A means to an industrialisation end? Demand side management in Nigeria

Electricity is essential for economic development and industrialisation processes. Balancing demand and supply is a recurrent problem in the Nigerian electricity market. The aim of this work is to assess the technical and economic potential of Demand Side Management (DSM) in Nigeria given different future levels of industrialisation. The paper places industrialisation at the centrefold of the appraisal of DSM potential in Nigeria. It does so by designing industrialisation scenarios and consequently deriving different DSM penetration levels using a cost-optimisation model. Findings show that under the high industrialisation scenario by the year 2050 DSM could bring about 7 billion USD in cumulative savings thanks to deferred investment in new generation and full deployment of standby assets along with interruptible programmes for larger industrial users. The paper concludes by providing policy recommendations regarding financial mechanisms to increase DSM deployment in Nigeria. The focus on DSM serves to shift the policy debate on electricity in Nigeria from a static state versus market narrative on supply to an engagement with the agency and influence on industrial end-users

Identifying spatial efficiency-equity tradeoffs in territorial development policies : evidence from Uganda

In many countries, place specific investments in infrastructure are viewed as integral components of territorial development policies. But are these policies fighting market forces of concentration? Or are they adding net value to the national economy by tapping underexploited resources? This paper contributes to the debate on the spatial allocation of infrastructure investments by examining where these investments will generate the highest economic returns"spatial efficiency", and identifying whether there re tradeoffs when infrastructure coverage is made more equitable across regions"spatial equity". The empirical analysis focuses on Uganda and is based on estimating models of firm location choice, drawing on insights from the new economic geography literature. The main findings show that establishments in the manufacturing industry gain from being in areas that offer a diverse mix of economic activities. In addition, availability of power supply, transport links connecting districts to markets, and the supply of skilled workers attract manufacturing activities. Combining all these factors gives a distinct advantage to existing agglomerations along leading areas around Kampala and Jinja. Infrastructure investments in these areas are likely to produce the highest returns compared with investments elsewhere. Public infrastructure investments in other locations are likely to attract fewer private investors, and will pose a spatial efficiencyequity tradeoff. To better integrate lagging regions with the national economy, lessons from the WDR2009"Reshaping Economic Geography"calling for investments in health and education in lagging areas are likely to be more beneficial.Transport Economics Policy&Planning,E-Business,Banks&Banking Reform,Non Bank Financial Institutions,Economic Theory&Research

Globalization and Country-Specific Service Links

The Jones-Kierzkowski model of global fragmentation of production draws attention to the cost and efficiency of “service links” connecting “production blocks” in different countries. Country-specific service links include transport and telecommunications infrastructure and the overall business climate. Mobile factors of production, most prominently foreign direct investment (FDI), can shop around for countries with the most functional and inexpensive service links along with low labor costs. Those countries with favorable business climates and well-functioning service links are able to attract FDI and other mobile inputs, and participate in international production networks. We provide evidence that successful exporters of manufactures, notably in East Asia, have relatively favorable service links. A crosssection analysis of manufactured exports and of FDI in manufacturing confirms the importance of service link infrastructure.

Globalization and Country-Specific Service Links

The Jones-Kierzkowski model of global fragmentation of production draws attention to the cost and efficiency of “service links” connecting “production blocks” in different countries. Country-specific service links include transport and telecommunications infrastructure and the overall business climate. Mobile factors of production, most prominently foreign direct investment (FDI), can shop around for countries with the most functional and inexpensive service links along with low labor costs. Those countries with favorable business climates and well-functioning service links are able to attract FDI and other mobile inputs, and participate in international production networks. We provide evidence that successful exporters of manufactures, notably in East Asia, have relatively favorable service links. A cross-section analysis of manufactured exports and of FDI in manufacturing confirms the importance of service link infrastructure.Conflicting claims, Division rules, Operators, Minimal rights, Maximal claims, Duality, Convexity.

Inefficiencies in Public Electricity Provision and Impacts on Firms in Karachi’s Manufacturing Sector

The private costs of electricity supply failures are substantial and inimical to industrial productivity. Using results from a small sample survey of manufacturing firms in Karachi, the study documented the causes, extent and incidence of the failures, identified and classified the firms’ private responses, and estimated the capital share of internally produced power and the associated costs. The results are reported here to engender discussion for developing a policy model of infrastructure provision suited to a developing country like Pakistan. The most encouraging options are those that allow for cooperative provision amongst firms with concurrent reforms in the regulatory and institutional environments. An optimal policy will allow inter-firm trading of electricity making the power market competitive. Those firms that already have extensive private generating capacity due to weak public supply will realise scale economies by selling electric power to lower the costs of private provision. Competition in electricity supply implies that industrial users will find attractive substitutes in the private sector. This will lead to a reduction in the demand on public service, already limited in quantity and quality in key urban-industrial locations like Karachi.

Trade Policy and Export Performance in Morocco

Morocco’s trade policy is at a cross-roads. Historically, the country has had a very restrictive import regime that generated substantial transfers to domestic producers. In terms of the simple average of most-favored nation tariffs, Morocco is one of the ten most highly protected markets in the world. Yet, with the signing of the Euro-Med Agreement with the European Union and its implementation since 2000, a decision for the gradual opening of the domestic market through preferential trade liberalization was taken. This choice was subsequently reaffirmed through the conclusion of further free trade agreements with the United States and Turkey. The resulting shift in trade policy paradigms promises to create new opportunities for export-led economic growth and employment generation, while requiring adjustment of domestic producers to the new, more competitive economic environment and additional policy reforms to complement the market opening strategy.Trade, tariffs, services, logistics, export diversification, regional integration, world markets

A firm level analysis of outage loss differentials and self-generation: evidence from African business enterprises

This study examines the outage loss differential between firms that engage in backup generation and those that do not. Unmitigated outage losses were estimated to be US$2.01–US$23.92 per kWh for firms engaging in self-generation, and range from US$1.54–US$32.46 per kWh for firms without self-generation. We also find that firms engaging in self-generation would have suffered additional 1–183% outage losses had they not invested in self-generation. On the other hand, firms without self-generation would have reduced their outage losses by around 6–46% if they had engaged in selfgeneration. Further analyses however reveal that, although engagement in selfgeneration reduced outage losses, a firm engaging in self-generation may still suffer a greater unmitigated outage loss relative to a firm without a backup generator. The relative outage losses depend on the relative vulnerability of the operations of the two sets of firms to power interruption, and the relative generating capacity of a selfgenerating firm to its own required electricity loads. Policy reforms that allow firms, whose operations are highly vulnerable to outages, to make a binding contract with utilities in order to get preferential supply are recommended