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This paper examines the effect of different categories of foreign aid on poverty reduction. It uses a country case study for Sierra Leone to explore the impact of different aid types on pro-poor growth as a dimension of poverty reduction. Using annual time series data spanning from 1970 to 2007 and employing the bounds test approach to cointegration by Pesaran and Shin (), the study finds strong evidence to suggest that only aid in the form of grants do have a pro-poor effect. This result is more obvious in the long run than in the short run. Aid in the forms of loans and technical assistance could not prove signficant for fostering pro-poor growth in the country. Thus, even though total aid reveals a highly significant long-run impact in improving pro-poor growth in Sierra Leone, when disaggregated, only aid in the form of grants shows strong evidence of reducing poverty in the country. The implication of these findings is that for reducing poverty in typically poor and fagile states, aid in the form of grants should be encouraged. The increasing donor interest in technical assistance aid in recent years should be reconsidered as there is no strong evidence that it reduces poverty. [ABSTRACT FROM AUTHOR]

Policymakers in many developing countries had been mandated to pursue the goal of reducing child mortality as one of the Millennium Development Goals (MDGs). This paper analyses the factors influencing child survival in Ethiopia using a 2011 Demographic and Health Survey (DHS) dataset. Descriptive statistics and two-stage least square probit regression were employed for data analyses. Results showed that the majority of the children (82.19 per cent) were born to households in rural areas, while average household heads' age was 42.78 years. Using combined children data, fertility, age of household heads, residence in urban areas, drinking of alcohol and smoking significantly reduced probability of child survival, while altitude, education, male household headship, age at first birth and rendering of assistance on domestic chores by the husband increased it ( p < 0.05). It was concluded that efforts at reducing maternal fertility by promoting education of female children will go a long way in reducing child mortality in Ethiopia. [ABSTRACT FROM AUTHOR]

The goal of this paper is to assess how knowledge economy (KE) plays out in financial sector competition. It suggests a practicable way to disentangle the effects of different components of KE on various financial sectors. The variables identified under the World Bank's four knowledge economy index (KEI) are employed. An endogeneity robust panel instrumental variable fixed-effects estimation strategy is employed on data from 53 African countries for the period 1996-2010. The following findings are established. First, education and innovation in terms of scientific and technical publications broadly bear an inverse nexus with financial development. Second, the incidence of information and communication technologies is positive on all financial sectors but increases the non-formal sectors to the detriment of the formal sector. Third, economic incentives have positive implications for all sectors though the formal financial sector benefits most. Fourth, institutional regime is positive (negative) for the semi-formal (informal) financial sector. The findings contribute at the same time to the macroeconomic literature on measuring financial development and respond to the growing fields of informal sector importance, microfinance and mobile banking by means of KE promotion. Policy implications and future research directions are discussed. [ABSTRACT FROM AUTHOR]

This paper uses recent data on historical oil wealth to provide new evidence on the effect of oil wealth on democracy in Africa from 1955 to 2008. We find that oil wealth is statistically associated with a lower likelihood of democratization when we estimate the relationship in a pooled cross-sectional and time-series setting. In addition, when estimated using fixed effects and IV-2SLS methods, the strong negative statistical association continues to hold. Indeed, this result is robust to the source of oil wealth data, the choice and treatment of the variables set, and the sample selection. Our results also show other interesting and important results. The cross-country evidence examined in the study confirms that the 'Lipset/Aristotle/modernization hypothesis' (that prosperity stimulates democracy) is a strong empirical regularity. Also, the propensity for democracy rises with population size, population density, ethnic fractionalization, having British legal origin or colonial heritage, and having a supportive institutional environment in the form of maintenance of the rule of law. However, apart from oil wealth, democracy tends to fall with linguistic fractionalization and rough (mountainous) terrain. Moreover, consistent with the data, North Africa consistently fails to favor democratic development. [ABSTRACT FROM AUTHOR]

This paper analyses foreign direct investment (FDI) of Angola in Portugal. The reverse investment of African countries in Europe is a recent economic event that needs to be analysed, theoretically explained and empirically tested. A dynamic theoretical model is presented and a Bayesian model tests the model validating it. The results reveal that imports and corruption increase Angola FDI in Portugal. Some variables affect negatively Angola FDI in Portugal such as lagged Angola FDI, signifying an autoregressive negative effect in Portugal; the Portuguese official development assistance (ODA) to Angola, which are direct transfers from Portugal to Angola; and Angola's GDP. Policy implications are discussed. [ABSTRACT FROM AUTHOR]

This paper examines the effect of marital status and household size, among other correlates, on poverty in Nigeria, using the Harmonized Nigeria Living Standard Survey (HNLSS) data of 2009/2010. Our logit results show that monogamous marriage, divorce/separation and widowhood are negatively and significantly correlated with the probability of being poor. However, monogamous marriage has the largest probability of reducing poverty in Nigeria. We also find that household size matters in determining poverty in the country: a one-person household negatively and significantly reduces poverty while addition of members to the household progressively increases the probability of being poor. In addition, our results show that there is a significant concave (inverted U-shaped) relationship between age and poverty. Other variables found to significantly reduce the probability of being poor include: being a male, completion of post-secondary education, being in paid household employment, and residence in the North Central and South East geopolitical zones. Variables that increase the probability of being poor in Nigeria include rural residence, possessing no education, being a self-employed farmer, and residence in the North West geopolitical zone of the country. [ABSTRACT FROM AUTHOR]

Discussions on introducing a deposit insurance scheme in South Africa have been floating around since 2000, without any official proposal being published or brought to Parliament. Globally, countries have increasingly adopted deposit insurance schemes with the understanding that they provide a public benefit of increasing confidence in the financial system. It is likely that South African banks and government have resisted introduction of any scheme owing to costing issues. This paper estimates the cost of deposit insurance premiums for seven large South African banks for the first time, annually over the period 2000 to 2009 using an option-based model. The premiums exhibit high volatility over time and across banks but yield an average value that is internationally comparable. The authors also propose a risk-weighted, multi-tier premium structure to encourage appropriate pricing for different categories of risk. [ABSTRACT FROM AUTHOR]

The paper looks at how inequality in household expenditure components affects total inequality and poverty in Malawi. Total household expenditure is disaggregated into four mutually exclusive and exhaustive expenditure items, namely expenditure on food, expenditure on health, expenditure on education, and expenditure on non-food and non-human capital items. Using data from the second integrated household survey (IHS2), we find that the elasticities of poverty with respect to within-component and between-component inequality are positive, suggesting that an increase within-component and between-component inequality increases overall poverty in Malawi. The results also show that the elasticities of poverty, as measured by the poverty gap and poverty indices, with respect to inequalities in expenditure on food and health are positive and are about the same in magnitude. The results vindicate the exemptions and zero rating of some food, health, and education related goods and services under the Value Added Tax (VAT) system. More importantly, they also suggest that expanding the coverage of zero rating and exemption would have a poverty reducing effect. These findings hold at the national level, as well as when rural and urban areas are treated separately. Additionally, the results are insensitive to choice of poverty line. [ABSTRACT FROM AUTHOR]

This paper empirically investigates the relationship between financial development and economic growth in the North Africa region, using a panel regression and different indicators of financial development. We find that the relation depends on the type of the indicator of financial development. In fact, while both financial institutions and markets in Morocco and Tunisia have a positive effect on the economic growth, only the financial markets in Egypt will improve economic growth by increasing the supply of financial services. For Algeria, the banking system has a positive effect on economic growth. [ABSTRACT FROM AUTHOR]

This paper evaluates the determinants of borrowing, effects of borrowing on economic well-being, and potential disparity in responses by sources of well-being, location and gender, while controlling for other correlates. The 2001 Cameroon household consumption survey and a range of survey-based econometric methods that purge parameter estimates of potential intra-cluster correlation, endogeneity and sample selection biases were used. Access to credit/borrowing is strongly associated with household economic well-being irrespective of source of well-being. Rural well-being is significally more contingent on credit access than urban well-being. Male-headed households rely more significantly on credit access to enhance well-being than their female counterparts. Higher levels of education associate more significantly with well-being enhancement than lower levels, more so for female-headed households than their male counterparts. To sustain the impact of credit on well-being, accompanying measures - availability of sufficient funds, quality services by lenders, physical infrastructures, healthcare and training - are required. These findings are useful in the context of economic recovery and poverty reduction under the current situation in Cameroon, where financial intermediation is limited and penetration is shallow. To better serve the needs of the economically active poor, a microfinance delivery model is proposed. [ABSTRACT FROM AUTHOR]

Exercising fiscal prudence in periods of deteriorating fiscal balance requires sound policies which promote debt sustainability. This paper estimates a dynamic cross-country model and investigates the impact of domestic debt on economic growth and private sector credit in a panel of 21 sub-Saharan African (SSA) countries over the period 1985 to 2010. System-GMM results reveal a non-linear relationship between domestic debt and economic growth, characterized by a maximum turning point of 11.4 per cent of GDP. In addition, domestic debt is found to crowd out private sector credit by an elasticity of negative 0.3 per cent of GDP, deterring capital accumulation and private sector growth. These findings underscore the need for effective debt management strategies which incorporate debt ceiling to limit domestic indebtedness, as well as the design of financial policies which enhance credit availability, promote fiscal discipline and deepen domestic debt markets on the continent. [ABSTRACT FROM AUTHOR]

This paper compares the use of repo rate in South Africa during the pre-repo and repo system by trending and comparing the interest rate fluctuations between two selected periods of 1990-1998 and 1998-2010. Using a structural vector autoregressive (SVAR) econometric method to determine the relationship between the repo rate and other selected key macroeconomic variables in South Africa, an improved monetary efficiency was found during the repo period, which can be attributed to the use of an inflation-targeting framework. This is important as it provides a guide to policymakers on how effective the current monetary tool is, and how efficient the South African Reserve Bank (SARB) is in influencing the interbank rate, retail rates and inflation during selective periods. [ABSTRACT FROM AUTHOR]

Gender equality in employment is currently one of the greatest development challenges facing countries globally, including those in Africa. In 2011, the male employment-to-population ratio, globally, was estimated at about 72.7 per cent compared to the female employment-to-population ratio of only 47.9 per cent. For Africa as a whole, the male employment-to-population ratio was estimated at about 69.2 per cent compared to the female employment-to-population ratio of only 39.2 per cent. In addition to analysing the characteristics of gender equality in employment in Africa, this paper empirically studies the key drivers of gender equality in employment (proxied by the ratio of female employment rate to male employment rate for the age group 15-64 over the period, 1991 and 2009), using cross-sectional data. Our results suggest that for the all-Africa and sub-Saharan African samples, increased democracy (and its quadratic form), higher gross domestic investment, more primary education, and higher urban share of the population increase gender equality in employment while higher level of real GDP per capita, higher foreign direct investment, sex population ratio, and being a net oil-exporting country tend to lower it. However, North Africa is different. Apart from a negative and highly significant North African dummy in the overall results, the North African specific sample result indicates that while the quadratic element of real GDP per capita, higher gross domestic investment, higher urban share of the population, more secondary education, and being an oil-exporting country increase gender equality in employment, higher levels of real GDP per capita, more primary education, and sex population ratio tend to lower gender equality in employment in the sub-region. The policy implications and lessons of these results are discussed. These policies are directed at making the African labor market more inclusive and hence enhancing women's employment for the purpose of greater economic empowerment, household welfare and poverty reduction, in particular. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between poverty and lack of access to adequate safe water in rural Malawi. Data used in the analysis was collected from a survey covering 1,651 randomly selected households. We use Canonical Correlation Analysis (CCA) as a distinct technique for understanding the poverty-rural water access nexus. CCA results indicate that poverty in the context of low income and expenditure is positively correlated with lack of access to safe and adequate water. Integrated Rural Water Resources Management (IRWM) interventions are therefore needed to address both challenges of poverty and poor access to adequate safe water in rural Malawi. [ABSTRACT FROM AUTHOR]

This paper examines the weak form of market efficiency of five major stock markets; four African equity markets and one developed market. The weekly market index returns of the EGX 30, NSE 20, NSE All Share Index, FTSE-JSE All Share Index and the S&P 500 Index were analysed for the period 1998-2008. To determine if the stylized fact of stock returns in African markets violate the random walk hypothesis, numerous econometric and statistical techniques are employed. These methods include the autocorrelation test, the unit test, linear and non-linear models. The results indicate that the African markets do not behave in a manner consistent with the weak form of market efficiency. These results provide a contrast between the emerging African markets and the developed markets. It suggests that African emerging markets have higher average returns and volatility than developed markets. We argue that if the market could be made less volatile, it has the potential to attract more investment because of its attractive returns. [ABSTRACT FROM AUTHOR]

This paper uses two nationally representative datasets collected in 1992 and 2003 in Gambia to analyse small, non-farm enterprises. The results reveal evidence of significant credit constraint among these non-farm enterprises. Specifically, household wealth is a significant determinant not only of entry into the enterprise sector but also determines investment levels conditional upon entry. Furthermore, the marginal returns to investments in enterprises are very high and significantly exceed the prevailing lending rates of banks in the country. Besides being credit constrained, these enterprises are also affected by farm-related variables. Agricultural risk adversely affects enterprise investment. This latter result underscores the importance of livelihood diversification. [ABSTRACT FROM AUTHOR]

This research analyses the relationship between certain water-related habits and infrastructure likely to influence the frequency of diarrhoea in children that are five years old or younger. The study is implemented using an ordered logit model with information from 334 households from the Zambezi river in Mozambique, with children who were aged up to five years. The main objective of this paper is to emphasize the importance of hygiene education in the prevention of gastrointestinal diseases in children, that are affected by poor access to water systems and sanitation. Maintaining hygiene is especially important in households with young children, who are more vulnerable to gastrointestinal diseases. The results of the research reveal that in households that do not know that water transmits illnesses and where they do not wash their hands before preparing a child's meal, the children suffer diarrhoea more frequently. The main recommendation is to invest in hygiene education programmes to reduce the risk of illnesses such as diarrhoea. Improvements in access to water and sanitation may not be sufficient in order to improve life conditions if there is no hygiene education. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of social transfer programmes on school enrolment and child labour in Malawi utilizing a micro-simulation evaluation method. For this purpose, we simulate four hypothetical scenarios in which a household receives: (1) MK1,040 (US$2.5) for each child enrolled in school regardless of the child's gender; (2) MK1,040 (US$2.5) regardless of the child's enrolment status and gender; (3) MK1,040 (US$2.5) and MK2,080 (US$5) for each boy or girl enrolled in school, and (4) MK1,040 (US$2.5) and MK2,080 (US$5) for each boy or girl regardless of their enrolment status. Results show that boys' enrolment increases in all four scenarios, whereas girls' enrolment increases only when the conditionality on enrolment is enforced. [ABSTRACT FROM AUTHOR]

Investment is a crucial factor determining economic performance at the firm as well as the country level. In this paper I identify the determinants of the decision to invest in new plant and equipment as well as the determinants of the level of such investment for a sample of firms in 19 sub-Saharan African countries. In particular, I concentrate on the role of property rights, external finance, trade status and firm ownership on investment. Results indicate that internationally trading firms, foreign owned firms and firms with better access to sources of external finance tend to be more likely to invest and to invest more, with little role for indicators of property rights in influencing investment decisions found. [ABSTRACT FROM AUTHOR]

This paper explores the impact of regulations on the perceptions and management of risk. The study focuses on Zimbabwean banks. We evaluated the influence of banking regulatory policy using data gathered from a Regulatory Impact Assessment (RIA) questionnaire and data measuring annual overall output from Zimbabwean banks. We employed a number of statistical models ( Binomial, HLogLinear models and time series forecasting) to test various hypotheses concerning the perception of bank employees of the impact of regulation on the management of risk in Zimbabwean banks. We found that: (1) respondents' perceptions of the impact of regulation on risk management correlated among different risk types in Zimbabwean banks; (2) respondents generally appeared to perceive dollarization and Basel II positively; and (3) respondents were not optimistic about the impact of Reserve Bank of Zimbabwe (RBZ) policy on overall banking efficiency. Overall, we found that due to its near chaotic nature, RBZ regulation policy initiatives had no impact on the performance of banks in Zimbabwe. [ABSTRACT FROM AUTHOR]

Repayment of loans in microfinance is a very important subject for study. Microfinance institutions lend to poor and low-income borrowers and thus the terms of lending should be as easy as possible for more poor people to have access. On the other hand, poor and low-income borrowers tend to have no collateral and thus would constitute a considerable risk to lenders once they default. Lenders, therefore, have to devise a special system whereby to ensure that loan defaults are as low as possible in order to avoid charging a higher interest rate which will defeat the very purpose of microfinance-lending. In this paper, using a binary logistic regression model, we undertake to examine the factors that affect default among borrowers. It has been discovered that borrowers' socio-demographic characteristics, past participation in microcredit loans and past credit history have significant impacts, as special features, on their default rates. [ABSTRACT FROM AUTHOR]

This paper presents empirical findings on the impact of leverage (debt's ratio) on firms' performance. Empirical results based on 2003 to 2007 accounting and marketing data for 101 quoted firms in Nigeria lend some support to the pecking order and static tradeoff theories of capital structure. The study employed panel data analysis by using fixed-effect estimation, random-effect estimation and a pooled regression model. The usual identification tests and Hausman's Chi-square statistics for testing whether the fixed effects model estimator is an appropriate alternative to the random effects model were also computed for each model. A firm's leverage was found to have a significant negative impact on the firm's accounting performance measure (ROA). An interesting finding is that all the leverage measures have a positive and highly significant relationship with the market performance measure (Tobin's Q). The study further reveals a salient fact that Nigerian firms are either majorly financed by equity capital or a mix of equity capital and short-term financing. It is therefore suggested that Nigerian firms should try to match their high market performance with real activities that can help make the market performance reflect on their internal growth and accounting performance. [ABSTRACT FROM AUTHOR]

This paper analyses the characteristics of the recent African economic growth. The data reveal that during the period 1995-2005, Africa caught up with East Asia in terms of economic growth and investment. However, East Asia has improved its advantage on Africa in terms of GDP per capita and growth fundamentals. African economic growth rate was 2.2 percentage points higher during the period 1995-2005 compared to the period 1975-94. However, between the two periods, only primary education, exports and urbanization have significantly increased in Africa. The other growth determinants have either slightly deteriorated or remained stagnant. The results of growth regressions over the period 1995-2005 indicate that investment, private sector access to credit, government effectiveness, exports and the share of agriculture value added in GDP are significantly linked with economic growth. Thus, compared to the statistical analysis, growth regressions suggest that most of the variables which have significantly contributed to growth recovery are not those variables which have positively evolved in Africa. The good news is that African economies have grown recently without changing many growth fundamentals. The bad news is that the recent African growth recovery may not be sustainable if efforts are not focused on right growth fundamentals. [ABSTRACT FROM AUTHOR]

Three countries in southern Africa have the highest adult HIV prevalence in the world: Swaziland (25.9 per cent), Botswana (24.8 per cent), and Lesotho (23.6 per cent). Fiscal policy is crucial for addressing this HIV/AIDS crisis. Utilizing a calibrated model, this paper investigates the impact of fiscal policy on reducing the HIV/AIDS incidence rates in these countries. In particular, we studied the welfare impact of different taxation and debt paths in these countries in reducing the HIV/AIDS prevalence rates. This is particularly important given the current concerns about dwindling foreign aid (especially the global AIDS fund), and the fiscal deterioration and sustainability in these countries. Our results show that, acting optimally has not only a positive societal welfare effect but also positive fiscal effects. For example, it will alleviate the debt burden by 5 per cent, 1 per cent and 13 per cent of the GDP, respectively for Botswana, Lesotho and Swaziland by the year 2020. Thus, at a time of fiscal crisis in developed countries and dwindling international HIV/AIDS resources, the future of effective and efficient HIV/AIDS intervention in Africa is clearly domestic. [ABSTRACT FROM AUTHOR]

The study on this paper seeks to identify intervention design(s) which have had an impact on household food security in Kenya's drylands, and could be replicated in other places with similar conditions. Five different ex-post interventions in the drylands of Kenya were evaluated using descriptive statistics and econometric models. It was shown that the intervention project design which had integrated provision of irrigation water and access to markets for both farm inputs and produce in its development strategies had an impact through improvement in the levels and stability of household incomes. Access to markets included institutional organization and provision of transport. In conclusion, food security policy in the drylands should focus on creating an enabling environment for farmers in terms of market organization and provision of irrigation infrastructure. [ABSTRACT FROM AUTHOR]

In this paper, I use a novel approach to estimate Sierra Leone's aggregate capital stock from gross fixed investment and depreciation. Using Johanssen's maximum-likelihood cointegration methodology, I then estimate the parameters of the country's long-run per capita aggregate production function. Thereafter, the sources of economic growth are calculated, the key finding being that economic growth in post-independence Sierra Leone has been propelled by mostly capital accumulation. The implications of this capital-driven growth on poverty reduction and income distribution are then discussed. Policy recommendations for how to simultaneously promote economic growth and improve the living standard of the average Sierra Leonean are also provided. [ABSTRACT FROM AUTHOR]

The post-apartheid South African corporate governance (CG) model is a unique hybridization of the traditional Anglo-American and Continental European-Asian CG models, distinctively requiring firms to explicitly comply with a number of affirmative action and stakeholder CG provisions, such as black economic empowerment, employment equity, environment, HIV/Aids, and health and safety. This paper examines the association between a composite CG index and firm value in this distinct corporate setting within a simultaneous equation framework. Using a sample of post-apartheid South African listed corporations, and controlling for potential interdependencies among block ownership, board size, leverage, institutional ownership, firm value and a broad CG index, we find a significant positive association between a composite CG index and firm value. Further, our two-stage least squares results show that there is also a reverse association between our broad CG index and firm value, emphasizing the need for future research to adequately control for potential interrelationships between possible alternative CG mechanisms and firm value. Distinct from prior studies, we find that compliance with affirmative action CG provisions impacts positively on firm value. Our results are consistent with agency, legitimacy, political cost, and resource dependent theoretical predictions. Our findings are robust across a number of econometric models that adequately control for different types of endogeneity problems, and alternative accounting, and market-based firm valuation proxies. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to present the characteristics of youth employment in Africa as well as investigate its macroeconomic determinants, with a view to proffering some solutions. Our empirical estimates, using available cross-sectional data over the period 1991-2009 show that a nation's domestic investment rate is found to be positively and significantly associated with youth employment in the overall Africa and sub-Saharan estimations. However, domestic investment rate is negatively and significantly associated with youth employment in North Africa. Government consumption expenditures negatively and significantly affect youth employment in sub-Saharan Africa. Rising inflation is negatively and significantly associated with youth employment in North Africa. The level of real GDP per capita has a negative and statistically significant effect in both the overall Africa and North Africa youth employment. The quadratic term of real GDP per capita is positive in sign and significant only in the youth employment estimation for the whole of Africa. We find that real GDP growth positively and significantly affects youth employment in the overall Africa, sub-Saharan and North Africa estimations. Other important variables considered are globalization indicators (FDI and trade openness), credit to the private sector, ICT infrastructure, education, demographic factors, institutionalized democracy, time trend, net oil-exporting/importing country, and regional dummies. Key policy implications include increased productive domestic investment; promoting government expenditure effectiveness; reforming the fiscal systems for consolidation by all levels of government; effective regulation of FDI for domestic job creation; improvements in the diversification, competitiveness and value addition of African export commodities; encouragement of entrepreneurship and access to financing for the youth; greater productive infrastructure development; up-skilling, better training and education for the low-skilled workforce; the promotion of effective democracy that will design policies friendly to youth job creation; and efficient management of oil and other natural resources throughout the value chain. [ABSTRACT FROM AUTHOR]

The idea to find out if economic growth is pro-poor in Niger comes from the observation that despite good macroeconomic performance during the 2000s, poverty remains high. In this paper, two objectives are pursued. First, using an approach based on Kakwani et al. (2002), pro-poor growth is examined according to regional characteristics and place of residence. From the results obtained, it appears that overall economic growth is pro-poor Nigerien, except in cities (including Niamey) where growth seems to be pro-rich - the negative interference of inequality more than offset the positive effect of growth. Second, a simulation exercise is proposed to estimate the level of growth required to reduce poverty by 50 per cent, consistent with the objectives of the Millennium Development Goals. The study shows that Niger cannot achieve such a goal by maintaining a growth rate of 10.5 per cent, and only in 2020. [ABSTRACT FROM AUTHOR]

This paper deals with the dynamics of growth in the countries of the Economic and Monetary Community of Central Africa (CEMAC), focusing on external trade, in particular with China. Its aim is to shed light on the increasing influence of China in Africa. It uses dynamic panel estimations to measure the impact of trade orientation on economic growth in the CEMAC countries and concludes that specialization in natural resources affects economic growth negatively. But this effect is somewhat mitigated by the orientation towards China. Moreover, the weak intraregional trade between CEMAC countries has failed to contribute to their economic growth. [ABSTRACT FROM AUTHOR]

Our generation is experiencing the greatest demographic transition and Africa is at the centre of it. There is mounting concern over corresponding rising unemployment and depleting per capita income. We examine the issues in this paper from a long-run perspective by assessing the relationships among population growth and a plethora of investment dynamics: public, private, foreign and domestic investments. Using asymmetric panels from 38 countries with data spanning from 1977 to 2007, our findings reveal a long-run positive causal linkage from population growth to only public investment. But for domestic investment, permanent fluctuations in human capital affect permanent changes in other forms of investments. Robustness checks on corresponding short-run Granger causality analysis and the long-run 'physical capital led investment' nexus are consistent with the predictions of economic theory. As a policy implication, population growth may strangle only public finances in the long run. Hence, the need for measures that encourage family planning and create a conducive investment climate (and ease of doing business) for private and foreign investments. Seemingly, structural adjustments policies implemented by sampled countries may not have the desired investment effects in the distant future. [ABSTRACT FROM AUTHOR]

This paper considers whether or not in Tanzania, ethnicity conditions access to health and nutrition during childhood and adolescence. We estimate height-augmented Mincerian earnings functions with data from the 2004 Tanzanian Household Worker Survey. Instrumental variable parameter estimates reveal that when the effects of unobserved investments in health and nutrition during childhood and adolescence on adult height are accounted for, the labor market return on height varies across ethnic groups in our sample. This suggests that in Tanzania ethnicity is a constraint on effective health care policy as there is ethnic discrimination in the provision of health and nutrition investment during childhood and adolescence that constrains adult height, living standards and economic growth. As such, public health policy in sub-Saharan Africa could potentially be more effective through reforms that eliminate any ethnic bias in the provision of health capital during childhood/adolescence. [ABSTRACT FROM AUTHOR]

This paper forecasts inflation in Angola with an ARFIMA (autoregressive fractionally integrated moving average) model. It is found that inflation in Angola is a highly persistent variable with an order of integration constrained between 0 and 1. Moreover, a structural break is found in August 1996. Using the second subsample for forecasting purposes, the results reveal that inflation will remain low, assuming that prudent macroeconomic policies are maintained. [ABSTRACT FROM AUTHOR]

This paper assesses the potential economic impacts of Integrated Agricultural Research for Development (IAR4D) conceived to address observed low productivity, prevailing poverty level, slow growth and general underperformance of the agricultural sector associated with the traditional agricultural and rural development (ARD) approach. The economic surplus analysis suggested that IAR4D research and extension, with respect to maize production, could achieve returns ranging from 30 to 38 per cent and a maximum adoption of 25 to 50 per cent for the conservative and baseline scenario, respectively. Similarly, with the same range of maximum adoption, the approach could yield returns ranging from 22 to 29 per cent for the conservative and baseline scenario, respectively in millet production. However, the same range of adoption could result in 29 to 37 per cent for the conservative and baseline scenario, respectively in sorghum production. The estimated benefits are sensitive to expected adoption rates but much less so to changes in research and extension costs. However, the estimates indicate that the production of all the crops was socially profitable under the IAR4D option. Our results were consistent with earlier economic analyses which showed that IAR4D was more productive, profitable and acceptable to farmers than the conventional Research for Development (R&D) approach. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between health and productivity in South Africa. It tests for unit roots and structural breaks and uses the outcome to perform causality and simultaneous equations estimations. The results suggest that without structural breaks, the effect of health on productivity is downplayed. They highlight how long people live does not matter for productivity, the improvements in their lifespan does. Long life can improve productivity only if it is a healthy long life. The impact of improvements of levels of health on productivity is less than 25 per cent of that of improvement of growth rates of health. Improvements in both the levels and growth of male life expectancy enhance productivity more than those of females; an increase in productivity increases the levels of female life expectancy more than those for males. HIV/AIDS significantly reduces levels of life expectancy (with greater impact on females) and labour productivity. Overall, macroeconomic policy for health and growth cannot be conceived separately. Efforts to fight against HIV/AIDS can improve life expectancy and productivity, leading to higher growth. Females may be more vulnerable to die of HIV/AIDS related diseases than males are. Anti-AIDS programmes can have biased effects in favour of female health, although in itself this may not be enough to bring about gender-balanced improvements in health. [ABSTRACT FROM AUTHOR]

The paper highlights that macroeconomic policies do not often confer anticipated positive benefits in the desired direction. Indeed, macroeconomic policies may impact health outcomes negatively, create inequality and some other undesirable effects which may have significant effects on social well-being. While macroeconomic policies can have great impacts on health outcomes, the nature of the impacts of macroeconomic variables on health or proximate determinants of health is complex because they operate through the whole economy with significant lags. As a result of the non-availability of theoretical guidance on the appropriate measurement of health outcomes, the multiplicity of the various indicators gives rise to subjective interpretations of results. There are a number of areas where future research should focus. These include developing a better understanding of the transmission mechanism from macroeconomics policies to health outcome variables, and how macroeconomic policies can be made more effective and minimize the possible negative impacts on health outcomes. [ABSTRACT FROM AUTHOR]

Microeconomic studies cannot, by definition, identify general equilibrium economic effects of changes in health. Macroeconomic analysis is needed for this, and the paper reviews three strands in the empirical literature, based respectively on cross-country regression analysis, computable general equilibrium (CGE) modelling, and a mixture of microeconomic estimation and macroeconomic simulation. The first two strands have important drawbacks. Cross-country regression is beset with the problem of finding valid instruments. CGE models tend to contain a large number of imposed parameters, making it hard to judge the robustness of simulation results. Mixing micro-estimation with aggregative macro-simulation appears most promising as this methodology allows both drawbacks to be avoided, at least in part. [ABSTRACT FROM AUTHOR]

The financing of health care is a complex issue for policy makers. This is because high out-of-pocket payments on health care have been found to further impoverish the poor who have limited income to divide among basic necessities of which health care is one - catastrophic health expenditure (CHE). The Millennium Development Goals (MDGs) may be difficult to attain with high out-of-pocket payments by the poor; this is an issue of serious concern and highlights the need for the kind of analyses in this paper. The analysis used data collected by the Household and Expenditure Survey (HIES) 2002/2003 for Botswana and by the Household Budget Survey (HBS) 2002/2003 for Lesotho. Our results showed that in Botswana the proportion of households facing CHE at the 20 per cent and 40 per cent thresholds was 11 per cent and 7 per cent respectively, and the share of out-of-pocket health payments during the survey period was about 0.93 per cent. For Lesotho the proportions of those facing CHE expenditure at the 20 per cent and 40 per cent thresholds were 3.22 per cent and 1.25 per cent, and the share of out-of-pocket payment in total monthly expenditure was 1.34 per cent. Results from regression analyses suggest that having at least one senior member in the household imposes a higher risk for CHE for the household in Lesotho; for Botswana gender and education status of household head influence the probability of facing CHE. In designing health systems, policy makers need to ensure that households are not only able to access health services when needed, but that they are also protected from facing financial catastrophe by reducing out-of-pocket payments. [ABSTRACT FROM AUTHOR]

Evidence abounds in the rural livelihoods literature that rural households do not only receive a significant proportion of their incomes from non-farm sources, but also it is a significant source of employment for rural folks. This paper examines the pattern and determinants of non-farm income diversification in rural Ghana. Results show that off-farm income constituted 43 percent of rural household income in 2005/6. Female-headed households tend to have larger off-farm income shares compared to male-headed households. Non-farm income shares followed the same gender pattern albeit less pronounced. Unlike in Latin America and Asia, in rural Ghana, non-farm self-employment income is more important than non-farm wage-employment income. Regression results show that the gender composition of households, age, education, and access to credit, electricity and markets are important determinants of multiple non-farm activities and non-farm income. The findings call for strategies that can help rural households maximize the benefits from income diversification. [ABSTRACT FROM AUTHOR]

The International Monetary Fund (IMF) has worked with Sudan since 1997 to implement a managed float exchange rate. The IMF sees exchange rate flexibility as key to safeguard and rebuild foreign exchange reserves and essential to meet the international reserve target in Sudan. However, authorities in Sudan are concerned about the inflationary pressures that exchange rate flexibility may cause. A review of the literature reflects huge ambiguity about the outcome of exchange rate policies in Sudan. This calls for additional empirical investigations. This paper applies a computable general equilibrium (CGE) model to investigate the possible effects of devaluing the currently overvalued Sudanese pound, by simulating a depreciation of the Sudanese pound by 5 per cent, 10 per cent and 15 per cent. Based on the results, the study recommends that additional flexibility of the Sudanese exchange rate regime as suggested by the IMF be carefully considered if such flexibility devalues the Sudanese pound. [ABSTRACT FROM AUTHOR]

This paper examines the crowding out or crowding in effect of foreign direct investment inflow on domestic investment in Africa. Data for the period 1970-2008 were extracted from the UN statistical online database and the World Development Indicator 2009 online database and the study employed a recent panel cointegration estimation technique. The study revealed that foreign direct investment inflow crowds out domestic investment in the ECOWAS region. The study therefore recommends that policy makers in the ECOWAS countries focus on promotional resources to attract some types of foreign direct investment and regulate others. Policies should also be directed at putting in place a better targeted approach to screen foreign direct investment applications to ascertain their productive base before allowing them. [ABSTRACT FROM AUTHOR]

This paper analyses the effectiveness of foreign exchange market interventions by the Reserve Bank of Malawi (RBM). We use a GARCH (1, 1) model to simultaneously estimate the effect of intervention on the mean and volatility of the Malawi kwacha. Results from the GARCH model indicate that net sales of US dollars by the RBM depreciate, rather than appreciate, the kwacha. Empirically, this implies the RBM 'leans against the wind', that is, the RBM intervenes to reduce, but not reverse, exchange rate depreciation. On the other hand, results for the GARCH model for the post-2003 period indicate the RBM intervention in the market stabilizes the kwacha. In general, results for the entire study period show that the RBM interventions have been associated with increased exchange rate volatility, with the only exception being the post-2003 period. The implication of this finding is that intervention can only have a temporary influence on the exchange rate. [ABSTRACT FROM AUTHOR]

Egypt has been unable to sustain rapid economic growth in the past, nor has it been able to generate employment opportunities at a fast enough rate to keep unemployment from rising. It will be argued in this paper that this has been the result of significant implicit taxation of the agricultural sector. The latter has slowed the structural transformation of the Egyptian economy, increased the capital intensity of production in the urban sector, and slowed overall economic growth. The Egyptian experience is contrasted with that of South Korea and Taiwan. The results indicate that indeed structural change in Egypt has been slowed by the implicit taxation of agriculture. [ABSTRACT FROM AUTHOR]

This paper identifies and decomposes sources that explain household economic well-being in Cameroon. It uses the 2001 and 2007 Cameroon Household Consumption Surveys, synthetic variables constructed by the multiple correspondence analysis and econometric approaches that correct for potential endogeneity and unobserved heterogeneity in a step-wise manner and simultaneously. Sources of well-being that explain poverty are then decomposed into growth and redistribution components. Variables that significantly explain household economic well-being are education, health, household size, fraction of active household members, working in the formal sector and area of residence. Decomposition analysis shows that the growth components largely account for changes in deprivation in terms of each regressed-income source. With the exception of the income source education, redistribution components slowed down progress in alleviating shortfall in other regressed-income sources. These results have implications for public interventions that affect education and health for all, labour market participation and infrastructure development. [ABSTRACT FROM AUTHOR]

Various efforts by national governments, non-governmental organizations (NGOs) and international donors have shown limited success in reducing poverty in sub-Saharan Africa. As a result, poverty is still persistent in most households especially in rural areas. The persistence of poverty on the continent can be in part attributed to the top-down approach to development adopted by various poverty alleviation programs. This paper focuses on poverty reduction programs in Burkina Faso and argues that a community-driven approach to development and poverty reduction has the potential of lifting rural populations out of poverty trap. [ABSTRACT FROM AUTHOR]

This paper aims at assessing the optimal reserves in franc zone countries (FZC). First, an EMP crisis index of the cross exchange rate between the CFAF and the USD is constructed and its frequency is computed in a sample of eleven countries over the period 1980-2003. Subsequently, the estimated crisis probability is fed into a calibrated model economy of FZC to compute the optimal reserves to output ratio. We find that actual reserves are mostly lower than the implied optimal reserves. [ABSTRACT FROM AUTHOR]

An economy-wide, multimarket model is applied for Ghana and is used to assess the aggregate economic cost of agricultural soil erosion. To fill a gap in the literature regarding economic cost analysis of soil erosion, this paper also analyzes the poverty implications of land degradation. The model predicts that land degradation reduces agricultural income in Ghana by a total of US$4.2 billion over the period 2006-2015 and the national poverty rate will increase in 2015 by 5.4 percentage points. Moreover, soil loss causes a slowing of poverty reduction over time in the three northern regions, which currently have the highest poverty rates in the country. Sustainable land management (SLM) is the key to reducing agricultural soil loss. The present findings indicate that through the adoption of conventional SLM practices, the declining trend in land productivity can be reversed, and that use of a combination of conventional and modern SLM practices would generate an aggregate economic benefit of US$6.4 billion over the period 2006-2015. SLM practices would therefore substantially reduce poverty in Ghana, particularly in the three northern regions. [ABSTRACT FROM AUTHOR]

Macroeconomics in general and interest rate policy in particular are believed, from a theoretical point of view, to act on stock market movements. This paper discusses this issue in the case of the West African stock market by studying the Regional Securities Exchange (la Bourse Régionale des Valeurs Mobilières (BRVM)) stock market reactions to interest rates innovations. Our results, based on VAR analysis, show that the BRVM stock market does not react immediately to short-run interest rates' innovations. Nevertheless, backed reactions occur in imminent periods: at the earliest in the second period and at the latest in the sixth period according to VAR models used. Long-term effects of short-term interest rates' innovations on stock prices returns depend on models specified, on the kind of interest rate and on data frequency. Thus, the long-term effect of central bank rent rates' innovations is relatively more important than the one related to interbank rate's innovations. The previous situation of the market is, however, the main determinant of the change of stock prices. Our results show also that stock prices and short-run interest rates have a similar reaction to both exchange rate and inflation rate's innovations. [ABSTRACT FROM AUTHOR]

This paper studies the emergence of developing countries from a development trap. It shows that countries whose dynamics exhibits several growth peaks can be considered as cases of equilibrium jump. Applying this criterion to a sample of 65 countries that were initially very poor in 1950, it identifies 13 such countries, called 'emerging economies'. Comparing emerging and non-emerging economies in the 1950s and early 1960s, it shows that economic take-offs starting in the 1960s can be related to health and education in the early 1950s, while other possible factors, such as savings, openness and democracy are not significant. [ABSTRACT FROM AUTHOR]

Distances involved in accessing basic services can constitute a major barrier to development. This paper analyzes the relationship between the distance separating households from microfinance institutions' offices in Niger, and the low levels of development and performance of the microfinance sector in the country. To cope with the effects of geographical distance, microfinance institutions adapt their policies through more restrictive loan conditions, higher interest rates and more intensive screening. This then leads us to discuss the tension between access and sustainability in the context of financial services for the poor. [ABSTRACT FROM AUTHOR]