Adverse Shocks and Social Protection in Africa: What Role for Formal and Informal Financial Institutions?

This paper presents evidence on the wide range of adverse shocks reported by African households. The current financial and economic crisis adds another layer of risk to al-ready vulnerable households and firms. In responding to an adverse shock, households are involved in a balancing act that is aimed at maintaining consumption and/or assets above critical levels. Households mainly use coping mechanisms that depend on family and other networks and self-insurance. There is limited recourse to public social protection and formal credit and insurance markets. The paper examines some informal financial arrangements. Some of these are not designed to smooth consumption when there is an adverse shock. These informal mechanisms have the potential to be the platform to expand access and utilisation of formal finance particularly in rural communities. There is a clear role for publicly provided interventions. This is because informal risk sharing mechanisms do not cover all shocks. The premium paid may not be adequate to cover the entire financial implications of the shock. Finally, the design of the risk-sharing institutions can result in the very poor being excluded.

Ethnicity and wage determination in Ghana

The authors look at earnings differentials between members ofdifferent ethnic groups, and between employers'relatives, unrelated members of the same ethnic group, and other workers in Ghana's manufacturing sector. They find that a significant proportion of the earnings differentials identified between ethnic groups can be explained with reference to a fairly standard set of observations about workers'characteristics. Labor market segregation along ethnic lines - combined with considerable variation in employers'characteristics (especially educational attainment and family background, possibly because of discrimination in other markets) - accounts for most of the remaining differentials. Northerners earn considerably less than other groups, mainly because they are less educated. The Other Akan earn much more than the relatively low-earning Asante, Fante, and Ewe. There is no evidence of discrimination between ethnic groups, although there is evidence of discrimination in favor of inexperienced workers from the same ethnic group, who can be assessed, and matched with jobs more easily than similar workers from other ethnic groups. Finally, workers who are related to their employers, earn a considerable premium, possibly because they contribute more to productivity than their fellow workers (perhaps through an effect on"esprit de corps"). The authors'results draw attention to some startling differences in educational, and labor market attainment between groups. A strong case can be made for including such issues in the policy debate.Health Monitoring&Evaluation,Educational Sciences,Gender and Social Development,Anthropology,Education and Society

An investigation into poverty, educational attainment and outcomes in Ghana

This paper provides a preliminary survey of the educational attainment of Ghana's adult population. It describes patterns and trends and makes some allusions to possible associations between educational attainment and outputs and outcomes

Ethnicity and wage determination in Ghana.

This paper looks at earnings differentials between (1) members of different ethnic groups and (2) employers’ relatives, unrelated co-ethnics, and other workers, in the Ghanaian manufacturing sector. We find that a significant proportion of the identified earnings differentials between ethnic groups can be explained with reference to a fairly standard set of observed workers’ characteristics. Labour market segregation along ethnic lines combined with considerable variation in employer characteristics (possibly due to discrimination in other markets) accounts for most of the remaining differentials. There is no evidence of statistical discrimination between ethnic groups, although there is evidence of such discrimination in favour of inexperienced co-ethnic workers, who can be more easily assessed and matched to jobs than similar workers from other ethnic groups. Finally, workers who are related to their employers earn a considerable premium, possibly because they contribute more than their fellow workers to productivity.

The flow of external resources to the non oil developing countries in the seventies. With special reference to the Brazilian case

The external debt of the developing countries has become a major issue mainly because of the possible repercussions the debt may have on the international financial system. This situation is a direct function of the changes which have taken place in the international financial system beginning in the late sixties. Before 1975 more than 50% of the external obligations of the developing countries was with the official lenders. There had however, been a shift away to private lenders in the international capital market beginning from the late sixties. The large deficits experienced by the non oil developing countries in 1974 after the first oil price rise as well as the placement of a large percentage of the OPEC revenues in the international capital market encouraged the shift away from official sources of finance to private sources. The banks lent large amounts of finance to a small group of countries so that some individual banks became closely linked with the economic conditions of the borrowing country. The fate of one bank would not necessarily have any effect on the financial system. However, there was the fear that if a country failed to meet its obligations to the detriment of a major bank this would lead to uncertainty in the banking system, leading to some banks moving out from international lending and a decline in interbank lines. The possibility of financial instability was also increased by the possible domino effect which would occur if one large debtor was able to default successfully. As a result of this it was imperative that large debtors which faced payment problems, be helped to resolve these problems so that there was no possibility of a default occurring. The result of these events has been that the large debtors have been put into the limelight. The small debtors may not have large debts to cause undue worry to the banks, in fact some of them may owe very little to the banks. However, in terms of the effect which this debt may have on their external account and domestic economy, they should be no less important than the large debtors. Borrowing by the developing countries is not a new phenomena. It is the concentration of a large amount of debt amongst a few countries, as well as the exposure of some of the banks to these countries which is causing concern. External debt itself is not disadvantageous to an economy. What is important is that the borrowing conditions are such as not to make repayment difficult, and that the external funds obtained are used in such a way as to make repayment possible and not costly to the domestic economy. This implies that an explicit policy may be required before borrowing on a large scale is embarked upon. In the developing country context, although growth may be a necessary requirement for external borrowing to be successful, it is also important that foreign exchange is available for the country to be able to service and repay the debt in the currency stipulated in the loan terms. This introduces a broader aspect to the issue of external borrowing. (For those currencies whose local currency is accepted in repayment this is not a very important issue.) The role of the international economy in the debt repayment process of the developing countries is important in this context. Even if the country may have a favourable export sector policy, if there is no growth in the income of the major trade partners and there is an increase in protectionism it will be difficult for the debtor to repay the required foreign exchange debts. (Abstract shortened by ProQuest.)

Access to basic education in Ghana: the evidence and the issues

This review of educational development in Ghana has been developed to explore key issues in access to education, capture recent research, and to identify gaps in knowledge and understanding. This critical analytic review provides the basis for research which seeks to identify children who are excluded from basic education, establish the causes of their exclusion, and identify ways of ensuring that all children comnplete a full cycle of basic education successfully

Development of Convenient Cocoyam Pottage (Mpotompoto)

This study explored the feasibility of developing a ready-to-prepare cocoyam pottage, 'mpotompoto' to meet consumers' need for convenience in traditional dishes. Cocoyam chunks (1.2cm x 1.2cm x 1.2cm) were pre-gelatinized to obtain the instant base ingredient, and an accompanying spice-mix recipe was developed. Standard methods were used to determine the moisture content and selected functional properties of the ready-to-prepare base product. A consumer panel of fifty assessors who were familiar with sensory testing evaluated the product's organoleptic properties. A dish following a traditional recipe was used as control. The moisture content of the instant base was low (10%), signifying the potential for good storability. The water absorption capacity, oil absorption capacity, swelling power and solubility were 247.39 ± 7.12%, 87.98 ± 3.76%, 6.44 ± 0.58% and 3.78 ± 0.29%, respectively, indicating desirable functional characteristics for reconstitution. The consumer panel generally appreciated all evaluated products with mean likeness scores between 5 and 6 for all tested attributes on a 7-point hedonic scale. The convenient cocoyam pottage (mpotompoto) mimicked the traditionally prepared 'mpotompoto'. The study provides baseline information that can be commerciall

Contract Flexibility and Dispute Resolution in African Manufacturing

This paper examines the contractual practices of African manufacturing firms using survey data collected in Burundi, Cameroon, Côte d’Ivoire, Kenya, Zambia, and Zimbabwe. Descriptive statistics and econometric results are presented. They show that contractual flexibility is pervasive and that relational contracting is the norm between manufacturers, their suppliers, and their clients. The existence of long-term relations between firms helps them deal with contract non-performance through negotiation. Confrontational methods such as lawyers and courts are used only by large firms and when negotiations fail. Whenever confrontation can be avoided, business is resumed. Of the six studied countries, incidence of breach and the use of lawyers and courts are highest in Zimbabwe which is also the country with legal institutions that best support business. Our favored interpretation is that good legal institutions incite firms to take more chances, thereby encouraging trade and leading to more cases of breach and more recourse to courts and lawyers. A high frequency of contract non-compliance should thus not be interpreted as a sign of imperfect legal institutions.

Do African Manufacturing Firms Learn from Exporting?

In this paper, we use firm-level panel data for the manufacturing sector in four African countries to estimate the effect of exporting on efficiency. Estimating simultaneously a production function and an export regression that control for unobserved firm effects, we find both significant efficiency gains from exporting, supporting the learning-byexporting hypothesis, and evidence for self-selection of more efficient firms into exporting. The evidence of learning-by-exporting suggests that Africa has much to gain from orientating its manufacturing sector towards exporting.