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Analysing the Relationship between Innovation and Productivity: A Case Study of Senegalese Manufacturing Industries
(African Economic Research Consortium, 2024-05-13) Kane, Aboubacry
The objective of this study was to profile innovative companies and to examine the link between innovation and productivity in manufacturing firms in Senegal. It took into account the interaction between various forms of innovation. Using a descriptive analysis of variance (ANOVA) approach and multivariate regression, the study found that although Senegal had a satisfactory level of technology adoption, an innovation deficit remained in the industrial sector, notably in research and development (R&D) activities. The study established that larger enterprises and firms that export their products are the most innovative. However, no significant relationship was found between the gender of the manager of the firm and the adoption of various forms of innovation. Furthermore, our results demonstrate that the choice to adopt innovation in an organization is positively related to improved labour productivity. In regard to the other types of innovation, no association was found. Our results suggest the need to develop strategies that integrate innovation in industrial policy in order to facilitate its adoption. They also suggest the need to undertake regular surveys of innovation in firms so as to better understand market trends, identify their strengths and weaknesses and facilitate decision making in terms of innovation.
Do Natural Resource Endowments Affect Export Diversification in Africa? A Cross-Country Analysis
(African Economic Research Consortium, 2024-04-30) Niass, Dieynaba
This paper aims to analyse the effect of natural resources on the supply portfolio of African exports. Based on COMTRADE data on export products from 2000–2015, a methodological approach is applied using two standard measurement trade diversification indicators: active line counting and the standardised Herfindahl Hirschman index. These indicators are then linked to the status of resource-rich countries (and other controls) in a fixed-effects panel data model. The results of this paper suggest that the presence of oil resources (non-renewable resources) hurts diversification, essentially through the channel of degradation of institutions. Similarly, agricultural products (renewable resources) negatively affect African export diversification (count and index) through the exchange rate channel. This shows the need for Africa to strengthen the quality of institutions by fighting against corruption through transparency in the exploitation and export of natural resources, and through proper management. In addition, African countries must ensure the stability of monetary policies so that a depreciation of the exchange rate can be to their advantage.
Gendered Analysis of Households’ Uptake of Agricultural Technology, Production and Food Consumption in Rural Nigeria
(African Economic Research Consortium , 2024-04-29) Atata, Scholastica Ngozi; Voufo, Belmondo Tanankem; Efobi, Uchenna; Orkoh, Emmanuel
The literature suggests marked gender inequality in the use of agricultural technology despite the availability of evidence that women could be as productive as men when given equal access to agricultural resources. This underscores an urgent need to consider improving women’s access to agricultural technology to ensure the sustainable provision of food for all people, and particularly those in developing countries. This study addresses two specific objectives. It: (a) examines gender differences in households’ use of farm-level technology (herbicides, pesticides and inorganic fertilizer); and (b) assesses the impact of the uptake of agricultural technology on farm production and food consumption, paying particular attention to the gender of the household head. The results of a three-stage least squares (3SLS) regression reveal that households’ uptake of agricultural technology has a significant positive effect on their dietary diversity and food consumption expenditure per capita due to increased farm production. While these results are consistent regardless of the gender of the household head, the extent of effects for female-headed households is almost double that for male-headed households. Therefore, an essential policy implication of our result is that the government could use input subsidies to address some of the gender gaps with regard to agricultural technology access and use. Such efforts should address any entrenched inequalities in women’s access to agricultural production resources and consider other socioeconomic factors such as education and landholding, which contribute to gender inequality in agricultural technology uptake.
Maternal Education, Domestic Violence and Childhood Malaria in the Democratic Republic of the Congo
(African Economic Research Consortium, 2024-04-29) Baroki, Robert Luanda; Mariam, Anastasie Bulumba
This study investigates the effect of maternal human capital and domestic violence perception on child malaria in the Democratic Republic of the Congo (DRC), one of the countries with the highest malaria prevalence in the world. Second only to Nigeria, the DRC recorded the highest number of malaria victims in the world in 2022, representing 12% of global malaria deaths. Malaria is the main cause of child mortality and morbidity in the DRC, with nearly 30% of children below the age of five testing positive, as reported in the latest UNICEF survey. These statistics contrast with the widespread use of insecticide-treated bed nets and excellent knowledge of the modes of malaria transmission in the country. Therefore, this study explores other potential determining factors for malaria, particularly maternal education and attitude toward domestic violence, a measure of empowerment, in order to inform policy measures to combat the disease. The study also analyses anaemia as a malaria-related outcome, in an effort to comprehensively assess the effect of the proposed control factors on the malaria burden, as recommended by the World Health Organization. Using a logistic model based on Rosenzweig and Schultz’s framework and the 2013–2014 DRC Demographic and Health Survey, it is found that maternal education significantly and positively affect child malaria while female empowerment has positive and significant effects on anaemia. Cluster’s altitude, father’s education and mother’s age are other significant predictors of child malaria and anaemia.
Order Flow-Based Microstructure Analysis of the Spot Exchange Rate in Zambia
(African Economic Research Consortium, 2024-05-13) Phiri, Sydney Chauwa; Chisha, Keegan; Chipili, Jonathan M.
Traditional macroeconomic fundamentals have challenges in explaining nominal exchange rate movements at short horizons partly due to their inability to capture expectations. Using data from the Bank of Zambia, and an order flow-based microstructure model within a vector autoregressive (VAR) framework, this study establishes that order flows in the foreign exchange market in Zambia contain useful information in explaining daily exchange rate movements for the period 2016‒2020. Daily order flows of four out of 18 different customer types are found to contain information content with the interbank, manufacturing, households, as well as wholesale and retail being the most important. Cross-market order flows contain less information to explain daily movements in the kwacha/US dollar exchange rate. The policy lesson from the empirical results points to the central bank paying attention to the demand requirements by the four identified segments of the foreign exchange market that can potentially drive up the exchange rate and generate inflationary pressures.
Sudanese External Debt: Sustainability Analysis and Prospects for Solutions
(African Economic Research Consortium, 2024-05-06) Hag, Mohammed Gebrail
This study aims to analyse Sudan’s debt sustainability and suggests practical solutions for its external debt crisis. To this end, the study applies descriptive statistics methods to secondary data. The empirical results of a debt sustainability analysis point out that Sudan remains in debt distress as all its external debt burden ratios remain well above their respective indicative thresholds. Consequently, this study introduces three scenarios for solving the Sudanese debt crisis. The first is full or partial debt relief through the Heavily Indebted Poor Countries (HIPC) Initiative. The second scenario is repaying all external debt through the establishment of a so-called “oil revenue fund” to serve Sudanese external debt in collaboration with South Sudan. The study also suggests debt division between Sudan and South Sudan as a last resort. The study shows that Sudan faces an external debt burden ranging from US$7.96 billion (financial capacity weighted) to US$31.6 billion (geographical method weighted). By comparison, South Sudan’s debt burden ranges between US$8.2 billion (geographical method weighted) and US$31.84 billion (financial capacity weighted). Additionally, the study suggests that each country bears an additional US$4.2 billion as their share of the interest accumulation of the debt stock upon the separation of South Sudan, which amounted to US$39.8 billion. Several policy implications emerge from the study that could help policy makers in the two countries, and key creditors, be more strategic in addressing the issue in a way that accommodates common interests.
Technical Efficiency in the Services Sector of selected Sub-Saharan African Countries
(African Economic Research Consortium, 2024-04-29) Macharia, Kenneth Kigundu
While the service sector is increasingly playing a bigger role in the structural transformation of developing countries, the sector’s level of technical efficiency remains understudied. This study analyses the level of technical efficiency in the service sector of selected sub-Saharan African countries and identifies covariates of this technical efficiency. Data are from the 2013 World Bank Enterprise survey for six countries, namely Kenya, Uganda, Tanzania, Ghana, Zambia and the Democratic Republic of the Congo. The estimation is performed by a two-stage bootstrap data envelopment analysis approach at the country and sub-sector levels. The sub-sectors of interest are retail, wholesale, hotel and restaurant, transport, motor vehicle services and IT. The findings show substantial opportunity to enhance technical efficiency in the selected sub-Saharan Africa service firms. The nature of the opportunity varies across countries and sub-sectors. Firm size, export, firm age, research and development, training, female firm ownership and top manager’s experience have an influence on technical efficiency but this influence varies across countries. In general, the findings imply that there is a need to provide an enabling environment that allows the growth of service firms given that large service firms are more technically efficient compared to small firms.
The Distributional Impacts of Public Expenditure in Ethiopia: A Gender-Lens Analysis
(African Economic Research Consortium, 2024-05-06) Tesfaye, Wondimagegn
This study investigates the gendered distributional impacts of public expenditure policy using survey and administrative data from Ethiopia. It specifically assesses the progressivity and pro-poorness and poverty, and inequality impact of cash and in-kind transfers, through a gender-lens analysis. The study employs an expenditure incidence analysis approach based on the Commitment to Equity (CEQ) methodology to determine whether government expenditures redistribute resources to the poor. The findings of the study provide evidence that government social spending has significant welfare impacts, although some of the social services are poorly targeted. Among the public spending instruments studied, primary education spending and productive safety net programme (PSNP) transfers tend to be the most progressive, and tertiary education spending appears to be the least progressive. The benefits associated with public health spending are also less progressive. The results have important policy implications for public spending policy reforms, poverty reduction and income redistribution.

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