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on Africa |
| By: | Samantha Joy Cinco (Hochschule Fulda) |
| Abstract: | The COVID-19 pandemic brought about unparalleled global challenges. While these challenges were similar across countries, they triggered diverse fiscal responses from governments worldwide. The objective of this study is to analyze the fiscal response of African countries to the COVID-19 crisis with an emphasis on how their responses varied based on their economic situations and political institutions before the start of the pandemic. This research leverages a dataset of political and economic indicators before the pandemic (2019) and the total amount of fiscal response during the pandemic (2020-2021) for all countries in Africa. As a preliminary step, OLS regressions were conducted to determine the most influential political and economic factors affecting fiscal response during the pandemic. These factors were then used in a K-means clustering approach to categorize African countries based on similar economic and political profiles. Upon the completion of the clustering, subsequent Kruskal Wallis and Dunn’s tests were conducted to evaluate the significance of the clusters on their diverse fiscal response. Country clusters were determined using estimates of current account balance, government effectiveness, and political stability, controlled for the total number of reported COVID-19 cases. Results indicate that countries within the same cluster exhibit commonalities in their fiscal response and their economic and political profiles. Moreover, subsequent test results highlight the significance of these clusters, showing that economic context and political institutions influenced a country’s approach to COVID-19. This study’s outcome offers valuable insights for policymakers and other stakeholders about the implications of economic contexts and political institutions on the fiscal response to an external shock such as COVID-19. Moreover, the segmentation of the countries in Africa provides a nuanced understanding of the diverse needs within the continent and the need for targeted policy interventions when dealing with external shocks. |
| Keywords: | COVID-19 crisis, fiscal response, Africa, multivariate regression, cluster analysis |
| JEL: | H |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:inf:wpaper:2024.6&r= |
| By: | Judit Kiss (Institute of World Economics, HUN-REN Centre for Economic and Regional Studies) |
| Abstract: | Kenya is one of the leading SHC importers in Africa, where the aborted import substitution industrialisation, the liberalization of the economy and the failure of domestic textile industry led to SHC trade surge which is the direct product of the global (ultra)fast fashion linear business model resulting in overproduction and forced overconsumption. While SHC industry is noticeably beneficial for the economy and the people of Kenya due to job creation, income and revenue generation, providing affordable clothing, one should not ignore the detrimental impact on the environment and local textile/fashion industry which might be the backbone of economic growth and social transformation. In order to keep the benefits and minimize the drawbacks of SHC industry, in the short run the supply side pressure should be eased via decreasing the quantity and increasing the quality of SHC inflow in order to minimize waste, while in the longer run the enhancement of domestic garment industry should be accompanied by the gradual decreasing/phasing out of SHC inflow |
| Keywords: | secondhand-clothing industry, waste colonialism, fast fashion, Kenya, mitumba |
| JEL: | E2 F1 F6 O5 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iwe:workpr:273&r= |
| By: | Randrianarisoa, Radoniaina |
| Abstract: | This paper seeks to determine the existence of a stable demand for money relation for the case of Madagascar. We use an Engle-Granger error correction model to be able to demonstrate that in the long-run, the demand for money is negatively explained by the opportunity cost and positively by real income and the proxy for financial innovation. The latter, when taken into account, produces a less stable demand than when real income and opportunity cost are only used. Hence, the real demand for money in Madagascar is considered as stable, but fragile. This situation justified the migration to a more forward-looking monetary policy regime. |
| Keywords: | money demand, financial innovation, cointegration, vector error-correction model |
| JEL: | E41 |
| Date: | 2024–06–10 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121170&r= |