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1. Policy Briefs Concise summaries that present research findings and policy recommendations on key economic issues to inform policymakers and stakeholders.2. Research Papers In-depth studies and scholarly articles that explore various aspects of economic theories and empirical research, contributing to academic discourse and understanding.3. Working Papers Preliminary reports on ongoing research that are circulated to encourage discussion and suggestions for revision before final publication.4. Theses and Dissertations: CPP Thesis: Rigorous academic research focused on pertinent policy issues, typically by candidates of the Collaborative PhD Program. CMAP Thesis: Scholarly works by Master's candidates involved in the Collaborative Master's in Economics Program, showcasing original research in the Economics sector. CMAAE Thesis: Advanced research endeavors by Master's students under the Collaborative Master's in Agricultural and Applied Economics, contributing to knowledge in agricultural economics and related fields CMAAE Thesis5. Other Publications A diverse range of documents including, but not limited to, conference papers, book chapters, and research updates that do not fall under the conventional categories.
Recent Submissions
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Differential Impact of the COVID-19 Pandemic on Education in Nigeria: Implications for Policy Review
(African Economic Research Consortium, 2024) Omotoso, Kehinde O.; Adewole, Ololade G.; Gbadegesin, Taiwo F.
COVID-19, a World Health Organization (WHO)-declared pandemic and infectious disease caused by coronavirus, adversely affected various aspects of economies worldwide, with over two million fatalities, and millions of individuals and families affected. Like most countries, Nigeria implemented a lockdown policy restricting all movements except for essential services and functions, to contain the virus. This raises questions about the specific shocks, the catalytic trigger, mitigating strategies, emergent e-learning initiatives, and challenges. This paper investigates the various ways through which COVID-19 influenced the education sector in Nigeria. The study adopted a concurrent mixed method to examine the impact of the COVID-19 lockdown on learning activities in Nigeria. It employed the General Household Survey (GHS) panel 2018–2019 Wave 4, the 2020 Nigeria COVID-19 National Longitudinal Phone Surveys (COVID-19 NLPS) and a difference-in-difference method under a natural experiment scenario, complimented by qualitative data collected through organised stakeholder panel interviews across three significant zones: Abuja, Ile-Ife (Osun State) and Port Harcourt (River State). Educational (learning & teaching) shocks emerged due to the lockdown. The paper reports the interconnectivity of shocks that exposed lapses during the COVID-19 pandemic in the governance of the educational system, school environment, home front and learners’ reactive strategies. The variants of the specific shocks and reactive strategies categorically feature multidimensional outlook within the context of private stakeholders (parents and learners) and public stakeholders (education ministry and school administration). The lockdown-induced shock increased the probability of using digital tools to assess learning materials in 2020 compared to 2018/2019, though there was generally low access to digital tools for learning by those affected by the lockdown-induced shock. Several e-learning challenges were identified as many educators were technically deficient due to inadequacy or lack of internet facilities and capacities for new learning styles, android phones/laptops, lack of network coverage or network failures, full subscription to learning platforms such as Zoom or Microsoft Teams not budgeted for, power failure, uneven distribution of new learning facilities during COVID-19 and unpreparedness for the shock. Policy recommendations include the provision of e-learning platforms and projects in schools, and reduction of inequality in the access to e-learning.
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Impact of Teacher Qualification and Experience on Early Grade Achievement in Kenya
(African Economic Research Consortium, 2024-08-23) Sitati, Melap; Murebu, Rosemary; Ngugi, Rose; Onsomu, Eldah
The importance of teacher quality on early grade achievement of cognitive skills is the current policy discourse. Teacher quality is a key factor that influences learner’s achievement at all levels of schooling. This paper uses a multiple regression technique on Public Expenditure Tracking (PETs) and Service Delivery Indicators survey data (2014/2015) to interrogate the impact of teacher quality in terms of qualification in teacher training and experience on early grade achievement of cognitive skills in Kenya. Although the study reveals that teacher qualification in terms of training is the single-most important attribute that impacts on learner achievement, there is no significant difference between the teacher level of training on learner performance regardless of the time taken to acquire those qualifications. Interestingly, results showed that learners taught by certificate holders in teaching performed better than the ones taught by diploma holders. Pedagogical training, which is taught at certificate level, for teaching at primary education level is significant in affecting learner performance compared to diploma, yet the latter takes more duration and resources. The evidence also shows that teacher experience significantly affects learner performance especially in reading. However, further research could investigate how different type of school interventions amplify or weaken the effects of teachers on learners’ cognitive skill. The study recommends enhanced teacher professional development, more focus on in-service training on pedagogical skills acquired at the primary certificate level, equitable teacher distribution, and provision of adequate teaching and learning materials in school. It is also important to ensure that newly employed teachers have the required pedagogical skills and that they are provided with adequate pedagogical training programmes.
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Rainfall, Human Capital and Labour Market Outcomes: Evidence from Rural South Africa
(African Economic Research Consortium, 2024-08-22) Chakraborty, Kritika Sen; Villa, Kira M.
Rural households rely on several strategies to cope with weather variability, including school-work transitions of adolescents and changes in human capital investments. Using rich longitudinal data from rural South Africa linked with geospatial data on climate indicators, we examined the effect of rainfall realizations on the schooling and work decisions and education expenditures of adolescents and young adults. We exploited the exogenous within-individual variation in exposure to district-level rainfall realizations over age. Our results suggest that current and lagged growing season rainfall increases adolescent human capital investments on the intensive margin among both female and male adolescents. While current rainfall decreased labour market participation among adolescents in non-agricultural households, current rainfall increased female labour supply in agricultural households. We also found that previous-period rainfall positively affected work propensity among all male adolescents. Our results documented schooling and labour supply adjustments among adolescents in agricultural and non-agricultural households, in response to rainfall fluctuations.
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The Impact of Women’s Participation in the Labour Market on the Academic Performance of Children in Senegal
(African Economic Research Consortium, 2024-08-22) Ndoye, Mamadou Laye; Atchade, Touwédé Bénédicte
This study sought a better understanding of the impact of a mother’s participation in the labour market, on the academic performance of children in their primary school certificate examinations. The study used a recursive bivariate probit model in order to treat the endogeneity of the variable “mother’s participation in the labour market”. The data used in the study were drawn from the Integrated Regional Survey on Employment and the Informal Sector (ERI-ESI-2018). The results demonstrated that a mother’s participation in the labour market has a negative impact on the academic performance of children in their primary school years. These results inform us of the need to address the challenges faced by working mothers by providing them with the support they need to establish a balance between their professional and maternal responsibilities.
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The Effectiveness of Work Linked Vocational Training Programmes in Senegal
(African Economic Research Consortium, 2024-08-22) Lioniel, Mafang; Dumas, Tsambou André; Bertin, Malou Jonas; Gnilane, Diouf Marie Ndeye
The main objective of this study was to evaluate the effectiveness of work-linked vocational training in Senegal. In order to do so, we focussed on four specific objectives. First, we identified the main factors that promote or limit access to work-linked vocational training by the youth. Second, we evaluated the impact of work-linked vocational training on the income of youth in the labour market. Third, we evaluated the impact of vocational training on access to regular and stable employment. Fourth, we evaluated the impact of vocational training on labour productivity. To achieve these objectives, we used an endogenous switching regression (ESR) model and an endogenous switching probit model. We examined the robustness of the results using propensity score matching. These methodologies take into account observed and unobserved factors, thus enabling us to handle selection and endogeneity problems that may be related to vocational training. They were used to evaluate data derived from the Employment Policy Improvement Survey (EAPE) that was carried out in 2018 in Senegal. The results suggest that the sampled groups of youth that participated in vocational training display characteristics that differ from those of the sampled groups of youth that did not participate in vocational training. The sampled groups of youths who benefitted from training had a probability 19.27 percentage points higher, on average, of accessing a permanent job, and 24.18 percentage points higher of accessing temporary employment. These youth also had a probability 57.8 percentage points higher of accessing stable employment than youth that did not benefit from vocational training.
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Child Development and Family Human Capital Investment Decisions in Nigeria: A Study of Selected States in the Six Geo-Political Zones
(African Economic Research Consortium, 2024-08-22) Yelwa, Mohammed; Anyanwu, Sarah O.
The study examined child development and family human capital investment decisions in Nigeria. The study focused on household per capita income and family structure using the Nigeria living standard survey for 2018/2019 for the secondary data analysis and a field survey conducted by the researchers in six states in each of the geopolitical zones in Nigeria for the primary data analysis. The study was anchored on household utility maximization theory using the ordinary least squares (OLS) method to analyse the secondary data. Four different results were obtained. First, the result of findings from the OLS estimate revealed that per capita income had no significant impact on Family Human Capital Investment Decisions (FHCID) and male perception of the cost of education had a significant positive impact on FHCID. On the contrary, multi-dimensional poverty index and female perception of the cost of education had an inverse significant impact on FHCID. The second result revealed that average household size, family residence from 1 to 30 minutes proximity to school and 31 minutes and above proximity to school had no significant impact on FHCID. Dependency ratio showed an inverse significant impact on FHCID and family literacy level showed a significant positive impact on FHCID. The third result from the binary logistics regression showed that age, occupation and place of residence of the household head had no significant impact on FHCID. Gender (female-headed household) and education showed an inverse significant impact on FHCID. However, household head years in business or paid employment showed a positive impact on FHCID. The fourth result from the binary logistics regression revealed that marital status had no significant impact on FHCID; family size had a significant negative impact on FHCID; and family structure (type of parents) and number of girl child in the household had a direct impact on FHCID. This study showed complementarities in the home utility function, such that the marginal product of investments rises as family living standards rise. These findings highlight lifetime inequalities and necessitates a special focus on treatments for low-income households. Understanding human capital development and how diverse elements interact is critical to combating poverty and its intergenerational transmission. As a result, this study made several recommendations. First, the importance of persistent action by the government and other donor agencies such as the United Nation Children’s Fund (UNICEF) and The World Bank to address the problems of income inequality and pervasive poverty ravaging Nigeria’s economy. The study strongly recommends that family, especially parents, maintain justice and fairness within the home, to foster constructive, sympathetic and peaceful home, encouraging most children to exhibit excellent academic performance. Third, government agencies and hospitals, especially in rural areas, intensify family planning and birth control campaign to help reduce household size. Fourth, children of the poor be given opportunities for paid employment, to enhance their performance in the school. Fifth, children from poor homes be provided with access to scholarships, free instructional materials and books. Sixth, government and its agencies on education intensify sensitization and campaign for families to embrace Western education, especially in the northern region, promote compulsory primary basic education for all children and prosecute parents of out-of-school children or child labour to serve as a deterrent to others. Finally, the study recommends that non-governmental and religious organizations preach peace and tolerance within the family for the well-being and human capital development of their wards.
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Precolonial Centralization, Koranic Education and School Participation in Nigeria
(African Economic Research Consortium, 2024-08-22) Adeolu, Adewole Musiliu
Several studies have documented the persistence of economic development outcomes across space and over a long period of time. Other studies have argued that there has been a reversal of fortune over time and space. Since different areas of current Nigeria were once under the rule of states with different degrees of political centralization and later investment in Koranic education, this study sought to explore whether areas or districts under more centralized political system are more likely to participate in large scale school expansion programmes such as the 1976 Universal Primary Education (UPE) and 1999 Universal Basic Education (UBE). To check for evidence of reversal of fortune, we determine whether degree of state centralization on school participation was more or less in areas that have large investments in Koranic education. The important motivation for this study was the observation that participation in the tuition-free large-scale school expansion programmes implemented nationwide have not closed the disparity in school participation across the various regions of Nigeria. Even more surprising is that regions, such as the North-West and North-East, which fell under pre-colonial states with complex political arrangements have fallen behind in the education race relative the South-East, often regarded as a stateless society, and to some extent the South-South region which had a less complex political structure. This is contrary to the findings of several studies which show a positive relationship between this historical measure of state centralization and several indices of contemporary development outcomes. To explain this special case, we hypothesized that regions that had intensive and extensive contacts with Islamic culture and by extension Koranic education before the onset of Christian missionaries were unlikely to reap the full benefits of pre-colonial centralization. Ordinary Least Squares (OLS) results showed that while the index of state centralization has a positive and significant impact on enrolment in UPE and UBE programmes, the effect is negative and statistically significant for those with heavy investment in Koranic education (measured by district fraction of 1914-1946 cohorts with Koranic education). The results are robust to an adding extensive range of explanatory variables and a range of other specification tests. While the structure of the economy at the onset of Islamic activities in Nigeria may have made investment in Koranic education worthwhile, the contemporary world does not require Koranic education to make either regional or national advancement possible. Thus, there is a clear case of mismatch between the demands of modern economic life and the skills possessed by a large-section of it. Thus, well thought out policies are required to address this mismatch and accelerate inclusive economic development
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Importance of Investing in the First 1,000 Days of Life: Evidence and Policy Options
(African Economic Research Consortium, 2024-08-22) Onsomu, Lydia Kemunto; Ng’eno, Haron
Investment in the first 1,000 days of life is important for human capital development. The basic needs and services in these days of life are maternal healthcare; child healthcare; mobilization of mothers to seek early antenatal care; increasing hospital deliveries; enhancing exclusive breastfeeding for the first 6 months of life; increasing knowledge on the proper weaning diet; immunization; and early diagnosis and treatment of common childhood illnesses. However, there is a dearth evidence on the importance of investing in the early years of life. The purpose of this study was to explore the role of investing in the first 1,000 days of life for improved human capital accumulation. The study utilized the Kenya Demographic and Health Survey (KDHS) 2022 data. Using the Cox regression hazard model, the study found out that twins have a higher risk of mortality than single births and firstborns were less likely to die before their fifth birthday than the children born after them. The findings also indicate that an increase in the household size by 1 individual reduces the likelihood of death for children aged less than 1 year and for children aged between 13 and 60 months. Children from female-headed households reported a lower likelihood of mortality. Perhaps this is because of assurance of breastfeeding for the first 6 months of life when the child is living with the mother, increasing the probability of knowledge on the proper weaning diet and improved uptake of immunization by the mother. The likelihood of mortality for children whose mothers reported health comorbidities was higher than for those who reported good health. Children younger than 1 year of mothers who were assisted during delivery were less likely to die than those whose parents were assisted during delivery. In relation to the place of delivery, children who were delivered at a government health facility were less likely to die than those who were born at home. Based on these findings, the study recommends provision of civic education to pregnant and new mothers on the risks facing their new-borns and the importance of following the laid out public health protocols of the first 1,000 days of life to ensure the children’s survival..
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Nexus between Non-Cognitive and Cognitive Skills and their Joint effect on Labour Market Outcomes: Evidence from Youths aged 15–25 years in Kenya
(African Economic Research Consortium, 2024-08-22) Onsomu,Carol Bisieri; Macharia, John; Mwangi, Stephie
Cognitive skills, rooted in specific neural networks, and soft skills, comprising personal traits, attitudes, and motivations, jointly contribute to workforce adaptability in the ever-changing landscape of modern workplaces. Recognizing their pivotal role in enhancing human capital quality, this study explored their joint impact on labour market outcomes, including probability of employment. Traditionally, economists have predominantly emphasized cognitive skills, overlooking the significance of the non-cognitive dimension. Within the context of Kenya, the government has launched initiatives to empower its youth for social and economic development and the education sector has expanded. Despite this background, these efforts fall short of producing adequately trained middle level human capital, hindering national progress. This situation is aggravated by the grave concern of a job market mismatch, resulting in soaring youth unemployment rates. The root cause of this mismatch can be partly traced to the limited inclusion of non-cognitive skills in education curricula, despite ongoing reforms largely centred on cognitive development. Both in education and the workplace, non-cognitive factors emerge as stronger predictors of success than their cognitive counterparts. Occupations demanding a blend of cognitive and non-cognitive skills offer higher employment prospects and wage premiums. A synthesis of these skill sets renders workers more valuable and better positioned for career advancement. Addressing the pressing issue of youth unemployment necessitates the alignment of youth skills with labour market demands. This research seeks to address two key challenges: gender disparity and the mismatch between youth skills and available job opportunities. Using binary logistic regression, this study identified factors influencing youth employment, with a specific focus on the interplay between skills and values. Key findings underscore the importance of both cognitive and non-cognitive skills in labour market outcomes, with individuals possessing a combination of these skills enjoying improved employment prospects and career success. The study also revealed that the complementarity between agreeableness and digital literacy skills has a positive impact on the employment likelihood of female youth. Marital status signifies stability and responsibility, while education levels augment an individual’s competencies, enhancing competitiveness in the job market. Consequently, this study emphasizes the equivalence of personality traits and cognitive abilities in the eyes of employers and advocates for curriculum reform that integrates personality traits into employers’ selection criteria.
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Credit Constraints in Higher Education Attendance: Longitudinal Evidence from Ethiopia
(African Economic Research Consortium, 2024-08-22) Eigbiremolen, Godstime O.; Orji, Anthony
This paper examines the household wealth–higher education attendance relationship and the evidence on credit constraints in post-secondary schooling. Using unique longitudinal data that link household wealth and measures of cognitive ability age 12 years to higher education attendance at age 19–22 years, we differentiated short-term credit constraints from long-term credit constraints and directly tested the relative importance of short and long-term credit constraints in schooling decision. We found that both short-term and long-term credit constraints determine the household wealth–higher education attendance relationship. Therefore, we recommend complementing short-term policies like financial aid with long-term interventions that empower households to continue to invest in human capital development over the child’s life cycle, which will crystalize in higher cognitive ability and readiness for
higher education.
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Maternal Education, Economic Empowerment, and Infant Mortality in Burkina Faso
(African Economic Research Consortium, 2024-08-22) BARRO, Lamissa; TIENDREBEOGO, Aïcha; NANA, Issa; Mawuvi KY, Landry Paul Armand
Education levels in Burkina Faso, especially among women, remain low despite efforts made by government authorities and development partners to implement priority area 4 of the Sustainable Development Goals (SDG). This situation presents difficulties for women in terms of their being economically and socially empowered. At the same time, the infant mortality rate in Burkina Faso is higher than the average for sub Saharan Africa. This study therefore used data derived from health and population surveys to provide evidence of the combined impact of the level of education and economic empowerment of women on infant mortality, using an instrumental variables approach on a linear probability model. The results highlight the positive impact of the education levels of women understood through the aspect of literacy and their economic empowerment, in terms of probability of gain, decision-making power in relation to those gains and in relation to the family’s level of expenditure. Nevertheless, the impact of the level of economic empowerment of mothers remains mixed. In regard to economic policy, emphasis should be laid upon the strengthening of policies related to education of girls to ensure their empowerment in the future.
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Leveraging Digital Services and Market Development for Financial Inclusion
(African Economic Research Consortium, 2024-08-15) Shinyekwa,Isaac, M.B.; Mpuuga, Dablin; Nattabi, Aida K.; Bulime, Enock W.N.
The paper examines the extent to which digital financial services – mobile money, online banking and agency banking – contribute to financial inclusion in Uganda. We identify the key enablers and inhibitors of access and usage of digital financial services. To achieve this, we adopt a mixed methods approach and use the recent 2019/20 Uganda National Household Survey (UNHS) data, the World Bank’s Global Findex data for 2021, and insights from key informant interviews. We use an instrumental variable approach to control for endogeneity and run recursive probit models for the binary outcomes of usage of mobile money services, agency banking, and commercial banks. We also run models for access to commercial banks and usage of informal groups. The results re-affirm the gap between men and women in access to and usage of digital and formal financial services, although this gap has significantly reduced over time. We also find that informal financial groups are used more by women. Financial literacy proxied by an individual’s ability to read and/or write is a significant enabler of digital financial services usage among both men and women. Conversely, saving money at home/secret place has a strong negative effect on the overall usage of digital financial services, but a strong positive effect on the usage of informal groups. The new financial inclusion strategy should provide incentives to the private sector to promote innovation and investment in a broad range of new, friendly, and affordable products to attract the excluded sections of the population. Importantly, cultural and community institutions provide better opportunity towards changing social norms that have for long disadvantaged women and kept them financially excluded
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Digital Innovation Ecosystem Development for Financial Inclusion and Market Access: The Case of Tanzania
(African Economic Research Consortium, 2024-08-15) Mwighusa, Dennis; Diyamett, Bitrina
There is now consensus that innovative financial services that are provided in a more equitable and inclusive way are the cornerstone of social and economic development. In this regard, although Tanzania has recorded a significant growth in the level of financial service provision and has reached out to a good number of people in the country, especially through digital means, the country might not benefit from this wide coverage of financial services because it faces a glaring gap in inclusiveness. The reasons for the persistence of such exclusion – in spite of policies to address the challenges – are not clearly known. This work is an attempt to close this knowledge gap – basically towards understanding the factors contributing to both gender and location-related exclusion with the purpose to inform inclusion policies. The findings indicate that the major challenges revolve around inappropriate marketing strategies for the digital financial services for the poor; inappropriate products in terms of price and context fitness; and cost related to product development and service provision on the part of the providers. The existing inclusion policies did not seem to have helped much as they have some serious gaps in their design.
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Development of the Digital Financial Ecosystem in Rwanda: Drivers, Lessons and Way Forward
(African Economic Research Consortium, 2024-08-15) Munyegera, Ggombe Kasim
Digital financial services (DFS) have the potential to promote payments’ efficiency and boost financial inclusion even in remote areas with minimal traditional financial infrastructure such as bank branches. In Rwanda, the digitization of payments is a key policy strategy in a bid to transform the country towards a more cashless and knowledge-based economy. Since the establishment of the Rwanda Integrated Payments Processing System (RIPPS), various policy and product innovations have been put in place to increase the share of transactions done electronically. This study examines the development path of digital financial services in Rwanda over the decade 2011-2021 using a mixed-methods approach. The quantitative part entails descriptive and regression analysis to ascertain the trend, patterns and determinants of uptake for key DFS products in the country while the qualitative key informant interviews with key stakeholders are used to ascertain the opportunities and challenges for further promoting DFS in the country. The findings indicate that between 2011 and 2021, the number of people using Internet and mobile banking increased quite substantially. The number of active mobile money subscribers increased from 1.6 million in 2012 to 5.1 million in 2021, while credit cards increased from 115,200 in 2011 to 686,309 in 2021. The transactional volume and value also increased remarkably, partly fueled by COVID-19 and innovative use of mobile money, including electronic tax payment. The study recommends improving Internet connectivity and quality, promoting digital literacy, improving interoperability and enhancing cyber security to further boost DFS in Rwanda.
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Disability, Digital Financial Services and Financial Inclusion: Evidence from Rwanda
(African Economic Research Consortium, 2024-08-15) Munyegera, Ggombe Kasim
Persons with disabilities have disproportionately lower levels of access to financial and other services globally, resulting in lower socio-economic status relative to the general population. This study uses a mixed methods approach to quantify and explain the disability divide in Rwanda’s financial services. Using Probit models, the probabilities of accessing, owning and using digital platforms, financial accounts and products, and financial services are estimated while Tobit models are used to estimate the value of financial transactions. Probit and Tobit estimates are complemented by propensity score matching (PSM) as a robustness check. The results indicate that persons with disabilities are significantly less likely to own a mobile phone, computer and Internet or even use those owned by someone else. Ownership rates of mobile money and bank accounts, automated teller machine (ATM), credit cards, and usage of mobile and Internet banking are also lower among persons with disabilities. The usage of financial services – saving, remittances, credit and insurance – is also lower among persons with disabilities at the extensive margin (probability of usage) and intensive margin (value of transactions). A further finding is that, conditional on having a disability, females are less financially included related to males. The findings carry key implications regarding the need to boost financial inclusion for persons with disabilities to achieve overall equality as stipulated in Sustainable Development Goal (SDG) 10. Among others, there is need for interventions to raise digital and financial literacy among persons with disabilities and develop innovative products that appeal to the financial needs and difficulties of this vulnerable group in general and women with disabilities in particular.
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Behavioural Biases in Financial Access and Usage Divide: The Kenyan Case
(African Economic Research Consortium, 2024-08-15) Osoro, Jared; Bundi, Davis; Kiplangat, Josea
The noticeable strides Kenya has made on digital financial services that anchor the positive narrative of financial inclusion is evidently leaning towards payment services. However, digital divide still exists due to behavioural heterogeneity. This paper explores the influence of behavioural biases in access and usage of mobile money services, the dominant digital financial services in Kenya. The 2021 FinAccess data anchors the empirical investigation on the extent to which behavioural biases are an obstacle to access and usage of mobile money. Deploying descriptive statistics on gender disaggregated data and a probit model to estimate marginal effects, we ascertain that behavioural biases contribute to the digital divide evident among men and women households in Kenya. These biases drive a wedge between access and enhanced usage of digital financial services in a manner that slows the sequential process of the former, leading to the latter. Beyond advancing literature in this area, this paper proffers arguments in favour of putting in place measures to enhance household incomes that have a gender lens, for they have the potential of ameliorating the gaps underlying financial exclusion of women and low-income earners in mobile money access and usage. It also argues for a policy position that discourages the consideration of basic digital financial services as a revenue mobilization platform through direct taxation as that could be counterintuitive.
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Bank Competition, Digital Finance, and Gender Differences in Financial Inclusion in East Africa
(African Economic Research Consortium, 2024-08-15) Wamalwa, Peter; Tiriongo, Samuel; Mulindi, Hillary
Competition in the banking sector is a catalyst for innovation and the adoption of digital channels to provide financial services. The low cost of providing financial services through digital channels has been leveraged on by banks to extend services to the underserved and the excluded. This paper deploys panel regressions and binary response models to analyse the impact of competition in the banking sector on penetration and utilization of digital financial services across gender in Kenya, Uganda, and Tanzania, controlling for competition in the telecommunications sector. The latest wave of Finscope Survey (2017) and financial inclusion household survey (FinAccess, 2021) datasets are used. The analysis shows that males have a higher probability of using digital financial services than females. Females in rural areas, engaged in the agriculture, services, trade and casual labour are less likely to use digital financial services compared to their male counterparts. Competition in the banking industry increases utilization of digital financial services due to banks leveraging on innovation to provide relevant services at low cost. Therefore, a policy approach that considers gender differences and fosters competition in banking and mobile telecommunication industries will encourage providers of financial services providers to effectively leverage on mobile money and digital finance to close gender gaps in the utilization of digital financial services in the EAC region.
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Mobile Money Usage: A Comparative Analysis of Burundi with other East African Countries
(African Economic Research Consortium, 2024-08-15) Ndayikeza, Michel Armel; Nyamweru, Jean Claude; Ndoricimpa, Arcade
This study examines the use of mobile money services in Burundi and compares it with other East African countries to identify areas for improvement. The focus is on the supply side, with the aim of offering practical recommendations for policy makers to enhance the usage of mobile money. We use secondary data to compare mobile money usage and transaction fees across East African Community (EAC) countries. Additionally, the analysis draws on semi-structured interviews with key informants from the National Agency of Regulation and Control of Telecommunications, the Central Bank of Burundi, the Ministry of Finance, and other institutions crucial to the development of mobile money. The information collected during these interviews is organized into four thematic areas: institutional environment and regulation, interoperability, government's role, and the impact on smallholder farmers. The findings indicate that mobile money usage in Burundi is relatively low, standing at 11%, in comparison to other EAC countries. Although higher than South Sudan's usage rate of 1%, it falls far behind Tanzania (45%), Uganda (54%), and Kenya (69%). The cost of sending US$ 10 varies between 0.2% and 10.8% across EAC countries, with the lowest fees observed in Kenya and the highest in Tanzania. Interviews with experts highlighted the need for supply-side actors to recognize the country's low mobile money usage rate and fully realize the potential benefits of this technology. The study contributes to the limited literature on mobile money and digital finance in Burundi and offers some policy recommendations to address the issue.
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Determinants of Mobile Money Adoption and Use in Burundi
(African Economic Research Consortium, 2024-08-15) Ndoricimpa, Arcade; Nyamweru, Jean Claude; Ndayikeza, Michel Armel
This study examines the factors determining mobile money adoption and use in Burundi. Heckman selection model is applied on a recent household dataset (Integrated household living conditions survey in Burundi, EICV 2019-2020). The estimation results point to different socio-economic factors that drive the adoption and use of mobile money in Burundi. Age category, education level, being a member of savings and loans associations, and household size are the factors determining the likelihood of mobile money adoption in Burundi, while the probability of mobile money use in Burundi seems to be influenced only by education level, place of residence, and the well-being level. Considering this study’s findings, the Government of Burundi should implement policies to reduce the gender gap and duality urban-rural. Efforts should also be put on education investment to reduce illiteracy. The Government of Burundi should also continue implementing policies to raise the well-being of the population and social self-sustained groups, and initiatives to increase incomes of the population especially in rural areas should be encouraged. In addition, concerted effort from different stakeholders, mobile network operators and regulators, is also needed. Making payment systems flexible by increasing mobile agents in remote areas would also most likely lead to increased mobile money adoption. We hope that the findings from this study will inform public authorities to take necessary measures to increase mobile money adoption and use in Burundi.
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Poverty, Inequality and Inclusive Growth Dynamics: Evidence from Nigeria’s Panel Household Surveys
(African Economic Research Consortium, 2024-08-12) Edeh, Henry C.; Ozor, Jane O.
Using updated Nigeria’s micro panel household surveys, we estimate the impact of human capital endowments on household economic well-being – controlling for exogenous circumstance-related factors over which households have little or no control. We found that education and health endowments have significant causal impact on the well-being of the households. More so, education has significant causal impact on the income of households below the bottom 40% (specifically the households at the bottom 25%). Inequalities at the national level are mainly determined by rural-urban and northern-southern inequalities. These observed income inequalities in rural-urban sectors and northern-southern geopolitical zones are mainly propelled by differences in education and health endowments of the households. However, the equalization of human capital endowments in terms of education and health is indeed growth-enhancing. We suggest, therefore, that policies capable of eliminating inequalities in access to schooling and health will enable households at the bottom of the distribution to enjoy better economic well-being.