Commerce

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    Financial Inclusion and Entrepreneurship in Six Sub Saharan African Countries: Evidence from FinAccess and FinScope Survey Data
    (African Economic Research Consortium, 2023-06) GAKPA, Lewis-Landry
    This paper investigates how financial inclusion affects individuals’ decisions to start businesses in the context of six Sub-Saharan African countries, using micro-data from the FinScope and FinAccess surveys. To do so, we use an instrumental variable (IV) technique to assess the empirical relationships. Overall, the results reveal that access to banking services, formal non-banking services, informal financial services and mobile money services positively and significantly influence the decision to start businesses in the six countries, namely Kenya, Rwanda, Tanzania, Uganda, Namibia and Zambia. Furthermore, although the results show that a range of both demand and supply-side barriers prevent individuals from accessing banking services for entrepreneurial purposes, supply-side constraints are the most common barriers to individuals starting a business. In view of the above, policy interventions should first aim at creating an enabling environment to increase people’s access to all types of financial services and, secondly, address both supply- and demand-side constraints to promote entrepreneurship and economic growth. These measures should be aimed at increasing the level of financial inclusion with a view to stimulating entrepreneurial activities, which are the real pillars in development and poverty reduction process in Sub-Saharan African countries.
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    The Impact of Cross-country Heterogeneity on Consumer Energy Efficiency: Evidence from a Panel of African Countries
    (AERC, 2021-04-19) Adetutu, Morakinyo; Ajayi, Victor A.
    Considering the widespread depletion of global energy resources, the efficient use of energy is required to guarantee energy access and reduce energy poverty. To this end, this study investigates the level of residential energy efficiency for 17 African countries during the period 1980-2011. Using the parametric stochastic frontier analysis (SFA), we estimated residential energy demand and energy efficiency. Further, we modelled the impact of cross-country heterogeneity on the level of energy use efficiency. Results indicate an average efficiency level of 70%, implying modest levels of residential energy efficiency across our sampled countries. Moreover, we observed that crosscountry variation in energy efficiency levels is influenced by national characteristics. Based on our results, we argue that energy policies should be conditional on countryspecific factors and considerations.
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    Poverty, inequality and welfare effects of trade liberalization in Côte d'Ivoire: A computable general equilibrium model analysis
    (AERC, 2006-10-01) Bédia F. Aka
    This paper attempts to quantify the effects of removing trade taxes and instituting some necessary fiscal reform on poverty and income distribution in Côte d’Ivoire. It first analyses income distribution for various homogenous socioeconomic groups using an absolute poverty line based on the constant basic needs approach. Next it simulates and analyses in a computable general equilibrium (CGE) model the impact on poverty, inequality and welfare of the elimination of taxes on agricultural exports and imports combined with a change in the domestic tax rate. The results show that poverty increases for all households, but depending on the simulations the situation is diversified among socioeconomic groups. Liberalizing trade by removing tax on exports leads to an increase in domestic prices of agricultural and industrial goods, resulting in an increase in the consumer price index and a decrease in households’ disposable income and thus in their consumption. Public employees are identified as the most affected by poverty following trade tax reform
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    Import Demand in Ghana: Structure, Behaviour and Stability
    (AERC, 2011-01) Harvey, Simon; Sedegah, Kordzo
    This study analyses the structure of, and model demand for imports into Ghana using time series data from 1967 to 2004. Also, it assesses the long-run and short-run elasticities of aggregate imports and their components, and determines whether the import demand function has shifted during the period under consideration as a result of trade liberalization. Cointegration and error correction models are used to estimate parsimonious models for aggregate imports and three other categories. The results indicate that domestic income, foreign exchange reserves and trade liberalization all play significant roles both in the short-run and long-run import demand levels in Ghana. We also find that there is general parameter stability in the import demand functions over the study period. Therefore, trade policy authorities who aim at reducing imports to correct balance-of-payments imbalances in the long run should focus their efforts on policies that will increase the per capita income at the macroeconomic level and implement policies that will ensure an even distribution of per capita income to reduce poverty.
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    Trade Liberalization Financing and its Impact on Poverty and Income Distribution in Ghana
    (AERC, 2011-01) Bhasin, Vijay K.
    Ghana has adopted a Growth and Poverty Reduction Strategy that emphasizes increased focus on poverty reduction in the design and implementation of its policies. This study uses a CGE model, social accounting matrix and data from the 1999 Ghana Living Standards Survey 4 to examine the impact of unilateral partial trade liberalization both in isolation and combined with foreign capital inflows and value-added tax on the poverty and income distributions of various categories of households. Those included were agricultural households, public sector employees, private sector employees, nonfarm self-employed workers and non-working persons. The study found that eliminating trade-related import and export tariffs on agricultural goods and import tariffs on industrial goods in isolation, combined with foreign capital inflows and combined with VAT reduces the incidence, depth and severity of poverty of all categories of households, with the exception of the incidence of poverty of public sector employees and the non-working group when import tariffs on industrial goods are eliminated in isolation. On the other hand, elimination of trade-related export tariffs on industrial goods in isolation and combined with foreign capital inflows increases the incidence, depth and severity of poverty of all categories of households, with the exception of the incidence of poverty of the non-working group. Moreover, elimination of trade-related export tariffs on industrial goods combined with VAT reduces the incidence, depth and severity of poverty of all categories of households. Income distributions of the private sector employees and the non-working group were found to improve to a larger extent when trade liberalization in isolation is considered. For agricultural households, on the other hand, the income distribution improves to a larger extent when trade liberalization is combined with foreign capital inflows and VAT. Results also indicate that financing of unilateral partial sector-wise trade liberalization through domestic resources (VAT) could have a greater impact on poverty alleviation and improvement in the income distributions of households than the foreign resources (foreign capital inflows).