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This paper examines the determinants of private tutoring in five major Middle East and North Africa (MENA) countries: Egypt, Algeria, Lebanon, Morocco, and Tunisia. The paper uses data extracted from the SAHWA Youth Survey (2016) and runs a probit model. The main findings indicate that age, receiving financial support, having educated parents and living in urban areas increase the demand for private tutoring. Conversely, the results show that being a male student or a child of an employed mother will decrease the need for a private tutor. The empirical findings propose potential policy implications for MENA countries facing the exacerbation of gaps in the education system while emphasizing the challenges hindering public schools from delivering quality education. [ABSTRACT FROM AUTHOR]

The African Continental Free Trade Area (AfCFTA) has been hailed as a key pillar and catalyst for economic growth, industrialization, and sustainable development in Africa. One of the anticipated benefits is the promise to increase intra‐African trade through the elimination of import duties and other tariffs among countries. However, due to the heterogeneity between the African countries, questions remain as to whether each country will benefit from tariff elimination. This paper aims to evaluate the macroeconomic, fiscal, and welfare consequences of import tax removal in Senegal with the rest of Africa. We link an extended version of the partnership for economic policy (PEP) static computable general equilibrium (CGE) model with a non‐parametric microsimulation approach. We calibrate the model with Senegal's most recent Social Accounting Matrix. The microeconomic model is calibrated using the latest Senegalese household consumption survey. The findings indicate that tariff removal from the rest of Africa has favorable economic, fiscal, and welfare impacts for Senegal. The paper suggests that it will lead to an increase in economic growth and investment. The removal of tariffs is expected to favor urban households over rural ones and leads to a modest decrease in income inequality, accompanied by a 3.36% reduction in the number of poor. [ABSTRACT FROM AUTHOR]

This paper examines the effect of competition on nonperforming loans in the Nigerian banking industry between 2011 and 2018 using the system generalized method of moments. The findings establish the competition‐stability hypothesis in the Nigerian context. The interaction between competition and bank size/capitalization has a positive and significant effect on nonperforming loans. These results showed that low competition increased nonperforming loans in the Nigerian banking industry while bank size and capitalization enhanced competition to increase nonperforming loans. Also, bank size/capitalization are complementary for addressing nonperforming loans. The paper recommends that the Central Bank of Nigeria (CBN) regulates the market power of the five largest banks in the industry to address the adverse effects of competition on mounting nonperforming loans in the Nigerian banking industry. [ABSTRACT FROM AUTHOR]

This paper investigates, for the first time, the uncertainty on the tourism of North Africa and uncertainty on the second‐degree effects of the North African tourism sector. The study uses data from 1995 to 2019 and a structural vector autoregression to perform the investigation. The research finds that uncertainties, measured by the uncertainty of Europe, the uncertainty of the Middle East and Central Asia, and the volatility of GDP growth of the Euro area, have significant negative effects on investment and job creation in, as well as the contribution to the GDP of, the North African tourism sector. The paper invents a new proxy of risk, measured by the volatility of crude oil production in North Africa, and finds that this new risk measure has a significant negative impact on the North African tourism sector. The results show that geopolitical risk and the uncertainty of Africa do not significantly affect the North African tourism sector. The paper suggests that policymakers in North Africa subsidize tourism‐related activities and explore new markets to attract tourists during periods of high risk and uncertainty. [ABSTRACT FROM AUTHOR]

This paper examines the trade–peace nexus in Africa and ascertains how poverty and inequality tilt the relationship in the eight regional (economic) blocs in Africa, viz. the Arab Maghreb Union (UMA), the Common Market for Eastern and Southern Africa (COMESA), the Community of Sahel–Saharan States (CEN–SAD), the East African Community (EAC), the Economic Community of Central African States (ECCAS), the Economic Community of West African States (ECOWAS), the Intergovernmental Authority on Development (IGAD) and the Southern African Development Community (SADC), from 1998 to 2020 using the Driscoll–Kraay estimate. The study contributes to the literature by disaggregating the peace effect of trade in Africa by the regional (economic) blocs to allow for in‐depth and context‐specific analysis. The paper also expands the scope of existing studies by examining the direct effect of poverty and inequality on peace in addition to the indirect effect that is revealed through their interactions with trade integrations. The findings reveal that trade promotes peace in Africa, while wide income inequality and a large poverty gap increase the likelihood of conflict. The interaction of poverty and inequality with trade integration shows that while the poverty level does not improve the effect of trade on peace, inequality reduces the impact of trade on peace. The study concludes that poverty and inequality play significant roles in the trade–peace nexus in Africa. Policy recommendations are discussed. [ABSTRACT FROM AUTHOR]

It is against this background that the African Development Bank, in collaboration with the United Nations Development Programme and The United Nations Economic Commission for Africa, organized its 2021 African Economic Conference from 2 to 4 December 2022 in Cabo Verde to address the timely issue of post-COVID-19 development financing in Africa. At the time this paper was finalized (31 July 2022), close to 12 million COVID-19 cases had been reported in Africa (Figure 1), more than 225,000 people had died from the coronavirus (Figure 2) and the total number of active cases in Africa was about 500,000 (Figure 3). Since 2020, Africa and the entire world have experienced socioeconomic challenges of alarming proportions owing to the COVID-19 pandemic. Many policy responses and stimulus packages designed seem insufficient to address the negative effect of COVID-19, mostly when access to financing was very low and the lending gap very high prior to the COVID-19 outbreak. [Extracted from the article]

Countries across the world continue to invest in social protection programs with the goal of ending poverty by 2030. It is important to examine these programs to know whether they are serving the purpose of reducing poverty. In Rwanda, the impact of the Vision Umurenge Program (VUP) regarding poverty‐related outcomes has not been consistently revealed. This leads to uncertainty about the program's effectiveness in achieving the stated goals. This paper intends to fill this gap by estimating the impact of the VUP Direct Support on poverty outcomes. It uses the Propensity Score Matching method to compare the effects of the VUP with a counterfactual outcome. The findings show that the program is benefitting households in response to economic risks. However, the scheme is not lifting them above the national poverty lines. The main contribution of the paper is that it uses a novel method using the latest statistics to evaluate the VUP. In addition, it uses the most recent household data. The study provides a significant contribution to evaluation of the effectiveness of anti‐poverty interventions in Rwanda, as well as the Sub‐Saharan region, where the journey towards achieving the goal of reducing poverty is demanding. [ABSTRACT FROM AUTHOR]

This paper seeks to evaluate efficiency and competition dynamics of the banking sector in Kenya for the period 2001–2017 using bank‐level data for 37 commercial banks. We apply non‐parametric data envelopment analysis to analyze measures of various aspects of efficiency in the banking sector. We also adopt Panzar–Rosse, H‐statistics to assess the level of competition in the banking sector. To examine the effect of efficiency on competition, panel estimators are applied. The study findings indicate that efficiency was on an upward trend and averaged 69%. The banking sector is characterized by monopolistic competition as shown by an H‐statistic of.59. Managerial ability measured by data envelopment analysis efficiency score was found to be an important factor in promoting competition for the Kenyan banking sector. The study shows that there is room for Kenyan banks to improve their efficiency by optimizing the scale of operations and continuing to adopt technology. This paper recommends policy makers to continue adopting policies that promote greater banking sector efficiency and competition. [ABSTRACT FROM AUTHOR]

This paper examines whether technological innovations such as information and communication technology infrastructure, mobile phone subscriptions, secure internet servers and the number of automated teller machines and bank branches increased financial deepening in 43 African countries for the period 2010–2019. The study employs panel corrected standard errors, fixed effects and quantile regressions for empirical analysis. The results show that technological innovations have a positive and significant influence on financial deepening in Africa in terms of banks' mobilisation of deposits and allocation of credit to enterprises. Furthermore, the technological indicators have a strong and positive effect on higher levels of bank credit to the private sector than lower levels. As for bank deposits, only the number of branches was found to have significant and positive effects at a high level of bank deposits compared with a low level. These results imply that African governments and development partners can leverage ICT developments to increase financial deepening and reinvigorate debt financing, which is the primary funding source for small and medium‐size enterprises. [ABSTRACT FROM AUTHOR]

This paper analyzes the effects of informal finance on formal finance in West African Economic and Monetary Union (WAEMU) countries. To this end, it uses a Probit model with a binary endogenous regressor and data from the Global Findex database, 2021. The findings indicate that having already saved informally positively affects the behavior of individuals to save formally. They also indicate that informal financial credit positively affects formal financial credits in the WAEMU. These findings indicate that formal finance is complementary to informal finance in the WAEMU. On the other hand, the findings show that labour force participation, mobile banking use and online banking use increase the likelihood of use of formal and informal services in the WAEMU. This paper suggests that formal financial institutions (mainly banks and microfinance institutions) should strengthen their collaboration with actors (money keepers, itinerant bankers, tontines systems) involved in the provision of informal financial services to populations in order to improve formal financial intermediation in the WAEMU. [ABSTRACT FROM AUTHOR]

The article discusses various reports published within the issue including one by Alan Gelb et al which discusses the performance of different groups of countries with an emphasis on better-performing low-income countries and another by Ji Hong Kim which examines Korea's economic development.

The article discusses the topics published within the issue, including one on the significance of a shared sectoral growth in the economy and another on the role of migration and remittances in the process of shared growth.

To facilitate the introduction of a single currency in Economic Community of West African States (ECOWAS), the fiscal convergence criterion currently proposed by countries limits the public deficit to 3 per cent of GDP. According to the literature, the limitation of the public deficit to a given threshold is the most fundamental norm of the various convergence pacts existing and needed for monetary integration. Through a nonlinear panel data model, this paper tests the validity of the threshold by determining the public deficit threshold not to be exceeded so that fiscal policy has a positive effect on economic growth. Over the decade 2007–2016, this threshold is estimated at 4.74 per cent of GDP. Thus, the paper concludes that the proposed convergence criterion of 3 per cent of GDP is pro‐growth. However, in relation to the estimated threshold, there is a room for manoeuvre that can be used for supporting economic growth. Thus, the proposed threshold could be readjusted upward. The analysis also reveals that only four countries in ECOWAS are on the track to respect in the future, the proposed fiscal criterion and therefore are taking an important step toward the adoption of the future currency. The other countries need to make significant fiscal consolidation operations before hoping to adopt the single currency on the basis of fiscal discipline. [ABSTRACT FROM AUTHOR]

This paper investigates the determinants of venture capital investments across 25 African countries over the period 2014–2019. In particular, it considers the significance of innovation and digitalization in Africa's venture capital activity. The results show that digital infrastructure, high‐technology exports, internet coverage, market size, minority investor protection and government effectiveness are the main drivers of venture capital deals in Africa over the period examined. More generally, these findings highlight that digital infrastructure and connectivity, innovation and institutional frameworks all play an important role in shaping a favorable environment to attract venture capital funding. [ABSTRACT FROM AUTHOR]

African countries generally cut corporate income tax (CIT) rates in the hopes of attracting foreign direct investment (FDI), whereas the effectiveness of tax rate reductions in attracting extractive industries FDI is controversial. This paper estimates the impact of the statutory CIT rate, as applied to mining companies, on FDI inflows to the gold and silver sectors of African economies. The estimation results indicate that the impact of the mining CIT rate on the host country's gold and silver FDI inflows is negative, but not statistically significant, at the conventional levels of significance. These results suggest that cuts in the CIT rate applied to mining companies will not necessarily attract FDI to gold and silver projects. Moreover, we find a strategic complementarity in gold and silver FDI inflows between countries, suggesting that an increase in the host country's gold and silver FDI inflows may stimulate FDI to gold and silver projects in neighbouring countries. Furthermore, the results show that infrastructure, government stability and gold and silver reserves positively affect gold and silver FDI inflows. The main findings of the paper suggest that, instead of granting corporate tax incentives, governments may consider improving the quality of socio‐economic infrastructure, the availability of geological information and promoting political and economic stability for attracting mining investments. [ABSTRACT FROM AUTHOR]

Investments in large‐scale land acquisition by foreigners, also referred to as land grabbing, are crucial to sub‐Saharan Africa's development. Land acquisition investments have attracted considerable attention in global development circles due to their potential positive (e.g., technology transfer, employment creation, infrastructure improvement, and global market integration) and negative (e.g., environmental degradation, food insecurity, displacement, and loss of livelihoods) impacts. The factors making land investments attractive to foreign investors are unclear. This paper examines country characteristics associated with land acquisitions in 20 sub‐Saharan African countries to provoke evidence‐based discussion. The paper estimates regression models of land acquisitions using country‐level data from 2010 to 2019 on demographic and economic conditions, natural resources, business practices and governance. The results reveal that the availability of land and water, corruption, days required to start a business, government effectiveness, cost of business startup and political stability are critical determinants of land acquisition investments in sub‐Saharan Africa. The paper recommends that African governments should: (1) strengthen regulatory frameworks on foreign direct investment in land; (2) scrutinize investors' business models, technical experience and knowledge of local culture; (3) undertake rigorous environmental and social impact assessments (ESIA) to weigh the long‐term cost‐benefits of LASLA projects; and (4) conduct transparent contract negotiations, taking political and economic power imbalances between parties into consideration. [ABSTRACT FROM AUTHOR]

An introduction to articles published within this issue is presented, citing those on health issues in Africa and risk mitigation.

The paper examines the effect of governance and health expenditure on infant mortality with a panel data of 32 sub‐Saharan African (SSA) countries from 2000 to 2015. Having accounted for potential endogeneity issues related to maternal choices that are made due to contemporaneous infant mortality, the evidence from system generalized method of moment reveals that health expenditure and governance shows no direct influence on infant mortality. However, the coefficient of the interaction between government effectiveness and health expenditure is significant and shows a negative relationship with infant mortality, implying that the effectiveness of health expenditure may be explained by the administrative capacity of countries in SSA. To validate our model, the result from the sensitivity analysis reveals that health expenditure and its interaction with government effectiveness and political stability/absence of violence exert a reducing effect on the under‐five mortality rate. Therefore, since governance quality is lower in SSA compared to other regions, we recommend that governance should be improved consistently in order to achieve health‐related outcomes. The findings further signal the urgent need to formulate policies that directly redress health conditions, rather than through indirect instruments. This focus is critical for the advancement of sustainable development goal 3 in SSA. [ABSTRACT FROM AUTHOR]

This paper examines the importance of good institutions in harnessing the growth effects of the bulging economically active population in sub‐Saharan Africa (SSA). The paper utilizes a panel dataset comprising 39 countries over the period 2002–13. Based on the system generalized method of moments estimator, this paper finds that an increase in the relative size of the working‐age population has no direct significant impact on growth, except through the presence of strong and high‐quality institutions. The paper also finds that control of corruption, rule of law and political stability are the specific aspects of institutions that matter the most in reaping the dividend. These results do not only highlight the primacy of strong institutions but also shed light on the key institutional pillars that need to be strengthened to rake in the positive effects of an increasing working age population on economic growth in SSA. [ABSTRACT FROM AUTHOR]

Abstract: Based on the Salter‐Swan‐Corden‐Dornbusch framework, which argues that capital inflows may appreciate the official exchange rate by aggravating the effects of any previously existing domestic distortions, this paper examines the claim that workers’ remittances cause the Dutch disease in sub‐Saharan Africa (SSA). Specifically, the study investigates whether remittances cause financial overheating and spending effects. The study adopts the dynamic panel instrumental variable system generalized method of moment (IVSGMM). This study finds that although workers’ remittances cause financial overheating, they neither increase general spending nor appreciate the real exchange rate, thereby implying that workers’ remittances do not cause the Dutch disease in SSA from 1996 to 2013. These findings suggest that governments should establish diaspora incentive schemes so as to encourage remitters and recipient households’ to invest productively. Government efforts should be integral at improving the financial education for remitters and the recipient households so as to avoiding channelling overheating effects to spending effects and to the Dutch disease. [ABSTRACT FROM AUTHOR]

This paper investigates whether and how aid targeted at specific sub‐categories of economic infrastructure could assist the economies of 14 Economic Community of West African States to attract higher foreign direct investment (FDI) inflow via improvement in infrastructure in water supply and sanitation, energy, transport and ICT. By relying on the three stage least squares estimation technique that is able to account for endogeneity among structural equations, and utilizing data spanning 2005–2018, we found quite interesting results. First, aid targeted at infrastructure indicates a strong positive effect on the countries' infrastructure endowment. Second, there is robust evidence that aid promotes FDI, but not necessarily through the infrastructure channel. Targeted aid appears to exert a positive and direct knock‐on effect on FDI—apparently, because investors anticipate the positive effect that targeted aid is almost always inclined to produce on host countries' infrastructure endowment. Finally, aid allocation by Development Assistance Committee donors seems to have been primarily merit‐based, followed by weaker evidence for "need". The study recommends, inter alia, more need‐based aid allocation, particularly in economies where initial infrastructure endowment is minimal. [ABSTRACT FROM AUTHOR]

Rural entrepreneurship is an important employment generation intervention for the fast‐growing young labour force in developing countries. Many bottlenecks including access to finance impede rural youths from performing in their new ventures. This paper examines the impact of access to finance on rural youths' entrepreneurship in Benin using data from the second wave of the School‐To‐Work Transition Survey, involving over 900 youths. The paper employs the endogenous switching regression technique, combined with propensity score matching, to investigate the drivers of rural youths' access to finance and its impact on entrepreneurship intention and performance. The results indicate that age, education, poverty status, experience, working in the agricultural sector and the existence of a bank branch are important determinants of rural youths' access to finance. The results also show that access to finance increases the probability of youth entrepreneurship by 15.2% on average. Moreover, the study shows a significant gender gap in rural entrepreneurship of 5.24% among youths with access to finance in Benin. These results suggest that policymakers should facilitate the access of youth, especially young women, to finance by encouraging formal financial institutions to reduce their credit eligibility conditions for those who do not have collateral. [ABSTRACT FROM AUTHOR]

The lack of resources is often highlighted as the most important correlate of poor learning outcomes in developing countries. However, increasing school resources may not necessarily drive better learning if resources are not properly translated into learning outcomes. This paper investigates the efficient utilization of school resources to promote learning. It tries to better understand the extent to which efficiency plays a role in the relationship between school resources and learning outcomes. Applying the Data Envelopment Analysis methodology, an efficiency analysis is performed using the PASEC 2014 learning assessment that covers 10 francophone West and Central African countries. The results show that the efficiency of school resource utilization varies across countries and across schools within the same countries. The relationship between some of the key elements of school resources and learning is weak in the least efficient schools. This suggests that resources allocated to the least efficient schools should consider first addressing inefficiency issues. While efficiency drivers may vary depending on the country's specific contexts, findings show that student absenteeism, community engagement in school management, teaching time and school environment seem to play a role in school efficiency. [ABSTRACT FROM AUTHOR]

This paper employs the autoregressive distributed lag bound test and Nigerian time series data spanning 1980–2016 to provide empirical evidence on the educational financing—(youths) capacity development nexus via secondary school enrollment channel. The greatest factor that is pivotal to developing the capacity of Nigerian youths is investment in the quantity of education, and more significantly in its quality. The paper's main results show that budgetary allocation to education positively and significantly impacts secondary school enrollment, both in the long and short runs. Thererfore, the study recommends a substantial investment in the educational sector even if there has to be a trade‐off with other types of unproductive investment. [ABSTRACT FROM AUTHOR]

This paper studies the effect of health care expenditure on health outcomes in sub‐Saharan Africa (SSA) using data from 1995 to 2018 for 45 countries. It uses fixed effects and generalized methods of moments estimation approaches for the analysis. The paper measures health care expenditure using three proxies: namely, total health care expenditure per capita, public health care expenditure to gross domestic product (GDP), and private health care expenditure to total health expenditure. Health outcomes are measured by child health outcomes (under‐5 mortality rate) and life expectancy. The results show that increase in health care expenditure as measured by total health care expenditure per capita and public health care expenditure to GDP leads to decline in under‐5 mortality rates. The results also show that total health care expenditure per capita leads to an increase in life expectancy. The study therefore recommends that governments in SSA increase budget allocations towards the health care sector to achieve better health outcomes. [ABSTRACT FROM AUTHOR]

This paper studies the drivers of nonresident holdings of local currency debt in Nigeria. Using data over 2007M1–2019M1, we show that, on average, global factors (global interest rates, oil prices) seem to carry more weight than domestic factors (treasury bills rate and domestic risk) in foreign portfolio investors' decisions in Nigeria. Specifically, we show that foreign participation is, in the long run, positively correlated with oil prices and profitable rates of return on local‐currency instruments, but negatively correlated with exchange rate depreciation pressures. In the short run, oil prices, opportunity cost of funds and perception of Nigeria‐specific risks also play a role. These results highlight the volatile short‐term nature of such flows and call for a package of policy reforms to attract longer‐term direct investments. [ABSTRACT FROM AUTHOR]

The paper examines the role of education in reducing gender differentials in the Kenyan labor market. Using 2015/16 Kenya Integrated Household Budget Survey, we estimate the logit and multinomial logit model. The paper employs instrumental variable technique to correct for potential endogeneity that arises when analyzing education and labor market outcomes. The results from both models show that being a woman reduces the chances of entering the labor market. We find that education yields positive effects in the labor market. On average, the difference between the marginal effect of education on employment probability between men and women is two percentage points, with the effect being higher for women. In the multinomial logit model, educated women are more likely to be employed in both the public sector and the informal sector, while in the private sector they are less likely to be employed. The implication of these findings is that policies should target education as a tool that can reduce gender differential in the labor market. This should be coupled with affirmative action that gives priority to women and minimizes preference for men in the labor market. [ABSTRACT FROM AUTHOR]

This paper contributes to the literature in an attempt to understand the determinants of the informal economy by investigating the relationship between financial development and the size of the informal economy using an unbalanced panel data of 41 sub‐Saharan African (SSA) countries over the period 1991–2015. The paper applies different techniques such as ordinary least squares, fixed effects, system generalized method of moments, and quantile regression. The results show that financial development and its square are important determinants of the informal economy in SSA. Across a number of specifications, we find that financial development reduces the size of the informal economy and that there is a U‐shaped relationship between financial development and the informal economy. [ABSTRACT FROM AUTHOR]

This paper provides an empirical estimate of the effect that upgrading of roads along the two main transit routes in the East African Community (EAC) had on the total bilateral trade costs facing manufacturing industries. The transit routes are the Northern Corridor and the Central Corridor, which link the capital cities of Burundi, Kenya, Rwanda, Tanzania, and Uganda to the seaports of Mombasa in Kenya and Dar es Salaam in Tanzania. This paper exploits information on the condition of roads along these routes, which is published by government and donor agencies. The reports pertain to road projects that were completed in the period 2004–2010, and indicate that the share of paved roads in good condition along the Corridors doubled between 2003 and 2010. This study estimates that the increase in the quality of transit roads lowered both domestic and cross‐border trade costs, and that the latter effect is larger than the former. The study also finds that the increase in trade volumes due to better transit roads is attributable to industries producing output with above median weight. These industries dominate the EAC manufacturing sector, suggesting that a compositional change in cross‐border trade flows arising from better transit roads is unlikely. [ABSTRACT FROM AUTHOR]

This paper examined the effects of the financial liberalization strategy adopted on the African continent over 25 years ago in promoting new business entry using data from 22 sub‐Saharan African (SSA) countries in 2006–2017. Results from the dynamic generalized method of moments models show that: financial development via a policy of financial liberalization does not have a uniform effect on entrepreneurship; the interest rate gap significantly undermines the entrance of new firms; the ratio of broad money/gross domestic product (GDP) was positive and statistically significant while real interest rate had mixed findings; interactive effects of interest rate spread and real interest rate with regulatory quality was negative; the interaction of interest rate spread and real interest rate with natural resources confirms its destabilizing effect, although there was evidence suggesting that natural resources do not directly undermine entrepreneurship growth. Other results show real GDP and private credit have a significantly positive effect, and the cost of getting electricity significantly undermines entrepreneurship. The study calls for the need to deepen the financial sector though targeted reforms across SSA countries to reap its growth‐inducing effects on economic outcomes, while promoting institutional quality and efficient use of natural resources to achieve a non‐declining infusion of SMEs on the continent. [ABSTRACT FROM AUTHOR]

A growing body of literature highlights the importance of export sophistication for economic development. Given the newness of the literature on export sophistication, its determinants are under‐exploited. As a pioneer study, this paper attempts to fill this gap in the literature by examining the effect of infrastructure development on export sophistication. Based on a panel of 45 African countries over the period 2003–2016, the results of the different estimations show that infrastructure, including transport, electricity, ICT and access to water and sanitation, improves export sophistication in Africa. Our results also show that the effect of infrastructure varies at different intervals of the export sophistication distribution. Therefore, improved infrastructure would allow African countries to not only improve their export structure but also achieve sustainable and durable growth. [ABSTRACT FROM AUTHOR]

This paper highlights the existence of a nonlinear relationship between bank stability and competition and analyzes the role that government intervention plays in shaping this relationship. We used a sample of 45 banks in North African countries over the period 2005–2019. We applied a semiparametric approach based on penalized spline estimation. The results unveil the specific shape of the competition–stability relationship at different levels of competition; banks reconsider their risk‐taking behavior at each level of competition. This nonmonotonic stability at different levels of competition is attributed to the quality of intervention, which is found to be an important determinant in shaping this relationship. Thus, we explain the dispersion of risk levels among North African banks in part by the quality of regulation in each country and conclude by recommending the strengthening of regulation, supervision and the macro‐prudential framework. [ABSTRACT FROM AUTHOR]

This paper examines, in depth, the hypotheses explaining the tax effort of seven West African Economic and Monetary Union (WAEMU) countries over the period 1996–2018. The studies of Karakaplan and Kutlu were applied to the stochastic tax frontier model. This provides a new method for analyzing tax effort that solves potential endogeneity problems, especially those of income. This study confirms the positive impact of income, trade openness, urbanization, government capital spending and anticorruption on tax revenue mobilization, while the size of the agricultural sector has a negative impact on tax revenue. On the other hand, reforms of tax institutions have no effect on tax effort. The average tax revenue of the countries of the WAEMU is 11.34 and the average tax effort is estimated at 0.7901 over the period 1996–2018. Thus, these countries could achieve a tax revenue to GDP ratio of 13.72% if they fully exploit their potential. [ABSTRACT FROM AUTHOR]

This paper analyzes the effects of climatic variables on food crop yields at the prefectural level from 1996 to 2016 in Togo. Using the panel‐corrected standard errors method and panel data from departments in charge of agricultural statistics and meteorology, the results show that meteorological variables have various effects on food crops yields, but the negative effects are dominant. In addition, adaptation strategies through agricultural land reallocation have not enabled farmers to improve food crops yields. There is an urgent need for public authorities to implement actions to strengthen farmers' resilience through practice adoption and cultural innovations for adaptation to climate change. [ABSTRACT FROM AUTHOR]

The Old Age Pension (OAP) to elderly South Africans is one of the biggest programs in developing countries. It's a vital income source to many households because it puts a significant cash transfer into the hands of many poor households, and the sharp increase in its take‐up at the minimum eligibility age further demonstrates its importance. This paper estimates the OAP's impact on households' food security, quality of water and sanitation facilities, where the last two are essential public health‐related outcomes. We find that the OAP has a significant and positive impact on food security, but not on the quality of drinking water and sanitation. We attribute the latter to the high fixed costs associated with access to quality drinking water and proper sanitation services and their nature as a form of public good. The paper further attempts to understand whether gender influences these outcomes. [ABSTRACT FROM AUTHOR]

This paper analyzes factors that drive foreign direct investment (FDI) in Africa. To do so, for the first time in the literature, the paper uses 5-year panel data and the system-GMM technique over the period 1970-2009. The main results are as follows: (a) larger countries attract more FDI; (b) regardless of their size, however, more open countries, politically stable countries, and countries offering higher return to investment also attract FDI; (c) FDI inflows are persistent in Africa. This suggests that countries that manage to attract FDI today are likely to attract more FDI in the future. [ABSTRACT FROM AUTHOR]

Abstract: This paper seeks to understand if education can be an effective tool in achieving gender equality in labour force participation in Cameroon. For this purpose, the multinomial and binary logit models are estimated. The paper accounts for the potential endogeneity of education in the equation of labour force participation by using the instrumental variables approach. Data used are data on employment and the informal sector obtained from the National Institute of Statistics in Cameroon. The findings shed light on the negative impact of being a woman on the probability of getting a job. They also show that education and the interaction term between gender and education has a positive and statistically significant impact on the probability of working in the public and the formal private sectors. These results suggest that education yields a premium skill which offsets the negative effect of being a woman. [ABSTRACT FROM AUTHOR]

In sub-Saharan Africa (SSA), competitive elections can cause considerable violence and widespread destruction of property, most of which is ethnically motivated. Recent literature shows that ethnic identification is more prominent during competitive election periods in comparison to other identifying categories such as gender, religion, and class/occupation. This paper utilizes data from 12 SSA countries and over 40,000 respondents taken from the Afrobarometer. It asks if individual perceived living conditions changes in the run-up to competitive elections. Strong evidence shows that a perceived living condition does change. It is positively related to the proximity to an election and this proximity effect depends on the competitiveness of the election. The paper further investigates the background mechanisms behind this positive relationship, that is, to what extent does living conditions of the individual change if the party that the individual supports wins the election and is there a change in living conditions of the individual before and after the election? In addition, this paper documents that ethnic identification also has a positive impact on individual perceived living conditions after controlling for electoral cycle variables. [ABSTRACT FROM AUTHOR]

This paper seeks to establish the contribution of the Common Market for Eastern and Southern Africa (COMESA) programmes in promoting industrialization. It further seeks to establish the link between industrialization and productivity. The paper uses a gravity model to estimate a cross‐sectional time‐series (panel) dataset for the period 2001–2015. The results indicate that membership to COMESA has created large markets and promoted industrialization among member states. However, results also confirm that COMESA member states still heavily trade in industrial intermediates with non‐members. The study further reveals that the share of foreign total factor productivity (TFP) to COMESA's TFP are weaker than expected, which suggests non‐convergence to international knowledge spillovers. The study concludes that COMESA programmes have positively affected industrialization. We therefore recommend that COMESA should continue implementing strategies, policies and programmes that promote industrialization and technology transfer. [ABSTRACT FROM AUTHOR]

This paper revisits the exchange rate pass‐through (ERPT) to inflation in Nigeria and South Africa by incorporating structural breaks and using time series variables, namely the consumer price index, nominal effective exchange rate, gross domestic product, and crude oil price. Based on the Maki cointegration test and a flexible estimation approach of the Autoregressive Distributed Lag (ARDL) model, our empirical evidence suggests that the long‐ and short‐run ERPT to inflation is complete for Nigeria, while for South Africa it is incomplete both in the long run and short run. This result indicates that prices are stickier in South Africa compared to Nigeria. The comparison between Nigeria and South Africa confirms the role of inflation targeting and central bank credibility on the ERPT. The results divulge further that output growth in Nigeria increases inflation in the long run while it is anti‐inflationary in the short run. For South Africa, the effect of output growth is negatively insignificant. In addition, the long‐run effect of oil price is negative and significant for Nigeria, while for South Africa the short‐run effect of oil price is positive and significant. Therefore, the findings of this paper will assist the monetary authorities to achieve monetary policy objectives. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between female access to land, rights to such land, and engagement in non‐farm entrepreneurship in rural Africa. We used data from the four countries (Ethiopia, Nigeria, Tanzania and Malawi) that were featured in the Living Standards Measurement Study—Integrated Surveys in Agriculture dataset for the period 2013–15. To estimate the relationship, we compute the marginal effect from the logistic regression, while controlling for other important covariates that explain non‐farm activities at the individual/household level. We find that overall, women's access to land and rights to such land significantly explain their likelihood to engage in non‐farm enterprises. However, this relationship is not seen across the sampled countries. In Nigeria, for instance, we find that though the relationship is positive, it was not significant. While for Ethiopia, Tanzania and Malawi, we find a positive and significant relationship. We explain our result based on two important perspectives. The policy implications of our result are included in the paper. [ABSTRACT FROM AUTHOR]

Catastrophic healthcare expenditure (CHE) can plunge households into poverty. Faced with CHE, the question that becomes relevant is how long it will take the household to exit CHE. This paper examines the effect of the Ghana National Health Insurance Scheme (NHIS) on exit time from CHE. The paper uses the Cox proportional hazard model for the analysis, with data sourced from round six of the Ghana Living Standard Survey and World Development Indicators. The results show that households that spend 40% (20%) of their non‐food incomes on healthcare, on average, exit CHE after 10 months and 4 days (13 months and 24 days) being in CHE and those with NHIS coverage exit CHE 19 days (30 days) earlier than those without NHIS coverage. Policy implications arising from this paper include the need to expand NHIS enrolment to mitigate impoverishment due to out‐of‐pocket healthcare payments. Households with higher risks of severe CHE and longer exit time from CHE should be identified and provided with comprehensive NHIS coverage than those with lower risks. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of the sectoral reallocation of labor on unemployment in Morocco. Using the Lilien index for job reallocation, we estimate an autoregressive distributed lag model using quarterly data between 2001 and 2019. The analysis yielded two key findings. In the short run, job reallocation raises unemployment, which can be attributed to the inadequacy of the quantity of newly created jobs in the emerging sectors, the mismatch between the actual and the needed skills of the workforce, and the costs of job search. In the long run, job reallocation reduces unemployment as the emerging sectors develop and the workforce adapts to the changes in the labor market. Policymakers should design strategies that accelerate the adaptation of labor supply to the needs of emerging sectors and reduce transitional unemployment. Public policy should focus on identifying and developing emerging and labor‐intensive sectors that can absorb the surplus of skilled and unskilled labor. [ABSTRACT FROM AUTHOR]

This paper aims to analyze the effect of information and communication technology (ICT) diffusion on the shadow economic activities in Africa for the period from 2000 to 2015. To this end, we use a panel data model on a sample of 48 countries. The results obtained show that the diffusion of ICTs, especially mobile telephony and the Internet, negatively and significantly affect the size of the shadow economy in Africa. The level of education, capital stock, economic growth, and financial development also contribute to reducing the size of the informal economy in Africa. However, our results suggest that informal activities are motivated by the abundance of natural resources and migrant remittances. Robustness checks are done through the system generalized method of moments and a change in the measurement of the shadow economy confirms the validity of the results. We recommend to decision‐makers to implement public policies facilitating the access and the use of new telecommunications tools and services and to improve the institutional framework to encourage private economic agents to invest in formal activities. [ABSTRACT FROM AUTHOR]

The aim of this paper is to assess the effect of government spending on happiness in 39 African countries from 2006 to 2018. The neoclassical view predicts a positive effect, while public choice theory predicts the opposite. The results obtained using the Generalized Method of Moment reveal that public spending has no direct effect on happiness in Africa. However, public spending positively affects happiness in the poorest countries of Africa. Furthermore, governments can improve the happiness of African populations through public spending coupled with democratic regimes and the control of inflation. [ABSTRACT FROM AUTHOR]

The article discusses papers within the March 2010 issue of "African Development Review," including one about capital flight repatriation and its impact on economic growth in African countries, and the effect of intervention programs on poverty in Northern Ethiopia.

This paper examines market efficiency in the foreign exchange market in Tanzania. A nonlinear Markov switching model was used to analyse the Tanzanian shilling against the US dollar spanning from 2 January 2009 to 30 April 2020. The estimation period was 2 January 2009–28 May 2019, and the post‐sample forecast period was 28 May 2019–30 April 2020. From the results of the two‐state Markov switching model, we define State 1, which is more volatile, as the inefficient state and State 2, which is less volatile, as the efficient one. In the unconditional probabilities from the Markov switching model, the exchange rate has a 94% probability in the inefficient state, which indicates that 94% of all speculators fully extract information when predicting future exchange rates, while 30% of all investors do not; suggesting that the foreign exchange market undergoes conditions of efficiency and inefficiency. In addition, findings showed that the exchange rate is expected to spend approximately 18 days in regime 1 and 8 days in regime 2. The policy implication of these findings is that foreign exchange market participants should pay attention to regimes and underlying market conditions when designing and applying their investment strategies. [ABSTRACT FROM AUTHOR]

Industrialization constitutes one of the strategies of structural transformation in many sub‐Saharan African (SSA) countries. In this paper, we re‐examine the effect of financial development on the industrialization of 35 SSA countries over the period 1996–2018. Contrary to previous work, we formulate the hypothesis that there exists a threshold of financial development beyond which financial development positively influences industrialization. Using the dynamic panel threshold regression model, and system generalized methods of moment models, we find two main results. First, financial development has a negative and significant impact on the development of industrialization. Secondly, the findings show the existence of a nonlinear relationship between financial development and industrialization development. Thus, we find that financial development has a negative effect on industrialization below the threshold while the effect is significantly positive on industrialization in countries whose financial development is above the threshold. The results are stable to the different robustness tests used. These findings highlight the need for SSA countries to develop better financial institutions if they hope to boost the manufacturing sector. [ABSTRACT FROM AUTHOR]

This paper analyzes intra‐Common Market for Eastern and Southern Africa (COMESA) trade in services by establishing its determinants and exploring the role of trade facilitation on the same. The study relies on the Poisson Pseudo Maximum Likelihood (PPML) estimator of the gravity model on bilateral services trade data for total services and eight categories of services in 17 COMESA countries from 2005 to 2019. Results reveal that several factors determine intra‐COMESA services trade, the salient ones being GDP (exporter's and importer's), distance, contiguity, and time zone differences. Trading under a service‐specific trade agreement affects a few services: transport and other business services exports. The effect is positive for transport services and negative for other business services exports. Trade facilitation measures, especially broadband technologies, significantly improve services trade across various sectors. A key policy implication of our results is that service trade is more likely to grow through digital, information, and communication infrastructure development. Thus, policy should prioritize increasing access and usage of broadband technologies. [ABSTRACT FROM AUTHOR]

This paper presents a susceptible–exposed–infected–quarantined–removed (SEIQR) dynamic stochastic general equilibrium model to evaluate the macroeconomic effects of the current COVID‐19 pandemic. The SEIQR configuration setting is calibrated using COVID‐19 data from Morocco. Using the model, we demonstrate how the pandemic might lead to declining consumption and productivity. We illustrate that a combination of quarantine policy, vaccination and treatment of the uninfected person is more successful than using only one of the policies. The combination lowered the number of infected, exposed and quarantined people. We also assessed the economic effects of multiple strategies. [ABSTRACT FROM AUTHOR]