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on Africa |
| By: | Yaya, Aminou |
| Abstract: | This paper's objective is to analyse the role of fiscal policies and the exchange rate regime in the effect of terms of trade shocks on growth volatility in SSA. To achieve this objective, we use an estimation technique based on instrumental variables (2SLS) for a sample of 44 sub-Saharan African countries covering the period spanning 1980 to 2020. The results show that terms of trade shocks as well as discretionary policy contribute to growth volatility in sub-Saharan Africa. However, fiscal rules reduce the effects of terms of trade shocks and discretionary policy volatility on growth volatility. Furthermore, exchange rate regime fixity tends to positively affect growth volatility. This result implies the need for sub-Sahara African countries to consider fiscal policies, and the nature of the exchange rate regime in their resilience and volatility reduction strategy. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:9c842ab2-4340-4e28-93c0-607d12e69a60 |
| By: | Ablam Estel Apeti; Bao-We-Wal Bambe |
| Abstract: | Since the 1990s, inflation targeting (IT) has been adopted by a growing number of developing countries, including in Africa, where South Africa, Ghana, and Uganda have implemented the monetary framework to promote macroeconomic stability. Despite extensive literature on the topic, little is known about the impact of IT on the performance of African economies. We fill this gap by applying the synthetic control method over the period 1990-2020 to estimate the IT effect from a counterfactual situation based on a comparison group. We find robust evidence that the IT framework has not significantly reduced inflation in any of the three countries. We then explore the underlying mechanisms and argue that weak Central bank independence and the frequent supply shocks to which African economies are exposed make it difficult for Central banks to achieve their inflation targets. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:f3726aa6-716f-45a0-8c58-fbb64bc93346 |
| By: | Daniel, Lanta; Mwighusa, Dennis; Diyamett, Bitrina |
| Abstract: | Financial services are key to economic growth and societal well-being, boosting access to credit, savings, and overall development. Despite progress in mobile phone and mobile money adoption in Sub- Saharan Africa particularly Tanzania, financial exclusion in the country remains high compared to other East African countries, with significant gender and urban-rural disparities. This study examines digital financial inclusion in Tanzania, focusing on rural women's experiences and challenges. Using focus group discussions and policy analysis, the study highlights major gaps in awareness, usage, and understanding of mobile money services, as well as overlooked policy aspects. Key findings reveal that while awareness of digital financial services is widespread, rural communitiesespecially womenlack a thorough understanding of these services. This gap in comprehension limits their usage, indicating that mere awareness is insufficient. The study underscores the importance of tailored interventions, such as community engagement, capacity building for agents, and targeted policy frameworks, to address these challenges. Recommendations are provided for both the public sector and the private sector on how to enhance financial inclusion, ensuring that no one is left behind in the digital financial landscape. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:39cdb42d-dbf4-4e35-a1a7-69a3625e8b0c |
| By: | Munyengera, Ggombe Kasim; Agnes, Mutuyimana; Seth, Kwizera; Precious, Akampumuza |
| Abstract: | Digital financial inclusion in Rwanda has grown from 46% of adults in 2016 to 66% in 2020. The nature of payments has also evolved, shifting from peer-to-peer transactions to more sophisticated ones, such as tax payments. According to the 2020 Finscope survey, 94% of commercial banks now offer some form of electronic payment. This progress notwithstanding, cash remains the preferred method of payment for groceries (98% of respondents), electricity (52%), medical fees (60%), education (44%), and personal spending (60%). Critical impediments to further DFS development and adoption include limited interoperability among platforms and services of different service providers and low levels of digital literacy. The mid-term evaluation of the National Strategy for Transformation revealed that only 24% of adults were digitally literate in 2021, less than halfway to the target of 60% by 2024. Low levels of awareness of DFS products, unreliable networks, especially in rural areas, and low levels of trust partially motivated by cyber insecurity are additional impediments to being addressed. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:b37c4ced-2a36-4e7e-8c3c-2ed0552a17ce |
| By: | Daniel Bj\"orkegren; Jun Ho Choi; Divya Budihal; Dominic Sobhani; Oliver Garrod; Paul Atherton |
| Abstract: | Although 85% of sub-Saharan Africa's population is covered by mobile broadband signal, only 37% use the internet, and those who do seldom use the web. The most frequently cited reason for low internet usage is the cost of data. We investigate whether AI can bridge this gap by analyzing 40, 350 queries submitted to an AI chatbot by 469 teachers in Sierra Leone over 17 months. Teachers use AI for teaching assistance more frequently than web search. We compare the AI responses to the corresponding top search results for the same queries from the most popular local web search engine, google.com.sl. Only 2% of results for corresponding web searches contain content from in country. Additionally, the average web search result consumes 3, 107 times more data than an AI response. Bandwidth alone costs \$2.41 per thousand web search results loaded, while the total cost of AI is \$0.30 per thousand responses. As a result, AI is 87% less expensive than web search. In blinded evaluations, an independent sample of teachers rate AI responses as more relevant, helpful, and correct than web search results. These findings suggest that AI-driven solutions can cost-effectively bridge information gaps in low-connectivity regions. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2502.12397 |
| 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 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:k76mt_v1 |