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The African Continental Free Trade Area (AfCFTA) has been hailed as a key pillar and catalyst for economic growth, industrialization, and sustainable development in Africa. One of the anticipated benefits is the promise to increase intra‐African trade through the elimination of import duties and other tariffs among countries. However, due to the heterogeneity between the African countries, questions remain as to whether each country will benefit from tariff elimination. This paper aims to evaluate the macroeconomic, fiscal, and welfare consequences of import tax removal in Senegal with the rest of Africa. We link an extended version of the partnership for economic policy (PEP) static computable general equilibrium (CGE) model with a non‐parametric microsimulation approach. We calibrate the model with Senegal's most recent Social Accounting Matrix. The microeconomic model is calibrated using the latest Senegalese household consumption survey. The findings indicate that tariff removal from the rest of Africa has favorable economic, fiscal, and welfare impacts for Senegal. The paper suggests that it will lead to an increase in economic growth and investment. The removal of tariffs is expected to favor urban households over rural ones and leads to a modest decrease in income inequality, accompanied by a 3.36% reduction in the number of poor. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of financial openness on financial sector development and income inequality. We use the de jure and de facto measures of financial openness across 78 countries from 1980 to 2019. By employing a system generalized method of moments (GMM) with 5‐year averaged data and a novel push and pull modeling framework, we obtain three key results. First, the de jure measure of financial openness exacerbates income inequality and is sensitive to banking crises and conflict intensity. Second, the de facto measure spurs stock value traded in emerging market economies (EMEs) and declines domestic credit in Africa. Third, the interaction between de facto measures with schooling and governance factors affects financial sector development and income inequality. We highlighted that the mere usage of the de jure measure and their interaction is incorrect. The key implication is that valuable information about the real impact of openness can be obtained from the de facto measures and their interaction with favorable macroeconomic fundamentals, governance factors, and adverse nonpolicy factors. [ABSTRACT FROM AUTHOR]

This paper examines the trade–peace nexus in Africa and ascertains how poverty and inequality tilt the relationship in the eight regional (economic) blocs in Africa, viz. the Arab Maghreb Union (UMA), the Common Market for Eastern and Southern Africa (COMESA), the Community of Sahel–Saharan States (CEN–SAD), the East African Community (EAC), the Economic Community of Central African States (ECCAS), the Economic Community of West African States (ECOWAS), the Intergovernmental Authority on Development (IGAD) and the Southern African Development Community (SADC), from 1998 to 2020 using the Driscoll–Kraay estimate. The study contributes to the literature by disaggregating the peace effect of trade in Africa by the regional (economic) blocs to allow for in‐depth and context‐specific analysis. The paper also expands the scope of existing studies by examining the direct effect of poverty and inequality on peace in addition to the indirect effect that is revealed through their interactions with trade integrations. The findings reveal that trade promotes peace in Africa, while wide income inequality and a large poverty gap increase the likelihood of conflict. The interaction of poverty and inequality with trade integration shows that while the poverty level does not improve the effect of trade on peace, inequality reduces the impact of trade on peace. The study concludes that poverty and inequality play significant roles in the trade–peace nexus in Africa. Policy recommendations are discussed. [ABSTRACT FROM AUTHOR]

This paper examines whether technological innovations such as information and communication technology infrastructure, mobile phone subscriptions, secure internet servers and the number of automated teller machines and bank branches increased financial deepening in 43 African countries for the period 2010–2019. The study employs panel corrected standard errors, fixed effects and quantile regressions for empirical analysis. The results show that technological innovations have a positive and significant influence on financial deepening in Africa in terms of banks' mobilisation of deposits and allocation of credit to enterprises. Furthermore, the technological indicators have a strong and positive effect on higher levels of bank credit to the private sector than lower levels. As for bank deposits, only the number of branches was found to have significant and positive effects at a high level of bank deposits compared with a low level. These results imply that African governments and development partners can leverage ICT developments to increase financial deepening and reinvigorate debt financing, which is the primary funding source for small and medium‐size enterprises. [ABSTRACT FROM AUTHOR]

This paper investigates the determinants of venture capital investments across 25 African countries over the period 2014–2019. In particular, it considers the significance of innovation and digitalization in Africa's venture capital activity. The results show that digital infrastructure, high‐technology exports, internet coverage, market size, minority investor protection and government effectiveness are the main drivers of venture capital deals in Africa over the period examined. More generally, these findings highlight that digital infrastructure and connectivity, innovation and institutional frameworks all play an important role in shaping a favorable environment to attract venture capital funding. [ABSTRACT FROM AUTHOR]

African countries generally cut corporate income tax (CIT) rates in the hopes of attracting foreign direct investment (FDI), whereas the effectiveness of tax rate reductions in attracting extractive industries FDI is controversial. This paper estimates the impact of the statutory CIT rate, as applied to mining companies, on FDI inflows to the gold and silver sectors of African economies. The estimation results indicate that the impact of the mining CIT rate on the host country's gold and silver FDI inflows is negative, but not statistically significant, at the conventional levels of significance. These results suggest that cuts in the CIT rate applied to mining companies will not necessarily attract FDI to gold and silver projects. Moreover, we find a strategic complementarity in gold and silver FDI inflows between countries, suggesting that an increase in the host country's gold and silver FDI inflows may stimulate FDI to gold and silver projects in neighbouring countries. Furthermore, the results show that infrastructure, government stability and gold and silver reserves positively affect gold and silver FDI inflows. The main findings of the paper suggest that, instead of granting corporate tax incentives, governments may consider improving the quality of socio‐economic infrastructure, the availability of geological information and promoting political and economic stability for attracting mining investments. [ABSTRACT FROM AUTHOR]

This paper seeks to establish the contribution of the Common Market for Eastern and Southern Africa (COMESA) programmes in promoting industrialization. It further seeks to establish the link between industrialization and productivity. The paper uses a gravity model to estimate a cross‐sectional time‐series (panel) dataset for the period 2001–2015. The results indicate that membership to COMESA has created large markets and promoted industrialization among member states. However, results also confirm that COMESA member states still heavily trade in industrial intermediates with non‐members. The study further reveals that the share of foreign total factor productivity (TFP) to COMESA's TFP are weaker than expected, which suggests non‐convergence to international knowledge spillovers. The study concludes that COMESA programmes have positively affected industrialization. We therefore recommend that COMESA should continue implementing strategies, policies and programmes that promote industrialization and technology transfer. [ABSTRACT FROM AUTHOR]

This paper analyzes factors that drive foreign direct investment (FDI) in Africa. To do so, for the first time in the literature, the paper uses 5-year panel data and the system-GMM technique over the period 1970-2009. The main results are as follows: (a) larger countries attract more FDI; (b) regardless of their size, however, more open countries, politically stable countries, and countries offering higher return to investment also attract FDI; (c) FDI inflows are persistent in Africa. This suggests that countries that manage to attract FDI today are likely to attract more FDI in the future. [ABSTRACT FROM AUTHOR]

This paper calculates the trade efficiency of China's exports to Africa by considering trade inefficiency factors, such as Chinese aid to Africa and Chinese contracted projects. Based on a stochastic frontier gravity model and data for China's exports to 38 African countries from 2010 to 2020, this study draws the following conclusions. First, trade inefficiencies, such as China's aid and contracted projects, play a positive role in promoting China's export trade to Africa. Second, the efficiency of China's export trade to Africa varies significantly in different regions, among which countries with high export trade efficiency are concentrated in North and South Africa. Third, the trade potential and trade expansion space of China's exports to Africa vary significantly among different product sectors, which provides much space for promoting trade policy. We highlight that China's government should develop differentiated regional trade policies due to regional heterogeneity in terms of export trade efficiency between China and African countries. [ABSTRACT FROM AUTHOR]

Empirical evidence on the benefits of international ownership for small and medium‐sized enterprises (SMEs) financial performance is either not available for most African and Middle Eastern countries or presents mixed results. In this paper, we investigate this further by examining the effects of ownership structure on firm performance, using financial data covering SMEs in 60 African and Middle Eastern countries, for the years 2006–2015. Results from pooled ordinary least squares and random‐effects estimations indicate that international ownership is significantly positively correlated with firm performance for (most of) Africa and the Middle East. Examining the interaction of international ownership with capital resources, we find that internationally owned firms do not use capital more efficiently than locally owned firms, implying that internationally owned firms use international resources—other than capital—more efficiently. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to evaluate the relative influence of bilateral and multilateral concessional debts on public investment in 32 sub‐Saharan African countries over the period 1985–2020. Dynamic panel autoregressive distributed lag models comprising the mean group, pooled mean group and dynamic fixed effect estimators were employed in our model estimations. The results revealed that bilateral and multilateral concessional debts had a long‐run positive and significant effect on public investment. The findings indicated that a 1% change in bilateral and multilateral concessional debt was associated with 8.6 and 11.3% increases in public investment, respectively. While the short‐run influence of bilateral concessional debts was significantly positive, multilateral concessional debts had a short‐run positive but insignificant effect on public investment. It is discovered that institutional quality is associated with declines in public investment. The contingency analysis shows that institutional quality explains a lot about how well bilateral and multilateral concessional debts drive public investment. The evidence suggests that poor institutional quality is more likely to undermine the effectiveness of bilateral concessional debts on productive investment than multilateral concessional debts. [ABSTRACT FROM AUTHOR]

A growing body of literature highlights the importance of export sophistication for economic development. Given the newness of the literature on export sophistication, its determinants are under‐exploited. As a pioneer study, this paper attempts to fill this gap in the literature by examining the effect of infrastructure development on export sophistication. Based on a panel of 45 African countries over the period 2003–2016, the results of the different estimations show that infrastructure, including transport, electricity, ICT and access to water and sanitation, improves export sophistication in Africa. Our results also show that the effect of infrastructure varies at different intervals of the export sophistication distribution. Therefore, improved infrastructure would allow African countries to not only improve their export structure but also achieve sustainable and durable growth. [ABSTRACT FROM AUTHOR]

The article discusses papers within the March 2010 issue of "African Development Review," including one about capital flight repatriation and its impact on economic growth in African countries, and the effect of intervention programs on poverty in Northern Ethiopia.

The paper studies the effects of the coronavirus disease 2019 (COVID‐19) pandemic on African economies and household welfare using a top‐down sequential macro‐micro simulation approach. The pandemic is modeled as a supply shock that disrupts economic activities of African countries and then affects households' consumption behavior, the level of their welfare, and businesses' investment decisions. The macroeconomic dynamic general equilibrium model is calibrated to account for informality, a key feature of African economies. We find that COVID‐19 could diminish employment in the formal and informal sectors and contract consumption of non‐savers and, especially, savers. These contractions would lead to an economic recession in Africa and widen both fiscal and current account deficits. Extreme poverty is expected to increase further in Africa, in particular if the welfare of the poorest households grows at lower rates. We also use the macroeconomic model to analyze the effects of different fiscal policy responses to the COVID‐19 pandemic. [ABSTRACT FROM AUTHOR]

This paper aims to analyze the effect of information and communication technology (ICT) diffusion on the shadow economic activities in Africa for the period from 2000 to 2015. To this end, we use a panel data model on a sample of 48 countries. The results obtained show that the diffusion of ICTs, especially mobile telephony and the Internet, negatively and significantly affect the size of the shadow economy in Africa. The level of education, capital stock, economic growth, and financial development also contribute to reducing the size of the informal economy in Africa. However, our results suggest that informal activities are motivated by the abundance of natural resources and migrant remittances. Robustness checks are done through the system generalized method of moments and a change in the measurement of the shadow economy confirms the validity of the results. We recommend to decision‐makers to implement public policies facilitating the access and the use of new telecommunications tools and services and to improve the institutional framework to encourage private economic agents to invest in formal activities. [ABSTRACT FROM AUTHOR]

The aim of this paper is to assess the effect of government spending on happiness in 39 African countries from 2006 to 2018. The neoclassical view predicts a positive effect, while public choice theory predicts the opposite. The results obtained using the Generalized Method of Moment reveal that public spending has no direct effect on happiness in Africa. However, public spending positively affects happiness in the poorest countries of Africa. Furthermore, governments can improve the happiness of African populations through public spending coupled with democratic regimes and the control of inflation. [ABSTRACT FROM AUTHOR]

This paper examines the role institutional quality plays amongst the empirical drivers of income inequality in Africa. Using a dynamic two‐step difference GMM with robust standard errors over the period 1990–2017, we find no statistically significant effect of institutions in general, on income inequality. However, we find that institutional quality indicators such as control of corruption and the strict enforcement of the rule of law significantly reduce income inequality. We also find no statistically significant effects of the other institutional quality indicators such as government effectiveness, voice and accountability, regulatory quality and political stability on income inequality in our sample. We suggest that more premium be placed on corruption control and the stringent adherence to the rule of law in ensuring equitable distribution of income in Africa. Furthermore, we re‐echo suggestions that promote institutional development in Africa as institutions in general remain very weak. [ABSTRACT FROM AUTHOR]

Despite the key role of agricultural development in the fight against hunger and the achievement of food security, little is known on the cross‐country effect of terrorism on agriculture. At the same time, there is some tentative evidence suggesting that conflicts reduce agricultural inputs and outputs such as land, production and income. This paper contributes to this emerging literature by investigating how terrorism affects agriculture on a panel of 48 African countries over the period 1998–2016. Six terrorism indicators are used, namely: domestic terrorism, transnational terrorism, unclear terrorism, total terrorism, number of attacks and number of deaths due to terrorism. Three agricultural indicators are used, namely: inputs (consisting of agricultural land and labour) and output (consisting of agricultural productivity growth). Using the generalized method of moments, the following findings are established. First, while transnational terrorism, unclear terrorism, the number of attacks and the number of deaths due to terrorism are positively associated with agricultural land, domestic and total terrorism reduce agricultural land. Second, all the terrorism indicators are negatively associated with agricultural productivity growth and agricultural labour in African countries. Globally, terrorism and terrorist threats are causing a decline in agricultural activity in Africa. [ABSTRACT FROM AUTHOR]

This paper examines the impact of access to electricity on internal conflicts in Africa. Using income inequality as a transition variable and a sample of 36 countries, we estimate a panel data model by several regressions, including fixed effects, random effects, generalized least squares and the Driscoll–Kraay method from 1990 to 2017. Our findings show that regardless of the considered dimension, access to electricity reduces the risk of internal conflicts in Africa. However, its effects differ depending on whether a given area is urban or rural. The findings also suggest that income inequality is crucial to reducing internal conflicts in Africa. [ABSTRACT FROM AUTHOR]

This paper takes a new dimension on the foreign direct investment (FDI)–growth nexus through the lens of the allocation puzzle. We examine how the influx of FDI affects the broader economy through its impact on real economic sectors in a panel of 42 Sub‐Saharan African (SSA) countries over 1980–2017. Using a dynamic panel model and decomposing the real sector into its parts, we test for the possibility of a two‐way bi‐directional relationship between growth in agriculture, manufacturing, industry and service value additions, and FDI. There is no evidence of an allocation puzzle at the level of the real sector and the components parts, which suggests that SSA countries with relatively high growth in the real sector will attract more FDI. While the effect of FDI on the real sector is positive at the disaggregated level, there is a positive bi‐directional effect between FDI and growths in manufacturing, industry and service value additions. The results are robust to key determinants of the growth–FDI nexus. [ABSTRACT FROM AUTHOR]

Industrialization constitutes one of the strategies of structural transformation in many sub‐Saharan African (SSA) countries. In this paper, we re‐examine the effect of financial development on the industrialization of 35 SSA countries over the period 1996–2018. Contrary to previous work, we formulate the hypothesis that there exists a threshold of financial development beyond which financial development positively influences industrialization. Using the dynamic panel threshold regression model, and system generalized methods of moment models, we find two main results. First, financial development has a negative and significant impact on the development of industrialization. Secondly, the findings show the existence of a nonlinear relationship between financial development and industrialization development. Thus, we find that financial development has a negative effect on industrialization below the threshold while the effect is significantly positive on industrialization in countries whose financial development is above the threshold. The results are stable to the different robustness tests used. These findings highlight the need for SSA countries to develop better financial institutions if they hope to boost the manufacturing sector. [ABSTRACT FROM AUTHOR]

This paper examines the effect of public and private health spending on health outcomes measured by infant and child mortality rate using a panel of 37 African countries over the period 1995–2018. Based on both system generalized method of moments and least squared dummy variable corrected bias estimators, we find that the level of public health expenditures has statistically significant positive effects on mortality reduction. However, private health spending has a statistically significant positive effect on infant and child mortality rates when it interacts with public health spending. This means that the health effect of private health expenditure is strengthened by public health spending. Conditioning on the level of private health expenditure, the total effect of public health expenditure on child mortality reduction is slightly higher in absolute value than that of private health expenditure. The main policy implication that emerges from our results is the need to increase public health expenditure and support the effectiveness of private health expenditure. This additional fund should be allocated to some specific expenditure categories which have a very direct link with child and infant mortality rates. [ABSTRACT FROM AUTHOR]

This paper investigates the effect of oil dependence on access to water and sanitation in 49 African countries, with data covering the period 1996–2015. Additionally, it investigates as a first attempt how the Extractive Industries Transparency Initiative (EITI) affects the relationship between oil dependence and access to water and sanitation. Using the two‐step system generalized method of moments, the results show that oil dependence is negatively associated with access to water and sanitation, both for the total population and urban and rural populations, respectively. Considering the difference between oil abundance and oil dependence, we find that both oil abundance and oil dependence are negatively associated with access to water and sanitation. Finally, the results illustrate that the EITI mitigates the negative effect of oil dependence on access to water and sanitation in resources rich African countries. [ABSTRACT FROM AUTHOR]

The objectives of this paper are to verify the linear and the non‐linear effects of infrastructural development on inclusive human development in Africa. The results of the system generalized method of moments (system GMM) estimations show a positive effect of infrastructural development on inclusive development across all the infrastructural development indexes employed, except the information and communication technology (ICT) infrastructural composite index, which presents an insignificant negative effect. Besides, a non‐linear effect of infrastructures on inclusive development is established across all the infrastructure indicators except for the ICT indicator. Negative thresholds for complementary policies are established for the African Infrastructure Development Index (AIDI) and the transport index whereas positive thresholds are apparent for the electricity index and the water and sanitation infrastructure index (WSS). Accordingly, in order to sustain the positive incidence of the AIDI and transport index on human development, complementary policies should be engaged to avoid an overall negative effect on human development when the indexes are, respectively, 31.12 and 25.56. In the same vein, the electricity index and WSSI should exceed critical levels of, respectively, 49.79 and 41.92, to engender an overall positive effect on inclusive human development. [ABSTRACT FROM AUTHOR]

This paper analyses the Tiebout hypothesis in Angola's provinces from 2004 to 2013, using a spatial panel data model. The Tiebout hypothesis, which states that a country's internal migration is dictated by regional public policy, is tested. Angola's internal inter-provincial migration is related to gross domestic product per capita, local public expenditure, unemployment, poverty, population density, the number of public employees in the region, and a NGO for civic education. The results reveal that spatial autocorrelation is a reality in the Angolan context, validating the adoption of a spatial model, and that regional migration is explained by the covariates. The general conclusion is that the Tiebout hypothesis is accepted in the Angolan regions, and that the most important cause of migration is regional poverty. Policy implications are derived and it is concluded that an efficient anti-poverty policy is needed in the Angolan context at regional level in order to decrease internal migration. [ABSTRACT FROM AUTHOR]

This paper analyzed the factors that drive foreign direct investments (FDI) by looking at regional heterogeneity among the five African regions. For the first time, FDI drivers are analyzed for each of the five regions of Africa contrary to previous studies which focused on Africa as a whole. The paper used a panel dataset from 1970 to 2010 of 53 African countries divided into: Central, East, North, Southern, and West Africa. Ordinary least squares (OLS) and generalized method of moments (GMM) techniques are used for the estimations. The main results indicate that: (i) agglomeration has a strong positive relationship with FDI inflows in all the regions except Central Africa. However, in West Africa, the second lag of FDI is significantly negative; (ii) there is a negative relationship between FDI inflows and GDP per capita in all the five regions, but a U-shaped relationship is observed in Central, North, and West Africa. But GDP growth rate has a strongly positive relationship with FDI inflows in Central Africa but negatively significant in West Africa; (iii) FDI follows domestic investment in East, Southern, and West Africa; (iv) democracy is a major factor in attracting FDI to Southern Africa, being upward concave; (v) infrastructure development has a positive impact on FDI inflows in East and North Africa; (vi) trade openness has a positive relationship with FDI inflows in all the five regions except in East Africa; (vii) inflation deters FDI inflows to East Africa; (viii) the level of urbanization has a strong positive relationship with FDI inflows only in West Africa; (ix) net foreign aid has a negative relationship with FDI inflows to East, North, and Southern Africa; (x) higher life expectancy deters FDI inflows to Central Africa but promotes the same to East and North Africa; (xi) metal production and exportation attract significant FDI to Central Africa while oil production and exportation attract higher FDI to West Africa; (xii) monetary union attracts greater FDI to Central and West Africa; and (xiii) political instability is a strong hindrance to FDI inflows to West Africa. [ABSTRACT FROM AUTHOR]

This study evaluates the potential impacts of the implementation of the African Continental Free Trade Area's (AfCFTA) tariff modalities on tax revenues, industrial production, trade flows, welfare and consumption for seven central African countries. Drawing on data from member states and the Global Trade Analysis Project (GTAP) database, two methodologies are applied in the study. Computable general equilibrium (CGE) and partial equilibrium (PE) are used to evaluate the long‐ and short‐term effects respectively. The results show that the reduction in tariff barriers provided by the AfCFTA will lead to a decrease in tariff revenue in some Central African countries in the short term. However, in the long term, these losses remain largely offset by the socio‐economic benefit issues generated by the implementation of the agreement, particularly in terms of economic growth and the well‐being of the region's population. To cub these revenue deficits, this paper encourages Central African countries to ratify and implement the AfCFTA. Also, they should diligently adopt all necessary reforms that could help reap the potential long‐term gains. [ABSTRACT FROM AUTHOR]

This paper examines the determinants of the spread of coronavirus disease 2019 (COVID‐19) in Africa, based on the framework of social determinants of health. Applying Poisson Pseudo Maximum Likelihood (PPML) and quantile regressions to panel data and country‐specific socioeconomic background data from 53 African countries, the study finds that enhancing capacity for early testing helps for timeous uncovering of cases, early isolation and contact tracing for effective control of the spread. Other factors such as managing of international movements through reduction of international exposure and ensuring better sanitation and hygiene were found to be relevant in diminishing COVID‐19 spread, whereas alcohol consumption and population density heighten the spread. The work also highlights that stringent measures will be counter‐productive unless they are coupled with measures to create and preserve livelihoods, together with humanitarian relief assistance to the poorest segments of the population. The results are robust to alternative techniques. As policy recommendations, we implore African governments to the promotion of sustainable livelihoods and social safety nets as measures to accompany stringent lockdowns; and good sanitation programmes to become a lifestyle of citizens. Careful attention should be paid to the socioeconomic trade‐off in respect of international travel restrictions given the high dependence of most African economies on tourism. [ABSTRACT FROM AUTHOR]

HIV/AIDS and child malnutrition are pervasive in eastern and southern Africa. This paper employs cross‐country panel data on 20 countries from 1991 to 2017 to explore the macro‐level relationship between HIV/AIDS and child malnutrition. Using instrumental variables (IV) regression, we find that HIV/AIDS is a robust predictor of long‐term and chronic malnutrition. Conditional on various controls, the results demonstrate a positive empirical association between HIV/AIDS and stunting. Moreover, increased access to improved water, female education, and food availability are critical for reducing stunting. These findings underscore the need for an integrated national policy on nutrition and HIV/AIDS and intersectoral collaboration between government agencies responsible for managing nutrition and HIV/AIDS programs. [ABSTRACT FROM AUTHOR]

This paper explores the impact of the institutional environment on the performance of 291 microfinance institutions in 34 sub-Saharan Africa countries during the period 2006 to 2014, by analysing the unbalanced panel data using fixed effects and generalized method of moments (GMM) estimation techniques. The panel regression results demonstrate strong evidence that a strong institutional environment has a positive effect on the performance of microfinance institutions in sub-Saharan Africa. More specifically, the findings reveal a positive and significant relationship between business freedom and microfinance performance in sub-Saharan Africa. These vital findings not only provide useful information to policy makers and key microfinance industry players, but also highlight the impact that institutional qualities have on microfinance performance. [ABSTRACT FROM AUTHOR]

This paper investigates the link between foreign direct investment (FDI), democracy and economic growth on a panel of eight Southern African countries for 1980-2014 using the system generalized method-of-moment (GMM) estimator. We find that FDI has a direct positive effect on economic growth and that strong democratic institutions are a significant driver of economic growth in the sample countries. The impact of FDI on economic growth is dependent on the level of democracy in the host countries. This implies that countries with strong democratic institutions are better able to absorb the positive spillovers from FDI. In policy terms, Southern African countries should sustain the institutional reform policy agenda already in place in order to benefit more from the significant inflows of FDI. [ABSTRACT FROM AUTHOR]

The benefit of growth experienced since 2000 in Africa has not been broadly shared. Poverty fell by only 8.0 percentage points between 1990 and 2010 compared to the targeted 28.3 percentage points by 2015. Although income inequality fell by 4.3 percent between 1990 and 2009, Africa remains the second most unequal region globally after Latin America and the Caribbean region. Fiscal policies play important roles in reducing poverty and inequality through such instruments as taxes, transfers and government spending. Countries with high fiscal space tend to have lower poverty rates than those with lower tax revenue to GDP ratios. Indeed, fiscal space alone tends to account for 16.5 percent of changes in poverty reduction. Institutions play an important role in increasing fiscal space in Africa. Countries with increasing participatory, transparent and accountable budgetary process tend to have stronger impact of fiscal space on poverty and inequality reduction. Although 29 countries recorded declines in the distributional effectiveness of their fiscal policies over time, the distributional impact rose by 35 percent or more in countries such as Angola, Mozambique, South Africa and Togo. This paper calls for enhancing the non-extractive revenues by diversifying revenues sources from the extractive sectors and improving progressive taxation in countries with high fiscal space and high income inequality. Heavy investment in quality and accessible education and health services, and social programs are also vital to reduce poverty and inequality in Africa. [ABSTRACT FROM AUTHOR]

We estimate the additional investment required to meet the Sustainable Development Goals (SDGs), with a focus on SDG 1 on ending extreme poverty by 2030 as well as alternative scenarios of reducing poverty. Ending poverty will be an insurmountable task. Africa requires a double-digit growth rate of 16.6 per cent per year between 2015 and 2030 to end extreme poverty by 2030, which corresponds to an investment-to-GDP ratio and a financing gap to GDP ratio of 87.5 and 65.6 per cent per annum, respectively. However, the estimates on the required growth rates vary widely across sub-regions and levels of development of individual countries. Countries and sub-regions with low initial poverty levels and higher responsiveness of poverty to income will be able to end poverty with lower growth rates and lower development finance. The paper outlines the potential policy implications of our findings. [ABSTRACT FROM AUTHOR]

This paper empirically studies the key drivers of gender equality in youth employment over the period, 1991 and 2011. Using the pooled OLS method with year, sub-regional, and oil fixed-effects, our results suggest that for Africa as a whole and Sub-Saharan Africa (SSA), quadratic levels of real per capita GDP, gender equality in primary education, trade openness, FDI inflows, political globalization, economic growth, urbanization, female population, and being a net oil-exporting country are significantly positively associated with gender equality in youth employment. The level of real GDP per capita, equality in secondary education, gross domestic investment, access to telephone, youth unemployment, and Muslim faith tend to lower it. Government consumption expenditure also lowers it in SSA. However, North Africa is different: the level of real GDP per capita, gender equality in secondary education, and government consumption expenditure tend to increase gender equality in youth employment, while being an oil-exporting country and youth unemployment tend to lower it. [ABSTRACT FROM AUTHOR]

The paper seeks to examine the impactful role of institutions in attracting remittances inflow to ECOWAS region for the period 1996-2013. In a bid to achieve this key objective, a system generalized method of moment (GMM) is adopted on a panel dataset in which insightful outcomes emanate. The results reveal an appreciable impact of institutional infrastructures on the migrants' remittances in the region. More specifically, institutional measures of governance appear to act as a spur on remittances, but other institutional decompositions like economic and political governance structures constitute avoidable drags, judging by theoretical priors and statistical levels of significance. These results remain valid to the exclusion of the francophone countries from the original dataset. On the policy front, the overall target is for government to formulate policies that seek to address the symptomatic causes of low inflow of remittances into the region, with special focus on the institutional dimension of the governance framework. Among the auxiliary policy targets include those that would address the problems of dysfunctional institutions, as well as those that would deepen financial systems and engender improved growth of GDP per capita. The study also makes some suggestions for future enquiries. [ABSTRACT FROM AUTHOR]

This paper tests the hypothesis of a negative relation between openness and inflation in the context of African countries. A dynamic model of inflation in which openness enters alternately as an endogenous and exogenous variable is estimated with different panel data estimation procedures. The paper finds no robust evidence that openness served as a mechanism to restrain inflation in the region. On the contrary, the results suggest that increased openness, treated as an endogenous variable, is associated with higher inflation on holding constant such factors as food supply constraint and level of economic development which are found significant co-determinants. [ABSTRACT FROM AUTHOR]

This paper analyses the productivity of a representative sample of African seaports in Angola, Mozambique and Nigeria from 2004 to 2010, using a data envelopment analysis (DEA) approach. The paper finds that Nigerian seaports are the most efficient, followed by those in Mozambique and Angola. A discussion of the results is provided, in addition to the related policy implications. [ABSTRACT FROM AUTHOR]

The economic crisis has had significant short-term effects in most countries around the world, including those in sub-Saharan Africa. Many of the economies are now expected to begin recovering, although the recovery is anticipated to be protracted, uneven across indicators and countries, and may be fragile. Despite the recovery, will the crisis have long-term consequences for human development and Millennium Development Goal (MDG) achievements in Africa? If so, what are the mechanisms through which such impacts could take place, and what is the role for policy? This paper seeks to address these questions by examining the evidence from similar episodes in the past, and by using a simple framework to assess the long-term impact on human development including trends towards the MDGs. Using growth projections to 2014 for the countries in the region, and a range of observed trends, it models possible impacts on the MDGs, and demonstrates how the crisis could lead to real slow-downs or reversals in the rate of progress. Based on these results the paper suggests that a series of active policy interventions are needed both to accelerate progress towards the MDGs and to build resilience for the future. [ABSTRACT FROM AUTHOR]

This paper uses panel data from two new data sets on educational attainment to investigate the effects of education on several development outcomes in African countries. I find that education has a positive and significant impact on these development outcomes. I also find that different levels of education affect development outcomes differently; for some development outcomes, primary and secondary education may be more important than tertiary education, while for some development outcomes, such as income growth rate, tertiary education may be more important. The results of this paper have implications for development policy in African countries. [ABSTRACT FROM AUTHOR]

This paper argues that food security and human development are intricately linked, and that meaningful progress on the one cannot be sustained without concomitant progress on the other. The paper surveys recent research on various aspects of the linkages between food security and human development and highlights areas where further research would enrich our understanding of the complex interactions and synergies between the two. It concludes by calling for a more systematic investigation of the human development-food security nexus with a view to generating new and practical insights for improving food security and advancing human development in sub-Saharan Africa. [ABSTRACT FROM AUTHOR]

China's relationship with Africa has grown exponentially over the last decade with US$95 billion in bilateral trade in 2008 and US$5.4 billion of Chinese investment in Africa for the same year. The growth of Sino-African relations also has an impact on the role of traditional development partners in Africa in particular in the aftermath of the 2008 financial crisis, which has already led some traditional development partners to reduce their aid budgets and subsequently their Official Development Assistance (ODA) flows to Africa. The objective of this paper is to analyse different development cooperation modalities in Africa of traditional development partners and China. This requires identifying trends in aid, debt relief, general budget support, trade, preferential trade access, and investment flows of both traditional development partners and China. The paper advocates that complementarities can be built between these development modalities on a national, regional and global level. This would enhance development effectiveness, increase efficiency and create win-win situations which would be beneficial to African countries, China and traditional development partners. [ABSTRACT FROM AUTHOR]

Natural resource endowment offers great opportunities for achieving high levels of growth and development, notably via fiscal revenue mobilization throughout the entire chain of operations from exploration to production to exports. In the case of African countries, however, resource-rich countries have not yet been able to take full advantage of their resource wealth to mobilize government revenue. In fact it appears that they have often been outperformed by their resource-scarce counterparts in this regard. Is the low revenue performance a result of distorted incentives induced by the natural resource bonanza or the lack of capacity to harness the revenue potential from the natural resource industry? This paper explores these questions and provides some empirical evidence based on data from a sample including African countries as well as countries from Latin America, Asia, and the Middle East for the period 1980–2007. The paper undertakes an econometric analysis to examine the factors that determine revenue performance in African countries from a comparative perspective, with a focus on the role of natural resource endowment. The results are consistent with the evidence from the literature, especially with regard to the role of economic structure (notably the share of agriculture in GDP), the tax base (per capita income), and trade. We compute an index of revenue performance that relates the actual revenue to the level predicted by the econometric model and we find that African resource-rich countries have performed poorly relative to their resource-scarce counterparts and compared to the oil-rich Middle Eastern countries. The paper concludes with some policy implications for African countries. [ABSTRACT FROM AUTHOR]

In Africa's least developed countries (LDCs), escape from poverty and convergence to living standards of more advanced economies depends critically on structural transformation and the emergence of productive entrepreneurship that would accelerate growth and job creation. So far, however, subsistence agriculture has been the main source of employment in these countries, while a dynamic private sector in industry or high value-added services has remained elusive. Utilizing the flow approach to labor markets, this paper complements the empirical literature and numerous surveys on small and medium enterprise (SME) constraints and develops a theoretical framework that examines the main obstacles to entrepreneurship in Africa's LDCs. The paper posits that given the persistent frictions in product and labor markets as well as skill shortages that characterize these economies, development of productive entrepreneurship cannot be left to markets alone. The policy analysis suggests that the state has an important role to play. Well-targeted government interventions including training of potential entrepreneurs and workers can help to establish more modern and highly productive SME clusters that Africa's LDCs need. [ABSTRACT FROM AUTHOR]

The costs of accessing and using a port/export hub should be high on the list of priorities for export promotion agencies in Africa. This conclusion emanates from this paper focusing on the geographical location of manufacturing export industries in South Africa. Here manufacturing export firms tend to be spatially concentrated with about 84 per cent of total manufacturing exports produced in only 6 per cent of magisterial districts. Distance from an export hub is negatively related to the density of manufactured exports. The largest volumes of manufactured exports are generated within 100 km of an export hub. For electronics, about 98 per cent of manufacturing takes place within 100 km of an export hub. Comparison over time showed that the number of locations from which manufacturing exports occur increased by 15 per cent over 1996–2004 and that manufacturing exports increased in the band between 200 and 400 km from the nearest hub. [ABSTRACT FROM AUTHOR]

This paper proposes an empirical study of the links between poor governance, weak institutions and the growth of per capita income in the countries that belong to the Economic Community of West African States (ECOWAS). We estimate a conditional beta-convergence model using panel data. We find that variables such as the rule of law, property rights, the regulatory burden, political violence, and government ineffectiveness hinder growth in these countries. An interesting question is then the following: what can the countries do to improve their situations? To answer this question, we give several examples (Ghana, Nigeria and the NEPAD) of measures that are undertaken in order to strengthen the institutions and improve governance. [ABSTRACT FROM AUTHOR]

International remittances flowing into developing countries are attracting increasing attention because of their rising volume and their impact on recipient countries. This paper uses a panel data set on poverty and international remittances for African countries to examine the impact of international remittances on poverty reduction in 33 African countries over the period 1990–2005. We find that international remittances—defined as the share of remittances in country GDP—reduce the level, depth, and severity of poverty in Africa. But the size of the poverty reduction depends on how poverty is being measured. After instrumenting for the possible endogeneity of international remittances, we find that a 10 percent increase in official international remittances as a share of GDP leads to a 2.9 percent decline in the poverty headcount or the share of people living in poverty. Also, the more sensitive poverty measures—the poverty gap (poverty depth) and squared poverty gap (poverty severity)—suggest that international remittances will have a similar impact on poverty reduction. The point estimates for the poverty gap and squared poverty gap suggest that a 10 percent increase in the share of international remittances will lead to a 2.9 percent and 2.8 percent decline, respectively, in the depth and severity of poverty in African countries. Regardless of the measure of poverty used as the dependent variable, income inequality (Gini index) has a positive and significant coefficient, indicating that greater inequality is associated with higher poverty in African countries, much in conformity with the literature. Similar results were obtained for trade openness. In the same vein, per capita income has a negative and significant effect on each measure of poverty used in the study. Our results also show that inflation rates positively and significantly affect poverty incidence, depth and severity in Africa. In all three poverty measures, the dummy variable for sub-Saharan Africa is strongly positive, and strongly negative for North Africa. The policy implications of these results are discussed. [ABSTRACT FROM AUTHOR]

From marginal access to school before 1960, African modern education systems expanded steadily during the 1960s and 1970s, prompted by high priority given to education. The 1980s experienced stagnation and decline due to a drastic decrease in education financing further to the balance of payment and budget deficits, and the ensuing structural adjustment programmes. Since 1990, there have been intensified efforts to reverse the trend through national and international efforts. The African education sector continues to face serious challenges of low and inequitable access to education, irrelevant curriculum and poor learning outcomes, inadequate political commitment and financing, weak education system capacity, and weak link with the world of work. Drawing on relevant documents and data, the paper discusses briefly those challenges and the education policy measures taken to address them. It also assesses to what extent the Bank response was relevant and effective in addressing the African education challenges. While progress has been made in bringing more children to schools, the results in terms of quantity and quality have been far from the targets, particularly in sub-Saharan Africa. The paper concludes with a call for a greater effort to keep the promise for education for all and for quality education. This may require an invitation for a new forum on education to take stock and try again more realistic policies and better defined means to effectively implement them. The forum's resolutions should not be limited to the primary education but consider the education sector as a whole in the context of a globalized economy and labor market. [ABSTRACT FROM AUTHOR]

Copyright of African Development Review / Revue Africaine de Développement is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of African Development Review / Revue Africaine de Développement is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper provides econometric evidence linking African countries’ per capita total as well as government health expenditures and per capita income to two health outcomes: infant mortality and under-five mortality. This relationship is examined using data from 47 African countries between 1999 and 2004. Health expenditures have a statistically significant negative effect on infant and under-five mortality rates. The magnitude of our elasticity estimates are in consonance to those reported in the literature. For African countries, our results imply that total health expenditures (as well as the public component) are certainly important contributors to health outcomes. In addition, we find that both infant and under-five mortality are positively and significantly associated with sub-Saharan Africa. The reverse is true for North Africa. While ethnolinguistic fractionalization and HIV prevalence positively and significantly affect the health outcomes, higher numbers of physicians and female literacy significantly reduce these health outcomes. These results have important implications for attaining the targets envisioned by the Millennium Development Goals. The data implications are also discussed. [ABSTRACT FROM AUTHOR]