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on Africa |
| By: | Sanjay Agarwal; Martin Luis Alton; Abel Bove; Victoire Ngounoue; Vincent Perrot |
| Keywords: | Public Sector Corruption and Anticorruption Measures Urban Development - City Development Strategies Social Development - Social Accountability Finance and Financial Sector Development - Bankruptcy and Resolution of Financial Distress Finance and Financial Sector Development - Debt Markets Public Sector Development |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:20133&r=afr |
| By: | Edward Lorenz (University of Nice Sophia Antipolis, France; GREDEG CNRS) |
| Abstract: | This paper draws on the results of World Bank Enterprise surveys to investigate the relation between financials constraints and innovation performance for a sample of firms in 9 African nations: Ethiopia, Zimbabwe, Rwanda, the Central African Republic, Uganda, Zambia, Tanzania, Ghana and the Democratic Republic of Congo. In common with much of the recent literature focusing on these issues, the analysis makes use of direct measures of innovation and of financial constraints. The econometric analysis takes into account the potential endogeneity of financing constraints to the firm’s decision to innovate. The results show that financing constraints have a negative impact on the probability of successful innovation and that this negative impact tends to be greater both for small-sized firms compared to large firms and for young firms compared to old firm. The results have important policy implications and strongly suggest that government subsidies and financial support programs for micro and small-sized firms could make a positive contribution to increasing the innovation performance of African nations. |
| Keywords: | Contextual Credit constraints, Innovation, Small and Medium-sized Enterprises, Sub-Saharan Africa |
| JEL: | G32 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2014-29&r=afr |
| By: | Svetlana Adrianova; Badi H. Baltagi; Panicos Demetriades; David Fielding |
| Abstract: | We present a theoretical model of moral hazard and adverse selection in an imperfectly competitive loans market that is suitable for application to Africa. The model allows for variation in both the level of contract enforcement (depending on the quality of governance) and the degree of market segmentation (depending on the level of ethnic fractionalization). The model predicts a specific form of non-linearity in the effects of these variables on the loan default rate. Empirical analysis using African panel data for 111 individual banks in 29 countries over 2000-2008 provides strong evidence for these predictions. Our results have important implications for the conditions under which policy reform will enhance financial development. |
| Keywords: | Ethnic fractionalization, Governance, Financial development, African Banks, Panel data. |
| JEL: | G21 O16 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:14/14&r=afr |
| By: | Christian Pierdzioch (Department of Economics, Helmut-Schmidt-University); Monique B. Reid (Department of Economics, Stellenbosch University); Rangan Gupta (Department of Economics, University of Pretoria) |
| Abstract: | We use South African survey data to study whether short-term inflation forecasts are unbiased. Depending on how we model a forecaster’s information set, we find that forecasts are biased due to forecaster herding. Evidence of forecaster herding is strong when we assume that the information set contains no information on the contemporaneous forecasts of others. When we randomly allocate forecasters into a group of early forecasters who can only observe the past forecasts of others and late forecasters who can observe the contemporaneous forecasters of their predecessors, then evidence of forecaster herding weakens. Further, evidence of forecaster herding is strong and significant in times of high inflation volatility. In time of low inflation volatility, in contrast, forecaster anti-herding seems to dominate. |
| Keywords: | Inflation rate, Forecasting, Forecaster Herding |
| JEL: | C53 D82 E37 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201455&r=afr |
| By: | Nagler, Paula; Naude, Wim |
| Abstract: | Although non-farm enterprises are ubiquitous in rural Sub-Saharan Africa, little is yet known about them. The motivation for households to operate enterprises, how productive they are, and why they exit the market are neglected questions. Drawing on the Living Standards Measurement Study -- Integrated Surveys on Agriculture and using discrete choice, selection model and panel data estimators, this paper provide answers using data from Ethiopia, Niger, Nigeria, Malawi, Tanzania, and Uganda. The necessity to cope following shocks, seasonality in agriculture, and household size can push rural households into operating a non-farm enterprise. Households are also pulled into entrepreneurship to exploit opportunities. Access to credit and markets, household wealth, and the education and age of the household head are positively associated with the likelihood of operating an enterprise. The characteristics are also associated with the type of business activity a household operates. Rural and female-headed enterprises and enterprises with young enterprise owners are less productive than urban and male-owned enterprises and enterprises with older owners. Shocks have a negative association with enterprise operation and productivity and a large share of rural enterprises does not operate continuously over a year. Enterprises cease operations because of low profits, a lack of finance, or the effects of idiosyncratic shocks. Overall the findings are indicative that rural enterprises are"small businesses in a big continent"where large distances, rural isolation, low population density, and farming risks limit productivity and growth. |
| Keywords: | Access to Finance,Microfinance,Labor Policies,Rural Poverty Reduction,E-Business |
| Date: | 2014–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7066&r=afr |
| By: | Christian Lambert Nguena (Association of African Young Economists) |
| Abstract: | The relative positive economic growth experienced by most African countries in the recent decade has come with insufficient demand stimulation. The concern of poverty at the forefront of economic policy, the need for inclusive growth and sustainable development, inter alia, brings forward the inevitable question of the monetary policy responsibility. Accordingly, the monetarist theory that focuses on price stability inherently neglects the demand stimulation aspect of economic prosperity. Since the mid 1980s, the monetarist school driven by its central aim of fighting inflation and maintaining credibility in markets and economic agents has been priority for monetary authorities (especially in Africa). To this effect, while good results in terms of inflation targeting has been achieved in many African countries; economic growth has sometimes been low. Hence, in light of the above, using a statistical and theoretical debate method, the Credible Monetary Policy (CMP)1 paradox is traceable to Africa. Accordingly, with the promising economic environment in Africa, we recommend the promotion of a monetary policy oriented toward improving economic growth under the constraint of price stability. In light of the above view, there are some note worthy signs such the recent decision by the two CFA zone central banks to either maintain interest rates at a low level or reduce it despite tightening measures of monetary policy taken by the European Central Bank (ECB) earlier in the year. In the same vein, the central bank of South Africa has maintained its policy of low interest rates with an objective of economic expansion. Since, the 2008 financial crisis, the consolidation of the Federal Reserve’s declared final objective of lowering interest rates and making emergency loans is an eloquent example to reassure African central banks in the choice of the pro-growth monetary policy option. |
| Keywords: | Pro growth monetary policy, CMP paradox, Financing enterprises, African central bank |
| JEL: | C23 C33 E52 E58 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:aay:wpaper:13_001&r=afr |
| By: | International Monetary Fund. Middle East and Central Asia Dept. |
| Abstract: | KEY ISSUES Political Context: Sudan is embarking on a difficult national dialogue with the opposition and some armed groups in the Blue Nile and South Kordofan regions. The objective is to break the current destructive cycle of instability and prepare for the upcoming presidential election in 2015. This dialogue, if successful, could help create the conditions needed to address the challenges that emerged after the secession of South Sudan, including sustaining a much-needed broad economic recovery and adjusting the economy to its new potential. The current staff monitored program (SMP) is providing an adequate policy framework and a path in this direction. Macroeconomic situation and outlook: Tight monetary conditions and improved fiscal performance, together with lower food prices, contributed to lower inflation at end-March. However, the curb market exchange rate further depreciated against the U.S. dollar on account of the uncertainties in the oil market triggered by the South Sudan conflict, further widening the gap between the official and curb market rates to more than 50 percent. The outlook for 2014 remains broadly favorable, with growth expected to reach 2.5 percent, and inflation to continue its downward trend to about 18 percent. Program performance: Performance under the SMP through end-March 2014 was affected by adverse shocks and security spillovers. All end-March quantitative benchmarks were met, except for the ones on net international reserves and net domestic assets of the Central Bank of Sudan (CBOS). The indicative targets on social spending and the non-oil primary deficit were also missed by a slight margin. Corrective actions have been taken to ensure that these targets will be met in the second quarter. Urgent measures are needed to address the gap between the official and curb market exchange rates. The authorities have also made good progress toward meeting their end-June structural benchmarks. Risks remain large and tilted to the downside. The uncertain political transition, the volatile domestic oil market, and the fragile security environment may slow down the reform momentum. The recent peace agreement between the warring factions in South Sudan, if implemented, would improve the risk outlook. |
| Keywords: | Staff-monitored programs;Fiscal policy;Fiscal reforms;Economic indicators;Letters of Intent;Staff Reports;Sudan; |
| Date: | 2014–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:14/249&r=afr |