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1. Dark Spots in the International Commodity Value Chain: The Case of Copper in Zambia

Author:
Dale Mudenda and Léonce Ndikumana
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper investigates mineral export misinvoicing in Zambia as a channel of capital flight, with a focus on copper, gold, and gemstones. The analysis reveals major discrepancies between Zambia’s recorded exports and imports as recorded by its trading partners. In the case of copper, a large share of exports recorded in Zambia as headed to Switzerland does not appear in Swiss imports. The ‘missing copper’ cannot be traced through analysis of trade between Switzerland and its major partners either. Gaps in the opposite direction are observed in Zambia-China trade, suggesting export underinvoicing, a common mechanism of capital flight. These do not offset the gaps observed in mirror trade statistics between Zambia and Switzerland, which remain a mystery. Similarly, whereas the primary destination recorded for Zambian gold exports is South Africa, these do not appear in gold imports recorded by South Africa. The gemstones sector is characterized by high informality that enables smuggling and export underinvoicing. Zambia must implement measures to curb misinvoicing of mineral exports and address structural opacity in the trade value chain if it hopes to maximize the gains from the exploitation of its mineral resources.
Topic:
Political Economy, Commodities, Exports, Global Value Chains, and Minerals
Political Geography:
Africa and Zambia

2. China’s Provinces as Global Actors: Evidence from China-Africa Relations

Author:
Charlotte Lenz
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
LSE IDEAS
Abstract:
With the launch in the early 2000s of China’s ‘Going Global’ Strategy, Chinese provinces became one group of actors participating in China’s South-South relations. In this Strategic Update, Charlotte Lenz investigates the role of Chinese provinces as foreign policy actors and explains their internationalisation strategies, challenging the prevalent perception of China as a unitary actor on the world stage. Drawing on evidence from Africa-China relations, the report identifies two strategies employed by Chinese provinces in pursuit of their foreign policy interests: (1) Formal and informal “twinning” as a collaborative model between central and local actors, wherein central actors design policies and provincial governments execute projects; (2) and “clustering” according to a sectoral logic of investment and diplomacy in which a certain Chinese province engages a certain foreign country. Despite ongoing bureaucratic centralisation under Xi Jinping, provinces continue to pursue their own internationalisation strategies to help meet local economic and employment targets. Understanding their agency, interests and limitations is thus key to deriving a better understanding of China’s evolving global presence.
Topic:
Foreign Policy, Diplomacy, Bilateral Relations, Investment, and Internationalization
Political Geography:
Africa, China, and Asia

3. Growth Through Inclusion in South Africa

Author:
Ricardo Hausmann, Tim O'Brien, Andrés Fortunato, Alexia Lochmann, and Kishan Shah
Publication Date:
11-2023
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
It is painfully clear that South Africa is performing poorly, exacerbating problems such as inequality and exclusion. The economy’s ability to create jobs is slowing, worsening South Africa’s extreme levels of unemployment and inequality. South Africans are deeply disappointed with social progress and dislike the direction where the country seems to be heading. Despite its enviable productive capabilities, the national economy is losing international competitiveness. As the economy staggers, South Africa faces deteriorating social indicators and declining levels of public satisfaction with the status quo. After 15 years, attempts to stimulate the economy through fiscal policy and to address exclusion through social grants have failed to achieve their goals. Instead, they have sacrificed the country's investment grade, increasing the cost of capital to the whole economy, with little social progress to show for it. The underlying capabilities to achieve sustained growth by leveraging the full capability of its people, companies, assets, and knowhow remain underutilized. Three decades after the end of apartheid, the economy is defined by stagnation and exclusion, and current strategies are not achieving inclusion and empowerment in practice. This report asks the question of why. Why is the economy growing far slower than any reasonable comparator countries? Why is exclusion so extraordinarily high, even after decades of various policies that have aimed to support socio-economic transformation? What would it take for South Africa to include more of its people, capabilities, assets, and ideas in the functioning of the economy, and why aren’t such actions being undertaken already? The Growth Lab has completed a deep diagnostic of potential causes of South Africa’s prolonged underperformance over a two-year research project. Building on the findings of nine papers and widespread collaboration with government, academics, business and NGOs, this report documents the project’s central findings. Bluntly speaking, the report finds that South Africa is not accomplishing its goals of inclusion, empowerment and transformation, and new strategies and instruments will be needed to do so. We found two broad classes of problems that undermine inclusive growth in the Rainbow Nation: collapsing state capacity and spatial exclusion.
Topic:
Inequality, Economic Growth, Unemployment, and Inclusion
Political Geography:
Africa and South Africa

4. Why Morocco’s Youth Employment Policies Continue to Fail

Author:
Ismail Ait Bassou
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
Although Morocco has launched several programs designed to provide job opportunities for young people, youth unemployment rates remain high. This paper argues these programs have proven ineffective and are compounded by an unsustainable business environment, and presents some recommendations to ensure the planned reforms in the youth employment sector deliver on what they promise.
Topic:
Labor Issues, Employment, Youth, and Job Creation
Political Geography:
Africa and Morocco

5. The Implications of Financial Development for Economic Growth in CEMAC

Author:
Jean-Cedric Kouam
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
In recent years, the Economic and Monetary Community of Central Africa (CEMAC) has experienced sluggish economic growth. This has fallen from 4.86% in 2010 to 0.04% in 2021 (World Bank, 2021), a drop of 4.82 percentage points in a decade. In addition to the high vulnerability of economies to exogenous shocks, several economists such as Asteriou & Spanos (2019) attribute the slowdown in growth to the underdevelopment of the financial sector. In CEMAC, the access of populations to mobile money or commercial bank deposit services has undoubtedly become insufficient to keep economies on a sustainable and inclusive growth path. This article reviews the evolution of financial development indicators in the CEMAC zone since 2013, and its impact on the performance of states in terms of economic growth. We use secondary data collected from the World Bank and the Bank of Central African States (BEAC), between 2013 and 2021. The analysis provides public authorities in CEMAC with arguments to promote financial development in the sub-region to boost economic growth, and better take advantage of the opportunities of the African Continental Free Trade Area (AfCFTA). The paper is structured in two sections. Section 1 presents the evolution of financial development indicators in CEMAC and section 2, the implications for economic growth and sustainable development.
Topic:
Development, Regional Cooperation, Finance, Economic Growth, and CEMAC (Central African Economic and Monetary Community)
Political Geography:
Africa and Central Africa

6. Financial Autonomy of Decentralized Local Authorities and Local Development

Author:
Herve Ondoua, Bin Meh, Boris Andzanga Ndzana, and Jean-Cedric Kouam
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
The financial autonomy of Decentralized Territorial Collectivities (DTCs) is today considered as the foundation of local governance. It confers decision-making power in financial matters to municipalities and regions, as well as a certain level of independence in the management of the resources at their disposal. In Cameroon, the general principles of financial autonomy are defined in the law on the General Code of DTCs, in particular in the Fifth Book, which repeals the law establishing the financial regime of local authorities and that on the financial regime of the State. Thus, financial autonomy should enable DTCs to develop by using their own resources in improving the living conditions of their populations. Despite these powers, DTCs still depend for the most part on income from municipal taxes and income transferred by the State. However, DTCs in Cameroon have real economic and financial potential but not a degree of financial autonomy that would allow them to accelerate the development of their locality. This reflection is aimed at local elected officials, political authorities, government authorities and civil society, with the aim of examining the effectiveness of financial autonomy in the face of the economic and financial potential of DTCs and their ability to implement their own local development projects. This article relates financial autonomy and local governance, on the one hand, and shows how financial autonomy is a factor of valorization of local resources, on the other hand.
Topic:
Development, Government, Finance, Local, Decentralization, and Autonomy
Political Geography:
Africa and Cameroon

7. What Synergy of Action in the Fight Against Corruption in Cameroon?

Author:
Theophile Nguimfack Voufo
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
The phenomenon of corruption is growing so much in Cameroon, to the point where we must be careful that it does not become a characteristic of Cameroonian identity. Cameroon has twice held the rank of the highest corruption index in the world.[1] However, the will of the public authorities to put an end to it is matched only by the determination of the actors of corruption to escape the meshes of the control mechanisms. Given the government strategy and the proliferation of organizations fighting against corruption, one could expect a significant reduction of this scourge in Cameroon. But like a hydra, corruption remains a major problem in Cameroonian society. A substantial literature has been able to highlight the strengths and weaknesses of administrative, political, and jurisdictional bodies in the fight against corruption.[2] Among other weaknesses are prominently the subordination of the power of sanction to the will of the president of the Republic, the politicization of special operations to fight against corruption, and the lethargy of certain control bodies. The creation of the NACC, an organization specializing in the fight against corruption, has created hope in Cameroon. But, the decree fixing its attributions does not give it its own power of sanction. Consequently, NACC limits itself to noting the facts of corruption and reports them to the public authorities or seizes the judge by denunciation. This technique of referral by denunciation was mainly oriented toward the judicial judge. In practice, however, NACC had to experiment with referral to the Audit Bench of the Supreme Court, which opens up the prospect of collaboration between these two bodies in the fight against corruption in Cameroon. The question arises as to how NACC and the jurisdiction of accounts can combine their actions in the fight against corruption in Cameroon. After analysis, it appears that the ways of functional collaboration between the two organizations exist (I); however, they require some operational coordination (II).
Topic:
Corruption, Courts, Bureaucracy, and Efficiency
Political Geography:
Africa and Cameroon

8. The Russian-Ukrainian War: An Opportunity to Strengthen the AfCFTA

Author:
Steve Tametong and Venessa Aboudi
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
The world had hardly covered from the horrors of the COVID-19 pandemic when it was once again tested on February 24, 2022, by the outbreak of war between Russia and Ukraine. The consequences of this war are quite significant for humanity. On the economic level, the Russian-Ukrainian conflict has highlighted the disadvantages of globalization, understood as a process marked by the interconnection and interdependence of world economies. The inflationary shock and the food crisis resulting from the inoperative nature of import channels for certain basic necessities from Russia and Ukraine have demonstrated the fragility of the economies. With regard to African countries, in particular, the prices of several basic food products (wheat, flour, rice, maize, bread, vegetable oil, etc.) have risen sharply. Indeed, most African countries are almost dependent on the import of agricultural products and seeds from the two belligerent countries. These imports correspond to 35 billion US dollars of imports each year (1). This appears to be an incongruity given the extent of arable land on the African continent. The low production and especially processing capacity increases the dependence of African economies on the import of these basic products. The outbreak of the Russian-Ukrainian conflict makes it possible to question the economic resilience of African States, that is to say, their “capacity [ to] keep output close to [their] potential despite a shock ” (2). Above all, it offers the opportunity to analyze the economic and commercial potential of the AfCFTA in the process of building the resilience of African economies to external shocks. Indeed, the AfCFTA was officially launched in January 2021 with the main objective of “creating a single market for goods and services facilitated by the movement of people in order to deepen the economic integration of the African continent…” (3). This policy note is structured around the idea that the Russian-Ukrainian conflict, in view of its socio-economic consequences on the African continent, offers an opportunity for African countries to work toward the strengthening of the AfCFTA. So that it appears as a real pole of competitiveness and inter-African trade likely to counter the shocks and uncertainties of the dynamics of world trade. Before analyzing the AfCFTA as a pole of production and export of African products (II), it is necessary to take stock of the socio-economic consequences of the Russian-Ukrainian war on African economies (I).
Topic:
Security, International Trade and Finance, Military Strategy, Free Trade, Peace, and Russia-Ukraine War
Political Geography:
Africa, Russia, Europe, and Ukraine

9. Entrepreneurship, Youths, and Women Economic Inclusion in Cameroon

Author:
Laurent Brice Nsengue, Bin Joachem Meh, and Jean-Cedric Kouam
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
Bentham’s theory of utilitarian morality leads us to know that the purpose of economic activity is to ensure social progress for the happiness of the greatest number. Thus, excluding people from an economic system without considering their interests is considered a destruction of the common good. According to the United Nations (1962), population is one of the most important factors of economic productivity, as it influences the rate of development of a country. Women represent 49.6% of the world’s population and young people aged 10 to 24 represent 15.5% of the world’s population (UN World Youth Report, 2020; World Bank, 2020). In Cameroon, youth and women represent more than 60% of the population, but remain the most economically excluded (BUCREP, 2005). This reality appears to be a challenge for a country that wants to be an emerging country by 2035. The main objective of this paper is to show the role that entrepreneurial development could play in promoting the economic inclusion of youth and women in Cameroon. It is expected to raise awareness among public authorities as well as the private sector of the importance of economic inclusion of youth and women through entrepreneurship development. Based on studies carried out by credible international and local institutions, we focus on the challenges of entrepreneurship in the context of the economic inclusion of youth and women and the opportunity of entrepreneurship for the economic inclusion of young people and women in Cameroon.
Topic:
Economics, Women, Entrepreneurship, Discrimination, Youth, Equality, and Inclusion
Political Geography:
Africa and Cameroon

10. Universal Basic Income: A Primer for Poverty Reduction in Africa

Author:
Bin Joachem Meh, Ntoubia Larissa, and Ondoua Herve
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
Universal basic income (UBI) scheme provides regular payment in cash to everyone in the economy irrespective of their social, economic, financial, and political status. UBI has a direct effect on poverty reduction; this implies that providing cash to everyone in the society irrespective of their financial status will reduce the rate of poverty as citizens will be able to meet basic needs such as food, housing, and clothing especially if this basic income amount is above the poverty line. For others, UBI will only increase inequality and poverty especially in developing countries who lack finances to provide such income to everyone in the society (Robert, 2019). UBI is a simple and practical solution to eradicating poverty, by giving everyone a minimum income, regardless of whether they are young, old, employed or unemployed, the government can tackle poverty reduction (Centre for Social Justice, 2018). More recently UBI has been a major issue of concern and it is seen as the answer to wider problems of technological unemployment, wealth inequality, mental health stability and social mobility. In India, UBI improved mental and physical health and in Namibia UBI program reduced household poverty from 76% to 37% in one year (Johanna, 2014). The high poverty rate and the scanty nature of the UBI literature in Africa makes this study an important contribution to the body of knowledge and further enable policy makers to reflect on the implementation of UBI principle. The objective of this paper is to analyze the effects of universal basic income on narrowing the poverty gap in Africa. The rest of the paper will bring out the role of UBI in poverty reduction, and propose some policy recommendations for the introduction of the UBI in Africa.
Topic:
Poverty, Universal Basic Income, Humanitarian Crisis, Wages, and Income
Political Geography:
Africa

11. The African Continental Free Trade Area: A boon for the “Africa We Want” by 2063?

Author:
Jean-Cedric Kouam
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
One of the major objectives set by the African Union (AU) in Agenda 2063, is to achieve a “prosperous Africa, based on inclusive and sustainable growth”. To ensure the prosperity of the people, especially of women and youth, member states have, in the first ten years of the adoption of this agenda, taken a number of initiatives to strengthen economic integration of the continent. Among these initiatives, the implementation of the African Continental Free Trade Area (AfCFTA) in January 2021, occupies a prominent place. In launching the AfCFTA, and making it effective, the intention of the AU is to overcome the historical fragmentation and isolation of the various African economies. The challenge is to open them up to new global trade opportunities and improve transport and communication links across the continent. However, not all AU member countries have ratified this major project. The objective of this article is to take stock of the economic integration process that has been set in motion with the effective entry into force of the AfCFTA. It highlights, on the one hand, the main reasons that justify the reluctance of states that have not yet signed the AfCFTA agreement and, on the other hand, outlines the opportunities offered by AfCFTA for an Africa that wants to emerge as a strong, united and influential player and partner on the world stage.
Topic:
International Trade and Finance, Regional Cooperation, Free Trade, and African Union
Political Geography:
Africa

12. Cameroon: The State’s Transfer of Powers to the Regions

Author:
Pacome Vouffo
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
If there is one thing that is hardly debatable in legal science, it is the evolution of law through constitutional or legislative textual reform on a given issue. The issue of decentralisation in Cameroon is an illustration. The constitutional and legislative dynamics since independence reflect this, particularly with the inclusion of local authorities in the Constitution of 4 March 1960, the 1974 laws applicable to the Communes and their subsequent amendments , the constitutional reform of 18 January 1996 explicitly raising decentralisation to the constitutional rank , the laws of 22 July 2004 on decentralisation and today Law No. 2019/024 of 24 December 2019 to lay down the General Code of Regional and local authorities(CGCTD). This Code enshrines an evolution in decentralisation law and sets out the terms and conditions for the exercise by the State of powers transferred to regional and local authorities in general and to the Regions in particular. From a legal point of view, this reframing does not seem to have aroused the interest of the doctrine in the same way as the question of the special regime for the North-West and South-West Regions, which has been addressed . In view of its scope, however, it is easy to admit that the legislator has made a significant change. It is necessary to examine the contours of this evolution in order to untangle the threads and consequently set the markers for understanding, following an approach based solely on the Regions as a framework for analysis and not on all the Regional and Local Authorities. Indeed, the choice of the Regions as the analytical framework is not insignificant. As the first level of decentralisation in Cameroon, the Region has only recently been established since its consecration in 1996. It is the characteristic of regionalism instituted since the constitutional reform of 18 January 1996. This regionalism is legally translated by the erection in 1996 of administrative provinces into Regions, headed by a President, an indigenous personality of the Region elected by his peers , and an elected Regional Council whose political colouring prints a mixture of traditional chiefs with the other departmental Councils. Compared to the Commune, therefore, the Region is a new feature of decentralisation which finds its basis in the controversy that took place during the 1996 reform on the form of the State between the supporters of the centralised State and those of the federal State. According to the doctrine, it is a point of agreement between these two (02) trends. When we know that regionalism as a technique for organising the unitary State is an advanced version of decentralisation that could border on federalism without being one, we can only subscribe to the idea that the Region is the point of agreement that would have federated the actors of the 1996 reform. With these considerations in mind, the attention given to the Region is justified. Following this logic, it must be agreed that the exercise by the State of powers transferred to the Regions did not disappear with the advent of the CGCTD, as some authors have suggested. It was maintained, however, with a reform of the legal framework that underpins an evolution in this area. If yesterday, the exercise by the State of powers transferred to the local and regional authorities in general and to the Regions in particular was legally self-evident (I), in the current state of Cameroonian decentralisation law, it is now only a possibility (II).
Topic:
Governance, Reform, State, and Local
Political Geography:
Africa and Cameroon

13. The Regional Administrative Structure in Cameroon

Author:
Ebenezer David Ngahna Mangmadi
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
Be it from a common law or a special status, a regional and local authorities[1] resulting from the constitutional reform of January 18, 1996[2], has an administration in charge of instructing and implementing the decisions taken by its executive organs. Under the authority of a secretary general who is appointed by the President of the Republic[3], it is implemented according to the standard organisation set out in decree n°2021/742 of 28 December 2021. It should be noted that this important legal text taken in application of article 496 of law n°2019/024 of 24 December 2009 on the general code of regional and local authorities (hereafter CGCTD), has greatly contributed to the acceleration of the process of establishing the regions initiated by the elections of December 6, 2020. The configuration of the standard model of regional administration that it suggests, highlights a complex combination of structures with diverse functions, the articulation of which may vary from case to case. This organisational scheme reveals the extent of the tasks that a regional administration must undertake, but it is not easy to access. As such, it deserves to be explained. This note is intended for professionals in the field of decentralisation, researchers and citizens seeking information. More clearly, the aim is to inform the reader about the subtleties of the structuring of the regional administration. To achieve this, it relies on an interpretive approach to the texts, mainly, the law n°2019/024 of 24 December 2019, and the decree of 28 December 2021. After presenting the different structures of the regional administration (I), the text will dwell on their articulation (II).
Topic:
Government, Local, Decentralization, and Regionalism
Political Geography:
Africa and Cameroon

14. Moving on Up: Multilevel Monitoring and Advocacy for Health Rights

Author:
Abrehet Gebremedhin
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
Accountability Research Center (ARC), American University
Abstract:
Multilevel approaches to monitoring and advocacy are often used by international development practitioners, particularly in civil society, in efforts to hold governments—from the national to the local—to account for policy implementation. However, such approaches are not yet well understood or identified by many scholars in the social accountability field. This evidence review addresses this gap through a cross-case comparison of multilevel approaches in ten health rights programs across Africa, Asia, and Latin America. It draws on published evaluations, working papers, and peer-reviewed journal articles, as well as insights shared by implementers and researchers. Cases were selected to illustrate health rights initiatives that included monitoring or advocacy activity at a minimum of two different levels: local health facility, district, regional, provincial or national. Four significant findings emerge from this review of evidence: Vertical integration is a relatively common feature of multilevel monitoring and advocacy in these ten cases and is most likely to take place at the lower ends of the health system. However, it is largely implicit, and often not articulated in project design or theories of change. Horizontal organizing—the coordination of civil society action across districts or geographies—is a less visible feature of multilevel approaches to health rights programming than vertical integration. Despite the multilevel nature of health monitoring and advocacy in these ten cases, less than half reported working at the regional or provincial level, indicating a ‘missing middle’ between local and national activity. Escalation—the process by which citizens’ unaddressed claims move upwards to those with greater decision- making powers—is an important mechanism for accountability and one way in which vertical integration can happen. However, escalation is not clearly articulated in much of the gray literature, and therefore merits further research. The findings from this evidence review have implications for strategy, including: the importance of explicitly identifying multilevel tactics for monitoring and advocacy; theorizing the process by which unaddressed claims can be addressed, particularly moving up beyond the local level; emphasizing the importance of the ‘middle’ and ensuring regional and provincial decision-making is leveraged; and looking to link vertical integration with opportunities for horizontal organizing.
Topic:
Civil Society, Health, Accountability, Advocacy, and Monitoring
Political Geography:
Africa, Asia, and Latin America

15. Does Project-Level Aid for Water and Sanitation Improve Child Health Outcomes? Evidence from Household Panel Data in Uganda

Author:
Lynda Pickbourn, Raymond Caraher, and Léonce Ndikumana
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
Empirical studies on the effectiveness of aid to the water, sanitation, and hygiene sector (WASH aid) have focused primarily on access to these services as the benchmark for evaluating the effectiveness of aid in this sector. Given the importance of WASH services for public health outcomes, the effectiveness of WASH aid should also be evaluated in terms of its impact on health outcomes. This is especially important in low- and middle-income countries where achieving sustained improvements in child health outcomes remains a challenge. This paper uses geocoded sub-national data on the location of WASH aid projects in Uganda in conjunction with six waves of nationally representative household-level panel survey data to examine the impact of aid-funded WASH projects on the probability of stunting among Ugandan children and infants. Analysing aid effectiveness at the sub-national level avoids the problems of cross-country heterogeneity in aid effectiveness that plagues other studies. Results of the difference-in-differences regression analysis suggest that proximity to an aid-funded WASH project reduces the probability of stunting by 14–21 per cent. The results suggest that scaling up aid to the WASH sector can help improve child health outcomes in the country.
Topic:
Health, Humanitarian Aid, Water, Sanitation, and Child Care
Political Geography:
Uganda and Africa

16. Gold in Ghana: A Story of Unbalanced Exchange

Author:
Léonce Ndikumana and William Godfred Cantah
Publication Date:
09-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
his paper presents the historical and institutional context of the development of the gold sector in Ghana, which sets the stage for examining the contribution of the sector to the economy and its exposure to capital flight. The analysis sheds light on the important role that the regulatory framework and the fiscal regime that govern the gold sector have played in perpetuating a system of unequal distribution of gains from gold exploitation in terms of tax revenue and foreign exchange earnings in favour of foreign gold companies. The statistical analysis of gold export statistics reveals substantial discrepancies between Ghana’s gold exports and the recorded value of imports by its trading partners. These differences point to export underinvoicing as a conduit of capital flight, while also exhibiting a systematic lack of transparency and inconsistencies vis-a-vis established international conventions governing the recording of trade transactions, especially in the case of gold destined for South Africa which does not show up in the latter’s import statistics. Overall, the analysis suggests that the gains from the gold sector remain much below potential, but that at the same time there may be room for reforms that can improve the benefits from gold exploitation for the country.
Topic:
Development, Regulation, Capital Flight, Exchange Rates, and Gold
Political Geography:
Africa, South Africa, and Ghana

17. Cocoa in Ghana, the ‘Political Crop’: Does State Control Shield the Cocoa Sector from Exposure to Capital Flight?

Author:
Léonce Ndikumana and Kwame Adjai-Mantey
Publication Date:
08-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
Since its introduction into Ghana in the 19th century, cocoa has been considered a strategic crop, over which the post-independence governments have maintained substantial control. Cocoa is indeed referred to as a ‘political crop.’ The cocoa sector is closely regulated by the government through the Ghana Cocoa Board (COCOBOD). This paper aims to investigate whether this special industrial organization structure and the strict regulation help minimize the sector’s exposure to capital flight that would otherwise occur through export misinvoicing and leakage of foreign exchange earnings from cocoa exports. Indeed, compared to the gold sector in Ghana and the cocoa sector in neighboring Côte d’Ivoire, both of which are fully liberalized and dominated by foreign corporations, the cocoa sector in Ghana exhibits relatively little evidence of export misinvoicing. Moreover, cocoa export earnings are fully repatriated as they are in the hands of COCOBOD. The analysis, however, indicates that the gains from the cocoa sector in terms of contributions to GDP, tax revenue, and poverty reduction remain sub-optimal. This suggests that there is substantial room for improvement of these outcomes through targeted reforms and policy interventions at the sectoral level.
Topic:
Political Economy, Reform, Exports, Capital Flight, and Cocoa
Political Geography:
Africa and Ghana

18. Capital Flight from Natural Resource-Dependent African Countries: Updated Estimates and Analysis for the Cases of Cameroon, Ghana, and Zambia, 1970-2021

Author:
Léonce Ndikumana
Publication Date:
08-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper is part of a project that investigates domestic and global drivers and enablers of capital flight from Cameroon, Ghana, and Zambia, three countries that are significantly endowed in natural resources. It presents estimates of capital flight from these three countries and discusses the key drivers of the phenomenon. The results show that as of 2021, estimated total capital flight stood at $71.1 billion for Cameroon, $50 billion for Ghana, and $71.5 billion for Zambia. External borrowing and, in the cases of Zambia and Cameroon, trade misinvoicing, are key correlates of capital flight. While external borrowing directly and indirectly drives capital flight, trade misinvoicing constitutes an important mechanism of unrecorded cross-border capital flows. This study contributes to the efforts to uncover the mechanisms and enablers of capital flight from Africa, with the aim of shedding light on possible strategies to curb further capital outflows in the context of efforts to scale up and diversify development financing to support recovery from global crises, the transition to green growth, and sustainable development in Africa.
Topic:
Development, Political Economy, Natural Resources, Capital Flight, and Trade
Political Geography:
Africa, Zambia, Ghana, and Cameroon

19. The political economy of energy production in post-independence Tanzania: A review

Author:
Japhace Poncian and Rasmus Hundsbæk Pedersen
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
In Tanzania, energy production is a matter of great political significance. Despite government commitment to promote non-hydro renewable energy, like solar and wind deployment, so far has been limited. Large, non-hydro, renewable projects have not yet attracted adequate government interest to get implemented. This new DIIS Working Paper suggests that the prioritisation of different sources of energy has been influenced by major shifts in the country’s broader development policy priorities. Access to electricity has in turn been scaled up. These developments point to the importance of political economy factors influencing energy sector development in Tanzania. The paper examines how such factors have influenced government energy source choice and, more importantly, how renewable energy has featured in Tanzania’s energy politics since independence. The paper is based on a review of existing academic and grey literature on energy sector development, reform, and politics throughout the period from independence in 1961 to 2021.
Topic:
Development, Political Economy, Renewable Energy, Independence, and Energy
Political Geography:
Africa and Tanzania

20. Climate change adaptation relevance of Tanzania’s national budget

Author:
Noah Pauline, Peter Rogers, Edmund Mabhuye, Beatrice Sumari, Lucas Katera, Jamal Msami, Per Tidemand, and Esbern Friis-Hansen
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
In Tanzania, climate change adaptation is financed by international development assistance and by nationally generated revenue. While international development assistance is registered by OECD and climate change adaptation relevance tagged by donors, the proportion of the nationally generated revenue that is climate change adaptation relevant is unknown. This DIIS Working Paper analyses the climate change adaptation relevance of the national budget (from 2014 to 2022), using the same methodology applied in a previous study (Yanda et al., 2013). The study further assesses the degree to which climate change adaptation financed is devolved to local government. The study finds that a disproportionately high proportion of climate adaptation finance is used at central government levels due to priorities being established at the ministry level. Moreover, the study finds that local governments lack discretion over climate change adaptation finance due to the country’s highly centralised policies, practices and procedures. Qualitative fieldwork indicates that nearly all climate change adaptation finance accessed by local governments comes with a central government tag (directive) on how to use it.
Topic:
Climate Change, Development, Environment, Poverty, Budget, and Inequality
Political Geography:
Africa and Tanzania