African Economies Research Articles

Developments, bottlenecks, and opportunities in seed markets for improved forages in East Africa: The case of Kenya

AbstractBackgroundCattle farming plays a pivotal role in Africa's agricultural and livestock sector, poised for growth due to population expansion and rising per capita consumption of animal‐sourced food. Forages are a primary source of feed for dairy cattle, significantly impacting production costs. While local forage varieties are preferred by dairy farmers, there has been an increase in the adoption of improved forages in recent years. However, the overall adoption rate is still low, for example, due to underdeveloped forage seed markets.MethodsThis study describes the dynamics, challenges, and potential of these markets in Kenya and selected East African countries, focusing on (i) market evolution over the past decade, (ii) forthcoming market prospects, and (iii) bottlenecks and opportunities for improvement. Data were gathered in 2022 through qualitative interviews with stakeholders representing six segments of the forage seed sector across six countries.ResultsWe found a sustained growth of the improved forage seed market in recent years. The main challenges for further growth are high seed prices, regulatory difficulties, and limited producer knowledge.ConclusionsThe findings unveil positive dynamics in the region's forage seed market, fueled by the engagement and determination of stakeholders who recognize the manifold benefits that it holds for both the dairy industry and economic growth. The realization of this market's potential requires addressing prevailing challenges, including elevated seed costs, intricate variety registration processes, and a pervasive lack of awareness among farmers.

Is external debt an impediment to the South African economy?

Is external debt an impediment to the South African economy?

Housing prices in South African economy: Investigating macroeconomic drivers using time-varying approach

Despite being one of the least liquid assets, housing is unarguably the most significant asset class and the biggest contributor to household wealth. The goal of the current empirical research is to examine the macroeconomic drivers of housing prices. Thus, the study examines the impact of macroeconomic variables and oil prices on housing prices using monthly time series data from 2003(M1) to 2023(M3). Generalized Autoregressive Score Model (GAS) is employed to appraise the time-varying relationships between housing prices and macroeconomic variables, as well as housing prices and oil prices. The findings resulting from the empirical analysis indicate that the housing market in South Africa is substantially influenced by macroeconomic factors and oil prices. Therefore, the South African government and policy makers must maintain strong macroeconomic policy formulation and environment as they have an impact on housing prices, which, in turn, have an impact on the welfare and quality of life of the populace.

How do conflicts affect energy security risk? Evidence from major energy-consuming economies

Conflicts, whether internal or external, have the ability to increase energy security risks. Given this background, this paper investigates the impact of conflicts on energy security risks in the panel data of 40 major energy-consuming economies from Asia, America, Europe, and Africa by employing the Cross-sectionally augmented Autoregressive Distributed Lag model from 1996 to 2021. The results show that the risks to long-term energy security fall with the rise in internal and external conflicts globally and in Asian, American, European, and African economies. However, all regions see decreased long-term energy security risk due to rising financial development. At the same time, national income mitigates energy security risks globally and in American countries. Technological innovation reduces long-term energy security risks globally in Asian, American, and European economies. Conversely, only gross domestic product and technological innovation cause the energy security risks to fall globally and in American economies.

Development effects of industrialization, labor force participation and electrification on productive capacity in Africa: A panel data investigation

In our study spanning 2010–2022 across 50 African economies, we investigated the effects of industrialization, labor force participation, and electrification on Africa’s productive capacity. We also examined how electrification moderates the effect of industrialization and labor force participation on productive capacity. We adopted the pooled OLS, the fixed effect estimator, and the dynamic system GMM estimation technique for our analysis. Our findings indicate industrialization, labor force participation, and electrification as potent channels for enhancing Africa's productive capacity. In tandem with Africa’s reality, we find that electrification isn’t moderating the positive impact of industrialization and labor force participation on productivity. Our findings also revealed human capital development, government health expenditure, and institutional quality as pivotal drivers of productive capacity in Africa, while factors like global economic policy uncertainty and natural resource endowment exhibit predominantly negative roles. These results underscore the need for African policymakers and leaders to foster an enabling environment that facilitates industrialization, increased labor force participation, and improved electricity access to promote economic performance and productivity.

The BRICS in Southern Africa

The BRICS were created at the beginning of the 21st century to reorganize the international world order to represent their weight in international politics, economics, and geopolitics. Although they are entirely different, the BRICS saw a strategic space to reach these goals in the African continent. Thus, these countries started to broaden their presence in the African continent. As a result, BRICs started their relations with Africa differently, but they acted in similar sectors. The fellow paper pursues to analyze the Brazilian, Russian, Indian and Chinese (called here as BRICs) insertion in Southern Africa, highlighting the main convergence sectors and divergences between them. The methodology will be based on historical analyses, connecting their historical insertion in Southern Africa in a broad perspective of foreign policy objectives in the 21 st century. In the first session, we will approach the economic presence of BRIC in Southern Africa in 21 st century. Latter, we will abstract each one's foreign policy for the region (highlighting the main economic sectors and diplomatic presence).
 Moreover, it will be possible to compare their presences, highlighting the convergence and divergence between them. The Chinese and Indian weight in Africa's economy is more perceptive than Brazilian's and Russian's. Nonetheless, all BRICs have been widening their trade and diplomatic relations with Southern Africa in the 21st century due to their perspective of the importance of Africa in international world politics.

The Transformative Trajectory for Nigeria in the Aftermath of Joining the African Continental Free Trade Agreement.

The African Continental Free Trade Agreement (AfCFTA) is a significant initiative aimed at promoting economic integration among 54 African nations. This article examines the historical context, challenges, and achievements of the AfCFTA, including tariff reductions, trade in goods and services, intellectual property rights, and free movement of persons. It also highlights the challenges faced by African economies, such as low industrialization and limited access to finance. The article proposes strategic solutions, such as infrastructure development and regulatory harmonization, to address these issues. The AfCFTA has created the world's largest free trade area, promoted trade in services, and attracted foreign investment. The article highlights its resilience during the COVID-19 pandemic and acknowledges its transformative potential in shaping Africa's economic future. Future prospects include scope expansion, regional integration, digitalization, and sustainable growth. Keywords: Global trade, AfCFTA, Regional Trade, Trade block

Renewable energy consumption and its impacts on agriculturalization under climate neutrality targets

Improvements in energy efficiency, cost savings, and environmental advantages are possible effects of adopting and using renewable energy in agriculture. However, whether renewable energy consumption (REC) has any impact on agricultural productivity is a research question that this analysis tries to answer. Previous research neglected to consider the influence of REC on agriculture. The primary objective of the analysis is to analyze the role of REC in sustainable agriculture in Asia, America, Africa, and Europe with the help latest econometric technique of the CS-ARDL model. The findings show that REC and technological capital (TC) improve long-run agriculturalization in the full sample, Asia, Africa, America, and Europe. The results infer that a 1% increase in REC causes agriculturalization to boost by 1.512% in the full sample, 1.254% in Asia, 1.654% in Africa, 0.897% in America, and 1.325% in Europe. In addition, financial development favorably influences long-run agricultural productivity in the full sample, Africa, America, and Europe, and population growth only impacts agricultural productivity in the long run. In contrast, the long-run agricultural productivity is negatively impacted by environmental pollution globally and in Asia. On the other hand, in the short run, TC positively impacts agricultural productivity in all samples, while other short-run estimates are insignificant in most samples. These findings suggest that renewable energy utilization may lead to more effective and resilient agricultural systems by supplying clean and dependable electricity, lowering greenhouse gas emissions, and supporting sustainable resource management.

Economic Transition Opportunities for Nigeria in joining the African Continental Free Trade Area.

This article explores the African Continental Free Trade Area (AfCFTA) and its implications for Nigeria. AfCFTA, established in 2018, aims to create a competitive single African market by eliminating tariffs and barriers, fostering economic growth, job creation, and industrialization. The nature of trade in Continental Africa has been more with the rest of other continents than within Africa. Then comes the question of what is standing on the way of inter and intra Africa trade. With trade we can unlock Africa growth and development and by so doing, we can improve per capita income in the continent and by so doing reduce poverty in Africa. The article discusses the objectives and challenges of AfCFTA, emphasizing the importance of infrastructure, regulatory harmonization, and trade facilitation. For Nigeria, Africa's largest economy, joining AfCFTA offers expanded market access, job opportunities, and economic diversification. The government's rationale for participation includes promoting industrialization, increasing export opportunities, and improving trade balance and foreign exchange reserves. The reality is that we all need each other to get the wheel of life going. Keywords: Globalization, AfCFTA, Regional Trade, Trade balance

The Growth Opportunities for Nigeria in Joining the African Continental Free Trade Area.

This Article examines the African Continental Free Trade Area (AfCFTA), focusing on its inception, goals, challenges, and specific implications for Nigeria. Africa, with abundant natural resources and cultural diversity, faces hindrances like poor infrastructure and governance, limiting intra-African trade. Established in 2018, AfCFTA aims to create a competitive single African market by eliminating tariffs and barriers. AfCFTA objectives span tariff elimination, customs harmonization, dispute resolution, and cooperation on technical barriers. Challenges include infrastructure gaps, non-tariff barriers, economic diversity, competition adjustments, informal trade, political instability, capacity constraints, and financing issues. Mitigating these requires strategies like infrastructure development, trade facilitation, capacity building, and harmonizing standards. Nigeria, as Africa's largest economy, could benefit from AfCFTA by accessing cheaper goods. However, implementation faces delays due to unmet trade requirements. The National Action Committee outlines pillars for effective implementation, emphasizing institutional development, export growth, improved trade facilitation, and infrastructure development. Despite Nigeria's delay, the upcoming Guided Trade Initiative in October 2023 is anticipated to accelerate its participation in AfCFTA, fostering economic growth and trade relations within the continent. Keywords: Global trade, globalization, AfCFTA, Trade Block, Commerce.

Bundling Genetic and Financial Technologies for More Resilient and Productive Small-Scale Farmers in Africa

Abstract Using a multi-year, spatially diversified randomised controlled trial spanning two African countries, this paper explores whether a complementary bundle of genetic and financial technologies can boost the resilience and productivity of small-scale farmers. The analysis shows that both moderate droughts and more severe yield losses undermine the resilience of control-group households, and that these shocks have long-lasting effects as farmers invest and produce less following shocks. Severe yield shocks also increase hunger and food insecurity. The genetic technology—drought-tolerant seeds—provides economically significant protection against mid-season drought and mitigates the long-term drop in farm productivity seen in the control group. The financial technology—satellite-based index insurance—offsets the long-term consequences of severe yield losses that are not mitigated by the drought-tolerant seeds. Finally, the analysis shows that treatment-group farmers who experienced shocks and saw the technologies in action subsequently increased their agricultural investment beyond pre-shock levels, an effect we call the resilience dividend. Unfortunately, this apparent experiential learning cuts both ways. Farmers who did not experience the efficacy of the risk management technologies backed away from using them. Our findings thus showcase how genetic and financial risk-mitigating technologies can offer farmers more complete protection, as well as the challenge of inducing sustained uptake of technologies that are midway between experience and credence goods and only infrequently reveal their benefits.

The Non-Agricultural Labour Productivity Effects of Working Time: South Africa’s Case

The purpose of the current study is to assess the impact of working time on non-agricultural labour productivity in the South African economy. To achieve this objective, the study utilised the Autoregressive Distributed Lag Model (ARDL) and correlation analysis to analyse the effects of different working time arrangements on labour productivity. The results of the study indicated that weekly working hours have a significant influence on worker productivity. Working between 30 and 39 hours per week was found to greatly enhance productivity both in the short and long term. Additionally, working between 15 and 29 hours per week showed a slight positive effect on productivity. Conversely, working more than 39 hours per week (between 40 and 45 hours) only increased productivity in the short term, while working less than 29 hours and exceeding 45 hours per week had a negative impact on labour productivity. These findings suggest that an optimal working schedule to maximise labour productivity is between 30 and 40 hours per week, with overtime not exceeding 5 hours per week. Establishing a proper schedule of weekly working hours is crucial for maximising labour productivity and reducing work-related stress, which can impede productivity.

ASSESSMENT OF THE COVID-19 PANDEMIC IN SOUTH AFRICA:

The conventional understanding is that the coronavirus pandemic (Covid-19) has challenged the development of the economies at all levels – global, regional and domestic. The need to assess its damage to the South African economy became imperative if the economy has to be resuscitated in an informed and targeted way. The study therefore aimed at assessing the impact of the Covid-19 Pandemic in South Africa, assessing the effectiveness of the South African government response to Covid-19 and outlining government strategies that have been employed in an effort to rebuild the South African economy. The study utilised the qualitative research approach in which semi-structured interviews were used to collect information on a purposive sample of 12 participants. Through the use of thematic analysis as the data analysis method, the study discovered that the Covid-19 pandemic has both long-term and short-term impacts on the South African economy such as loss of employment, contracting GDP, depressed growth below pre-pandemic projections and lack of organisational performance. In response to Covid-19, the government introduced supporting programmes to businesses, regulations aimed at allowing credit facilities and partnership with various stakeholders. Strategies such as expansionary monetary strategies and the introduction of specific programmes targeting the resuscitation of key economic sectors have been implemented to rebuild the economy. The study, therefore, recommends that the government needs to build a buffer of resources in preparation of devastating pandemics such as Civid-19, such that when the country is hit by the pandemic, there are avenues that can be explored to resuscitate the economy. There is also need to ensure that there is a platform where business organisations can flourish as they can access capital and resources.

Socio-economic Effect of COVID-19 on the Global Economy

Epidemics and pandemics have been part of human existence since time immemorial. Although the foregoing terms are often used interchangeably, they have distinctive meanings in the scientific world. The world has been plagued with a significant number of epidemics and pandemics in prior and recent years. Earlier news on the outbreak of COVID-19 was received with scepticism by leaders and citizens of several advanced, emerging and developing economies around the world. Most global leaders doubted the exponential effect of COVID-19 on their respective countries and on the global economy as a whole. The purpose of this research was to examine the impact of COVID-19 on global economic activities and output. The research relied on the quantitative approach to scientific inquiry. Specifically, a cross-sectional design was adapted and used in the study. This enabled the researchers to gather relevant research data over a specific period of time. Data required for the conduct of the study were obtained mainly from secondary sources. These included peer-reviewed articles published in journals, research papers, textbooks, and newspaper publications; Google Search Engine including Worldometers.info, Africanews.com, and Weforum.org; financial websites such as Tradingeconomics.com; and electronic databases of the World Bank, International Monetary Fund, and World Economic Outlook, among other significant sources. Annual data on global gross domestic products from 1990 through 2019, data on the top twenty global economies from 2019 through 2021 and available data on the COVID-19 pandemic as of 20th April 2020 were used in the study. Regression models and descriptive statistics were used to describe the research variables; and to evaluate their behaviour over the stated time frame on the global economy. Findings from the research revealed a positive but non-significant relationship between fiscal year and global GDP (p = 1.12239, p > 0.05). The results suggested that the fiscal year alone has no significant influence on global GDP. Rather, internal and external environmental factors in a given financial year, such as Tsunamis, tornadoes, earthquakes, bushfires, hurricanes, and pandemic outbreaks (such as COVID-19), influence global GDP and its attendant growth. The findings revealed Ghana’s estimated economic losses from COVID-19 (GH¢15 billion) are equivalent to 4.27% of projected GDP (GH¢351.19 billion) for 2020 and equivalent to 4.34% of GDP (GH¢346 billion) for 2019, while estimated global economic losses from the pandemic (US$2.7 trillion) ranged from 3.05% to 3.06% of projected global GDP (US$88.574 trillion or US$88.312 trillion) for 2020. Almost all African economies are struggling to patch the economic holes created by the menacing COVID-19 pandemic. Since the non-occurrence of a similar or higher magnitude pandemic in the near and distant future cannot be guaranteed, the researchers recommended the need for leaders of various economies to put the necessary contingency measures and structures in place to avert devastating effects, should any pandemic occur. Experiences from the Ebola and Coronavirus outbreaks are expected to serve as strong practical case studies for the Africa Centre for Disease Control (ACDC) to improve its response rate to epidemic and pandemic outbreaks on the continent. The ACDC should be able to advise member countries on the state-of-the-art medical facilities required to facilitate treatments for epidemic and pandemic outbreaks. There is a need for inter-country collaboration. That is, African countries that are “handicapped” in medical facilities and equipment should collaborate with those that are endowed with and also share expertise to save the continent from socio-economic dissipation. The World Health Organisation (WHO) must continue to monitor health conditions and situations in countries and territories and provide early signals to enhance the preparedness and responsiveness of various economies. Member countries must provide the necessary logistics and technological assistance so WHO could improve on its existing structures and mechanisms for “systematic disease surveillance and reporting.”

A roadmap to a green economy in South Africa: modelling technological innovation and energy consumption in the novel dynamic ARDL simulations framework

A roadmap to a green economy in South Africa: modelling technological innovation and energy consumption in the novel dynamic ARDL simulations framework

The South African broadcasting corporation's coverage of the Russia–Ukraine war

Russia's invasion of Ukraine in February 2022 caused ideological confusion in South Africa, which holds Russia in high esteem as a Brazil, Russia, India, China, and South Africa (BRICS) partner and a major player in Africa's political economy since 2000s. Against this background, this article examines the coverage of the Russia–Ukraine war on selected days from the start of the war to April 2022 on the South African Broadcasting Corporation (SABC). Through content analysis, the study concludes that war-related topics that received the most coverage were security, peace, United Nations, and civilians. War-related topics that received least coverage on SABC News were sanctions, battlefield, EU policies, nuclear, U.S. policies, justification, and disinformation. The article argues that SABC News coverage was largely objective.

Trade openness, poverty, and sustainable development: Testing for causality using Dumitrescu-Hurlin approach

Purpose — This research paper explores the causal links between trade openness, poverty, and sustainable development, shedding light on the potential impact of trade policies on poverty reduction and sustainable development in the Economic Community of West African States (ECOWAS) region.Method — We utilize the Dumitrescu-Hurlin (DH) panel causality test, a robust econometric approach capable of discerning the direction and magnitude of causal relationships among variables. We employ a comprehensive dataset spanning from 1986 to 2020, covering ECOWAS countries, to conduct a rigorous empirical analysis.Result — The empirical findings from the DH causality analysis reveal a unidirectional relationship between trade openness, human capital investment, and both sustainable development and poverty. Additionally, bidirectional causality relationships are observed between human capital investment and poverty. The results also highlight the absence of a consistent and uniform pattern of Granger causality between poverty and sustainability across individual West African economies. This heterogeneity underscores the need for customized policy approaches based on empirical evidence derived from country-specific causality analyses, rather than adopting one-size-fits-all solutions.Novelty — This research stands out by exploring the causal connections among trade openness, poverty, and sustainable development within the Economic Community of West African States (ECOWAS) region. The adoption of the Dumitrescu-Hurlin (DH) panel causality test enhances the empirical analysis, offering a comprehensive understanding of both the direction and magnitude of these relationships.

Fields of contestation and contamination: Maize seeds, agroecology and the (de)coloniality of agriculture in Malawi and South Africa

Farmer-managed seed systems and the conservation of agrobiodiversity are increasingly recognized as important components of food and seed sovereignty. In contrast, hybrid, genetically modified (GM), and, increasingly, gene-edited crops continue to be promoted by Green Revolution proponents as a “climate smart” package that includes fertilizers, pesticides, purchased seeds, and links to global markets. Influencing seed laws and policies to support the uptake of modern crop varieties has been a key entry point in many countries, facilitated by networks of foreign donors, philanthropists, governments, and multinational companies. Using the case of South Africa, where GM crops have been grown for several decades, we provide insights on implications for Malawi, which passed a Seed Act in 2022, implicitly supporting GM crops. Both countries have histories of colonial agriculture with strong policy support for modern, hybrid varieties of maize, and the replacement (and displacement) of local, open-pollinated maize varieties. In South Africa, several studies have revealed the contamination of smallholder fields and seed systems. Through a political ecology lens, we explore how maize and its cotechnologies were commodified in South Africa and Malawi, and what South African experiences of GM crop adoption in smallholder farming systems can tell us about the challenges to be faced by smallholder Malawian farmers. We reveal how colonial histories and ongoing colonialities of power, knowledge, being, and nature continue to shape the character and form of agriculture in both countries, running counter to the needs of agroecological smallholder farmers and their ways of knowing and being. We conclude by envisioning what reimagined, transformed and decolonial approaches for food and agriculture might look like on the African continent, and how they might contribute toward the attainment of food and seed sovereignty and an agroecological future.

Do international tourism arrivals, infrastructural development, and trade openness promote economic complexity in Africa?

Recent scholarly articles consistently show that economic complexity promotes economic development. However, upon further examination of the literature, it becomes evident that macroeconomic determinants of economic complexity are not fully investigated, particularly in Africa. This study addressed this gap in the literature by investigating the impact of international tourism arrivals, infrastructural development, and trade openness on economic complexity in Africa. The study utilized the dynamic system GMM and panel Fixed Effects estimators for 34 African economies from 2010 to 2021. The results indicated that international tourism arrival and trade openness have beneficial effects on economic complexity in Africa, while the effects of infrastructural development remained mainly negative. Additionally, we established that human capital development and foreign direct investment inflow are potent channels for promoting economic complexity on the continent. We highlighted the policy implications of these findings.

A dynamic, stochastic, Bayesian, provincial input–output model for the South African economy

A dynamic, stochastic, Bayesian, provincial input–output model for the South African economy