Search

Begin New Search Topic Economics Political Geography Africa

1. Egypt: The Price of Inaction on Tax Reform

Author:
Omar Ghannam
Publication Date:
01-2023
Content Type:
Research Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
Like public finances elsewhere, the public finances of the Egyptian state suffer from a semi-permanent deficit. Although a limited deficit in state budgets is acceptable for most prevailing economic theories, the persistent and worsening deficit in public budgets leads to severe phases during which the economy suffers. During periods of economic prosperity, soft loans are easily accessible, which encourages states to rely on borrowing as a secondary source of financing for extended periods until it becomes a permanent source of financing. The financial market eventually puts an end to every period of easy borrowing, forcing the government to face the reality it has tried to avoid. Under such circumstances, governments have three tools at their disposal: borrowing at the highest interest rate, austerity and disabling services and social protection programs, and raising taxes and customs duties. Borrowing at the highest interest rate is every government's first choice because it does not require a reformulation of the social, economic, and political contract between the state and its citizens. But the price of such a policy is a worsened deficit. Borrowing, before or after a crisis, is not a solution but merely a postponement of the crisis, in the hope that the market recovers. When it is no longer possible to borrow amid the worsening economic conditions of a crisis, the government resorts to other tools with varying degrees of risk. Austerity is a recipe for widespread social outcry and has catastrophic effects on the poor and middle classes as well as the overall economy due to decreased purchasing power. To overcome the crisis with the least social tension, the state can also resort to taxation to generate possible revenues whether from the economy as a whole or the sectors and classes with concentrated surpluses of value. The more severe the crisis, the more the government is forced to use additional tools and impose strict measures. Debts are nothing but deferred taxes, and taxes remain key in every economic crisis. When a global economic crisis looms, questions abound. Could the crisis be approached with fewer social and economic burdens and with more room for maneuver? In this context, this paper will discuss the tax policies adopted in the past few years in Egypt and how they could have been more effective. The primary role of taxes is to meet the government's financial needs to implement its role under the social contract, whether formal or informal. Therefore, taxes are a convenient introduction to understanding the political economy of any state. Tax policies are an essential tool for achieving macroeconomic goals, and they directly reflect the political and socioeconomic considerations driving a country’s economy. This paper will address the main role of taxes in financing the requirements of the social contract from the perspective of the adequacy and effectiveness of tax collection.
Topic:
Economics, Governance, Reform, Finance, and Tax Systems
Political Geography:
Africa and Egypt

2. 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

3. A Monumental Relationship: North Korea and Namibia

Author:
Tycho van der Hoog
Publication Date:
03-2023
Content Type:
Special Report
Institution:
East-West Center
Abstract:
Visitors to Windhoek, the capital city of Namibia, will quickly learn a remarkable fact that is well-known among the local population—much of the capital’s architectural landscape is designed and constructed by North Korea. In recent years, North Korean nationals have built the official residence of the president of Namibia, the State House; the national cemetery for the fallen heroes of the liberation struggle, the National Heroes’ Acre; the national history museum, the Independence Memorial Museum; the Ministry of Defense headquarters and other buildings. The Namibian government thus uses North Korean aesthetics for some of the most important aspects of its power: the president, the history, and the army. This analysis explores the relationship between Namibia and North Korea by providing historical and political context to the aforementioned buildings. Today, Namibia often has the reputation of a quaint and sometimes sleepy destination, tucked away in the southwestern corner of the African continent. Yet, Namibia was at the center of geopolitical tensions for most of the twentieth century. The complicated decolonization process of Namibia, or “the Namibian question,” as it became known in the corridors of the United Nations (UN), had its roots in the aftermath of three decades of German occupation between 1884 and 1915. German South West Africa, the area that became modern Namibia, was transferred to South Africa as a League of Nations mandate territory and renamed “South West Africa.” South Africa viewed the territory as an unofficial fifth province and introduced brutal apartheid legislation. Internal opposition against the South African regime resulted in the formation of nationalist organizations, of which the South West Africa People’s Organization (SWAPO) became the most prominent.
Topic:
International Relations, Economics, Politics, Arts, and Culture
Political Geography:
Africa, Asia, North Korea, and Namibia

4. Macro-financial implications of public debt in South Africa: The role of financial regimes

Author:
Theshne Kisten
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the role of financial frictions in the public debt–growth nexus, documenting that a public debt shock has different macro-financial implications dependent on the state of financial markets in South Africa. A non-linear vector autoregression model is estimated which allows the transmission mechanism to be characterized by two distinct financial regimes: stressful versus normal. The empirical results suggest that a public debt shock has a broadly insignificant impact on economic growth over the full sample, reflecting the ineffectiveness of government borrowing in stimulating the economy, and could suggest that the high and growing debt service costs faced by the government reduces funds available for investment purposes. Debt shocks are found to be deflationary in both regimes, lending support to the precautionary savings effect and the existence of a well-developed financial market, while interest rates decline with the immediate impact being moderately larger in the stress regime, providing evidence of the accommodative stance between fiscal policy and monetary policy. In response to a public debt shock, financial conditions show an immediate and transitory improvement in the high-stress regime; however, in the low-stress regime there is an immediate yet negligible improvement in financial conditions. Lastly, the responses evolve over time, with fiscal policy being less effective in stimulating the economy in the post-crisis period, but it has been effective in reducing financial stress in the high-stress regime.
Topic:
Economics, Finance, Economic Growth, and Public Debt
Political Geography:
Africa and South Africa

5. The Impact of the Ukrainian-Russian War on Rwanda

Author:
Jonathan R. Beloff
Publication Date:
03-2023
Content Type:
Journal Article
Journal:
Turkish Policy Quarterly (TPQ)
Institution:
Turkish Policy Quarterly (TPQ)
Abstract:
The current Ukrainian-Russian war has far greater-reaching effects than what is typically reported in much of the international news media. The war has significantly impacted African development, which was already harmed during the global Covid-19 pandemic. With the pandemic seemingly over, African nations such as Rwanda hoped for increased economic development. However, the current war in Ukraine sparked increased fuel and food prices throughout the continent, which has impacted expected growth rates. This article reviews the war’s impact on the central African nation of Rwanda. It illustrates Rwandan anger about the economic implications of the war and the frustration from the nation’s inability to stop its effects.
Topic:
Development, Economics, Pandemic, COVID-19, and Russia-Ukraine War
Political Geography:
Africa, Russia, Europe, Ukraine, and Rwanda

6. Promoting diaspora investment in fragile settings: The case of Somalia

Author:
Guido Lanfranchi
Publication Date:
08-2023
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
This policy brief analyses the extent to which diaspora investment can support economic development and livelihoods, with a particular focus on fragile settings. Using the case study of Somalia, the brief explores some of the main advantages and risks associated with this tool. On the one hand, diaspora investment can channel finance into productive activities in the diaspora’s country of origin, supporting the creation of revenue streams, while also generating returns for diaspora investors. On the other hand, particularly in fragile settings, these investments can also undermine social cohesion and even increase the likelihood of violent conflict, especially if they are channelled along identity lines. On the basis of this analysis, the brief offers the following recommendations to donor governments interested in promoting diaspora investment in Somalia and beyond: (i) to ensure effectiveness, donors should gather comprehensive, in-depth data on the needs and preferences of both potential investors in the diaspora and investees in the country of origin; (ii) to avoid exacerbating tensions and conflict, donors should be as inclusive and transparent as possible in their engagement with stakeholders, most notably in the selection of beneficiaries; (iii) any efforts to promote diaspora investment in fragile settings should be grounded in a thorough understanding of the specific context in which they are implemented, in order to understand both the economic and political implications of such investment.
Topic:
Economics, Politics, Diaspora, Investment, and Fragility
Political Geography:
Africa and Somalia

7. Correlates of Politics and Economics: How Chinese Investment in Africa Changes Political Influence

Author:
Carla D. Jones, Mengge Li, and Hermann A. Ndofor
Publication Date:
03-2022
Content Type:
Special Report
Institution:
Foreign Policy Research Institute
Abstract:
This study investigates the impact of Chinese economic engagement in Africa (FDI and loans from China to African countries) on African countries’ international political alignment as evidenced by voting patterns in the UN General Assembly. We find three seasons of Chinese policy in Africa. Pre 2008, Chinese economic engagement in Africa was driven primarily by economic considerations, market seeking for FDI and likely resource seeking for loans. During the Great Recession, China came to terms with its rise as an economic power and thus started leveraging its economic power in international relationships. During this season, both Chinese FDI and loans were no longer driven by economic considerations but rather by international relations which led to increased political alignment with recipient African countries. The final season captured the Xi Jinping era beginning 2013. During this season, Chinese FDI had no effect on African countries’ foreign policy alignment with China, but Chinese loans still had a significant positive effect. This likely reflects a movement away from FDI to less transparent bilateral loans as a means of utilizing Chinese economic power to influence foreign policy. During the entire period of the study, Chinese FDI to Africa resulted in reduced political alignment between African countries and the United States.
Topic:
Foreign Policy, Economics, Politics, Investment, and Influence
Political Geography:
Africa, China, and Asia

8. Estados Unidos y África. Historia de una no-política

Author:
Pablo Rey-García and Pedro Rivas Nieto
Publication Date:
10-2022
Content Type:
Journal Article
Journal:
Revista UNISCI/UNISCI Journal
Institution:
Unidad de investigación sobre seguridad y cooperación (UNISCI)
Abstract:
En este artículo se estudian las relaciones entre Estados Unidos y África, desde los puntos de vista económico, político y de seguridad. Son, estos tres campos, interdependientes, pero a la vez enormemente dinámicos, tanto por la inercia política estadounidense, como por los condicionantes propios de África (déficit en desarrollo, pobreza, inseguridad o inestabilidad política) como por el contexto internacional. En este último aspecto, cobra especial relevancia la invasión rusa de Ucrania o la emergencia de la ambición militar China, pues ambos países compiten con Estados Unidos por tener una mejor posición en el continente africano.
Topic:
International Relations, Development, Economics, National Security, and Terrorism
Political Geography:
Africa, Russia, China, Asia, North America, Sahel, United States of America, and Horn of Africa

9. Beyond 2025: The Future of the African Growth and Opportunity Act

Author:
Daniel F. Runde and Sundar R. Ramanujam
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
Over the past two decades, the United States has provided assistance and support for sub-Saharan Africa’s efforts to transform its economic and trade relationships, centered around the African Growth and Opportunity Act (AGOA). First enacted into law on May 18, 2000, AGOA was designed to significantly enhance designated sub-Saharan African countries’ market access to the United States by providing duty-free treatment for specific import categories. The legislation’s primary goal was to promote economic growth through good governance and free markets. To qualify and remain eligible for AGOA, countries were expected to demonstrate progress toward market liberalization and to improve the rule of law, human rights protections, and core labor standards. More than 20 years later, AGOA continues to provide preferential treatment to 44 countries in the region, spanning over 6,500 tariff lines. Since May 2000, AGOA has been amended four times, mostly to clarify preferential treatment terms, technical standards, and sunset deadlines. The act was initially designed to be valid for eight years, expiring at the end of September 2007. In July 2004, however, President George W. Bush signed the AGOA Acceleration Act, extending it to 2015. Toward the end of his second term, in June 2015 President Barack Obama extended its validity by signing the Trade Preferences Extension Act, under which AGOA is set to expire in 2025. The global political and economic landscape has changed profoundly since AGOA was enacted in 2000, even before the Covid-19 pandemic created new disruptions and accelerated several ongoing changes. The mobile telephony revolution has created new opportunities for millions to participate in the digital sphere, use mobile banking and payments systems, and receive commercial, educational, and medical services via the internet. Even as the sub-Saharan African region’s middle class continues to grow, it is also set to experience a youth population boom in the next three decades—which, under the right conditions, could pay a demographic dividend and avert a social crisis. Meanwhile, the United States has also entered an era of great-power competition with China. With China’s influence in sub-Saharan Africa rising significantly, this competition is also playing out through the region’s political and economic institutions. Considering these opportunities and challenges, leaders in Washington (and their constituents across the United States) ought to look at Africa as a prospect for deepening commercial partnerships, not as a continent that needs to be “saved” through foreign assistance. Accordingly, the United States can consider one of the three following scenarios in response to AGOA’s current expiration timeline
Topic:
Development, Economics, International Cooperation, and International Trade and Finance
Political Geography:
Africa

10. Defying United Nations Sanctions: Three Reasons for African Engagement with North Korea

Author:
Tycho van der Hoog
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The United Nations (UN) sanctions against North Korea are weakened by structural evasion techniques and weak enforcement. The African continent is a crucial node in the global illicit networks of North Korea. This paper examines three motives for African states to cooperate with North Korea, with a particular focus on the context of southern Africa: historical affinity (reciprocity), the practical issue of maintenance dependency (necessity), and the presence of weak enforcement regimes (opportunity). Based on a deep reading of UN Panel of Experts reports, academic literature and policy papers, novel archival material, and an interview with a defected North Korean diplomat, this paper argues that solutions to strengthen the sanctions regime can be successful only if they are grounded in African initiatives.
Topic:
Security, Economics, United Nations, and Sanctions
Political Geography:
Africa, Asia, and North Korea

11. Turkish Influence in Sub-Saharan Africa

Author:
Soner Cagaptay, Spencer Cook, and Amal Soukkarieh
Publication Date:
06-2022
Content Type:
Special Report
Institution:
The Washington Institute for Near East Policy
Abstract:
Trade volume has soared and projects like the development of Sudan’s Suakin Port have drawn notice, but Ankara faces economic headwinds in its bid to keep the momentum going. Atraveler through today’s Africa might be surprised by frequent markers of a distant power: Turkey. Consider that in Somalia, “Istanbul” is now one of the most popular girls’ names and that Turkey’s largest embassy in the world is located in Mogadishu. In the tiny coastal nation of Guinea-Bissau, Ankara has announced a new embassy, its forty-fourth on the continent. Meanwhile, state-owned Turkish Airlines now flies to sixty-one African destinations, compared to just a handful when Recep Tayyip Erdogan’s Justice and Development Party (AKP) government began its Africa outreach two decades ago. Trade volume has soared as well, with projects like Turkey’s proposed $4 billion development of Sudan’s Suakin Port drawing headlines­—and consternation from rivals in the Gulf. In this illuminating Policy Note, Soner Cagaptay, Spencer Cook, and Amal Soukkarieh survey Ankara’s robust activity in sub-Saharan Africa, where dynamics are shifting, and not always to Turkey’s advantage. Amid an economic swoon at home, Ankara is seeking improved ties with Middle East states and could be receptive to cooperating with Washington in Africa as part of the competition against other great powers, namely, China.
Topic:
Foreign Policy, Economics, Trade, and Competition
Political Geography:
Africa, Turkey, and Sub-Saharan Africa

12. Algeria’s social support policy: Economic costs and the need for reform

Author:
Hami Hassan
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
With the ratification of the 2022 budget in Algeria, the issue of budget allocations for social support and social benefits has resurfaced once again. This paper attempts to understand the repercussions of state intervention in economic affairs, and the historical and ideological underpinnings of the welfare state in Algeria as a rentier state based on the nationalization of all economic relations in crisis political contexts, the effects of which extended to the state’s relationship with society and the relations of production within it.
Topic:
Economics, Reform, Finance, and Social Order
Political Geography:
Africa and Algeria

13. Analysis of Cameroon – Nigeria Trade and Prospects for the African Continental Free Trade Area

Author:
Henri Kouam and Vera Kum
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
Free trade between Cameroon and Nigeria is about reducing barriers to cross-border trade between the two countries by allowing traders on both sides of the spectrum to explore a larger market and private sector producers to expand their business. This policy brief examines the nature of Cameroon and Nigeria’s trade whilst illustrating the benefits of free trade on living standards, employment, and income inequality. It recommends that Cameroon and Nigeria cooperate on trade facilitation measures to increase the benefits of the African Continental Free Trade Area.
Topic:
Economics, International Trade and Finance, Regional Cooperation, Bilateral Relations, and Free Trade
Political Geography:
Africa, Nigeria, and Cameroon

14. Trade Liberalization and Economic Development: Lessons for Africa

Author:
Henri Kouam and Fabien Sundjo
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
What happens when countries lower their tariff & import duties and open up their economy to other countries? This policy brief looks at the impact of trade liberalization on economic development, drawing from broad-based international literature. It shows how free trade can positively impact economic development, boost incomes, and improve standards of living. The African Continental Free Trade Area will stimulate intra-regional trade and help countries like Cameroon address acute development challenges. However, the expected positive results will depend on its successful implementation.
Topic:
Development, Economics, Regional Cooperation, Trade Liberalization, Trade, Economic Development, and Liberalism
Political Geography:
Africa

15. A Gateway to Africa? Economic Opportunities in Israel-Morocco Relations

Author:
Morr Link
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
Since renewing diplomatic relations between Jerusalem and Rabat, the scope of trade indeed has grown between the two countries, but the full potential still has not been realized. How can the economic cooperation be improved, which also entails many policy opportunities for both Israel and Morocco?
Topic:
Economics, International Cooperation, International Trade and Finance, Bilateral Relations, and Economic Cooperation
Political Geography:
Africa, Middle East, Israel, and Morocco

16. Who Lends to Africa and How? Introducing the Africa Debt Database

Author:
David Mihalyi and Christoph Trebesch
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Africa’s sovereign debt markets are not well understood, partly due to a lack of data. This paper introduces the Africa Debt Database (ADD), the most granular and comprehensive dataset on external borrowing by African governments thus far. Our project moves beyond existing aggregate datasets and instead releases information on individual loans and bonds, in particular on the financial terms of each instrument. Taken together, we cover nearly 7000 loans and bonds between 2000 and 2020, with a total volume of 644 billion USD. Using this data, we study Africa’s record lending boom of the 2010s in detail. The debt boom was mainly driven by large sovereign bond issuances in London and New York, as well as growing lending by Chinese state-owned banks. The micro data also reveal a large variation in lending terms across countries, time, and creditors. Sovereign external bonds have interest rates of 6 percent, on average, Chinese banks charge 2-4 percent, and multilateral organizations just 1 percent. Strikingly, many governments in Africa simultaneously borrow large amounts from both private and official creditors, at vastly different rates. The large differences in debt servicing costs are indicative of a cross-creditor subsidy, as cheap concessional loans can be used to pay the high interest to private or Chinese creditors.
Topic:
Economics, Foreign Aid, Credit, and Influence
Political Geography:
Africa, China, and Asia

17. The Emergence of African Continental Free Trade Area Agreement and Lessons from the Asia-Pacific Trade Agreement

Author:
Samuel Igbatayo
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Africa’s regional integration agenda arrived at a cross roads in 2019, with the adoption of the African Continental Free Trade Area (AfCFTA) agreement. The AfCFTA framework came into force on 30th May, 2019, with its ratification by The Gambia, which brought the total number of African Union (AU) member state ratifications to twenty-two, the minimum threshold for AfCFTA implementation (Baker McKenzie 2019). As of May; 2022, forty-three of the 55 African countries have ratified the AfCFTA agreement (African Union 2018). The 12th Extraordinary Session of the Assembly of the African Union in Niamey on 7th July; 2019, witnessed the launching of AfCFTA’s operational phase, which is governed by five instruments, namely: the rules of origin, the online negotiating forum, the monitoring and elimination of non-tariff barriers; a digital payment system and the African Trade Observatory. In addition, the beginning of trade under the terms of the agreement was set for July 1, 2020 (TRALAC 2020). A free trade agreement (FTA) can be aptly described as a pact between two or more countries on areas in which they agree to lift most or all tariffs, and other barriers to imports and exports among them (Barone 2019). Under a free trade framework, goods and services can be traded across international borders, with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange. The theory of free trade Agreements is rooted in classical economics, dating back to the era of Adam Smith. During this period, David Ricardo (1772-1823), a British political economist, was acknowledged with pioneering thoughts on free trade as a key instrument for wealth accumulation. The evolution of preferential trade agreements is traceable to the rise of European countries after World War II, with the establishment of the European Coal and Steel Community in 1951, a development that eventually culminated in the creation of the European Union (EU) (Johnston 2019). Spurred by the success of regional bodies with free trade agreements and Africa’s poor trading performance; estimated at a paltry 3% of annual global trade, the African Union embarked upon the creation of the AfCFTA agreement as a tool for Intra-Africa trade and regional integration.
Topic:
Economics, Treaties and Agreements, Regional Integration, and Free Trade
Political Geography:
Africa and Asia-Pacific

18. How Innovative Financing Models Can Support the Scaling of Supply Chain Innovations

Author:
Allie Dichiara and John Simon
Publication Date:
10-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
Substantial progress has been made toward achieving Sustainable Development Goal (SDG) 3: Health and Well-Being for All. However, progress is plateauing as global health development funding decelerates, and much of the remaining gaps are among the hardest to address, especially for the most vulnerable and hardest-to-reach communities. A key element to reigniting progress toward SDG 3 is significantly improving the effectiveness of the current fragmented health commodity supply chain, through which billions in spending—approximately $6 billion in donor funds in 2015 and $50 billion in overall spending in 2017—flow each year to low- and lower-middle-income countries (LMICs). Fortunately, there is a growing number of innovative supply chain solutions available across sub-Saharan Africa that could have the potential to dramatically improve the underperforming status quo.
Topic:
Economics, Science and Technology, Innovation, and Supply Chains
Political Geography:
Africa

19. Unravelling Africa’s raw material footprints and their drivers

Author:
Albert Kwame Osei-Owusu, Michael Danquah, and Edgar Towa
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper applies an environmentally extended input–output analysis, leveraging the Eora database, to estimate the global raw material footprints of 51 African nations from 1995 to 2015. It employs least absolute shrinkage and selection operator and panel regression models to quantify the effects of diverse variables on Africa’s raw material footprints. The findings show that the raw material footprints of Africa’s production and consumption soared by 41 per cent and 38 per cent, respectively, from 1995 to 2015, mainly driven by biomass and construction materials. They show that Africa outsources 25 per cent of its raw material footprints from consumption, while over 60 per cent of its footprints from production arise from its exports. Our findings beckon African governments to reduce the excessive focus on exploitation and concentrate on combatting corruption and extreme rent-seeking while decoupling Africa’s raw material footprints from rising public debt, carbon emissions, income levels, and population.
Topic:
Economics, Carbon Emissions, Public Debt, Income, Raw Materials, and Input-Output Analysis
Political Geography:
Africa

20. Determinants of corporate cash holdings in South Africa

Author:
Ewa Karwowski, Hanna Szymborska, Keagile Lesame, and Tlhologelo Thoka
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Globally, corporate cash holdings have risen since the 1980s. In South Africa, some commentators have accused corporations of engaging in an ‘investment strike’, while others see corporate liquidity as a precaution against systemic uncertainty. We use the unique South African Revenue Service/National Treasury firm-level dataset to scrutinize corporate liquidity, using panel analysis. Relative to GDP, corporate cash and liquidity holdings have not increased between 2010 and 2017. However, corporate cash is high in international comparison and has grown at the firm level. We do not find evidence for the hypothesis that companies are engaging in an investment strike. Cash and liquidity are shaped by idiosyncratic and sectoral risk factors. In the short run, heightened uncertainty might reduce corporate cash and liquidity as firms struggle to adjust to an unexpected economic situation. In the medium run, we find a strong association between political uncertainty and corporate cash and liquidity holdings.
Topic:
Economics, Corporations, Liquidity, and Cash
Political Geography:
Africa, South Africa, and Global Focus

21. Questioning Participation in Ramlet Bulaq, Cairo

Author:
Omnia Khalil
Publication Date:
10-2021
Content Type:
Special Report
Institution:
Arab Reform Initiative (ARI)
Abstract:
Since the 1990s and the onset of the liberalization of Egypt’s economy, Cairo has experienced a major process of privatization of urban spaces with State and private developers forcibly removing residents of informal neighborhoods, often referred to as `Ashwa’iyat, from central Cairo to replace them with new developments destined for the “elites”. One of the neighborhoods that illustrates these dynamics is Ramlet Bulaq, a central area located on the eastern side of the Nile. Historically the area consisted of highly industrial plots and small crafts spaces. Starting in 1996, the state and wealthy private developers began displacing local residents and new buildings, such as the Nile City Towers, emerged in their stead. Efforts to displace the local residents in Ramlet Bulaq met forms of resistance by the local community. These forms of resistance intensified after the 2011 revolution, when activists joined local residents in their efforts to oppose forced displacement and began proposing alternative development schemes. The struggle over the area magnified after 2012, when clashes occurred between the guards of the Nile City Towers and local residents. In this paper, I narrate the process of mobilizing against forced eviction in Ramlet Bulaq from 2012 to 2015. I, alongside many others, tried to follow a model of participatory community design in order to upgrade the neighborhood that was classified as informal settlement by the Informal Settlement Development Fund since 2010. Despite years of mobilization, most of the families of Ramlet Bulaq ultimately ended up selling their plots to the developers of Nile City Towers exhausted by years of struggle. They have since moved elsewhere. I reflect on some of the reasons of this failure to counter the developments taking place and reflect on some of the limitations of participatory approaches when power dynamics are stacked against local communities.
Topic:
Economics, Revolution, Urban, Participation, and Community
Political Geography:
Africa and Egypt

22. Economic Diversification in Africa: How and Why It Matters

Author:
Zainab Usman and David Landry
Publication Date:
04-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Many African countries have placed economic diversification high on the policy agenda, yet they first need to define what it means in their specific structural and socioeconomic contexts. For decades, economic diversification has been a policy priority for low- and middle-income economies. In the words of former managing director of the International Monetary Fund (IMF), Christine Lagarde, “We know that economic diversification is good for growth. Diversification is also tremendously important for resilience.” Unfortunately, this goal continues to elude many African countries. In fact, the continent is home to eight of the world’s fifteen least economically diversified countries. This reality weakens the foundation of their economic transfomation and slows their pace of progress. It also makes these countries particularly vulnerable to sudden external shocks, as the pandemic-induced disruption of tourism and oil-dependent economies has illustrated. Given the importance of diversifying African economies, it is critical to recognize how various dimensions of diversification can have different implications for the menu of policy options. Closely associated with the process of structural transformation from lower to higher productivity sectors, economic diversification has three evident dimensions. The first relates to the expansion of economic sectors that contribute to employment and production or gross domestic product (GDP) diversification, and the second is associated with international trade or exports diversification. This paper, however, focuses on a third dimension that the economics literature pays scant attention to: fiscal diversification. This fiscal element involves expanding government revenue sources and public expenditure targets and can therefore play a central role in helping to catalyze broader economic transformation through the expansion of activity in specific industries and sectors. It is also critical that policymakers effectively measure the extent to which this objective is being achieved. Both the expansion of existing economic sectors and the creation of new ones may diversify an economy. But these processes are vastly different in practice and will garner distinct outcomes. Of the main tools used by economists to measure diversification, the Theil Index differentiates between the respective contributions of new economic sectors and existing ones to overall diversification. Another tool widely used by development practitioners—the Public Expenditure and Financial Accountability (PEFA) framework—has significant potential for evaluating fiscal diversification but would need to capture more information on government revenue collection and spending and link them to policy objectives.
Topic:
Economics, Governance, Diversification, and Trade
Political Geography:
Africa

23. Exploring economic support networks amidst racial inequality in Namibia

Author:
Annalena Oppel
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Community or interpersonal support as a critical source of livelihood sustenance in the Global South can exhibit unequal dynamics. An understanding of these practices is primarily tied to the conceptual space of poverty or small communities. Less is known about how social support systems might respond to structural inequalities. I address this by exploring how support practices might be shaped by inequalities in the Namibian context. I draw on primary network data to assess inequality as a social dynamic within the space of support and evaluate whether providing worse-off others corresponds to former discriminatory practices under the apartheid regime. My results suggest that inequality has normalized a sense of support as necessity for black but not white Namibians. More broadly, by recognizing differences in group practices, I evidence that exploring support practices across structural inequalities can enhance insights on the social replication of inter- and intragroup-based inequalities.
Topic:
Economics, Race, Inequality, and Social Networks
Political Geography:
Africa and Namibia

24. Russia’s Foreign Policy: The Internal-International Link

Author:
Aldo Ferrari, Eleonora Tafuro Ambrosetti, Maxim Matusevich, Marianne Belenkaya, Andrei Kolesnikov, Alicja Curanović, Alexander Graef, and Paola Magri
Publication Date:
05-2021
Content Type:
Special Report
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
What drives Russia’s foreign policy in Vladimir Putin’s times? Why did the Kremlin decide to annex Crimea, occupy South Ossetia, intervene in Syria, or give its blessing to Nord Stream II? When explaining Russia’s foreign policy, the consolidation of Putin’s autocratic tendencies and his apparent stability despite many economic and political challenges have contributed – at least in the West – to an excessive “Putin-centrism” and the relative neglect of other agents of domestic politics. As a result, many facets of the country’s foreign policy decisions are misunderstood or shrouded under a thin veil of vagueness and secrecy. This Report attempts to fill this gap, exploring the evolving distribution of political and economic power under the surface of Putin’s leadership to assess the influence of different “lobbies” on Russia’s foreign policy. Who decides what in Moscow? The answer, unsurprisingly, is not always “Vladimir Putin”. All of the contributions in the volume underline the complexity of Russia’s decision-making process beneath the surface of a monolithic and increasingly personalistic government.
Topic:
Foreign Policy, Economics, Politics, Authoritarianism, and Domestic Politics
Political Geography:
Africa, Russia, and Eurasia

25. Crime, inequality and subsidized housing: evidence from South Africa

Author:
Roxana Elena Manea, Patrizio Piraino, and Martina Viarengo
Publication Date:
04-2021
Content Type:
Research Paper
Institution:
Centre for International Environmental Studies, The Graduate Institute (IHEID)
Abstract:
We study the relationship between housing inequality and crime in South Africa. We create a novel panel dataset combining information on crimes at the police station level with census data. We find that housing inequality explains a significant share of the variation in both property and violent crimes, net of spillover effects, time and district fixed effects. An increase of one standard deviation in housing inequality explains between 9 and 13 percent of crime increases. Additionally, we suggest that a prominent post-apartheid housing program for low-income South Africans helped to reduce inequality and violent crimes. Together, these findings suggest the important role that equality in housing conditions can play in the reduction of crime in an emerging economy context.
Topic:
Apartheid, Crime, Economics, Law, Inequality, Violence, and Legal Sector
Political Geography:
Africa and South Africa

26. COVID-19 in Africa: The implications for macroeconomic and socioeconomic dimensions

Author:
Mma Amara Ekeruchera
Publication Date:
04-2021
Content Type:
Working Paper
Institution:
Centre for the Study of the Economies of Africa (CSEA)
Abstract:
The COVID-19 outbreak began in December 2019 in the Wuhan city of China and has continued to spread globally. As of this writing, 28.2 million cases have been recorded globally with 910,000 deaths. Aside the health impact, the pandemic has led to an unprecedented disruption in economic activities, initiating a sudden demand, supply, and financial shock. The mitigation strategies put in place by governments across the world to curb the virus as well as the uncertainty associated with the pandemic has led to a reduction in the consumption of non-essential commodities. Meanwhile, disruptions to global supply chains in a closely connected world as well as the reduced demand have necessitated a slowdown in production. Furthermore, investors have become more risk averse with the prices of risk assets falling to levels experienced in the 2007-20008 global financial crisis. To counteract the fall in private sector demand, stabilize the financial system, and ensure economic recovery, governments and central banks across the world have deployed a range of policies and programmes. Central banks are cutting policy rates and providing direct liquidity to the financial system. Federal and sub-national governments are providing tax relief, cash transfers, and employee retention schemes to alleviate the burden on affected individuals and businesses. Africa is not left behind as governments have increased spending plans (about 1.9% of their GDP) and central banks are adopting more accommodating monetary policies.
Topic:
Economics, Health, Monetary Policy, Central Bank, Macroeconomics, Pandemic, COVID-19, Socioeconomics, and Supply Chains
Political Geography:
Africa

27. Establishing the empirical basis for tracing the development outcomes of agricultural investments

Author:
Helle Munk Ravnborg, Bernard Bashaasha, Rikke Broegaard, Michael Byaruhanga, Evelyne Lazaro, Festo Maro, Khamaldin Mutabazi, Teddy Nakanwagi, and David Tumusiime
Publication Date:
04-2021
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
This DIIS Working Paper describes the design of a questionnaire survey developed and implemented in order to trace the development outcomes of foreign agricultural investments in six research locations in Tanzania and Uganda. The questionnaire survey was conducted as part of the Agricultural Investors as Development Actors (henceforward AIDA) research programme which, in particular, focuses on development outcomes in terms of employment, migration, food security and wider dynamic economic effects, such as access to technology, infrastructure and markets; land markets and perceived security of land tenure; and water access and security of tenure. The working paper which serves as a methodological reference document describes the approach which was employed for drawing six independent samples of 400 respondents each, as well as the approach developed for computing a foreign agricultural investment exposure index and for computing a locally informed household poverty index.
Topic:
Agriculture, Climate Change, Development, Economics, Emerging Markets, Environment, Poverty, Water, Food, Governance, Inequality, Investment, and Land Rights
Political Geography:
Sub-Saharan Africa and Africa

28. Governance, Social Policy, and Political Economy: Trends in Norway’s Partner Countries

Author:
Stein Sundstol Eriksen
Publication Date:
04-2021
Content Type:
Special Report
Institution:
Norwegian Institute of International Affairs
Abstract:
In 2017–2018, NUPI (the Norwegian Institute of International Affairs) headed a project where political economy analyses were undertaken in eleven of Norway’s partner countries. These analyses were published as eleven separate reports. The reports focused on power relations and political developments in the partner countries, but they also analyzed the nature of governance. After the publication of the World Bank’s Worldwide Governance Indicators for 2019, the MFA approached NUPI and requested that we summarize the findings of this report for Norway’s eleven partner countries and assess these findings in light of the political economy analyses. We were also asked to investigate whether there were any connections between the nature and quality of governance on the one hand, and the nature of social policies and the human rights situation on the other. This report presents the findings of this assessment of the governance scores in the light of the above-mentioned political economy analyses. The report is structured as follows: Firstly, after briefly describing the governance indictors used by the World Bank, we summarize the eleven countries’ scores on the various governance indicators. Secondly, we assess the evolution of governance in the eleven countries, by comparing the scores in the 2019 report with those from 2011. Thirdly, we summarize the findings of the political economy analyses of the eleven countries and discuss how they fit with the governance scores. Finally, we present the eleven countries’ expenditure on social policies, as reported in the ILOs World Social Protection Report, and the human rights situation for the partner countries, and then describe how these findings relate to the governance scores.
Topic:
Development, Economics, Political Economy, Governance, and Social Policy
Political Geography:
Africa, Europe, and Norway

29. Financial disruption and fragile markets: A political-economic perspective on SMEs in the Somali private sector under COVID-19

Author:
Jos Meester, Johannes Claes, Claire Elder, and Guido Lanfranchi
Publication Date:
05-2021
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
This report explores SME growth and resilience in the fragile Somali context during the COVID-19 pandemic, including its relation to wider political-economic developments. The pandemic has demonstrated how Somali businesses have continued to be resilient and at times even thrive during crisis, but it has also exposed the sizeable vulnerability associated with the Somali territories’ trade, import dependence and financing system. The global COVID-19 pandemic has disrupted the supply and trans-shipment of goods. This has created shortages and price fluctuations for Somalia’s import-based economy and hampered the country’s payment system. It has also reduced remittances, buying power, access to finance and tax revenues. Shifts in funding streams have realigned political financing patterns and created price instability as political actors seek new ventures through which to move funds. Although the economic shock brought about by COVID-19 has not structurally changed the Somali political economy, it has exacerbated existing patterns of inequality. The contribution of the private sector to the COVID-19 response has likely supported a range of livelihoods throughout the Somali territories, yet the preferential access to governance and strong competitive position that allowed this also highlights a worrying level of inequality and market concentration, and raises questions regarding government legitimacy. It seems likely that the COVID-induced economic crisis has therefore reinforced rather than destabilised those dynamics that prevent small businesses from competing on an equal footing and fragile situations from developing and stabilising.
Topic:
Economics, Markets, Politics, COVID-19, and Fragile Markets
Political Geography:
Africa and Somalia

30. ‘A careful foot can step anywhere’: The UAE and China in the Horn of Africa: Implications for EU engagement

Author:
Jos Meester and Guido Lanfranchi
Publication Date:
06-2021
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
Over the last decade, the UAE and China have vastly expanded their economic, political and military footprint in the Horn of Africa, and their actions now have the potential to shape developments in the region. Room for cooperation between Abu Dhabi and Beijing exists on issues such as maritime security, regional stability, and economic development. Moreover, the two countries’ interaction could lead to improvements in the Horn’s underdeveloped infrastructure by triggering a race to investment. Yet, development and stability in the region might suffer if the strategic interests of external players take precedence over local ones, or if local elites (mis)use external support for narrow domestic political calculations. The EU and its member states have high stakes in the Horn’s stability. To optimise their engagement, European policymakers should be aware of the implications of the Emirati and Chinese presence, and they should strive to improve cooperation among the wide range of external players active in the Horn.
Topic:
Economics, International Cooperation, Politics, Military Affairs, Economic Development, and Economic Stability
Political Geography:
Africa, China, Asia, and Horn of Africa

31. Africa and the 'Globalization Bargain': Towards a Collective Economic Sovereignty

Author:
Al-Chukwuma Okoli and Atelhe George Atelhe
Publication Date:
01-2021
Content Type:
Journal Article
Journal:
AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:
Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:
Africa’s existential situation in the prevailing global order is such that no state thereof can afford to take national sovereignty too seriously. Apart from the myriad of structural challenges imposed on the continent by globalization, Africa is faced with a gamut of political and economic problems that can only be meaningfully addressed through some form of strategic multilateral collaboration. Africa’s aspiration to economic sovereignty has been constrained by the structural conditionalities of globalization, which have kept the continent overly weak, dependent and underdeveloped. The constraint is so immanent that individual African states can hardly afford even the relative sovereignty to harness a strategic balance in the fast ossifying asymmetries of interdependence that characterize the contemporary global political economy. It is posited in this paper that the remedy for Africa lies in the ability of her states to transcend their disempowering territorial-cum-nationalistic divides and capitalize on the existing continental multilateral mechanisms towards mainstreaming collective sovereignty, based on the principle of pan-African supranationalism. To that end, leveraging and maximizing the gains and prospects of extant regional and continental supranational organisms would become both salient and expedient.
Topic:
Economics, Globalization, Sovereignty, and Collective Bargaining
Political Geography:
Africa

32. A Visualization of Egypt’s Economic Performance During COVID-19

Author:
Omar Auf
Publication Date:
02-2021
Content Type:
Journal Article
Journal:
Cairo Review of Global Affairs
Institution:
School of Global Affairs and Public Policy, American University in Cairo
Abstract:
In this infographic article, we illustrate Egypt’s economic performance, pandemic response, and future based on commentary from IMF economist Said Bakhache.
Topic:
Economics, Public Health, Pandemic, and COVID-19
Political Geography:
Africa and Egypt

33. More than a Monolith

Author:
Ariana Bennett
Publication Date:
08-2021
Content Type:
Journal Article
Journal:
Cairo Review of Global Affairs
Institution:
School of Global Affairs and Public Policy, American University in Cairo
Abstract:
Home to 54 unique countries, ancient civilizations and cultures, Africa is much more than meets the world’s eye.
Topic:
Civil Society, Economics, Environment, Culture, Social Policy, and Regionalism
Political Geography:
Africa

34. Africa is Climbing the Prosperity Ladder but Some Rungs are Broken

Author:
Musaazi Namiti
Publication Date:
08-2021
Content Type:
Journal Article
Journal:
Cairo Review of Global Affairs
Institution:
School of Global Affairs and Public Policy, American University in Cairo
Abstract:
Africa is a continent with six of the world’s ten fastest-growing economies, but can it overcome its major challenges?
Topic:
Economics, Inequality, Economic Growth, and Prosperity
Political Geography:
Africa

35. In Malawi, the battle to save mangoes

Author:
Charles Mkoka
Publication Date:
08-2021
Content Type:
Journal Article
Journal:
Cairo Review of Global Affairs
Institution:
School of Global Affairs and Public Policy, American University in Cairo
Abstract:
Malawi, like other African fruit producers, is drawing on local and global resources to combat a pest which threatens vital fruit exports.
Topic:
Agriculture, Economics, Exports, Farming, and Crops
Political Geography:
Africa and Malawi

36. Overcoming The Challenge Of Fiscal Transition In Cameroon

Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
The Nkafu Policy Institute
Abstract:
On 16 November 2020, Cameroon’s government published the 2030 National Development 2020- Strategy (SND30), which operationalises the second phase of the emergence vision for 2035. This 10-year plan aims to implement favourable conditions for sustainable economic growth and an accumulation of national wealth through structural changes essential for industrialisation. The strategic objectives to be achieved can be summarised as follows: achieve approximately a double-digit economic growth attain the 25% threshold as the share of manufacturing production in GDP reduce poverty to less than 10% in 2035 consolidate the democratic process and strengthen national unity while respecting the diversity that characterises the country To achieve these clearly defined objectives, public authorities must increase their efforts to encourage local production. In other words, local producers need to be supported and supervised by being rewarded with a package of tax relief measures. The challenge is to promote the “made in Cameroon” and progressively reduce the dependence on manufactured products’ imports.
Topic:
Economics, Economic Growth, Tax Systems, and Fiscal Policy
Political Geography:
Africa and Cameroon

37. The Concept Of Africapitalism And The Role Of The Private Sector In Africa’s Socio-Economic Development

Author:
Dinga Tambi and Dr. Fuein Vera Kum
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
The Nkafu Policy Institute
Abstract:
Development is one of the main priorities of the United Nations. Development is a multidimensional concept that seeks to achieve a higher quality of life for all people. Economic development, social development and, environmental protection are interdependent and mutually reinforcing components of sustainable development. Africa is one of the fastest-growing continents in the world today. The private sector plays a great role in terms of job creation and employment. Constrained by a crippling environment and burdensome government policies for decades, Africa still hosts a majority of the least developed countries of the world. The private sector is said to have a major role to play in Africa’s development, a situation which Elumelu (2019) describes as ‘Africapitalism.’ According to Elumelu (2019) Africapitalism represents the belief that the private sector in Africa has a critical role to play in the continent’s development. For Africapitalism to hold, some basic principles have be put in place. These include entrepreneurship, long-term investments, investment in strategic sectors, and regional connectivity amongst others. Africapitalism lays emphasis on private sector growth as the primary driver of Africa’s development. It calls for a new kind of capitalism for Africa: one that focuses on long-term investment in key sectors of the economy to spark the growth of African-owned businesses, stimulate the creation of jobs, and guarantee sustainable economic growth. Essentially, africapitalism embodies a private sector-led approach to solving some of Africa’s most intractable economic growth and development problems.
Topic:
Economics, Capitalism, Business, Economic Development, Private Sector, and Job Creation
Political Geography:
Africa

38. An Analysis of the Effects of Oil Price Fluctuations on the Conduct of Monetary Policy in the Economic

Publication Date:
03-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
For many years, the economies of the Economic and Monetary Community of Central Africa, like most of the world’s economies, have been confronted with numerous fluctuations in the price of raw materials on international markets. For these predominantly extroverted economies, that is, those dependent on export earnings, these price variations have consequences for their macroeconomic performance and the conduct of economic policy. Like most economic crises in the world in the past, the pandemic caused by the new Coronavirus that has been raging since 2020 has also brought with it many changes. Between the confinement measures taken by public authorities to curb the spread of the virus and the resulting slowdown in global economic activity, there has been an inevitable significant drop in global oil demand. The direct consequence of such a scenario is the fall in oil prices on world markets, which is very bad news for the public finances of oil-exporting countries. The main objective of this report is to analyze the effects of oil price fluctuations on the conduct of monetary policy in the CEMAC. We start from the observation that oil shocks are the source of strong inflationary pressures in these economies. It is the responsibility of monetary policy to ensure price stability. Thus, after analyzing the effects of oil price fluctuations on the world economy as well as the macroeconomic and financial implications of these fluctuations on the economies in 2020, we use a Vector Auto Regressive model to analyze the contribution of oil price shocks on the historical dynamics of macroeconomic variables in the various CEMAC countries between 2001 and 2020. Then, we use a Panel Smooth Transition Regression model to analyze the impact of oil price changes on monetary policy in the CEMAC.
Topic:
Economics, International Political Economy, Oil, Natural Resources, Monetary Policy, Global Markets, Inflation, and Macroeconomics
Political Geography:
Africa, Cameroon, and Central Africa

39. Should We Consider A Post-Covid-19 Reform Of The VAT In Cameroon?

Publication Date:
03-2021
Content Type:
Special Report
Institution:
The Nkafu Policy Institute
Abstract:
The COVID-19 pandemic so far has had a profound impact on the global economy. The containment measures adopted by governments to curb the spread of the disease have curtailed business activities, making it impossible for companies to adequately meet their tax obligations. As a result, forecasts for customs revenues and internal tax resources have been revised downward, mainly due to the closure of borders. Collected both at the borders and within the country, Value Added Taxes revenues have naturally been very negatively affected by the crisis. In Cameroon, losses related to value added tax in 2020 were estimated at CFAF 298.017 billion, representing 50.73 percent of recorded tax losses, which is hardly surprising. Value-added taxes are identified as the main source of tax revenue in Cameroon. They were estimated at 44.73% of tax revenue in 2019 and about 7% more than in 2016. The importance of VAT in tax revenue mobilization requires an examination of the Cameroonian tax system, particularly the factors that could explain a reform of the tax. Moreover, given that Cameroon is at high risk of external debt distress (IMF, 2018), there is an urgent need to find new ways to ensure the continued sustainability of public finances. This Tax Policy Letter analyzes the rationale for VAT reform in Cameroon. First, we present the severity of the economic repercussions of the coronavirus health crisis at the level of VAT revenues in Cameroon. Noting that VAT is the main source of indirect tax revenue – 60.19% in 2019 compared to 54.54% in 2016, for example – we then examine the guiding principles that govern its collection and application in Cameroon. A careful examination of these principles has allowed us to analyze the benefits associated with a reform of this tax on final consumption.
Topic:
Economics, International Political Economy, Tax Systems, Macroeconomics, Fiscal Policy, and Revenue Management
Political Geography:
Africa and Cameroon

40. The Declaration and Payment of Taxes in Cameroon: A Critical Appraisal

Author:
Dr. Louis-Marie Kakdeu, Ulrich D’POLA KAMDEM, and Dinga Tambi
Publication Date:
05-2021
Content Type:
Special Report
Institution:
The Nkafu Policy Institute
Abstract:
The Nkafu Policy Institute is delighted to share with you the results of a report that critically appraises the declaration and payment of taxes in Cameroon. Indeed, since 2004 the Doing Business Index (DBI) of the World Bank has been ranking national economies based on their performance in several domains. One of these domains includes the “paying taxes” indicator. It records taxes and mandatory contributions that medium-size companies must pay in a given year and equally measures the administrative burden of paying taxes and contributions and complying with post-filing procedures. Therefore, the weight of the tax burden remains a decisive element in the attractiveness of an economy as it encourages or dissuades national and foreign investors, widens or reduces the tax base, stimulates or refrains entrepreneurship. During the 2009 and 2016 General Census of Enterprises by the National Institute of Statistics, the following key question was asked to top management personnel: “What are the most important obstacles to entrepreneurship in Cameroon?” Taxation was cited as the first major obstacle regardless of cities, according to National Institute of Statistics reports.
Topic:
Economics, Governance, World Bank, Regulation, and Tax Systems
Political Geography:
Africa and Cameroon

41. The Impact of Conflicts on Natural Resources – The Case of Sudanese Darfur Region

Author:
Nagmeldin Karamalla-Gaiballa
Publication Date:
01-2021
Content Type:
Journal Article
Journal:
Polish Political Science Yearbook
Institution:
Polish Political Science Association (PPSA)
Abstract:
This research paper explores the impact of sociological perspectives on the relationship between natural resources and conflicts. From these theoretical perspectives, many fundamental sources of conflict over natural resources are identified and defined. This research takes the approach of a case study in which the researchers investigate and analyze the sources of conflict happening in the Darfur region of Sudan. This case study explores the demographic changes, economic development, and social inequality among some factors contributing to conflict over resources in this region. The research findings demonstrated that various factors play a vital role in the availability of natural resources, which is the main reason sides other reasons flaring conflict in the Darfur region in Sudan. These factors are related to climate change, destruction of ecosystems, immigration, demographic change, and political changes. Even though various factors could impact the conflict of resources in the Darfur region in Sudan, these researchers focused in this research paper on the sociological perspective only.
Topic:
Development, Economics, Natural Resources, Inequality, and Conflict
Political Geography:
Africa and Sudan

42. The Role of Global Climate Change in Structural Transformation of Sub-Saharan Africa

Author:
Askar Mukashov and Christian Henning
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
With increasing evidence that rural households in Sub-Saharan Africa (SSA) opt for deagrarianization as an adaptation strategy to climate change, it is becoming important to understand the role of Global Climate Change (GCC) in ongoing structural transformation processes in these countries. We use Senegal as a case study country and analyze how various GCC scenarios affect the country's economic sectors, households' welfare, and structural transformation patterns. Our simulation results suggest that GCC can increase the country's deagrarianization pace, with industrial and service sectors in the capital Dakar being the most important destinations of the former agricultural labor force. Although unplanned urbanization smoothes the overall negative impact of GCC and decreases spatial income disparities, uncontrolled deagrarianization is also associated with negative externalities. Previous growth-focused studies suggest that services partaking in Senegal’s deagrarianization can hamper its long-term growth prospects, and our results suggest that productivity increase of services can redirect part of the former agricultural labor force towards industrial sectors.
Topic:
Agriculture, Climate Change, Economics, Environment, Labor Issues, Income Inequality, Rural, and Housing
Political Geography:
Africa and Senegal

43. Resolving Human Wildlife Conflict in Botswana Through Social Protection

Author:
Israel R. Blackie
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
This policy brief is based on a national tracer survey covering 66 villages in Botswana. The main aim of the study was to ascertain the magnitude and social impacts of human wildlife conflict (HWC) on victims and their families. In addition, the study sought to assess the relevance and effectiveness of the ex gratia compensation scheme to victims of wild animals’ attack which was introduced in 2015. The key findings reveal that local people exposed to life threatening wildlife attacks express fear and animosity towards wild animals, and also feel rejected and disappointed from a fragmented government service delivery system. Major policy recommendations to be considered by government and other stakeholders include provision of comprehensive therapeutic rehabilitation and reconstructive surgery to HWC victims, comprehensive compensation according to the severity of injuries sustained, and establishment of an Ex Gratia Scheme or Ex Gratia Tribunal.
Topic:
Economics, Environment, International Political Economy, Sustainability, Ecology, and Wildlife
Political Geography:
Africa and Botswana

44. The National FDI Observatories, a Bulwark Against the Imbalance Effects of Chinese FDI In Africa?

Author:
Joel Moudio and Steve Tametong
Publication Date:
07-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
Sino-African relations are structured around three axes: trade, Chinese financing in Africa and foreign direct investment (FDI). The latter is the key element in the multinationalisation of companies. Between 2003 and 2018, Chinese FDI in Africa dropped from USD 75 million to USD 2.7 billion1 ; this is in contrast to the period 2004-2008 when Africa attracted about 10% of Chinese direct investment (Sanfilippo, 2010), with a peak in 2008 of about USD 5.5 billion “due to the purchase of 20% of the shares of the Standard Bank of South Africa by the Industrial and Commercial Bank of China (ICBC)”.2. These include: cross-border mergers and acquisitions, intra-group loans and borrowing, and the creation of subsidiaries abroad. While Chinese FDI in Africa is growing exponentially and is a development boon for African countries (1), it is also partly a “danger” for African economies. The case of Cameroon will illustrate this (2). In this context, the establishment of a National FDI Observatory (NFOID) under the joint action of civil society becomes a necessity in order to compensate for the State’s inadequacies in terms of monitoring and surveillance of the perverse effects of FDI (3).
Topic:
Civil Society, Economics, Hegemony, and Foreign Interference
Political Geography:
Africa and Cameroon

45. The Resurgence of Covid19 and its Impact on the Economies of CEMAC Countries

Author:
Cyriaque Junior Medjo Mekok
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
For more than a year, the world has been facing a phenomenon that has literally redefined habits within communities. This phenomenon is the global Corona virus pandemic, identified in December 2019 in China, in the city of Wuhan. Declared a pandemic by the World Health Organisation (WHO), it has multiplied cases of contamination and death throughout the world. As no country is self-sufficient, the Corona virus pandemic has forced all nations to adopt measures to protect their populations and territories. Since mid-January 2021, the WHO has authorised the release of Covid19 vaccines in the world in general and in Africa in particular. Astra Zeneca, Moderna, Pfizer/BioNTech, Johnson & Johnson and others are now being used to combat the disease. Even if their effectiveness is established at 66% in general against 85% for the severe forms, their ineffectiveness against the more contagious South African variant represents a disadvantage for their marketing in Africa. In order to better understand our subject, we will take stock of the resurgence of this crisis in the economies of the CEMAC countries (I), state its harmful effects on their economies (II) and provide prospects and solutions for economic recovery (III).
Topic:
Economics, Regional Cooperation, Pandemic, COVID-19, Health Crisis, and CEMAC (Central African Economic and Monetary Community)
Political Geography:
Africa, Chad, Cameroon, Central African Republic, Equatorial Guinea, Gabon, and Republic of Congo

46. Urban Governance in Cameroon: Between Laissez-Faire And Faire-Laisser

Author:
Joseph MagloirenOlinga Olinga
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
From a geohistorical point of view, Cameroonian cities are characterised by what B. TAMRU (2001) describes as a “process of vulnerability“. This concept is in line with the phenomenological approach, which studies the impact of human actions on risk and its aggravation, based on the study of damage (P. PIGEON, 1994). However, urban dynamics are still poorly taken into account in the diagnosis of environmental risks. In this case, the flood risk is rarely studied in all its spatio-temporal depth: “The risk of flooding is thus most often analysed at a time “t”, according to a given hazard, on channels considered as stable”. From this point of view, starting from a diachronic analysis, the geohistorical context of Cameroon cities, particularly urban centres such as Douala (economic capital) and Yaoundé (political capital), constitutes an important key to reading the current urbanistic, social, economic and environmental challenges. Based on recent news, in particular the images of the Yaoundé VII Town Hall flooded after the downpour of 8 June 2021, this paper analyses the vulnerabilities of Cameroon cities through the prism of two variables: firstly, the socio-spatial processes that produce them and, secondly, the mechanisms that determine the capacity of cities to adapt to environmental risks. It brings to the fore the thorny issue of urban governance lato sensu. The case of the Commune of Yaoundé VII is symptomatic of urban governance in Cameroon and raises the question of whether municipal executives are definitively caught in the dilemma of “laissez-faire” and “faire laisser”.
Topic:
Economics, Environment, Governance, and Urban
Political Geography:
Africa and Cameroon

47. Diaspora Investors and Access to Bank Credit in Cameroon: Constraints and Opportunities

Author:
Ballo Ngomna and Joel Moudio
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
According to the Doing Business 2020 report, “compared to the previous year, sub-Saharan African economies improved their average score by 0.9 points” on the Doing Business index, which ranks countries on the ease of doing business. Overall, Cameroon’s index value (46.1) does not give it an honourable ranking (167th out of 190). However, its ranking is better in terms of obtaining loans (80th out of 190), one of the ten components used to calculate the index.
Topic:
Economics, Finance, Credit, and Banking
Political Geography:
Africa and Cameroon

48. Perspectives on the Formalization of the Informal Economy in Cameroon

Author:
Joel Moudio Motto
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
Informal sector practices are the third most frequently cited barriers – after corruption and administrative bureaucracy – for formal enterprises in sub-Saharan Africa (Moyo & Sibindi, 2020). To address this, many programs are being implemented to crack down on and penalize non-compliance. Policies are also being implemented for reducing registration costs and imposing taxes on informal activities and formalization campaigns (De Mel et al., 2014). The issues raised by these measures are fiscal and compliance issues. From this point of view, the non-participation of the informal economy in tax revenues limits the action of the State, hence the need to formalize, by organizing informal channels into associations or interest groups, despite the tax and standardization challenges.
Topic:
Economics, Governance, Tax Systems, and Informal Economy
Political Geography:
Africa and Cameroon

49. Report on the 2021 Budget of Cameroon: An Analysis of the Sustainability of the Public Debt

Author:
Jean-Cedric Kouam, Henri Kouam Tamto, Bin Joachem Meh, and Marlyse Noussi
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
The purpose of this report is to analyze the 2021 budget of the State of Cameroon, examining the sustainability of public debt. We use data extracted from the Republic of Cameroon’s Finance Laws, notably those for 2021; available public debt data from the Autonomous Sinking Fund; as well as forecasts made by the Ministry of the Economy, Planning, and Regional Development in the New National Development Strategy 2020-2030. Using the framework for analyzing public debt sustainability defined jointly by the International Monetary Fund and the World Bank in 2018, we show that Cameroon’s public debt, while still sustainable (estimated at 46.9% of Gross Domestic Product, thus remaining below the community threshold of 70%), still poses a high risk of external debt distress on the Cameroonian economy. This result means that, in the absence of concrete and radical actions by the government to reduce its rate of indebtedness, it will be difficult for the Cameroonian Treasury to honor all the government’s financial commitments on the bond markets in the near future, particularly with respect to debt service payments. We show that Cameroon’s liquidity and solvency ratios correspond to a policy that can be improved. Some debt and debt service indicators are significantly above short-term benchmarks over the entire study period from 2021 to 2030. Given this situation, it is urgent that the government define and implement an effective and efficient fiscal policy capable of bringing Cameroon to the level of development hoped for by 2035. This requires a more optimal reallocation of resources in order to guarantee productive investments and sustainable human development (Fambon, 2002). In this sense, this report emphasizes the need to guarantee the competitiveness of national enterprises, which includes the promotion of national private investment and the choice of loans at preferential rates that require the repurchase and/or cancellation of certain components of the country’s public debt. Thus, the study recommends several economic policy proposals to the Cameroonian government to reduce the debt burden.
Topic:
Debt, Economics, Governance, Finance, and Public Debt
Political Geography:
Africa and Cameroon

50. Free Trade as a Catalyst to the Fourth Industrial Revolution Technologies in Cameroon’s Manufacturing Sector

Author:
Henri Kouam
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
The Nkafu Policy Institute
Abstract:
The Fourth Industrial Revolution is rapidly changing the nature of work in recent times. Policymakers are grappling with integrating 4IR technologies into their economies, but for Cameroon and Nigeria, free trade is a useful tool in supporting manufacturing and innovation. Free trade will increase competition in the Cameroonian market as lower trade barriers will increase the flows of goods and services into Cameroon. Admittedly, local manufacturers will innovate their processes in order to protect their market share and reduce the impact of foreign competition. Medium and high-tech manufacturing exports in Cameroon will drive by increased demand from other African countries and price-driven competition in local markets.
Topic:
Economics, International Trade and Finance, Free Trade, Manufacturing, and Industrialization
Political Geography:
Africa and Cameroon

51. EU–Africa Partnership on Migration and Mobility in Light of COVID-19: Perspectives from North Africa

Author:
Mehdi Lahlou
Publication Date:
02-2021
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
The coronavirus pandemic has turned into a global economic crisis with severe social effects in the least developed countries, particularly in Africa. Pre-existing challenges related to widespread poverty, demographic growth, food insecurity and governance issues have been exacerbated by the pandemic. While migration remains one of the key elements of the partnership agenda between Africa and the European Union, the aggravating socioeconomic situation in the African continent due to the impact of COVID-19 and its implications for migration dynamics requires going beyond business-as-usual approaches. The renewed scenario calls for a more comprehensive and development-oriented approach to migration, requiring new policy initiatives addressing the wider set of conditions that, beyond constituting developmental challenges in their own right, also drive migration in North Africa as well as in Sub-Saharan African countries.
Topic:
Economics, Migration, European Union, Mobility, Asylum, and COVID-19
Political Geography:
Africa, Europe, and North Africa

52. Seizing a Historic Opportunity: the U.S.-DRC Privileged Partnership for Peace and Prosperity

Author:
Michael A. Hammer
Publication Date:
11-2021
Content Type:
Journal Article
Journal:
The Ambassadors Review
Institution:
Council of American Ambassadors
Abstract:
The Congolese people have endured a tragic history, first at the hands of a colonial power and, since gaining independence, from its own homegrown rulers. A country with ample supplies of strategic minerals and natural resources has become dependent on considerable international humanitarian assistance and peacekeeping support to avoid a further calamity. Yet out of an imperfect electoral transition in 2019, the Democratic Republic of the Congo can break with the past and achieve substantial progress. Despite Congo’s unpredictability and legendary challenges, one constant has been clear throughout my time in Kinshasa: there is presently an opportunity for real change. One can envision how sustained good governance that channels resources toward development could rapidly transform this struggling nation. If President Tshisekedi can embody the vision he has ambitiously laid out, it is possible to achieve a rapid transformation of this struggling nation. But DRC cannot do it alone. Since the U.S. is a committed, reliable and long-term partner of the Congolese people and their government, it is incumbent on us to step up and make a difference. Still, given the enormity of the task at hand, U.S. interagency efforts in support of the DRC must be sustained over time even if there are setbacks and if progress is painfully slow. This is an investment well worth making!
Topic:
Security, Economics, International Cooperation, Military Strategy, Transition, and Prosperity
Political Geography:
Africa, North America, United States of America, and Democratic Republic of Congo

53. COVID-19 and Land-based Investment: Changing Landscapes

Author:
Clarisse Marsac, Nathaniah Jacobs, and Tehtena Mebratu-Tsegaye
Publication Date:
05-2021
Content Type:
Special Report
Institution:
Columbia Center on Sustainable Investment
Abstract:
The Covid-19 crisis has affected nearly all elements of the global economy, including the landscape of land-based investment (LBI). In addition to increased demand for land-based investment, especially among low- and middle-income countries which saw decreasing revenue and increasing spending in the first year of the pandemic, the crisis has also caused changes in the ways of doing business among host governments, home governments, and private sector actors involved in LBI. This report details and reflects on select Covid-19--related LBI developments in the short term, and potential longer-term shifts relevant to land-based investment practices in Sub-Saharan Africa and Southeast Asia. It also suggests possibilities for how a post-Covid economic recovery could improve practices for sustainable and responsible LBI.
Topic:
Development, Economics, Sustainability, and COVID-19
Political Geography:
Africa, Asia, Southeast Asia, and Sub-Saharan Africa

54. Trash Sorters: Entrepreneurs in Africa

Author:
Carl Manlan
Publication Date:
01-2020
Content Type:
Journal Article
Journal:
Cairo Review of Global Affairs
Institution:
School of Global Affairs and Public Policy, American University in Cairo
Abstract:
Africa is on the cusp of a community-led socioeconomic transformation, but this cannot happen without fully integrating the informal economic dynamos of young trash sorters.
Topic:
Economics, Youth, and Social Services
Political Geography:
Africa

55. Land Tenure Security, Credit Access and Agricultural Productivity in Cameroon

Author:
Tchinda Kamdem Eric Joel and Kamdem Cyrille Bergaly
Publication Date:
01-2020
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
Cameroonian farmers face two tenure systems: a modern regime and a customary regime. These two regimes are perpetually confronting each other, putting farmers in a total uncertainty as to the regime to adopt to ensure the sustainability of their ventures. This study aims to assess the influence of land tenure security on agricultural productivity through credit access. To achieve this goal, a two-stage sampling technique was applied to data from the third Cameroon Household Survey (ECAM 3). The number of farmers selected for the analysis was 602. These data were analysed using descriptive and three-step recursive regression models. The results of the analysis reveal that land tenure security improves agricultural productivity through the credit access it allows. A proof of the robustness of this result has been provided through discussion of the effects of land tenure security in different agro-ecological zones and through a distinction between cash crops and food crops. The overall results confirm that land tenure security positively and significantly influences agricultural productivity. The regression has also shown that the size of the farm defined in one way or another, the perception of farmers on their level of land tenure security and therefore indicates the intensity with which land tenure security influences agricultural productivity. The recorded productivity differential indicates that smallholder farmers, because they keep small farms, feel safer and produce more than those who keep medium-sized farms. The results also show that land tenure security significantly improves the value of production per hectare of food products that are globally imported into Cameroon. Therefore, we recommend that the public authorities promote land tenure security by reinforcing the unassailable and irrevocable nature of land title, but also by easing the conditions of access to it.
Topic:
Agriculture, Development, Economics, International Political Economy, Economic structure, and Economic Policy
Political Geography:
Africa and Cameroon

56. Political Instability, FDI and Economic Growth in Sub-Saharan African Countries: Evidence from Modelling Dynamic Simultaneous Equations

Author:
Lewis Landry Gakpa
Publication Date:
01-2020
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
The aim of this study is to examine the consequences of interaction between political instability and foreign direct investment (FDI) on economic growth of 31 countries in Sub-Saharan Africa in order to analyse one of the channels through which political instability affects economic growth. To achieve this objective, the study relies on a dynamic panel procedure and the Three Stage Least Squares Method to estimate a model of simultaneous equations over the period 1984-2015. The empirical results indicate that political instability affects economic growth directly and indirectly through its impact on foreign direct investment. We also highlight the simultaneous character of the relationship between political instability and the level of economic development in Sub-Saharan African countries. The results of the study then corroborate the idea that political instability hinders growth and thus calls for measures to improve the quality of political climate, which is one of the conditions necessary for a country’s economy to benefit from foreign direct investment.
Topic:
Economics, Foreign Direct Investment, Political stability, Economic Policy, and Macroeconomics
Political Geography:
Africa, South Africa, Angola, Namibia, and Botswana

57. Twin Deficits Phenomenon in the West African Economic and Monetary Union Countries: Panel Data Analysis

Author:
Kouassi Yeboua
Publication Date:
01-2020
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
For a long time, the West African Economic and Monetary Union (WAEMU) countries have been experiencing persistently high budget and current deficits. This study was undertaken to empirically test the “Twin Deficits Hypothesis” in these countries. The analysis was conducted within the framework of the Panel Vector autoregressive (VAR) approach over the period 1975–2013. In contrast to the conventional view which claims a one-way relationship between budget and current account deficits, the results show that budget deficits lead to a deterioration in the current account balance, and vice versa (bilateral relationship). We also found that budget deficits have an impact on current account balance mainly through imports.
Topic:
Economics, Monetary Policy, Budget, Economic Policy, and Macroeconomics
Political Geography:
Africa and West Africa

58. Explaining Wellbeing and Inequality in Cameroon: A Regression-Based Decomposition

Publication Date:
01-2020
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
This study sets out to estimate the determinants of household economic wellbeing and to evaluate the relative contributions of regressed-income sources in explaining measured inequality. In particular, a regression-based decomposition approach informed by the Shapley value, the instrumental variables econometric method, and the 2007 Cameroon household consumption survey, was used. This approach provides a flexible way to accommodate variables in a multivariate context. The results indicate that the household stock of education, age, credit, being bilingual, radio and electricity influence wellbeing positively, while rural, land and dependency had a negative impact on wellbeing. Results also show that rural, credit, bilingualism, education, age, dependency and land, in that order, are the main contributors to measured income inequality, meanwhile, the constant term, media and electricity are inequality reducing. These findings have policy implications for the ongoing drive to scale down both inequality and poverty in Cameroon.
Topic:
Development, Economics, Poverty, Inequality, Economic Inequality, and Economic Policy
Political Geography:
Africa and Cameroon

59. The Impact of E-Wallet Fertilizer Subsidy Scheme and its Implication on Food Security in Nigeria

Author:
Reuben Adeolu Alabi and Oshobugie Ojor Adams
Publication Date:
01-2020
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
This study examined the impacts of the e-wallet fertilizer subsidy scheme on quantity of fertilizer use, crop output and yield in Nigeria. The study made use of the Nigeria General Household Survey (GHS)-Panel Datasets of 2010/2011 and 2012/2013 which contain 5,000 farming households in each of the panel. We applied relevant evaluation techniques to analyse the data. The results of the impact analysis demonstrate that the scheme has generally increased the yield, crop output and quantity of fertilizer purchase of the participating farmers by 38%, 47%, and 16%, respectively. The study concludes that increased productivity, which the scheme engenders, can help to reduce food insecurity in Nigeria. Provision of rural infrastructure, such as good road network, accessibility to mobile phones, radio, etc., will increase accessibility of the small-scale farmers to the scheme or any other similar agricultural schemes in Nigeria.
Topic:
Agriculture, Development, Economics, Income Inequality, Economic Growth, and Rural
Political Geography:
Africa and Niger

60. The Exchange Rate Pass-Through to Inflation and its Implications for Monetary Policy in Cameroon and Kenya

Author:
Dongue Ndongo Patrick Revelli
Publication Date:
01-2020
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
Understanding how domestic prices adjust to the exchange rate enables us to anticipate the effects on inflation and monetary policy responses. This study examines the extent of the exchange rate pass-through to the Consumer Price Index in Cameroon and Kenya over the 1991-2013 period. The results of its econometric analysis shows that the degree of the exchange rate pass-through is incomplete and varied between 0.18 and 0.58 over one year in Kenya, while it varied between 0.53 and 0.89 over the same period in Cameroon. For the long term, it was found to be equal to 1.06 in Kenya and to 0.28 in Cameroon. A structural VAR analysis using impulse-response functions supported the results for the short term but found a lower degree of pass-through for the exchange rate shocks: 0.3125 for Kenya and 0.4510 for Cameroon. It follows from these results that the exchange rate movements remain a potentially important source of inflation in the two countries. Variance decomposition shows that the contribution of the exchange rate shocks is modest in the case of Kenya but significant in that of Cameroon.
Topic:
Development, Economics, Monetary Policy, Exchange Rate Policy, Economic Policy, and Inflation
Political Geography:
Kenya, Africa, and Cameroon

61. The Impact of Regulations on Investment in Mobile Telephone Infrastructure in Southern African Development Community Countries

Author:
Albert Makochekanwa
Publication Date:
01-2020
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
The main objective of the study was to investigate the impact of policy regulations on investments in mobile telecommunications network infrastructure in all the 15 member countries of the Southern African Development Community (SADC) region. The research employed panel data econometrics to achieve its stated objective. Estimated results shows that the coefficient of gross domestic product (GDP) per capita is positive and statistically significant, implying that an increase in this variable results in increase in demand and this in turn motivates infrastructure investment in mobile telephone. The coefficient on the previous level of mobile telephone infrastructure investment variable (Invkt-1) was found to be positive and statistically significant. This means that there is a systematic positive association between the previous level of mobile telephone infrastructure investment and the current. The coefficient of the main variable of interest representing mandatory unbundling (Regkt) was found to be positive and statistically significant. This implies that, overall, mandatory unbundling access regulation boost infrastructure investment in mobile telecommunication. Regression estimates shows that the coefficient on one of the variable of interest, political constraint (POLCON) has a negative and statistically significant impact on determining the level of mobile telephone infrastructure investment in SADC countries. Whilst this result is against expectations, one possible explanation may be presence of high level of rent seeking behaviour.
Topic:
Development, Economics, Regulation, Economic Growth, and Economic Policy
Political Geography:
Africa and South Africa

62. Birth Order and Demand for Immunization for Children under the Age of Five in Cameroon

Author:
Negou Kamga Vincent de Paul and Nda’chi Deffo Rodrigue
Publication Date:
01-2020
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
Despite free basic vaccines administered by the Expanded Programme on Immunization (EPI), there is still a fairly high death rate of children aged 0-5 worldwide due to vaccine-preventable diseases. Sub-Saharan Africa is the most affected region due to low levels of vaccination. This study analyses the effect of birth order on the immunization status of children in Cameroon, considering the contribution of cultural, economic and community factors. To do this, it uses data from the Demographic and Health Surveys of 1991, 1998, 2004 and 2011 produced by the National Institute of Statistics with the support of UNFPA, UNICEF, the World Bank and USAID. The EPI module was administered to 3,350, 2,317, 8,125 and 25,524 children under five in 1991, 1998, 2004 and 2011, respectively. The multinomial probit model makes it possible to find that birth order has a negative and highly significant effect on the full and timely immunization of children under five and the impact increases with birth order. Moreover, the impact of birth order increases after adjusting for cultural factors. This increase indicates that, beyond the effect of birth order, cultural factors are at the root of prejudices leading to the abandonment of children. Considering children under two years of age, and vaccines taken during the first four months, the corresponding birth order effect points to the benefits of routine immunization and response campaigns in promoting immunization of children under five.
Topic:
Economics, Health, Health Care Policy, and Children
Political Geography:
Africa and Cameroon

63. How Did Conflict Affect Women’s Economic Opportunities in Sub‑Saharan Africa?

Author:
Jeni Klugman and Turkan Mukhtarova
Publication Date:
10-2020
Content Type:
Special Report
Institution:
Georgetown Institute for Women, Peace and Security (GIWPS)
Abstract:
Prior research suggests that in times of conflict, women seek paid work for various reasons. But do these shifts last post-conflict? The authors analyze women’s labor force participation and employment trends in six conflict-affected Sub-Saharan African countries: Burundi, Chad, Côte d’Ivoire, Guinea-Bissau, Liberia, and Rwanda. The report finds there are significantly higher labor force participation rates among women, both in absolute numbers and relative to men’s participation, in these conflict-affected countries compared to peer countries. However, while conflict expanded women’s economic opportunities, it did not transform or improve the quality of jobs available to them. Most women continue to work in agriculture, often lacking decent working conditions and adequate social security. A deeper investigation of Liberia suggests that conflict-related disruptions expanded women’s economic opportunities. The predicted employment likelihood rose significantly between 1986 (three years before the conflict) and 2007 (four years after the end of the conflict) for all Liberian women, but especially among married women.
Topic:
Economics, Labor Issues, Women, Conflict, Participation, and Opportunity
Political Geography:
Africa, Liberia, Rwanda, Burundi, Chad, Guinea-Bissau, Côte d'Ivoire, and Sub-Saharan Africa

64. China Maritime Report No. 6: Djibouti: China's First Overseas Strategic Strongpoint

Author:
Peter A. Dutton, Isaac B. Kardon, and Conor M. Kennedy
Publication Date:
04-2020
Content Type:
Special Report
Institution:
China Maritime Studies Institute, U.S. Naval War College
Abstract:
This China Maritime Report on Djibouti is the first in a series of case studies on China’s “overseas strategic strongpoints” (海外战略支点). The strategic strongpoint concept has no formal definition, but is used by People’s Republic of China (PRC) officials and analysts to describe foreign ports with special strategic and economic value that host terminals and commercial zones operated by Chinese firms.
Topic:
Economics, Military Strategy, Military Affairs, Geopolitics, Navy, Oceans and Seas, Seapower, Chinese Communist Party (CCP), Port, and People's Republic of China (PRC)
Political Geography:
Africa, China, Asia, Djibouti, and East Africa

65. Socio-Economic Implications of Covid-19 in Cameroon

Author:
Dr. Fuein Vera Kum and Henri Kouam
Publication Date:
06-2020
Content Type:
Special Report
Institution:
The Nkafu Policy Institute
Abstract:
The economic impact of COVID-19 will be broad-based, causing wages to fall due to social distancing and quarantine measures on the service sector. While communications and ICT-related sectors will be less affected, transport, entertainment and leisure sectors will be adversely affected, together with exports and domestic demand. Policymakers should utilise the $164 billion availed by international institutions to support SMEs and wages in the informal sector, whilst the 90 billion should be used in other to invest in the physical and digital infrastructure to support educational outcomes and employment over the medium term. Such actionable policies should accompany broader quarantine and social distancing measures.
Topic:
Economics, Health, Macroeconomics, Pandemic, and COVID-19
Political Geography:
Africa and Cameroon

66. Cameroon’s Informal Sector Put To The Test By Coronavirus (Covid-19)

Author:
Dr. Louis-Marie Kakdeu and Ulrich D’POLA KAMDEM
Publication Date:
06-2020
Content Type:
Special Report
Institution:
The Nkafu Policy Institute
Abstract:
On 6 March 2020, the first positive case of Coronavirus (COVID-19) was recorded in Cameroon. Towards the end of April 2020, the country has more than 1000 positive cases with eight (8) out of the country’s ten (10) regions affected. To block the spread of the Coronavirus in Cameroon, government’s authorities took a series of thirteen (13) measures on 17 March 2020. At the level of business enterprises, the objective of the actions taken to counter the virus was two-fold: to implement the government’s recommendations and, especially, to ensure continuity of work. For example, the use of telework has been adopted in some companies. However, while the government’s measures and those relating to telework have been widely followed in both the public and the formal private sectors, they have, nevertheless, been a real headache for the informal sector. Indeed, the informal sector in Cameroon is characterised by precarious activities, with little or no supervision, which are not covered by the National Accounting. This sector employs 90% of the active population and accounts for more than 50% of the country’s GDP according to the International Labour Organization – ILO (2017). Consequently, because of its weight in the Cameroonian economy, this article analyzes the impact of the COVID-19 pandemic on the informal sector.
Topic:
Economics, Health, Public Sector, Private Sector, Coronavirus, Pandemic, and COVID-19
Political Geography:
Africa and Cameroon

67. The Impact Of Covid-19 On Sino-African Trade Activities

Author:
Egoh Aziz
Publication Date:
06-2020
Content Type:
Special Report
Institution:
The Nkafu Policy Institute
Abstract:
The recent outbreak of COVID-19 has caused waves of horror and anxiety across many nations in the world. Considering the intense unravelling of the pandemic, no exact figure as per the number of confirmed and death cases worldwide is definite because the situation changes almost every hour. However, on April 14, 2020 3:40 GMT, Worldometer reported 210 countries and territories across the globe having a total of 1,925,179 confirmed cases, and a dead toll of 119,699 deaths. The impact of the pandemic is disastrous globally affecting a variety of sectors including the service and supply chain, as well as trade, manufacturing, and tourism. This article aims to provide a synoptic assessment of the impact of COVID-19 on Sino-African trade activities. It stresses that, if African policymakers revamp their efforts to quickly address COVID-19, the human casualty will be less and African economic growth may experience lesser shock as previewed by the IMF. On the other hand, if they relent their efforts, the human casualty will soar while the growth rate may decline. The effect of COVID-19’s outbreak in China has caused a slowdown on exports and services directed towards China.According to statistics from the General Administration of Customs of China, in 2018, China’s total import and export volume with Africa was US$204.19 billion, a yearly increase of 19.7%, surpassing the total growth rate of foreign trade in the same period by 7.1 percentage points. Among these, China’s exports to Africa were US$104.91 billion, up 10.8% and China’s imports from Africa were US$99.28 billion, up 30.8%; the surplus was US$5.63 billion, down 70.0% every year. The growth rate of Sino African trade was the highest in the world in 2018. This shows that Sino-African trade has a significant contribution to the growth of African economies.
Topic:
Economics, Health, International Cooperation, International Trade and Finance, Trade, Coronavirus, Pandemic, and COVID-19
Political Geography:
Africa, China, Asia, and Cameroon

68. 'No Place for Me Here': The challenges of Ethiopian male return migrants

Author:
Adam Moe Fejerskov and Meron Zeleke
Publication Date:
03-2020
Content Type:
Special Report
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
Every year, hundreds of thousands of migrants return to Ethiopia from abroad, many of them forced. The arduous irregular journeys that many Ethiopian migrants take, particularly men, expose them to extreme levels of physical, psychological and sexual violence. Building on interviews with Ethiopian male returnees, this new DIIS Report documents both the inhuman conditions of migration that most of these men are faced with during their travels, but also the difficulties of returning to a place that may not be felt as ‘home’ anymore. The report shows how processes of returning are neither easy or pleasant as most returnees are faced with social stigma, economic hardship and traumas from their migration journeys. The report questions the very notion of re-integration. The life-altering and irreparable effects of migration for Ethiopian men, seldom for the better, means that what was before will never be again. As such, there are no processes of development, forms of treatment or possibilities of employment that can bring one back to how things were. That does not mean that support in adjusting to a new life after migration journeys is not possible, it simply means that the objective can never be to reinstate migrants ‘back’ into their communities with any expectation that they can resume social relations or positions like things were before. The report is financed by the Danish Red Cross.
Topic:
Economics, Gender Issues, Migration, and Men
Political Geography:
Africa and Ethiopia

69. Africa's Economic Response to the Covid-19 Pandemic

Author:
V. Srinivas
Publication Date:
10-2020
Content Type:
Research Paper
Institution:
India International Centre (IIC)
Abstract:
Nelson Mandela once said, ‘do not judge me by my successes, judge me by how many times I fell down and got back up again.’ Economists have warned that the Covid-19 pandemic will have a substantial economic impact on Sub-Saharan Africa, and the economic costs could be devastating. The June 2020 Regional Economic Outlook for Sub-Saharan Africa projects that real GDP will contract by 3.2 per cent, and per capita income will fall by 5.5 per cent in 2020, levels last seen a decade ago. Lockdowns have affected informal sector workers, and small and medium enterprises in service sectors, resulting in more poverty and income inequality. The International Monetary Fund (IMF) has said that Africa’s regional policies should remain focused on safeguarding public health, supporting people and businesses hardest hit by the crisis, and facilitating recovery. The magnitude of the economic crisis in Africa can be gauged from the slowdown being witnessed in the larger economies. In South Africa, economic activity is projected to contract by 8 per cent in 2020, in Nigeria, the economic contraction is projected at 5.4 per cent in 2020, in Angola, economic activity will fall by 4 per cent, and in Ethiopia, economic growth is projected at 1.9 per cent, which is still 1.3 per cent below 2019 growth rates.
Topic:
Economics, International Political Economy, Economic Policy, Pandemic, COVID-19, and Regional Economy
Political Geography:
Africa, South Africa, and Sub-Saharan Africa

70. Assessing Digitalization and Data Governance Issues in Africa

Author:
Adedeji Adeniran and Idris Ademuyiwa
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The growth of digitalization and digital technology adoption in Africa holds the key to strengthening and diversifying economies across the continent. Although these developments offer potentially life-changing benefits for consumers, businesses and governments, the inherent flaws in the digital market mean these benefits are not guaranteed. As most gains from the digital economy are largely concentrated in the United States and China, the digital divide may widen the gap between the Global North and the Global South.
Topic:
Economics, Governance, Digital Economy, and Digitalization
Political Geography:
Africa and Global South

71. Assessing Capacities for Local Economic Development in Uganda

Author:
Susan Namirembe Kavuma, Assumpta Tibamwenda, Elijah Dickens Mushemeza, George Bogere, Lillian Tamale, Eugene Gerald Ssemakula, and Jonas Mbabazi
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Advocates Coalition for Development and Environment (ACODE)
Abstract:
This report presents the findings and discussions of Local Economic Development (LED) practices in nine districts of Northern Uganda that included: Adjumani, Amuru, Arua, Kitgum, Lira, Omoro, Oyam, and Yumbe. The analysis provides insights into implementation of LED policies, and the level of preparedness of the districts to implement the policy as a tool for economic transformation and development. LED was conceptualised as a process or development model where Local Governments, the private sector, and the community, are jointly and collectively engaged in identification, mobilization and management of resources at the local level. LED is therefore intended to create conducive environments for investment, increased household incomes, and higher revenues for Local Governments.
Topic:
Development, Economics, Governance, and Local
Political Geography:
Uganda and Africa

72. Levant Illicit Tobacco 2019

Author:
Oxford Economics
Publication Date:
03-2020
Content Type:
Commentary and Analysis
Institution:
Oxford Economics
Abstract:
This report provides an overview of the nature of illicit trade in cigarettes across three markets in the Levant region: Egypt, Jordan, and Lebanon. It establishes estimates of Illicit Consumption in each market and the impact it has on government tax revenue.
Topic:
Economics, Markets, Finance, and Illegal Trade
Political Geography:
Africa, Middle East, Lebanon, Egypt, and Jordan

73. Financing Public Private Partnerships (PPPs) in Botswana Through the Capital Market

Author:
Kelesego Mmolainyane
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
In her quest to further graduate to the high-income status, Botswana seeks to invest more in infrastructure development for both productive and social use. An efficient and effective infrastructure provision is fundamental to excellent public service delivery and access. Sadly, Botswana, like many other world economies, has a challenge of having an infrastructure financing gap. One of the innovative ways to fill this gap is through public private partnerships (PPPs) with the capital market that has excess liquidity. Infrastructure PPPs are complex and capital intensive projects that require project finance experts to advise parties involved regarding returns and risks associated with each project. Various project-financing models can be designed to suit project specifications and they cannot be over-generalised for all PPP projects. Nevertheless, given the tight fiscal space, Botswana now, more than ever, should consider issuing PPP bonds and applying user changes model to finance economic PPP infrastructure for sustainable and inclusive economic growth.
Topic:
Development, Economics, Infrastructure, Finance, Public Sector, Economic Development, and Private Sector
Political Geography:
Africa and Botswana

74. Key Drivers of Industrial Growth: A Case Study of Botswana’s Manufacturing Sector

Author:
Johanne Motsatsi and Goitseone Khanie
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
The paper examines the key determinants of industrial growth in Botswana, using manufacturing sector value added as the proxy for industrial growth. It employs the Autoregressive Distributed Lag (ARDL) cointegration approach using annual time series data for the period 1983 to 2015. Empirical results show that industrial growth is driven by financial sector development, human capital development, trade openness and foreign direct investment. Specifically, domestic credit to the private sector as a percentage of GDP and secondary school enrolment ratio are found to be significantly related to manufacturing value added as a percentage of GDP both in the long run and short run. While the relationship is limited to long run for total trade to GDP, it only exits in the short run for FDI net inflows. The study therefore recommends that policy makers should design and ensure proper implementation of financial sector development strategies that can help ease access to credit for manufacturing enterprises in the country. There is also a need for a holistic approach in the design and implementation of innovation and human resource development policies in order to provide a conducive environment for skills acquisition, innovation and technological advancements in the manufacturing sector. Trade policies and export promotion strategies should heighten productivity and value addition in the manufacturing sector, so as to make local firms internationally competitive. Finally, with regards to FDI, the Government of Botswana should create an environment that could entice multinationals to invest in the local manufacturing industry. This, however, should be coupled with protectionist policies to avoid crowding out local manufacturers and exposing them to foreign competition.
Topic:
Development, Economics, Economic Growth, Manufacturing, Economic Development, and Industrialization
Political Geography:
Africa and Botswana

75. Ordinary Shareholders' Rights Protection in Botswana

Author:
Ratang Sedimo and Kelesego Mmolainyane
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
This study seeks to examine institutional frameworks that exist in Botswana to protect the rights of ordinary shareholders. There is no literature on the subject matter in the context of Botswana; hence this study attempts to fill in the literature gap. The study uses a variety of data collection methods, such as semi-structured interviews, the Choppies case study and lessons learnt from other jurisdictions. Findings reveal that ordinary shareholders’ rights protection involves the use of institutional frameworks. In Botswana, existing frameworks are not adequate to protect ordinary shareholders’ rights. Furthermore, the study shows that ordinary shareholders in Botswana are mainly exposed to risks of losing their investments, partially or entirely, in case of non-compliance to regulatory requirements as shown by the reduction in Choppies’ stock price from P1.20 to P0.40 between years 2012 and 2018. The study suggests that the existing institutional frameworks should be reviewed to ensure adequate protection of ordinary shareholders’ rights.
Topic:
Security, Economics, Human Rights, Investment, Macroeconomics, Land Rights, and Labor Rights
Political Geography:
Africa and Botswana

76. Whistleblowing in Botswana's Construction Industry : A Public and Private Sector Perspective

Author:
Marumo Omotoye
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
The construction industry (CI) is considered one of the most corrupt both internationally and regionally. Therefore, this study examined the views and attitudes of professionals in Botswana’s CI towards the role whistleblowing (or protected disclosure) can play in curbing corruption in the sector. A convergent mixed methods approach was adopted. Semi-structured interviews were conducted with key stakeholders from the construction industry. Furthermore, a self-administered survey was utilised to collect quantitative data from 117 construction firms. Data revealed that there was little awareness of whistleblowing legislation. Fear of retaliation or punishment and job loss, and a lack of education on whistleblowing were identified as some of the most substantial barriers to effective whistleblowing in the industry. From a public policy perspective, it is recommended that an emphasis be placed on improving levels of education and awareness on whistleblowing in the construction sector. In addition, there should be consideration to amend the Whistleblowing Act 2016 to include construction industry regulators, the Public Procurement and Asset Disposal Board, and private media amongst the list of institutions authorised to receive reports of impropriety in order to extend the scope of legal protection to whistleblowers in the sector. Recommendations for further research are provided.
Topic:
Corruption, Development, Economics, Public Sector, Manufacturing, Economic Development, Private Sector, Industry, and Whistle Blowing
Political Geography:
Africa and Botswana

77. How Do International Sanctions End? Towards a Process-Oriented, Relational, and Signalling Perspective

Author:
Julia Grauvogel and Hana Attia
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
Research on sanctions has hitherto focused on their implementation and effectiveness, whereas the termination of such measures has received only little attention. The traditional model, which looks at sanctions and their removal in terms of rational, interstate bargaining, focuses on how cost–benefit calculations affect the duration and termination of such measures. Yet, this research insufficiently captures the back and forth between easing sanctions, stagnation, and renewed intensification. It also fails to account for the multifaceted social relations between senders, targets, and third actors that shape these termination processes, as well as for the signalling dimension of ending sanctions – not least because existing datasets tend to operationalise sanctions as a single event. To help fill these gaps, the paper proposes a process-oriented and relational understanding that also recognises how sanctions termination conveys the message of ending the visible disapproval of the target, which may be heavily contested. Case studies on Zimbabwe and Iran illustrate how such an approach sheds light on the different logics of action that shape processes of sanctions termination, and thereby contributes to a more holistic understanding of sanctions in general.
Topic:
Foreign Policy, Economics, and Sanctions
Political Geography:
Africa, Iran, Middle East, and Zimbabwe

78. When the dust settles: Economic and governance repercussions of migration policies in Niger’s north

Author:
Johannes Claes and Anna Schmauder
Publication Date:
10-2020
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
Mobility has played an important role in Niger’s north throughout its history. Local populations, in response to droughts or shifting border regimes in Libya and Algeria, have traditionally been able to make changes to their livelihood strategies and have shown a remarkable capacity for adaptation, often through migration as a way of diversifying livelihoods. However, since the early 2000s, and particularly since 2016, this system has come under pressure as increasing collaboration with Western countries, whose agendas are aimed at curbing irregular migration from Africa to Europe, has reduced the options available for income generation. This paper lays out the emerging longer-term dynamics in the region in response to the criminalisation of smuggling in Niger in 2015 and the measures subsequently taken to curb northward migratory movements. It has discerned such effects on the local economy and on the perception of governance providers, who are often responsible for detecting and managing discontent.
Topic:
Economics, Migration, Governance, and Smuggling
Political Geography:
Africa, Libya, Algeria, and Niger

79. A Surplus of Deficits

Author:
Amr Adly
Publication Date:
03-2020
Content Type:
Journal Article
Journal:
Cairo Review of Global Affairs
Institution:
School of Global Affairs and Public Policy, American University in Cairo
Abstract:
From a political economy perspective, there are four key forces working against the peace and prosperity of Middle Eastern and North African states. To defeat them robust institutions are essential.
Topic:
Economics, Political Economy, Economic Growth, Peace, and Financial Institutions
Political Geography:
Africa, Middle East, North Africa, and MENA

80. The Disrupting Stabilizer

Author:
Samuel Ramani
Publication Date:
06-2020
Content Type:
Journal Article
Journal:
Cairo Review of Global Affairs
Institution:
School of Global Affairs and Public Policy, American University in Cairo
Abstract:
How Russia’s military, diplomatic, and economic roles in the Mediterranean have developed in recent years
Topic:
Diplomacy, Economics, Military Strategy, Conflict, and Strategic Interests
Political Geography:
Africa, Russia, Europe, Middle East, and Mediterranean

81. Socio-economic implications of Covid-19 in Cameroon and proposals to reduce the economic fallout

Author:
Henri Kouam and Dr. Fuein Vera Kum
Publication Date:
06-2020
Content Type:
Special Report
Institution:
The Nkafu Policy Institute
Abstract:
The economic impact of COVID-19 will be broad-based, causing wages to fall due to social distancing and quarantine measures on the service sector. While communications and ICT-related sectors will be less affected, transport, entertainment and leisure sectors will be adversely affected, together with exports and domestic demand. Policymakers should utilise the $164 billion availed by international institutions to support SMEs and wages in the informal sector, whilst the 90 billion should be used in other to invest in the physical and digital infrastructure to support educational outcomes and employment over the medium term. Such actionable policies should accompany broader quarantine and social distancing measures.
Topic:
Economics, Pandemic, COVID-19, and Socioeconomics
Political Geography:
Africa and Cameroon

82. Report On The Effects Of BEAC’s Monetary Policy In Cameroon

Publication Date:
12-2020
Content Type:
Special Report
Institution:
The Nkafu Policy Institute
Abstract:
With an estimated population of about 26,709,663 in 2020, Cameroon is a Central African country bordering Nigeria, Chad, Central African Republic (CAR), Republic of Congo, Gabon, Equatorial Guinea, and the Gulf of Guinea. The country has 10 Regions, 58 Divisions and is populated by 283 ethnic groups. Because of its great climatological, mining, geographical, cultural, and human diversity, Cameroon is described as Africa in miniature. The economy of Cameroon accounts for more than 40% of CEMAC’s GDP and is the most diversified in the region. It is essentially based on the exploitation of various export products – oil, tropical woods, Arabica and Robusta coffee, cocoa, rubber, cotton, bananas, aluminum, palm oil, etc. Oil revenues represent, on an annual average, about 12% of the country’s total revenues (LFR, 2020). However, since 2009, the country has been facing a major security crisis caused by incursions by the Boko Haram terrorist sect in the Far North. They have also been facing socio-political unrest in the English-speaking regions of the North West and South West, whose security situation has deteriorated since the end of 2016. The situation remains volatile in these regions despite the holding of the first-ever regional elections. After a deceleration phase following the 2014 commodity crisis, growth in the economy of Cameroon slightly strengthened in 2018 (4.1 percent compared to 3.5 percent in 2017) before decreasing in 2019 (3.7 percent).
Topic:
Economics, Treaties and Agreements, Monetary Policy, and Macroeconomics
Political Geography:
Africa and Cameroon

83. An Analysis of the use of Chemical Pesticides and their Impact on Yields, Farmer Income and Agricultural Sustainability: The Case for Smallholder Farmers in Ethiopia

Author:
Aparna Rao and Risa Morimoto
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
In economic theory, the agricultural sector plays an undisputed role in growth, development and poverty reduction in a country. The sector is pivotal for a vast majority of Sub-Saharan Africa (SSA), given the large number of people dependent on agriculture for their livelihood. With the constraints on land expansion and the dual threat of climate change and an ever increasing population, agricultural productivity has become a key matter of concern in agricultural economics. Given this, a vast majority of literature focuses on improving productivity to meet food demand at any cost. A large percentage of it is focused on the use of pesticides, pre-harvest, to eradicate pests and diseases that lead to losses in the produce. As a result, there has been a significant increase in global pesticide usage over the last few years.
Topic:
Agriculture, Development, Economics, Poverty, Economic Theory, Sustainability, and Farming
Political Geography:
Africa and Ethiopia

84. Consumer Expenditure Inequality in Botswana

Author:
Lillian Mookodi
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
For over three decades, Botswana has achieved a fast growing economy, with an annual growth in real Gross Domestic Product (GDP) averaging 10.9 percent in the period 1981- 90, faster even than the East Asian Tigers or China (Good and Hughes, 2002). Between 2000 and 2001 financial year, Botswana’s economy recorded higher growth rates of 9.1 percent, an increase from 8.1 percent recorded between 1999 and 2000, which was mainly attributed to the growth in the mining sector (BIDPA Briefing, 2002). To emphasise on the desire to continue growing, Botswana has adopted Vision 2036, and other development strategies and policies to improve the implementation of interventions tackling unsatisfactory social indicators. Botswana has also subscribed to both continental and international frameworks, such as the Africa Agenda 2063 and United Nations (UN) Millennium Declaration and its Eight Millennium Development Goals, and further signed up for the UN Sustainable Development Goals (SDGs) of 2030. Regardless of the afore-mentioned positive growth, and immense efforts, the country has not achieved the desirable results it sought with regard to some of the social indicators, such as employment, unemployment, inequality and poverty.
Topic:
Economics, International Political Economy, Poverty, Labor Issues, Inequality, Demand, Unemployment, and Consumerism
Political Geography:
Africa and Botswana

85. The Economic Benefits of Vocational Education and Training in the Kingdom of Eswatini

Author:
Gugulethu Mgabhi and Mangaliso Mohammed
Publication Date:
01-2020
Content Type:
Working Paper
Institution:
Eswatini Economic Policy Analysis and Research Centre (ESEPARC)
Abstract:
This study assesses the economic benefits of the Government of Eswatini’s investment to technical vocational education and training (TVET) from 2005 to 2017. TVET Graduates from 12 public TVET Institutions have been tracked to uncover their absorbability in the labour market and, or self-employment. The study finds that the economic return of the Government of Eswatini’s investment to TVET in 2017 is E1,51. This means that for every E1 invested by the Government of Eswatini to TVET, the economy generates E1,51 through the TVET graduates’ activities in self-employment, formal employment, and part-time skills utilisation. With regards to highly demanded courses amongst the graduates, ccomputer studies have been found to be highly demanded at 20.9%, while agriculture is lowly demanded at 6.3%. The study finds that 56.6% of the graduates are absorbed in formal employment, while 13.7% are engaged in self-employment, meaning that 29.9% are part of the 32.4% unemployed persons in the country. However, the level of unemployment is still high, 43.3%. Graduates who were not economically active before enrolling at the TVET colleges have been found to be formally employed, 35%, 14% are self-employed, 2.5% are both formally and self-employed, while 48.5% are unemployed. A majority (58.5%) of employed graduates are from Gwamile VOCTIM, while self-employment is high amongst graduates from Big Bend Rural Education Centre, 44.4%. Unemployment has been found to be very high among graduates from Ekululameni, 100%. The study recommends that the Government of Eswatini should consider promoting self-employment amongst graduates. This could be done through establishing links with financing agencies to increase the rate of self-employment and reduce unemployment.
Topic:
Economics, Education, Governance, Training, Vocational Training, and Investment
Political Geography:
Africa and Eswatini

86. Towards 2022: Options for paying back Zambia's Eurobond Debt

Author:
Mbewe Kalikeka, Shebo Nalishebo, and Florence Banda-Muleya
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
On 20th September 2022, Zambia’s first Eurobond will mature. The Government will be required to settle its principal payment amounting to US$750 million in full. Twenty months later in April 2024, the Government will have to settle the second Eurobond worth US$1 billion. The third US$1.25 billion Eurobond will be paid back in three instalments in July of 2025, 2026 and 2027. With less than three years before the first Eurobond matures, there is no clear indication of how and where the money to pay back these Eurobonds is going to come from. This paper considers several options that will mitigate the possibility of a default when the principal payments on the Eurobonds are due. The lack of a payment strategy has made the bondholders jittery about whether they will get their money back. Bondholders have communicated their consternations by dumping the Zambian bonds which are perceived to be risky. With increasing yield rates on the three Eurobonds, of about 17% by end-September 2019, the market seems to have already priced in a default – only nations already in default, such as Venezuela, have yields as high as Zambia’s1. The yield rate is the barometer used to assess the risk inherent in the bond. In general, higher yields mean the bond has higher risk and corresponds to a decline in the value of the bond. There have been efforts made towards establishing a Eurobond Redemption Strategy, but its contents are yet to be publicised. Also, the failure to release the 2020-2022 Medium Term Expenditure Framework by September 2019, and the absence of the 2020-2022 Medium Term Debt Strategy to show a clear borrowing plan have added to the market apprehension. By just about every measure, the Zambian economic fundamentals are fragile. Growth is ailing, prompting the authorities to revise their growth projection targets from 4% to 2% in 2019. Agriculture has been in recession for several quarters now. The 2019 mining fiscal regime that has significantly raised the tax burden on mining companies to unsustainable and uncompetitive levels, coupled with reduced ore grades, has resulted in 8.4% reduction in mining value added in the second quarter of 2019. The electricity load management which commenced in mid-2019 continues to have adverse economy-wide effects. This has implications on revenue targets. Tax revenues in September 2019 were 17% lower than projected, a trend likely to continue at least up to the end of the year. Further, the recent weakness of the Kwacha is not helping either as it has increased the cost of external borrowing and debt servicing, making it prohibitively more expensive to service foreign-currency denominated loans, which include the Eurobonds.
Topic:
Debt, Economics, Markets, Public Debt, and Eurobonds
Political Geography:
Africa and Zambia

87. Review of the Gender Compliance Assessment of Uganda's National Budget: A Focus on the Agricultural Sector

Author:
Susan Namirembe Kavuma, Florence Kuteesa, George Bogere, and Richard Ayesigwa
Publication Date:
05-2019
Content Type:
Special Report
Institution:
Advocates Coalition for Development and Environment (ACODE)
Abstract:
The study examined the approach used to integrate gender issues in the budgeting process in Uganda. It focused on the agriculture sector and specifically analysed the Ministerial Policy Statements (MPS) of four institutions: Ministry of Agriculture, Animal Industry and Fisheries (MAAIF); National Agricultural Advisory Services (NAADS); National Agricultural Research Organisation (NARO); and Uganda Coffee Development Authority (UCDA). The analysis obtained data from relevant documents and primary data collected from key informants in the mentioned organisations along with oversight organisations such as: the Ministry of Finance, Planning and Economic Development (MFPED); Ministry of Gender, Labour and Social Development (MGLSD) and the Equal Opportunities Commission (EOC). Specifically, the study sought to elicit stakeholder’s perspectives on the gender issues in the sector, the approach used to integrate gender in the budget process, the assessment method and challenges encountered by Ministries, Departments and Agencies (MDAs) in the process of integrating gender in the budget process. A Knowledge, Attitude, and Practices (KAP) survey conducted among the respondents was to ascertain the awareness of gender issues in the sector
Topic:
Economics, Gender Issues, and Budget
Political Geography:
Uganda and Africa

88. Chinese investment in Uganda: new impetus for sustainable development?

Publication Date:
01-2019
Content Type:
Policy Brief
Institution:
Advocates Coalition for Development and Environment (ACODE)
Abstract:
Chinese investment is flowing fast into Uganda, and spreading into the agriculture and forestry sectors. The government needs to keep pace with these developments so the benefits can be shared by Ugandans. A new analysis shows that, while the jobs and new businesses created are well received, the working conditions and environmental practices of Chinese companies are often poor. Many people evicted from their land to make way for new projects have not been compensated. To hold Chinese companies to account, government agencies, with support from NGOs, must share information about these investments and introduce stronger regulation — in particular to uphold community rights. In turn, Chinese companies must be more transparent, responsible and legally compliant. With a proactive and accountable strategy for Chinese investment management, Uganda could make major gains for sustainable development.
Topic:
Development, Economics, International Trade and Finance, Foreign Direct Investment, Business, Accountability, Investment, and NGOs
Political Geography:
Uganda, Africa, and China

89. From the EMS to the EMU and...to China

Author:
Joseph Halevi
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The paper highlights the position of German authorities, showing that they were quite lucid about the fundamental weaknesses inherent in a process that separated monetary from fiscal policies by giving priority to the centralization of the former. Instead of repeating the well known critiques levelled against the EMU – for which readers are referred to the unsurpassed treatment by Stiglitz, the essay highlights the splintering of Europe in the way in which it has unfolded during the 1990s and in the first decade of the present millennium. In particular the early economic and political origins of the terminal crisis of Italy are located between the late 1980s and the 1990s. France is shown to belong increasingly to the so-called European periphery by virtue of a weakening industrial structure and persistent balance of payments deficits. The paper argues that France regains its central role by political means and through its weight as an active nuclear military power centered on maintaining its imperial interests and posture especially in Africa. The first decade of the present millennium is portrayed as the period in which a distinct German economic area had been formed in the midst of Europe with a strong drive to the east with an increasingly powerful gravitational pull towards the People’s Republic of China.
Topic:
Economics, International Political Economy, Political Economy, History, and Macroeconomics
Political Geography:
Africa, China, Europe, Asia, Germany, and Global Focus

90. State Capacity and Demand for Identity: Evidence from Political Instability in Mali

Author:
Maxim Ananyev and Michael Poyker
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
We demonstrate that civil conflict erodes self-identification with a nation-state even among non- rebellious ethnic groups in non-conflict areas. We perform a difference-in-difference estimation using Afrobarometer data. Using the onset of Tuareg-led insurgency in Mali caused by the demise of the Libyan leader Muammar al-Gaddafi as an exogenous shock to state capacity, we find that residents living closer to the border with the conflict zone experienced a larger decrease in national identification. The effect was greater on people who were more exposed to local media. We hypothesize about the mechanism and show that civil conflict erodes national identity through the peoples’ perception of a state weakness.
Topic:
Development, Economics, State Formation, State Actors, State, and Institutions
Political Geography:
Africa, Libya, and Mali

91. Participation in Non-Farm Activities in Rural Sudan: Patterns and Determinants

Author:
Ebaidalla M. Ebaidalla
Publication Date:
11-2019
Content Type:
Policy Brief
Institution:
African Economic Research Consortium (AERC)
Abstract:
Despite the importance of non-farm income in the livelihood of the rural population in Sudan, information available on its size and determinants is scant. This study examined the patterns and determinants of decisions to participate in non-farm activities in rural Sudan. It also investigates whether the determinants of participation in non-farm activities vary across agriculture sub-sectors and income groups as well as among males and females. The data for this study was sourced from the Sudanese National Baseline Household Survey (NBHS) conducted by Sudan’s Central Bureau of Statistics in 2009. The results show that non-farm income is a crucial source of livelihood, contributing about 43% to household income in rural Sudan. The results of multinomial logit and probit estimation methods indicate that educational level, mean of transportation, lack of land and lack of access to formal credit are the most significant factors that push rural farmers to participate in non-farm activities. Surprisingly, the effect of household income was positive and significant, implying that individuals from rich households have higher opportunity to engage in non-farm activities compared to their poor counterparts. Moreover, the analysis revealed some symptoms of gender and location disparities in the effect of factors that influence participation in non-farm activities. The study concluded with some recommendations that aim to enhance the engagement in non-farm activities as an important diversification strategy to complement the role of the agriculture sector in improving rural economy in Sudan.
Topic:
Agriculture, Economics, Gender Issues, Income Inequality, and Rural
Political Geography:
Africa and Sudan

92. Determinants and Economic Impact of International Tourist Arrivals in Ghana

Author:
Isaac Bentum-Ennin
Publication Date:
08-2019
Content Type:
Policy Brief
Institution:
African Economic Research Consortium (AERC)
Abstract:
Given Ghana’s endowments such as attractive sites; more than 500km of beaches, and World Heritage forts and castles, tourism is seen as an important tool for promoting the socio-economic development in that it generates many economic benefits such as incomes, employment and tax revenue, both within the sector and through linkages with other sectors. This study first, analyses the factors influencing the upward trends in international tourists’ arrivals and receipts and second, quantifies the impact of the tourism sector on the Ghanaian economy. The objective of this policy brief is to inform the Ministers of Interior, Tourism and Finance that the most important factor influencing international tourists’ arrivals in Ghana is the prevailing civil liberties and political rights and that Nigeria is a significant substitute destination. Also, that the tourism sector has had the greatest impact on the whole Ghanaian economy when compared to sectors such as agriculture, industry and other services sectors. It is hoped that appropriate legislations will be passed to deepen these liberties and rights and that policy measures will be put in place to ensure macroeconomic stability in order not to lose competitiveness to Nigeria. Also, it is hoped that the Tourism Ministry would lobby for more investment and more resources from the Finance Ministry in order to expand the sector since it has a huge potential to stimulate economic growth.
Topic:
Agriculture, Development, Economics, International Political Economy, Tourism, Economic Growth, and Macroeconomics
Political Geography:
Africa and Ghana

93. Performance of Small and Medium-Sized Enterprises in Uganda: The Role of Innovation

Author:
Ibrahim Okumu and Faizal Buyinza
Publication Date:
11-2019
Content Type:
Policy Brief
Institution:
African Economic Research Consortium (AERC)
Abstract:
Using the 2013 World Bank Enterprise Survey data for Uganda, this paper employs the quintile estimation technique to explain the relationship between innovation and firm performance in small and medium-sized enterprises (SMEs). Innovation involves the introduction of a new or significantly improved production process, product, marketing technique or organizational structure. Our results indicate that individual processing, product, marketing and organizational innovations have no impact on labour productivity as proxied by sales per worker. However, the results indicate the presence of complementarity between the four types of innovation. Specifically, the effect of innovation on sales per worker is positive when an SME engages in all four types of innovation. Even then the complementarity is weakly positive with incidences of a negative relationship when using any combination of innovations that are less than the four types of innovation. Policy-wise the results suggest that efforts to incentivize innovation should be inclusive enough to encourage all four forms of innovation.
Topic:
Development, Economics, International Political Economy, Economic Growth, and Economic Policy
Political Geography:
Uganda and Africa

94. Household Economic Well-Being and Child Health in The Democratic Republic of Congo

Author:
Janvier Mwisha-Kasiwa
Publication Date:
11-2019
Content Type:
Policy Brief
Institution:
African Economic Research Consortium (AERC)
Abstract:
Health is both a direct component of human well-being and a form of human capital that increases an individual’s capabilities and opportunities to generate income and reduces vulnerability. It is argued that these two views are complementary, and both can be used to justify increased investment in health in developing countries. Therefore, investment in child health constitutes a potential mechanism to end the intergenerational transmission of poverty. This paper examines the empirical impact of household economic well-being on child health, and the gender differences in effects using the Demographic and Health Survey conducted in 2014. A series of econometric tools are used; the control function approach appears to be the most appropriate strategy as it simultaneously removes structural parameters from endogeneity, the sample selection and heterogeneity of the unobservable variables. Results suggest a significant positive effect of household economic well-being on child health. However, the magnitude of the effect varies by gender of household head; children from households headed by males appear healthier compared to those from female-headed households. In the context of DR Congo, female-headed households often have a single parent, therefore, the economic well-being effect on child health in the male sub-sample can be considered to include the unobserved contribution of women. These results have implications for public interventions that enable women to participate in paid labour market activities as a means of improving household economic well-being, which in turn could improve child health.
Topic:
Development, Economics, Gender Issues, Health, Health Care Policy, and Children
Political Geography:
Africa and Democratic Republic of Congo

95. The Productivity Cost of Power Outages for Manufacturing Small and Medium Enterprises in Senegal

Author:
Lassana Cissokho
Publication Date:
11-2019
Content Type:
Policy Brief
Institution:
African Economic Research Consortium (AERC)
Abstract:
This paper investigates the productivity effects of power outages on manufacturing Small Scale Enterprises (SMEs) in Senegal, using a panel data on manufacturing firms. Productivity is estimated using stochastic frontier models, and power outages measured by their frequency or their duration. We controlled for firms owning a generator as well. The main results are drawn from random effects in a linear panel model. Nonetheless, the results remain consistent to the robustness checks using different models: a double-sided truncated data model and a generalized linear model, and different productivity measures: data envelopment analysis. We find that power outages have negative significant effects on the productivity of SMEs; for example, the manufacturing sector lost up to around 11.6% of the actual productivity due to power outages in 2011, and small firms appear to be affected more than medium ones, 5% against 4.3%. Further, firms with a generator were successful in countering the adverse effect of power outages on productivity. Besides, another outstanding result is the significant positive effect of access to credit on productivity. At last, it appears that productivity increases with firms’ size.
Topic:
Development, Economics, International Political Economy, Economic structure, Economic Growth, Macroeconomics, and Manufacturing
Political Geography:
Africa and Senegal

96. The Linkage between Foreign Direct Investment and Intra-Regional Trade within ECOWAS

Author:
Eme Dada
Publication Date:
08-2019
Content Type:
Policy Brief
Institution:
African Economic Research Consortium (AERC)
Abstract:
The objective of this policy brief is to inform the Ministers of Trade and Investment of Economic Community of West African State (ECOWAS) countries about the importance of the linkage between Foreign Direct Investment (FDI) and trade for developing countries. FDI is considered an important means of promoting export of the host countries. This is true of inward FDI, which comes for efficiency reasons. Conversely, there is concern that large flows of outward FDI results in a decline in the host country’s exports and loss of jobs. This in turn assumes that the exports of the source country will fall as FDI substitutes for trade.
Topic:
Development, Economics, International Trade and Finance, Foreign Direct Investment, and Economic Growth
Political Geography:
Africa, Liberia, Sierra Leone, Senegal, Mali, Guinea, Guinea-Bissau, Cape Verde, and Gambia

97. The Impact of Macroeconomic Variables on Capital Market Development in Botswana’s Economy

Author:
Koketso Molefhi
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
The study examines the impact of macroeconomic variables on stock and bond markets development in Botswana using Autoregressive Distributed Lag (ARDL)-Bounds Test. The results indicate that macroeconomic variables have an impact on capital market development in Botswana. In the short run, real output, money supply and inflation have a positive influence on the development of the stock market, while real exchange rate retards its development. Real output further supports the development of the stock market in the long run. For the bond market, only two variables, inflation rate and lending rate have positive and negative impact on the bond market in the long run respectively, while none of the variables influence the bond market in the short run. Policy implications include increased efforts by policy makers to increase money supply, gross domestic product for the development of stock market, while the bond market development requires a decrease in lending rates.
Topic:
Economics, Markets, Capital Flows, Macroeconomics, and Economic Development
Political Geography:
Africa and Botswana

98. Structural Transformation and Fiscal Policy in Botswana

Author:
Kelesego Mmolainyane
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
This paper analyses impacts of fiscal policy on structural transformation in Botswana using structural vector autoregression (SVAR) model over the period of 1990 to 2015. The study uses an inclusive sustainable transformation (IST) index and government expenditure as proxies for structural transformation and fiscal policy respectively. Results show that prudent fiscal policy can be used as a major strategic tool for structural transformation in Botswana. Most evidently, IST index responds positively to government expenditure shocks over time. In addition, fiscal policy innovations dominantly account for movements in structural transformation in Botswana. Notwithstanding, Botswana has a lot of potential and opportunity to use its fiscal policy more effectively and efficiently to promote an inclusive structural transformation that leads to sustainable economic growth.
Topic:
Economics, Economic structure, Macroeconomics, and Fiscal Policy
Political Geography:
Africa and Botswana

99. Unemployment in the SADC Region

Author:
Johanne Motsatsi
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
The objective of this study is to estimate the determinants of unemployment in the Southern African Development Community (SADC) region using annual data from 2000 to 2016. Given the characteristic of the data, the study adopts Fixed Effect (FE) estimation technique. For further analysis, the study also estimated the ARDL panel model to capture persistence effect of unemployment in the region. The FE results reveals that real GDP, foreign direct investment, consumer price index, credit to the private sector and interest rate are negatively related to unemployment. While trade openness, labour productivity and population have a positive sign. The results estimated with ARDL model are not very different from those of FE model, but we obtained a noticeably smaller estimates for ARDL model. Variables which have negative association with unemployment suggest that they are likely to reduce unemployment. Therefore, such indicators may be of interest to policy makers when formulating unemployment reduction strategies. In terms of policy advise, the study recommends the government of SADC member states to encourage the education system that can equip leaners with entrepreneurial skills and in-job practical skills, in order to promote high success rate of SMMEs as well as to provide skills needed in the labour market. It also recommended enforcement of free trade of goods and services in the region as a means of making the industrial sector an engine of economic growth in order to create much needed employment.
Topic:
Development, Economics, Labor Issues, Employment, Labor Policies, Macroeconomics, and Unemployment
Political Geography:
Africa and Botswana

100. Consumption Inequality in Botswana: The Decomposition of the Gini Coefficient of Consumer Expenditures

Author:
Lillian Mookodi
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Botswana Institute for Development Policy Analysis
Abstract:
This paper applies the Lerman and Yitzhaki (1985) inequality decomposition approach on food and non-food expenditures on the 2009/10 Botswana Core Welfare Indicator Survey; and the 2015/16 Multi Topic Indicator Survey datasets with an objective to see how overall inequality translates into inequality within each expenditure component. To test for a robustness of our results, we apply a simple bootstrap procedure to obtain the means, standard errors and confidence intervals for the component Gini coefficients estimates. The decomposition analysis results show that overall inequality based on the Gini coefficient of consumption expenditure within the groups has increased between the two periods from 0.498 to 0.533. These results suggest that this rise in overall expenditure inequality is due to the increased burden in the household budget of non-food spending, which tends to be more unequal than food spending. The consumption expenditure is very unequal on non-food items like recreation and hotels; health; education and transport. On one hand, lower Gini coefficients are observed for food; and clothing and footwear; these commodities are considered as necessities among others. This paper finally offers some possible policy measures to curb this consumption expenditure inequality.
Topic:
Economics, Developing World, Inequality, and Economic Inequality
Political Geography:
Africa and Botswana