AERC Working Paper Series 2025

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Economic Impact Analysis of Morocco’s Integration to Ecowas
(AERC, 2025) Dodo, Akakpo Ayebiogbon
This study assesses imports, customs revenue, and welfare effects in ECOWAS countries following a free trade agreement with Morocco. Trade agreements are expected to increase the share of Moroccan trading to the detriment of ECOWAS producers and simultaneously lead to a drop in supply through regional production and the slowdown in regional integration. To avoid regional disintegration, ECOWAS countries should monitor sensitive products with the private sector, adapt trade policies favorable to the competitiveness of sectors of the economy with high production capacities, build the capacity of actors to be able to exploit market opportunities and encourage local consumption. The study highlighted a decline in customs revenue in ECOWAS. These negative effects on customs tariffs could set back the process of Morocco's integration into ECOWAS. Welfare losses, due to the large diversion effects generated by trade agreements, would likely be significant for consumers.
Reform of the Payroll System and “Intra-civil Servant’s Corruption": Evidence from Democratic Republic of Congo
(AERC, 2025) Cha’ngom, Narcisse; Tchoupé, Christelle
This paper provides an in-depth analysis of the impact of payroll system reform on the likelihood that a civil servant (state agent) will experience intra-civil service corruption in the Democratic Republic of Congo (DRC). As part of a broader Public Administration Reform and Rejuvenation Project (PARRP) launched in 2011, a direct payroll system was introduced, replacing the previous practice of civil servants receiving their salaries in cash, by hand, from superiors or accountants, a process prone to various forms of abuse. Using a comprehensive and representative dataset obtained through the PARRP project, we first document a significant prevalence of corruption within the civil service in the pre-reform/pre-compliance period, with approximately 36% of civil servants reporting incidents of pay-related misconduct. Using access to financial services across provinces as a source of exogenous variation, we find that the reform reduced the probability of experiencing any form of pay-related misconduct by more than a third. Moreover, this deterrent effect is stronger in sectors characterized by an initially high prevalence of wage misconduct, where compliance with the reform led to a reduction in the probability of being a victim of wage misconduct of around 51%. These findings underscore the critical importance of considering corruption within the civil service when designing anti-corruption policies. This dimension has been largely neglected in existing policies, which have focused primarily on tackling corruption between state actors and public service users.
Decentralization and Household Prosperity in Cameroon
(AERC, 2025) Fozao, Pascaline Njungoh
Relating to the view that centralized governments are likely to be less sensitive to the needs of the local population than decentralized ones, we set out to investigate the impact of the 2010 decentralization on real total expenditures per adult equivalent – a proxy for household economic well-being (HEW). To do this, appeal is made to the pseudo-panel fixed effect model, with the panel constructed using age cohorts from the two most recent Cameroon household consumption surveys, and the unconditional quantile regression model of Firpo et al. (2009). Specifically, we report fixed effects regressions, correcting standard errors for within-prefecture and age-cohort correlations using the Jackknife estimator, at the mean, across colonial experiences, and the unconditional distribution. Results show that the adjusted exposure to the 2010 decentralization was associated significantly with improvements in household economic well-being (HEW) – in the order of 0.274 log points and 0.247 log points in the full and the labor force samples, respectively. A significant and positive responsiveness of HEW to decentralization is also recorded across expenditure percentiles, and the magnitude increases monotonically from the 10th to the 90th percentiles, except the dent seen among the median households. These results are, in essence, robust across samples (labor force, civil law, and common law samples), at the mean and across the distribution of real total expenditures per adult equivalent. More interestingly, the weighted exposure to the 2010 decentralization is more strongly associated with household economic well-being than the unweighted exposure. These findings are transmitted, at least in part, through improved social service delivery and associated labor market opportunities and these channels have important implications for alleviating poverty and curbing rural-urban migration in Cameroon and elsewhere in Africa.
Women’s Access to Land and Children’s Nutritional Outcomes in Rural Burkina Faso
(AERC, 2025) Kponou, Monsoi Kenneth Colombiano; Nikiema, Pouirkèta Rita
Across developing countries, women play an important role both as producers of major food crops and in improving household nutrition. This research uses data from the country's first Living Standards Measurement Survey to assess the effect of enhancing women’s empowerment on the nutritional outcomes of children in rural Burkina Faso. The results revealed a low baseline level of women’s empowerment in rural areas, but empowerment was positively correlated with children’s nutritional outcomes. This result regarding empowerment warrants further investigation into the components that most significantly affect children’s nutritional status. In this regard, access to land has been identified as a crucial factor in women’s empowerment. To leverage land access, we analyze its effect on children’s nutritional outcomes. Our results suggest that access to land is positively correlated with long-term nutritional status. The study suggests that improving women’s access to land will translate into significant gains in children’s nutritional outcomes in rural households.
How do South-South Integrations Affect Trade in Processed Goods? Evidence for Sub-Saharan African Countries
(AERC, 2025) Bayala, Dago Yves Steve
We examine the effects of regional integrations on processed goods exports for sub-Saharan African countries from 1990 to 2018. We use a structural gravity model estimated via a Poisson and Bernoulli pseudo maximum likelihood estimators to assess respectively the effects on intensive margins (increase in the value of existing trade) and extensive margins (increase in the number of export products). The results show that integrations in sub-Saharan Africa positively affect trade margins (intensive and extensive) for processed goods, and mainly at the extensive margins. We also find that the effects are more pronounced between countries with similar standards of living. Finally, we show that integrations in sub-Saharan Africa contribute to increased trade in intermediate goods and confirm at a sectorial level that intermediate inputs liberalization contribute significatively to industrialization of sub-Saharan African integrations. These results may have important implications for the establishment of the African Free Trade Area.
Financial Inclusion, Climate-Related Shocks, and Food Security in Ethiopia
(AERC, 2025) Shifa, Muna; Nanziri, Lwanga Elizabeth
In this study, we examine the impact of climate-related shocks on the food security status of households in rural Ethiopia and whether access to financial services can mitigate the adverse consequences of climate related shocks. We use panel data from the Ethiopian Socioeconomic Survey. Climate-related shocks are measured using self-reported shocks, as well as satellite-based weather data. To minimise endogeneity concerns in our regression analysis, we use a panel data correlated random effects (CRE) approach and an estimation approach, which combines a control function approach with the CRE approach. We show evidence of the negative and statistically significant impact of climate-related shocks on food security, meaning that households who have experienced climate-related shocks are more likely to report food insecurity. The findings also show that households that can save money, whether through formal or informal means, are less likely to experience food insecurity. In addition, we show that formal saving helps households reduce the negative impact of climate-related shocks on food security in rural Ethiopia.
Cereal Trade and Food Security: Empirical Evidence for Sub-Saharan African Countries
(AERC, 2025) Zahonogo, Windbeneti Arnaud
Sustainable Development Goal 2 (SDG2) aims to end world hunger, but Africa is currently not on track to meet this goal. Sub-Saharan Africa is particularly affected, with a significant increase in undernourished people. The issue of food security is, therefore, a pressing concern, and promoting trade has been suggested as one solution. This study examines the impact of cereal import openness on the prevalence of undernourishment in 27 Sub-Saharan African countries for the period 2000 - 2020. Using a two-stage least square instrumental variable (2SLS-IV) estimator, we find that greater cereal import openness is significantly associated with higher levels of undernourishment in sub-Saharan Africa and then increased food insecurity. Our results are robust to alternative food security indicators.
Exploring the Impact of Climate Smart Innovations on Household Food Security in Ethiopia
(AERC, 2025) Bedeke, Sisay Belay
Agro-food systems in Sub-Saharan Africa are frequently hampered by climate change as most farmers rely heavily on a climate-sensitive rainfed system. To improve agricultural production and achieve food security while building resilience to climate risks, the promotion of Climate Smart Innovations (CSIs) such as crop choice and conservation tillage in combination with irrigation use is critically required. Although there is extensive literature in Ethiopia on the drivers of CSI adoption, there are mixed findings on the single and joint CSI adoption impacts on household food security. To this end, this study examines factors influencing a single and joint adoption of CSI and how this adoption impacts household food security in Ethiopia. Data on social, biophysical, and economic factors, institutional support systems, CSI adoption, and food security were obtained from a panel Ethiopian Socio-economic Survey (ESS) data, a nationally representative survey, covering three waves (2013/2014, 2015/2016, and 2018/2019). Descriptive statistics such as mean and percentages as well as an endogenous switching regression model were applied to estimate the effect of a single and joint CSI adoption on household food security while at the same time accounting for endogeneity problems. Findings indicate that a single and joint CSI adoption has positive effects on HFCS, but negative effects on the HFIAS and CCSI. Results reveal that a single CSI adoption has positive and significant gains over the joint CSI adoption in terms of HFCS. This is supported by the positive and significant gains for the single adoption of crop choice only and irrigation use only compared to the gains obtained from the joint adoption of crop choice, conservation tillage, and irrigation practices. Hence, the results do not support the notion that the joint adoption of large complementary CSI often results in higher gains in food security. Based on these results, it was concluded that improvement in food security is not only driven by the type and number of CSIs jointly adopted but rather depends on several policy-relevant variables including access to credit services and access to weather information, and membership status in farmer/women organizations. This suggests that greater support in terms of improving access to credit and weather information should be in place for CSI non-adopters to reduce food insecurity.
Electricity Shortage and Productivity: Why Do Some Firms Thrive in a Poor Business Environment while others are Unable?
(AERC, 2025) Seukou, Yvette Djoha; Nourou, Mohammadou; Fokou, Carrel
Although the relationship between unreliable electric power costs and firm productivity has received considerable attention from researchers, few studies have asked why some firms succeed in an unreliable electric power environment while others are unable to. To achieve the study's purpose, the paper compares the World Bank Enterprise survey’s unbalanced panel data over two periods: 2006-2014 and 2008-2023. Additionally, it uses the "k-means clustering" algorithm to rank clusters of sub-Saharan African firms that share similar electricity shortages experience, adaptation strategies and productivity profiles. The multinomial probit model is used to determine the success factors of firms operating in an unfavorable environment, at firm and industry level over time. We find that there are three categories of firms operating under the constraints of power shortages: “heavily impacted firms”, partially impacted firms”, and “resilient firms”. Strong institutions reduce the probability of belonging to the group of firms that are “heavily impacted” by electricity shortages. In contrast, the probability of belonging to the “resilient” group of firms increases with gross domestic product. When we look at the influence of entrepreneurs' perception of certain obstacles in the business environment (electricity shortage and the informal sector) on cluster membership, we find that, for both grouped and period data, the perception of electricity shortage and the informal sector as a major obstacle in the business environment also explain cluster membership.
Effect of Landownership by Women on Household Food Security in Benin
(AERC, 2025) TOSSOU, Judith Urielle
Given the extent of food insecurity among rural women and gender inequalities linked to land rights, this research examines the effect of women's land ownership on household food security in Benin. The data comes from the Global Analysis of Vulnerability and Food Security survey (AGVSA, 2017). The propensity score matching (PSM) method and endogenous switching regression are applied to a sample of approximately 6502 households, of which 21% (1366) of agricultural households included female landowners. The results estimated using the (ESR) method and the (PSM) method reveal a positive and significant effect of women's land ownership on household food security. Following the ESR and PSM method; the results reveal that the factors that significantly influence women's land ownership are age, household size, agricultural empowerment index, access to credit, and levels of "primary" and "at least" education. less secondary” and the household’s housing status. Following the ESR method, the effect of transient heterogeneity is positive; which implies that the effect of land ownership on the food security index is significantly higher for women who have land than for those who do not. The potential effect of heterogeneity in the sample reveals that women who have land property would have a higher positive food security index than women who do not have it. The results indicate the very important role of land ownership by women in resolving food insecurity in rural Benin. Given our results and to improve the level of household food security in Africa and more precisely in Benin, political decision-makers will have to favor and encourage many women to acquire not only land but also large areas of land through applicable policies and reforms. Then, political decision-makers must also put in place communication systems to encourage more women's access to agricultural inputs and the practice of irrigation. Finally, decision-makers must increase access to credit for women.
Effects of Financial Inclusion on Tax Revenue Mobilization : Evidence from WAEMU Countries
(AERC, 2025) Chebochok, Milly Chepkorir; Bayale, Nimonka
Financial inclusion remains at the heart of government concerns. By creating favorable conditions for access to a diversified range of adapted financial products and services at affordable costs for the population, financial inclusion generates important opportunities that could lead to increased tax revenue mobilization. This paper analyzes the effects of financial inclusion on tax revenue mobilization, using panel data from West African Economic and Monetary Union (WAEMU) countries over the period 2006-2019. The findings suggest that financial inclusion positively and significantly influences the government's tax revenue. For example, an increase in one point of the financial inclusion index corresponds to an increase in total tax revenues by 0.63 points. Moreover, by looking at the effects of disaggregated financial inclusion dimensions (access, use, and affordability) on various components of tax revenue, we find that the estimated coefficients on the sub-components of financial inclusion are statistically significant. Results also indicate the magnitude of the effect of financial inclusion is higher on indirect taxes compared to direct tax revenues. This research recommends that policymakers should prioritize financial inclusion in their policies and development agenda through National Financial Inclusion Strategies (NFIS) because it can increase countries’ resource mobilization and help them build fiscal resilience.
The Role of Mobile Money on Household Food Security During Drought Shocks: An Evaluation of Key Pathways
(AERC, 2025) Abiona, Olukorede
This paper investigates the interaction between mobile money use and exposure to drought events among smallholder farmers in rural Tanzania. We examine the impact of drought on household food security for mobile money adopters relative to non-adopters. To investigate this pattern, we use household and agricultural datasets from the Tanzanian National Panel surveys (TNPS) between 2010 and 2020 in a difference-in-difference framework. Our findings demonstrate an added advantage of drought-mitigating strategies for adopter households by way of strategic farm inputs to improve yields as pathways. This paper contributes to the literature by building unique empirical evidence relating to innovative behaviours from mobile money adoption to support agricultural investment for sustainable household food security over a long-term period. Access to credits is revealed as the channel of transmission.
The Effect of Mobile Money on Financial Inclusion in Mozambique
(AERC, 2025) Ponguane, Sérgio
Financial inclusion is widely considered an important tool to ensure sustainable economic growth and alleviate poverty and inequality. However, financial inclusion in Mozambique is low compared to other African countries. The revolution of ICT and financial technologies, including mobile money is a breakthrough in financial inclusion. This study aimed to analyse the effect of mobile money on financial inclusion in Mozambique using the 2021 Global Findex data. Treatment Effect Model and Propensity Score Matching techniques were used to address the research questions. Findings suggest that mobile money positively affects savings and borrowing. However, the determinants of mobile money adoption and barriers are similar to those of conventional banking. This means that mobile money is more likely to benefit individuals who are already financially included. Therefore, inclusive financial strategies will require that access points expansion is combined with initiatives that improve household income and financial literacy.

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