain long-term credit.
    Date: 2024–05–09
  3. By: Twerefou, Daniel Kwabena (University of Ghana); Abeney, Jacob Opantu (University of Ghana); Toman, Michael (World Bank); Turkson, Festus Ebo (University of Ghana); Baffour, Priscilla Twumasi (University of Ghana)
    Abstract: Demand-side management of energy consumption using energy efficiency improvements has the potential to reduce poverty in addition to reducing greenhouse emissions. However, very little is known about the impact of electrical energy consumption inefficiency on poverty. Using data from a household survey and the Ordinary Least Square estimation technique, we first assess the impact of household electricity consumption efficiency on multidimensional poverty using a stochastic energy demand frontier model. Next, we estimate the impact of electricity consumption efficiency on consumption poverty based on a probit model. The results show that a percentage increase in energy efficiency reduces multidimensional poverty by approximately 9.4 percentage points while for lower and upper consumption poverty, the probabilities reduce by approximately 10.2% and 14.3% respectively. Male-headed households are more likely to experience poverty than female-headed households. Multidimensional poverty is reduced more for risk-taking households than risk-averse ones. However, being risk-neutral is not enough to reduce the probability of household consumption poverty. Education in both cases is found to significantly reduce the probability of being poor. We recommend that government should encourage demand-side management of electricity through efficiency improvement options such as star ratings and appliance rebate systems and also increase awareness of energy efficiency as a way of addressing poverty.
    Keywords: Households; Electricity Consumption; Efficiency; Environment; Poverty
    JEL: I32 Q01 Q42
    Date: 2023–07–17
  4. By: Depetris-Chauvin, Emilio; Özak, Ömer (Southern Methodist University)
    Abstract: We explore the effect of historical ethnic borders on contemporary conflict in Africa. We document that the intensive and extensive margins of contemporary conflict are higher close to historical ethnic borders. Exploiting variations across artificial regions within an ethnicity's historical homeland and a theory-based instrumental variable approach, we find that regions crossed by historical ethnic borders have 27 percentage points higher probability of conflict and 7.9 percentage points higher probability of being the initial location of a conflict. We uncover several key underlying mechanisms: competition for agricultural land, population pressure, cultural similarity, and weak property rights.
    Date: 2024–05–02
  5. By: Edem Effiong, Ubong; Justin Ukere, Idongesit; Polycarp Ekpe, John
    Abstract: In this paper, the influence of fiscal policy (government expenditure and taxation) and interest rate on the manufacturing sector of the Nigerian economy was explored for the period 1981 to 2021. The study utilized the autoregressive distributed lag (ARDL) model approach since some of our variables were integrated at level and others at first difference, and the bounds test reporting the existence of long run relationship in the model. Findings of the study in tudy indicated that in the short run, government expenditure and its one-period lag exerted a negative and significant influence on manufacturing sector performance; value added tax exerted a positive and significant effect on manufacturing sector performance while its one-period lag exerted a negative and significant effect; and interest rate exerted a positive and significant effect on manufacturing sector performance. In the long run, government expenditure put forth a negative but insignificant effect on manufacturing sector performance; while value added tax and interest rate exert positive and significant effect. In the disaggregated model, recurrent expenditure exerts a negative and significant effect; capital expenditure exerted a positive and significant effect; value added tax exerted a negative and significant effect; and interest rate put forth a positive and significant influence on manufacturing sector performance. The study recommended that there is need for a reduction in the cost of governance as a huge proportion of public spending is used in running the government other than being utilized in stirring critical sectors that could stir manufacturing sector performance.
    Keywords: Government Expenditure; Tax; Interest Rate; I ; Industrialization; Ma ; Manufacturing
    JEL: J53
    Date: 2024–02–10

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