2. Research Papers

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Access to Credit and Household Welfare in Rural Rwanda
(AERC, 2025) Musabanganji, Edouard
Rwanda is a densely populated developing country where many people depend on agriculture but lack access to credit. The country has low agricultural productivity, along with high levels of income inequality and food insecurity. Studies have shown that credit access can improve rural agricultural household welfare. Over the years, the government’s policies have substantially improved financial inclusion. However, poverty levels remain high particularly in rural areas. This study investigates the drivers of participation in the credit market and the effect of credit access on dietary and food diversity scores, as well as household spending. It utilizes data from 6,183 rural households obtained from the 2015 National Comprehensive Food Security and Vulnerability Analysis survey. It analyzes the effect and drivers of access to credit on rural household total monthly expenditure, food consumption score and dietary diversity score as the outcome variables. The study applied the Endogenous Switching Regression, Propensity Score Matching, and Coarsened Exact Matching techniques. The estimation yields consistent results and reveals that access to credit is positively affecting the welfare of rural households as it induces an increase of the household consumption expenditure of borrowing households. The study does not reveal a significant linkage between access to credit and the household food consumption score. The findings suggest increasingsensitization sessions and awareness on the importance of credits.
Access to Credit for the Small and Medium-Sized Enterprises in Senegal
(African Economic Research Consortium, 2021-10-27) Mouhamed, Abdoulaye Seck
While they represent more than 80% of Senegal’s industrial fabric, and against a backdrop of excess bank liquidity, only less than 18% of small- and medium-sized enterprises (SMEs) in the country have access to credit. This study sets out to identify the causes of their difficulty in accessing credit. The study is based on data from the World Bank’s Enterprise Survey for Senegal, and it uses a methodological approach based on logistic regression to identify the determinants of access to credit for SMEs. It found that having annual financial statements audited, being an innovating SME, being an exporting SME, having a high sales turnover, having fixed assets, and having a manager with long experience were the most important factors. The study also found that enterprises in the formal sector and those owned by women were more likely to have access to credit
Accounting for the Gender Gap in Urban Youth Unemployment in Africa: Evidence from Kenya
(AERC, 2021-04-19) Kamau, Paul; Wamuthenya, Wambui R.
Using a decomposition framework and Kenyan data from 1986, 1998 and 2005, this study analyzes the factors associated with the likelihood of unemployment among the urban youth labour force and the disproportionately higher vulnerability to unemployment among female youth compared to male youth. Overall, the results indicate that household-headship, training, marital status and being male as opposed to being female are significantly correlated with the likelihood of being unemployed. Level of formal education appears less important while experience appears to be more important for female youth. After controlling for potential endogeneity of training results indicate that access to training/skills could help to diminish overall youth unemployment by about 58% and by 53% and 51% for females and males, respectively. The decomposition analysis indicates that the observed gender gaps in youth unemployment are largely explained by differences in average characteristics between female and male youth. Householdheadship exerts the most positive effect in widening the differential. Over time, the combined positive effect of human capital variables declines sharply, thus narrowing the gap. Marital status increasingly limits young women from being employed, thus widening the gap. Overall, the analysis provides limited justification for employment discrimination in the youth labour market along gender lines.
Adjustment programmes and agricultural incentives in Sudan: A comparative study
(African Economic Research consortium, 1997-03-04) Elamin, Nasredin A. Hag; El Mak, Elsheikh M.
This study analyses the impact on agricultural price incentives of the main adjustment programmes implemented by the Sudanese government during the period 1978-1993, notably the Economic Recovery Programme (ECRP) 1978-1985 and the national economic Salvation programme (NESP), 1990-93. The study addresses two basic questions: Did these programmes provide any tangible incentives to agriculture? And are improved price incentives an efficient and sufficient condition for increasing aggregate agricultural output? The effects of the programmes on the level and stability of price incentives were measured, both at the sectoral (direct) and economywide (indirect) levels. The results indicate that both programmes failed to improve either the level or the stability of real farm prices. Poor macroeconomic policies appear to be the main cause. With regard to the efficacy of price incentives in stimulating aggregate agricultural output, the findings tend to confirm the predominant view that increases in real farm prices have positive but limited overall effect on agriculture. Non-price factors appear to play a greater role in determining aggregate agricultural output. The analysis implies that without the provision of adequate credit, public investments and improvement in infrastructure, the aggregate response of agriculture to price incentives would be minimal.
Adoption and Impact of ICT on Labour Productivity in Africa: Evidence from Cross-Country Firm-Level Data
(African Economic Research Consortium, 2021-07-22) Vaumi, Achille Tefong; Leudjou, Roland; Faha, Chistophe Péguy Choub
This paper uses a large cross-country firm-level database that contains information of about 6,300 firms from 19 sub-Saharan Africa (SSA) countries, collected by the United Nations Industrial Development Organization (UNIDO) in 2010 and 2011, to assess the determinants of adoption and use of Information and Communication Technologies (ICT) in SSA firms, while controlling for the problem of censoring that would exist in the modelling of ICT-capital adoption choice. The gain obtained from the adoption of ICT-capital investment has been examined by estimating the impact of ICT-capital on labour productivity in adopters’ firms, while considering the role of Organizational Changes (OC). Compared to the Cobb-Douglas production function the Translog production function has been tested to be more adequate with our data. Unlike previous work on the estimation of a production function, and given the simultaneity between labour productivity and ICT-capital investments, the Instrumental Variables (IV) method, has been used to address this endogeneity problem. The descriptive analysis shows that East African firms, on average, adopt ICT-capital more than other Africans countries, while Southern African firms, on average, use ICT-capital more intensively than other sub-regions. Finally, we find that income, wages and firms’ size are significant determinants of ICT-capital adoption. Moreover, the study reveals that the impact of ICT-capital intensity on labour productivity in SSA countries is positive and statistically significant in the presence of OC, which is robust to several different specification tests
Adoption of Information and Communications Technology (ICT) in Industrial Firms in Cameroon
(African Economic Research Consortium, 2021-10-04) Fambeu, Ariel Herbert
The ICT revolution is already a reality for firms in developed countries and in many developing ones, especially that there is now solid evidence of how it has improved productivity and growth. But at the same time, the ICT penetration rate is still low in African firms. Using data on industrial firms in Cameroon, the present study is an attempt to establish the determinants of ICT adoption in the country. It uses a negative binomial model and a probit model selection bias correction. It transpires from the study’s econometric results that the size of the firm, the human capital of its employees, the proportion of its employees who are ICT-literate, its organizational practices, its manager’s qualities and its regional location are the determinants of its ICT adoption rate. However, their discriminatory effect diminishes over time. From the study’s results, lessons can be drawn that can guide the development of an ICT diffusion policy, not only for the firms in Cameroon, but also for those in other similar African countries with a slow rate of ICT diffusion.
Adoption of Innovations and Productivity of Enterprises in French-Speaking Sub-Saharan Africa: Case of Cameroon, Senegal and Ivory Coast
(African Economic Research Consortium, 2021-10-04) Dumas, Tsambou André; Ludwick, Ndokang Esone; Olive, Nganguem Armelle; Aline, Zobo
The productivity of firms is the result of many factors, including their ability to innovate. For most authors, innovation can be diversified into product, process, organization and marketing innovation. The objective of this work is to highlight the impact of the adoption of innovations on firms’ productivity in Cameroon, Senegal and Ivory Coast. This work is based on the survey “Determinants of firms’ performance in Francophone Sub-Saharan Africa: The case of Cameroon, Ivory Coast and Senegal” conducted among 1,897 companies (639 in Cameroon, 723 in Senegal and 535 in Ivory Coast ) in 2014 by the International Development Research Centre (IDRC). This work uses a methodology consisting of two blocks of equations with a repeating structure. By estimating these equations using the bivariate probit and Double Least Squares (DLS) methods, the study finds that technological and non-technological innovations are complementary and have important effects on productivity of firms. This complementarity is proof that technological innovation contributes better to productivity when it is accompanied by non-technological innovation and vice versa. However, the introduction of new products (or services) accompanied by new methods of organization and marketing have a greater effect on the productivity of enterprises.
African Economic and Monetary Union (WAEMU)
(AERC, 2009-12-07) Sandrine Kablan
This paper measures the efficiency of WAEMU banks and its determining factors, after the banking system reforms from 1993 to 1996. Data envelopment analysis (DEA) was used for assessing technical efficiency and a stochastic frontier analysis (SFA) for cost efficiency. Results suggest similar evolutions for the two types of efficiency for all WAEMU countries except Côte d’Ivoire and Burkina Faso. A detailed analysis per banking shareholder’s equity group reveals that local private banks are the most efficient ones, followed by foreign and then state-owned banks. Despite the technological changes that occurred in the banking system, the Malmquist index shows that the increase of technical efficiency is much more a factor of scale efficiency change than of the incorporation of technological innovations. Lastly, WAEMU banks’ efficiency is sensitive to variables like financial soundness, the ratio of bad loans per country, the banking concentration and the GDP per capita.
Agricultural credit under economic liberalization and Islamization in Sudan
(African Economic Research consortium, 1998-02-05) Elhiraika, Adam B.; Ahmed, Sayed A.
This study uses survey data to examine the operations of the agrarian credit market, formal and informal, in Sudan under conditions of recent economic liberalization and Islamization; the latter does not allow interest rate fixing. In addition to descriptive analysis, the study specifies and estimates a model of farm household participation in the credit market. The survey results show a substantial increase in formal borrowing in agriculture, but relatively low informal credit. Implicit interest rates are found to be high in the formal segment compared with their previous levels, and the levels of formal and informal agrarian rates of interest are comparable. The research concludes that there is a need for enhanced institutional financial intermediation in the agrarian credit market as well as scope for the promotion of savings and credit associations among farmers.
Analysing Multidimensional Poverty in Guinea: A Fuzzy Set Approach
(AERC, 2012-12) Diallo, Fatoumata Lamarana
This study examines the multidimensional aspect of poverty in Guinea, taking into account both the monetary and non-monetary dimensions of poverty. We use data from the Full Base Survey on Poverty Assessment (FBSPA, 2002-2003). The methodology relies on the fuzzy set approach of Dagum and Costa (2004), which is supplemented by the decomposition methods of Mussard and Pi Alperin (2005). The main results that emerge are: i) the identification of the key variables associated with poverty; and ii) the identification of deprivation state according to selected attributes for different groups such as natural regions, administrative regions, area of residence, gender, religion and household size. The effect of attributes on the deprivation of each group and the global poverty index has also been tested.
Analysing Multidimensional Poverty in Guinea: A Fuzzy Set Approach
(AERC, 2020-04-27) Diallo, Fatoumata Lamarana
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.
Analysis of Bank Distress and Failure Predictability in Nigeria
(African Economic Research Consortium, 2021-08-01) Enebeli, Uzor Emeka Sunday; Ifelunini, Abanum Innocent
Analysis of Capital Flight from Burundi
(African Economic Research consortium, 2017-10-05) Ndoricimpa, Arcade
Burundi has reportedly lost resources amounting to 10.2% of gross domestic product to capital flight, on average, over the period 1985–2013. Given the episodes of political instability and poor governance that have characterized Burundi’s landscape in the past decades, an institutional analysis of capital flight is undertaken and some instances of embezzlement of public funds reviewed in this study. Data analysis of the main trends of capital flight is also undertaken. In addition, this study examines the drivers of capital flight from Burundi. The estimation results seem to be sensitive to the capital flight measurement used, but in general they suggest that external debt, political instability and wars, as well as exports, are the main drivers of capital flight from Burundi. To discourage capital flight, the findings of this study suggest that Burundi should promote peace and political stability. In addition, more responsibility, transparency and accountability are required from the Government of Burundi in managing external debt. Moreover, some actions are needed to reduce trade misinvoicing, which is a major channel of capital flight from Burundi.
Analysis of factors affecting the development of an emerging capital market: The case of the Ghana stock market
(The African Economic Research Consortium, 1998-03) Osei, Kofi A
The study looks at the institutional factors affecting the development of the Ghana stock market. Additionally, the study analyses the impact of the listing of Ashanti Goldfields corporation on the development of the Ghana stock market. The study establishes that the institutional factors particularly the legal and regulatory framework that ensure the protection and security of investors are in place, and that the call-over system of transactions is very transparent. The study also finds that the delivery and settlement of transactions are performed satisfactorily by brokers, however the introduction of a centralized clearing system would significantly improve upon the clearing and settlement procedures. The study further establishes that the entry into and exit from the GSE are without any significant restrictions. Analysis of the structure of the GSE shows among others that many of the local investors can be described as low income investors. A sizeable percentage has no formal education and the knowledge of local investors about the capital market is quite poor. Foreign investors have come from Europe, America, the Far East etc. With the exception of Nigeria, no foreign investors on the GSE have come from sub-Saharan Africa. Using the law of one price and the random walk test, the study establishes that the GSE is "weak-form" inefficient. Additionally, the study finds that the listing of AGC has had tremendous impact on the GSE in many ways including improving market liquidity and market turnover. The study recommends a campaign to educate the Ghanaian public about the activities of the GSE and to promote investment in general. There is need for the government to give fiscal incentives in the form of taxation in favour of listed companies, and to pursue prudent macroeconomic policies, particularly in the area of inflation management. A regular review of the legal and regulatory framework within which the investment laws operate is necessary to boost the confidence of investors.
Analysis of factors affecting the technical efficiency of arabica coffee producers in Cameroon
(The African Economic Research Consortium, 2007-01) Nchare, Amadou
This study analyses the factors influencing the technical efficiency of arabica coffee farmers in Cameroon. To carry out this analysis, a translog stochastic production frontier function, in which technical inefficiency effects are specified to be functions of socioeconomic variables, is estimated using the maximum-likelihood method. The data used were collected from a sample of 140 farmers during the 2004 crop year. The results obtained show some increasing returns to scale in coffee production. The mean technical efficiency index is estimated at 0.896, and 32% of the farmers surveyed have technical efficiency indexes of less than 0.91. The analysis also reveals that the educational level of the farmer and access to credit are the major socioeconomic variables influencing the farmers’ technical efficiency. Finally, the findings prove that further productivity gains linked to the improvement of technical efficiency may still be realized in coffee production in Cameroon.
An Analysis of Factors that Determine firm Survival during Economic Crises: The Case of Zimbabwe Manufacturing Firms
(African Economic Research consortium, 2017-03-05) Makochekanwa, Albert
The study analysed the various factors which contributed to the survival of manufacturing firms in Zimbabwe during the country’s crisis of the 1990s and the one between 2000 and 2008. The study employed both descriptive statistics using firm level data from World Bank Enterprise Survey, and a logistic econometric model. The findings from descriptive analysis indicate that survival of manufacturing firms in the 1990s was, among others, determined by such factors as access to finance (whether from bank loans, informal sources, or a company’s retained profits) to fund its operations including input procurement. Secondly, exportation was an important determinant which positively enhanced a given firm’s survival. Third, availability of electricity power to support manufacturing activities was a positive enhancement for firm survival. Findings from the 2011survey shows that the problem of foreign currency shortages were so severe that some firms were forced to exit the manufacturing business as they could not be able to source some of their vital inputs from the international market. Secondly, given that by 2011 corruption was a major problem for manufacturing firms, this implies that these gifts (bribes) increased the operational costs of these firms, and as such reduced their profit margins, thus negatively affecting their manufacturing business. Third, a number of firms interviewed said that they had been incurring losses on an annual basis due to electricity outages. At national level, firms lost around 6.9% of their total annual sales due to electricity power blackouts. Lastly, access to finance, especially from formal sources like banks, was also a major challenge as most banks were not providing loans to companies due to severe liquidity constraints. Turning to the exit (survival) logistic model which was estimated using the survey from 2011, the results showed availability of credit was an important factor affecting survival of manufacturing firms in the Zimbabwean context given that most firms’ balance sheets and net profits were rendered valueless, and as such firms found themselves looking for loans to finance working capital or make new investments that would ensure continuity and growth. The study also found that competition from both formal and informal competitors increased the probability of firms exiting the manufacturing sector. With regards to foreign ownership (or the extent to which a firm is a subsidiary of a multinational corporation), results indicate that foreign firms’ subsidiaries in Zimbabwe were more likely to stay in the economy comparable to domestic firms during economic crisis. The square of firm size (size2) was found to be negative and significant, implying that very large firms were assumed to be more established and expected to weather the common problems that bedevil small firms, and as such, they (very large firms) are less likely to exit. The impact of older firm (age2) on the probability of exit was negative and significant. As such, very old firms were assumed to be established and have more years of experience in conducting their line of business, thus less likely to exit from manufacturing activities.
Analysis of Health Care Utilization in Côte d'Ivoire
(AERC, 2020-04-27) Cisse, Alimatou
Health constitutes a sufficiently solid entrance to reduce poverty and promote economic growth. Yet, in most African countries and particularly in Côte d’Ivoire, the populations’ state of health has seen a real deterioration over the last decade. This study seeks to explain this decline by determining the explanatory factors of recourse to health care providers. To this end, the multinomial logit model is used. The theoretical basis for this analysis is the maximization of a utility function to produce health. The data to test the study’s hypotheses came from the survey of the National Institute of Statistics, entitled Social Dimension of Structural Adjustment, carried out in April 1993. The results show that the education level of the household head, the household’s income, the price of medication, and the time to reach the health care provider (as a proxy for the distance to a health care provider) determine the choice for a specific health care provider. The level of education and the income positively influence this choice, while the cost of medication and the time to provider (time to reach the health provider) negatively influence the choice of health care provider.
Analysis of Labour Market Participation in Senegal
(African Economic Research consortium, 2014-02-04) Kane, Abou
An Analysis of Married Women’s Empowerment in Sub-Saharan Africa
(African Economic Research consortium, 2015-02-23) BATANA, Yélé Maweki; ALI, Pitaloumani GNAKOU
Promoting women’s empowerment is good for economic development. The third Millennium Development Goal (MDG) is indeed about promoting gender equality and women’s empowerment. This empowerment is not only an important dimension of well-being, but it is also a means to achieving other development goals. Most research has explored this issue from a conceptual point of view. The aim of this study was to analyse married women’s empowerment in some Sub-Saharan Africa (SSA) countries. It used an approach based on the structural equation model with latent variables, a model that has been developed in psychometric literature. This approach enabled the study, within the same model, to measure the socio-demographic and cultural determinants of empowerment, as well as the effects of it on other dimensions of well-being in four SSA countries (Ghana, Madagascar, Malawi, and Nigeria). Data for this study were obtained from demographic and health surveys (DHSs). The findings highlighted the significant impact of the level of wealth, household size, level of education, and fertility rate on women’s empowerment. Further, the distributive analysis used in the study revealed the existence of significant differences between countries.

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