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on Africa |
| By: | Alphonse Noah; Luc Jacolin; Michael Brei |
| Abstract: | This paper investigates the impact of bank competition in Sub-Saharan Africa on bank non-performing loans, a measure of credit risk. Using bank-level data for a sample of 221 banks from 33 countries over the period 2000-15, we find a non-linear or U-shaped relationship between bank competition and credit risk. In other words, increased bank competition has the potential to lower credit risk via efficiency gains (lower credit cost, operational gains). However, the positive effects may be outweighed by adverse effects of excessive competition (lower profit margins, increased risk incentives). We also find that credit risk in Sub-Saharan Africa is not only related to macroeconomic determinants, such as growth, public debt, economic concentration, financial deepening and inclusion, but also to the business and regulatory environment. These results may provide useful insights on how to design and adapt prudential and regulatory frameworks to the specific needs in developing countries. |
| Keywords: | Bank competition, credit risk, bank stability, Africa |
| JEL: | G21 G28 D4 O55 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2018-27&r=afr |
| By: | Bénédicte Fonteneau (HIVA, KU Leuven); Sarah Vaes (HIVA, KU Leuven); Jan Van Ongevalle (HIVA, KU Leuven) |
| Abstract: | Social protection has come to feature more and more prominently on international and national development agendas. This quest for social protection in developing countries raises an important question: how can social protection act and be supported as an instrument for redistribution of wealth at the national level? Assessing and enhancing the redistributive potential of social protection mechanisms requires a multidimensional analysis and approach, encompassing political, technical, institutional and financial considerations. This study reports on a two-phased research combining conceptual work (Fonteneau & Van Ongevalle, 2015) with case studies in Senegal and Morocco in order to build and test a theoretical framework that can guide the assessment of the redistributive potential of social protection mechanisms in a developing context. The study offers in-depth insight into two ongoing social protection reforms: the adoption of Law 65.00 in 2002 on Basic Medical Coverage which initiated the introduction of a mandatory health insurance (AMO) for the formal sector and the establishment of a medical assistance scheme for the economically destitute (RAMED) in Morocco; and the ‘Extension of the health coverage through mutual health organisations in the context of decentralisation’ (DECAM) in Senegal. Based on insights from these two case studies, the study calls for development actors to support a maximalist interpretation of redistributive social protection, to make sure their support to social protection reforms is politically-smart, and to promote a more inclusive and meaningful stakeholder participation in policy making processes. The study demonstrates the need for a multidimensional analysis as well as the usefulness of the proposed theoretical framework to guide a comprehensive assessment of the redistributive potential of social protection mechanisms. |
| Keywords: | Social protection, reedistributive social protection, international development, donor funding, financing social protection, political dimensions of social protection |
| JEL: | I I3 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:nam:befdwp:0121&r=afr |
| By: | Barbara Rohregger (International Centre for Sustainable Development (IZNE), Bonn-Rhein-Sieg University of Applied Sciences); Katja Bender; Bethuel Kinuthia; Esther Schüring; Grace Ikua; Nicky Pouw |
| Abstract: | The paper contributes to the debate on the political economy of implementation of propoor social policy. It argues for a broadening of the debate, which is dominated by technocratic arguments, emphasizing the lack of financial resources, technology or skills as the major barriers for effective implementation. Describing the dynamic interplay of ‘formal’ operational programme structures and ‘informal’ traditional institutions in delivering the CT-OVC – the largest and oldest cash transfer programme in Kenya – it argues for the need to look more closely into the local political economy as an important mediating arena for implementing social policies. Implementation is heavily contingent upon the local social, political and institutional context that influences and shapes its outcomes. These processes are highly dynamic and ambivalent evolving between ‘formal’ and ‘informal’ structures and institutions. They may change over time and place, challenging the implicit assumption that programmes are evenly implemented across geographic and political entities. |
| Keywords: | Social policies, Kenya, local political economy, traditional authorities, devolution |
| JEL: | I38 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:sau:iznews:1802&r=afr |
| By: | Sanghamitra Bandyopadhyay (Queen Mary, University of London); Elliott Green (London School of Economics) |
| Abstract: | Inter-cultural marriages have long been of great interest to social scientists who wish to examine how ethnic, religious, racial and other identities form and change over time. However, the vast majority of this research has been concentrated in developed countries. As such we undertake the first major examination into the causes and correlates of inter-ethnic and inter-religious marriage in contemporary Sub-Saharan Africa. We use Demographic and Health Survey (DHS) couples data in a series of multi-level logit models from up to 36 countries to document a number of findings. First, we show that inter-ethnic marriage rates are high, at 22.3% on average, and rising across Africa over the past 30 years, with rates approaching 50% for recent marriages in Gabon and Zambia and rising rates over time for all countries in our dataset. In contrast, however, we show that inter-religious marriage rates are much lower, at only 5%, and stagnant, with no country average higher than 15% and declining over time in a number of countries. Second, as expected from the literature on inter-cultural marriages in other contexts, we show that modernization variables such as urbanization, literacy/education, wealth and declines in polygamy and agricultural employment are significantly correlated with rising levels of inter-ethnic marriage; in contrast, the relationship between modernization and inter-religious marriage is much more ambiguous. Third, we show that inter-ethnic marriage is significantly correlated with higher age at marriage, being previously married and migration before marriage. Finally, we find no evidence that inter-married couples have fewer children, in contrast to findings elsewhere. |
| Keywords: | Ethnicity, Religion, Marriage, Sub-Saharan Africa, DHS data, Modernization |
| JEL: | J12 N37 O10 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:cgs:wpaper:90&r=afr |
| By: | Schleicher, Michael; Klonner, Stefan; Sauerborn, Rainer; Sié, Alie; Souares, Aurélia |
| Abstract: | We investigate the properties of health insurance demand in Burkina Faso, where we offered poor households a voluntary health insurance product at half the usual price. The targeting procedure we implemented delivers a fuzzy regression discontinuity design, which identifies the price elasticity of demand for health insurance as well as associated selection effects. We find large price elasticities among urban households, whereas the demand of rural households is price-inelastic. There are important selection effects, with widowed male household heads being most price-sensitive. Correlating these heterogeneous effects with survey data on informal transfers and health expenditures, our results suggest that informal risk-sharing largely crowds out formal insurance and that a single insurance product may fail to align with poor households' small health budgets. We find no adverse selection into health insurance. |
| Date: | 2018–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0648&r=afr |
| By: | Park, Youngho (Korea Institute for International Economic Policy); Jung, Jae Wook (Korea Institute for International Economic Policy); Kim, Yejin (Korea Institute for International Economic Policy) |
| Abstract: | Unlike previous discussions on Africa that have focused on its commodities, recent focus has shifted to the potential of Africa's consumer market. Africa's remarkable economic growth and a population of 12 billion, which continues to expand in line with urbanization, has encouraged the development of the middle-income class. The increasing number of modern retail stores and supermarkets in the major cities illustrate the growth of Africa's consumer market. Yet, Africa's consumer market remains fragmented because of the poor logistical infrastructure, complex trade regulations, and political hostilities that limit trade between countries. As a result, inter-Africa trade remains at 12% of Africa's total trade while that of Western Europe and the Asia Pacific is at 61% and 39% respectively. Moreover, the majority of manufactured goods are imported because there is a lack of skills, equipment and knowledge as well and land ownership issues among other factors. The influx of cheap imported goods across a wide range of industries covering textiles, plastics, machinery, electronics, construction materials and others have also hindered the growth of the manufacturing sector in Africa because of its low cost competitiveness. Despite the merits of engaging with Africa, the trade volume between Korea and Africa has remained minuscule because of geographical and logistical barriers. Against this background, utilizing industrial zones in Africa would be an effective way for Korea to engage directly with the African consumer market. Eastern Africa, Ethiopia in particular, should be prioritized as an entry point because of its relative political stability, improving business environment and intensity of intra-regional trade. In terms of focus industries, although agriculture, textiles and minerals are the most consumed and exported items yet in Africa, Korea should prioritize production of machinery, petro-chemical products and non-mineral goods because better competitiveness in these areas. |
| Keywords: | Korea; African consumer market; industrial zones |
| Date: | 2018–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2018_013&r=afr |
| By: | Thomas Masterson; Ajit Zacharias |
| Abstract: | In this policy note, Thomas Masterson and Ajit Zacharias address the nexus between wage employment, consumption poverty, and time deficits in the context of Ghana and Tanzania. Based on a recently completed research project supported by the Hewlett Foundation, the authors apply the Levy Institute Measure of Time and Consumption Poverty (LIMTCP) to estimate whether the jobs that are likely to be available to potential employment-seeking, working-age individuals in consumption-poor households--who are predominantly female in both countries--can serve as vehicles of "economic empowerment." They investigate this question using two indicators of empowerment, asking (1) whether the individual would be able to move their household to at least a minimal level of consumption via the additional earnings from their new job and (2) whether the individual would be deprived of the time required to meet the minimal needs of care for themselves (personal care), their homes, and their dependents. |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levypn:18-4&r=afr |
| By: | Christian Senga (Institute of Development Policy (IOB), University of Antwerp; Institut Supérieur de Commerce de Goma (ISC)); Danny Cassimon (Institute of Development Policy (IOB), University of Antwerp); Dennis Essers (Institute of Development Policy (IOB), University of Antwerp; Economics and Research Department, National Bank of Belgium) |
| Abstract: | This study explores the drivers of secondary market yields of Sub-Saharan African (SSA) sovereign Eurobonds from 2008 to mid-2017. Our results indicate that, beyond global ‘push’ factors, country specific ‘pull’ factors such as inflation and GDP growth matter too for SSA Eurobond performance. A panel error-correction analysis suggests large heterogeneity in the short-term influence of our global and country variables across countries. We find no significant effect of bond-specific factors on yields when push and pull factors are accounted for. By emphasizing the prominence of country variables, reflecting the quality of countries’ macroeconomic management and their economic performance, our results qualify the common view that SSA countries have little control over their market borrowing costs. |
| Keywords: | Public debt, international bonds, bond yields, Sub-Saharan Africa |
| JEL: | F34 G15 H63 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:nam:befdwp:0123&r=afr |