Low-income sub-Saharan Africa Research Articles

The effect of renewable energy aid and governance quality on environmental tax effort in Sub-Saharan Africa

The literature on foreign aid and tax efforts largely overlooks the specific role of environmental aid and taxation. To fill this gap, we examine the effects of renewable energy development assistance (EDA) and governance quality on climate change tax effort, air pollution tax effort, and aggregate environmental tax effort in Sub-Saharan Africa (SSA). Utilizing panel data from 15 SSA countries over 20 years (2000–2019), the sample is divided into two groups based on income levels: seven low-income countries (LIC) and eight middle-income countries (MIC). The instrumental variable generalized method of moments (IV-GMM) regression technique is employed to estimate the parameters of the baseline model specifications. The study also uses the Smoothed Instrumental Variable Quantile Regression (SIVQR) technique to test the robustness of the baseline model. Among middle-income SSA countries, the findings suggest that renewable energy aid inflows reduce climate change tax efforts but increase air pollution and aggregate environmental tax efforts. However, among low-income SSA countries, renewable energy aid negatively impacts all three categories of environmental tax efforts. Governance quality tends to enhance all three categories of environmental tax effort in both low-income and middle-income SSA countries. The implications of these results are discussed.

Deposits and financial sustainability of deposit-taking microfinance institutions: evidence from low income Sub-Saharan Africa

Deposits and financial sustainability of deposit-taking microfinance institutions: evidence from low income Sub-Saharan Africa

Trends and Determinants of Intergenerational Educational Inequality in Sub-Saharan Africa for Birth Cohorts 1974 to 2003

This article expands the scope of comparative social stratification research in education to rapidly developing, largely low-income sub-Saharan Africa. First, we investigate trends in the association between parental socioeconomic status (SES) and children’s chances to attend and complete primary education, exploring whether and where educational expansion of the early twenty-first century led to equalization of educational opportunities. Drawing on data from 153 Demographic and Health Surveys and Multiple Indicator Cluster Surveys (1990–2017) from 40 countries, findings indicate that inequality in attendance declined, but inequality in completing six grades largely persisted. Cross-country analyses reveal a large variation in inequality levels and trends. We explore the role of national contextual factors and find that underweight prevalence, fertility rates, school fees, public spending on education, and the ratio of pupils to teaching staff systematically explain variation in SES gaps across countries and cohorts. Findings underline the importance of absolute material deprivation and school teaching resources in the stratification of educational opportunities in this region.

Liquidity And Deposit Insurance: The Case Of Deposit-Taking Microfinance Institutions In Low-Income Sub-Saharan Africa

The objective of this study was to examine the relationship between liquidity and deposit insurance of Deposit-taking Microfinance Institutions (DTMFIs) in Low-Income Sub-Saharan Africa (LISSA). Several DTMFIs in the region defaulted in meeting withdrawals on deposits and collapsed with depositors’ funds. The failure of DTMFIs to be liquid has dire consequences such as contagion risk due to the sudden and unexpected deposit runs and oblivion of depositors’ funds, which further condemn the small savers into extreme poverty levels. Panel data from the Microfinance Information Exchange for the years 2006 to 2017 of 64 DTMFIs sampled across 18 LISSA countries was utilised. The estimated random effects results showed that explicit deposit insurance is positive and significantly related to liquidity. Additionally, the capital adequacy ratio and the Basel implementation dummy are positive and significant determinants of liquidity. The study concluded that designing and implementing explicit deposit insurance schemes mitigates liquidity risk in depository microfinance and maintaining adequate capital adequacy levels and implementation of Basel recommendations improves the liquidity positions of the LISSA DTMFIs. The study recommended formulation of deposit insurance policies that embrace microfinance deposits of all types and adherence to the Basel capital adequacy standards complements deposit protection in hedging liquidity risk.

Capital flows to low-income sub-Saharan Africa: an exploratory review

PurposeThe purpose of the paper is to examine macroeconomic and institutional factors that influence capital flows to low-income sub-Saharan African (SSAn) countries. It analyzes capital flows in a disaggregated manner: foreign divert investment, portfolio equity and portfolio debt. There is a gap in the empirical literature in examining the factors that are important for various types of capital flows to low-income SSAn countries. Low-income SSAn countries attract very low levels of foreign investment compared to other developing economies in the SSAn region and other developing economies and this paper attempts to make a contribution in this area.Design/methodology/approachThis paper examines data on capital flows and that of various push and pull factors. Trends and dynamics of capital inflows and their macroeconomic and institutional drivers are analyzed for low-income sub-Saharan African countries. Such an analysis has not been fully explored for low-income SSAn countries.FindingsCapital inflows to low-income sub-Saharan Africa (SSA) have increased sevenfold since the 1990s, dominated by foreign direct investment (FDI). They overtook official development assistance and aid in the 2010s. Mozambique and Ethiopia attract the largest size of FDI compared to other low-income SSAn economies, with natural resources as key factors in the former. The largest share of FDI to low-income SSAn countries comes from other SSAn countries, mostly South Africa and Mauritius. Among macroeconomic push factors, capital inflows are more closely related to commodity prices, while the volatility index and global liquidity are also important. Among macroeconomic pull factors, trade openness and economic growth appear more closely related to capital inflows. The surge in capital inflows in the 2000s also followed the implementation of several regional trade and investment agreements in the region. The improvement in internal conflict in the 1990s and mid-2000s seems to have helped support the increase in capital inflows during that period. This institutional quality variable appears to more closely track capital inflows compared to other institutional quality indicators. There were also improvements in the investment profile, law and order, and government stability in the 1990s to early 2000s when capital inflows picked up.Research limitations/implicationsThis study focuses on low-income SSAn countries, which are less studied in the empirical literature and that face immense developmental needs that require foreign and domestic capital.Practical implicationsFindings of this paper can shed light to policy makers on the factors that are most important to help the region attract capital inflows and areas where further improvement is needed in the macroeconomic and institutional environment.Originality/valueThere is a gap in the empirical literature in examining the factors that are important for attracting capital flows to low-income SSAn countries. To our knowledge, this study may be the first to explore dynamics of capital flows against institional quality for low-income SSAn countries at a disaggregated level.

Deposits and financial sustainability of deposit-taking microfinance institutions: evidence from low income sub-Saharan Africa

Deposits and financial sustainability of deposit-taking microfinance institutions: evidence from low income sub-Saharan Africa

Is improvement in indicators of women’s empowerment associated with uptake of WHO recommended IPTp-SP levels in sub-Saharan Africa? A multilevel approach

ObjectivesThe global burden of malaria has reduced considerably; however, malaria in pregnancy remains a major public health problem in sub-Saharan Africa (SSA), where about 32 million pregnant women are at...

Inflammatory pathways amongst people living with HIV in Malawi differ according to socioeconomic status.

Non-communicable diseases (NCDs) are increased amongst people living with HIV (PLWH) and are driven by persistent immune activation. The role of socioeconomic status (SES) in immune activation amongst PLWH is unknown, especially in low-income sub-Saharan Africa (SSA), where such impacts may be particularly severe. We recruited Malawian adults with CD4<100 cells/ul two weeks after starting ART in the REALITY trial (NCT01825031), as well as volunteers without HIV infection. Clinical assessment, socioeconomic evaluation, blood draw for immune activation markers and carotid femoral pulse wave velocity (cfPWV) were carried out at 2- and 42-weeks post-ART initiation. Socioeconomic risk factors for immune activation and arterial stiffness were assessed using linear regression models. Of 279 PLWH, the median (IQR) age was 36 (31-43) years and 122 (44%) were female. Activated CD8 T-cells increased from 70% amongst those with no education to 88% amongst those with a tertiary education (p = 0.002); and from 71% amongst those earning less than 10 USD/month to 87% amongst those earning between 100-150 USD/month (p = 0.0001). Arterial stiffness was also associated with higher SES (car ownership p = 0.003, television ownership p = 0.012 and electricity access p = 0.029). Conversely, intermediate monocytes were higher amongst those with no education compared to a tertiary education (12.6% versus 7.3%; p = 0.01) and trended towards being higher amongst those earning less than 10 USD/month compared to 100-150 USD/month (10.5% versus 8.0%; p = 0.08). Water kiosk use showed a protective association against T cell activation (p = 0.007), as well as endothelial damage (MIP1β, sICAM1 and sVCAM1 p = 0.047, 0.026 and 0.031 respectively). Socioeconomic risk factors for persistent inflammation amongst PLWH in SSA differ depending on the type of inflammatory pathway. Understanding these pathways and their socioeconomic drivers will help identify those at risk and target interventions for NCDs. Future studies assessing drivers of inflammation in HIV should include an SES assessment.

How to Make Off-Grid Solar Electric Cooking Cheaper Than Wood-Based Cooking

Low-income sub-Saharan Africa (SSA) households rely on wood for cooking for the simple reason that it is the lowest cost cooking fuel. Thus, full attainment of Sustainable Development Goal 7 (SDG7) requires developing clean cooking technologies that are cheaper than wood cooking. This study provides a comparative marginal levelized cost of energy (MLCOE) analysis for wood cooking vs. innovative solar electric cooking technologies. The two key off-grid solar technologies evaluated are: (1) direct-use DC solar (DDS) electricity for cooking applications, and (2) high-cycle-life lithium titanate (LTO) batteries. MLCOE is reported in USD/kWh for energy delivered to cooked food. A low median MLCOE of USD 0.125/kWh is attained using DDS electricity which is output directly by a solar panel with little or no intervening electricity storage and few electricity conversion and control costs. DDS solar panel output has variable voltage and current that is managed by a specialized DDS cooker. LTO battery-regulated electricity has a median MLCOE of USD 0.24/kWh which declines to USD 0.16/kWh with electric pressure cooker use. The distributions of MLCOE for wood-based, DDS-electric, and LTO-electric cooking strongly overlap. The MLCOE cost model suggests specific means for modifying input costs, component lifetime, and system efficiency to improve solar MLCOE further relative to wood MLCOE.

Trends in the proportionate mortalities attributed to noncommunicable diseases in sub-Saharan Africa for the period 2000 to 2016.

Noncommunicable diseases (NCDs) remain a growing global health issue and sub-Saharan Africa (SSA) is no exception. Using secondary data obtained from the World Bank on 48 SSA countries, we describe the trends in the proportionate mortalities attributed to NCDs in SSA between 2000 and 2016. The baseline proportionate mortalities attributed to NCDs in SSA increased from 22.49% in 2000 to 33.69% in 2016, representing about 11% increase. The trend was replicated across the low-, middle-, and high-income countries in SSA. The highest change in the NCD mortalities in low-income SSA countries was seen in Eritrea where NCD mortalities increased from 19.3% in the year 2000 to 45.2% in 2016. In Rwanda, it rose from 24.8% to 44% during the same period. Ghana, a lower-middle-income country, also witnessed an increase from 27.3% in 2000 to 42.7% in 2016. The general increasing trend in the burden of NCD mortalities in SSA implies the need for higher prioritization of NCD prevention and control initiatives. There is a need for a greater contribution of nontraditional stakeholders in health through a multi-sectoral approach. We also recommend integrating NCD prevention and control strategies into existing public health structures being used for communicable disease control.

Contrasting Monetary and Multidimensional Poverty Measures in a Low-Income Sub-Saharan African Country

Despite significant progress in poverty measurement, few studies have undertaken an in-depth comparison of monetary and multidimensional measures in the context of low-income countries and fewer still in Sub-Saharan Africa. Yet the differences can be particularly consequential in these settings. We address this gap by applying a distinct analytical strategy to the case of Rwanda. Using data from two waves of the Rwandan Integrated Household Living Conditions Survey, we combine comparing poverty rates cross-sectionally and over time, examining the overlaps and differences in the two measures, investigating poverty rates within population sub-groups, and estimating several statistical models to assess the differences between the two measures in identifying poverty risk factors. We find that using a monetary measure alone does not capture high incidence of multidimensional poverty in both waves, that it is possible to be multidimensional poor without being monetary poor, and that using a monetary measure alone overlooks significant change in multidimensional poverty over time. The two measures also differ in which poverty risk factors they put emphasis on. Relying only on monetary measures in low-income sub-Saharan Africa can send inaccurate signals to policymakers regarding the optimal design of social policies as well as monitoring their effectiveness.

Cost-effectiveness of maternal GBS immunization in low-income sub-Saharan Africa.

A maternal group B streptococcal (GBS) vaccine could prevent neonatal sepsis and meningitis. Its cost-effectiveness in low-income sub-Saharan Africa, a high burden region, is unknown. We used a decision tree model, with Markov nodes to project infants' lifetimes, to compare maternal immunization delivered through routine antenatal care with no immunization. 37 countries were clustered on the basis of economic and health resources and past public health performance. Vaccine efficacy for covered serotypes was ranged from 50% to 90%. The model projected EOGBS (early-onset) and LOGBS (late-onset) cases and deaths, disability-adjusted life years (DALYs), healthcare costs (2014 US$), and cost-effectiveness for a representative country in each of the four clusters: Guinea-Bissau, Uganda, Nigeria, and Ghana. Maximum vaccination costs/dose were estimated to meet two cost-effectiveness benchmarks, 0.5 GDP and GDP per capita/DALY, for ranges of disease incidence (reported and adjusted for under-reporting) and vaccine efficacy. At coverage equal to the proportion of pregnant women with≥4 antenatal visits (ANC4) and serotype-specific vaccine efficacy of 70%, maternal GBS immunization would prevent one-third of GBS cases and deaths in Uganda and Nigeria, where ANC4 is 50%, 42-43% in Guinea-Bissau (ANC4=65%), and 55-57% in Ghana (ANC4=87%). At a vaccination cost of $7/dose, maternal immunization would cost $320-$350/DALY averted in Guinea-Bissau, Nigeria, and Ghana, less than half these countries' GDP per capita. In Uganda, which has the lowest case fatality ratios, the cost would be $573/DALY. If the vaccine prevents a small proportion of stillbirths, it would be even more cost-effective. Vaccination cost/dose, disease incidence, and case fatality were key drivers of cost/DALY in sensitivity analyses. Maternal GBS immunization could be a cost-effective intervention in low-income sub-Saharan Africa, with cost-effectiveness ratios similar to other recently introduced vaccines. The vaccination cost at which introduction is cost-effective depends on disease incidence and vaccine efficacy. Clinical Trial registry name and registration number: Not applicable.

The Demography of Mental Health Among Mature Adults in a Low-Income, High-HIV-Prevalence Context.

Very few studies have investigated mental health in sub-Saharan Africa (SSA). Using data from Malawi, this article provides a first picture of the demography of depression and anxiety (DA) among mature adults (aged 45 or older) in a low-income country with high HIV prevalence. DA are more frequent among women than men, and individuals affected by one are often affected by the other. DA are associated with adverse outcomes, such as poorer nutrition intake and reduced work efforts. DA also increase substantially with age, and mature adults can expect to spend a substantial fraction of their remaining lifetime-for instance, 52 % for a 55-year-old woman-affected by DA. The positive age gradients of DA are not due to cohort effects, and they are in sharp contrast to the age pattern of mental health that has been shown in high-income contexts, where older individuals often experience lower levels of DA. Although socioeconomic and risk- or uncertainty-related stressors are strongly associated with DA, they do not explain the positive age gradients and gender gap in DA. Stressors related to physical health, however, do. Hence, our analyses suggest that the general decline of physical health with age is the key driver of the rise of DA with age in this low-income SSA context.

Youth Employment in Sub-Saharan Africa: Challenges, Constraints and Opportunities

African demographics, economic structure, politics and globalisation trends combine into a perfect storm for Africa's policy makers. The large cohort of youth entering Africa's labour force is the best educated one the continent has seen, and Africa is witnessing its best growth performance in decades; yet jobs remain elusive in the formal wage sector. This is largely because African economies have hitherto failed to transform structurally from low productivity agriculture to higher productivity non-agricultural sectors and this, taken together with the high fertility and low infant mortality, has resulted in the structure of employment not changing much. Although many refer to the youth employment problem as the ‘youth unemployment problem’ in actual fact, (measured) unemployment in low-income sub-Saharan Africa (3%) and even in middle-income countries outside of Southern Africa, unemployment is not high as it is considered a ‘luxury’. In the absence of formal wage jobs, youth have found innovative ways to express and exploit their talents and capabilities in the agriculture and household enterprises (informal sector). Given the large numbers of youth entering the labour market each year, and the weak structural transformation of most African economies, the informal sector will remain a major employer of youth, particularly the less skilled and less educated, for decades to come. There is therefore a need for a shift in policy thinking across Africa. It is imperative that policy makers make concerted efforts to raise productivity (and thus earnings) in the informal sector, rather than continue to focus exclusively on the formal wage sector. In this regard, policy makers need to learn from, and work with the youth to enable scalability of certain youth initiatives.

Social Cash Transfers and Household Welfare: Evidence from Zambia's Oldest Scheme

Social cash transfers (SCTs) are considered a priority in least-developed countries, where the gap between the need for basic social protection and existing provisions is greatest. This study represents one of the first comprehensive treatments of the impact of social cash transfers in low-income sub-Saharan Africa, and the first for Zambia's oldest SCT scheme. The results, based on propensity score matching and fully efficient odds-weighted regression, and data from the Kalomo SCT pilot scheme, confirm positive SCT effects on per capita consumption expenditure. We also discover threshold effects with SCT mostly impacting food expenditure among poorer beneficiary households and non-food expenditure among wealthier beneficiaries.

Leading Dragon Phenomenon: New Opportunities for Catch-Up in Low-Income Countries

Modern economic development is accompanied by the structural transformation from an agrarian to an industrial economy and occurs through a process of continuous industrial and technological upgrading. Since the 18th century, all countries that industrialized successfully in Europe, North America and East Asia followed their comparative advantage and leveraged the late-comer advantage to emulate the leader-follower flying geese pattern of industrial upgrading. The large dynamic emerging market countries such as China, India and Brazil are also engaged in industrial upgrading but with a critical difference. In particular, because of its sheer size, China has absorbed nearly all labor-intensive jobs and become the world’s largest exporter of labor-intensive products. The current view is that China’s dominance hinders poor countries from developing similar industries. The authors argue that industrial upgrading has increased wages and is causing China to graduate from labor-intensive to more capital- and technology-intensive industries. These industries will shed labor and create a huge opportunity for lower wage countries to start a phase of labor-intensive industrialization. This process, called the Leading Dragon Phenomenon, offers an unprecedented opportunity to low-income Sub-Saharan Africa where the industrial sector is underdeveloped and investment capital and entrepreneurial skills are leading constraints to manufacturing. It can seize the opportunity and resolve the constraints by attracting some of the OFDI flowing currently from China, India and Brazil into the manufacturing sectors of other developing countries. All low-income countries will compete but to catch the jobs spillover from China, the winner must implement credible economic development strategies that are consistent with its comparative advantage.

Central Banking in Sub-Saharan Africa: Introduction and Overview

African central banks have covered an extraordinary distance since the early 1990s—closing the gap, in the process, between their own policy challenges and those of richer-country central banks. Some striking differences are nonetheless easily missed, amid the many parallels between central banking reforms in Sub-Saharan Africa (SSA) and those in the industrial and emerging-market economies. The abandonment of soft pegs in low-income SSA, for example, had less to do with capital mobility than with the failures of exchange control systems under pressure from fiscal imbalances and external shocks. Fiscal and quasi-fiscal demands, in turn, have almost certainly been more important than conventional stabilisation objectives as potential sources of inflation bias in SSA. Money-based disinflation programmes, to take a final example—often supported by tight fiscal rules under IMF conditionality—do not appear to have involved costly sacrifices of output, outside of South Africa. These observations, and more in the papers collected here, suggest that the distinctive structural and institutional features of low-income countries may have distinctive implications for the design and conduct of monetary policy. Collectively, the papers in this volume issue a compelling call for monetary policy research that focuses squarely on the economic environment of low-income Africa.

Residential Energy in the Third World

The residential energy sector in developing countries has become the focus of increasing concern and attention. This is partly because of its great size within national energy budgets, but also because, in most poorer Third World countries, the social and economic costs of supplying it with energy are high and are rising rapidly. Data from 15 country assessments by the United Nations Development Programme and the World Bank show that households account for 30-95% of total energy use, compared to 25-30% for industrialized countries ( 1). In low-income sub-Saharan Africa the proportions range from more than 50% to 95% (2). The highest proportions are found in poorer countries where house­ holds depend almost exclusively on biomass fuels.l In many places woodfuel resources are dwindling rapidly, owing mainly to deforestation for cropping and grazing land, but also to commercial logging, uncontrolled burning and, in some places, cutting for fuel. Consequently, for many of the two billion or so mostly poor people who depend on biomass fuels, the costs of meeting basic energy needs-in cash or in time spent gathering the fuels-impose severe and increasing stresses on already fragile household survival and production strategies. The implications reach far beyond energy itself. Most tree and other