Diversification: towards a new paradigm for Africa’s development

This paper is articulated around the following chapters. After this introduction, the first chapter will underscore Africa’s development stakes. This analysis will enable us to tackle the problem of modernizing and diversifying the productive fabric of African economies. The second chapter will be devoted to the recent renewal of the diversification problem. It will enable us to underscore the new concerns and the development of the debate on this issue since the failure of the experiences of the 1970’s. The third chapter will be devoted to the presentation and the discussion of diversification gauging tools. The fourth chapter will present facts connected to the diversification of African economies. In this chapter, we took a comparative approach that would allow us to put into perspective the different sub-regional experiences as well as link Africa’s economic history in comparison to that of Asia and Latin America. In the fifth chapter, we will abandon the descriptive approach in favour of analytical elements and attempt to determine factors justifying diversification. This approach will be reflected upon in detail in the sixth chapter where we will focus our attention on the relation between diversification and economic growth. Finally, in the last chapter we will look into formulating economic policy recommendations for African countries in the area of diversification.Diversification- Africa- Regional Economic Communities

The Shifting Effect of One Acre Fund on Agricultural Production Possibility Frontier: An Econometrics Analysis of Treatment Effect Estimation of Maize Yield in Busia County, Kenya

Maize is a staple food and its adequacy is a measure of food security in Busia County and across Kenya. Despite myriad efforts to increase its yield, the national level has remained low at 1.6 tons/ha relative to world average of 5.5 tons/ha and Busia County experiences much lower yield of 1.2 tons/ha. This low yield in the county coupled by high population growth rate arising from a fertility rate of 6 percent in the county when national level is 4.6 percent and a large population of women within productive age puts the county’s food security at stake. In attempts to support maize farming, One Acre Fund, a non-governmental organization has intervened through provision of farm inputs such as fertilizer and seeds as well as extension services among others. Thus this study sought to investigate the effect of interventions by One Acre Fund on maize yield in Busia County in Kenya. The study used primary data collected from a sample of 264 maize farmers’ family heads using questionnaires. The county was first stratified into seven constituent sub-counties out of which two sub-counties, Nambale and Teso North were randomly selected. The study sample was then drawn randomly from these two sub-counties. Robust regression result showed that improved inputs (using certified seeds and organic fertilizers as proxies) and organic manure had the effect of increasing maize yield. Propensity score matching estimation results using three matching algorithms interchangeably which are: nearest neighbor, kernel matching and radius matching with a radius of 0.01 indicated that One Acre Fund farmers managed to achieve significantly higher yields than similar non-members. The study recommends expansion of One Acre Fund membership and increased use of organic and inorganic fertilizer. Keywords: Maize yield, One Acre Fund, Busia County, Propensity Score Matching, Average Treatment Effect on the Treated, improved input

Looming Debt Crisis in Sub-Saharan Africa: Drivers, Implications and Policy Options

This study explores the trends, patterns and drivers of recent debt accumulation in Sub-Saharan African countries with a view to sheding light on possible strategies to minimize adverse effects on the economies and ensure sustainable development financing. This is in light of concerns about a possible ‘looming debt crisis’ in the developing world, which have been exacerbated by the Covid-19 pandemic. The analysis in this study is based on existing data, supplemented by detailed information obtained from government sources for the cases of Ghana, Kenya, and Uganda. The evidence shows that Sub-Saharan African countries have experienced rapid accumulation of both domestic and external public debt since the 2008 global financial crisis. Governments have resorted increasingly to non-concessional borrowing and high-cost private short-term loans including Eurobonds, which has contributed to increasing the overall cost of debt servicing. The debt sustainability analysis by the IMF/World Bank completed before the Coronavirus pandemic suggested that debt ratios in SSA would stabilize or decline by 2023, assuming that appropriate fiscal consolidation plans are implemented and that most drivers of the debt acceleration dissipate in the medium term. With the Covid-19 pandemic, debt ratios in SSA are likely to rise and would only stabilize at a much later period if African economies are hit with a full-blown crisis as witnessed by advanced economies. Most importantly, the coronavirus crisis will exacerbate debt distress in countries that were already in weak conditions. It is imperative for Africa’s creditors and the donor community in general to assist African countries in combatting the pandemic and minimizing its impact on the economies by alleviating the debt burden through an expanded debt relief and a robust debt restructuring program. Going forward, given that African countries need high levels of financing to reach sustainable development goals, they must devise a strategy for ‘growing with debt’ in the post-crisis period. The paper offers some suggestions to achieve this goal

Diversification: towards a new paradigm for Africa’s development

This paper is articulated around the following chapters. After this introduction, the first chapter will underscore Africa’s development stakes. This analysis will enable us to tackle the problem of modernizing and diversifying the productive fabric of African economies. The second chapter will be devoted to the recent renewal of the diversification problem. It will enable us to underscore the new concerns and the development of the debate on this issue since the failure of the experiences of the 1970’s. The third chapter will be devoted to the presentation and the discussion of diversification gauging tools. The fourth chapter will present facts connected to the diversification of African economies. In this chapter, we took a comparative approach that would allow us to put into perspective the different sub-regional experiences as well as link Africa’s economic history in comparison to that of Asia and Latin America. In the fifth chapter, we will abandon the descriptive approach in favour of analytical elements and attempt to determine factors justifying diversification. This approach will be reflected upon in detail in the sixth chapter where we will focus our attention on the relation between diversification and economic growth. Finally, in the last chapter we will look into formulating economic policy recommendations for African countries in the area of diversification

Diversification: towards a new paradigm for Africa’s development

This paper is articulated around the following chapters. After this introduction, the first chapter will underscore Africa’s development stakes. This analysis will enable us to tackle the problem of modernizing and diversifying the productive fabric of African economies. The second chapter will be devoted to the recent renewal of the diversification problem. It will enable us to underscore the new concerns and the development of the debate on this issue since the failure of the experiences of the 1970’s. The third chapter will be devoted to the presentation and the discussion of diversification gauging tools. The fourth chapter will present facts connected to the diversification of African economies. In this chapter, we took a comparative approach that would allow us to put into perspective the different sub-regional experiences as well as link Africa’s economic history in comparison to that of Asia and Latin America. In the fifth chapter, we will abandon the descriptive approach in favour of analytical elements and attempt to determine factors justifying diversification. This approach will be reflected upon in detail in the sixth chapter where we will focus our attention on the relation between diversification and economic growth. Finally, in the last chapter we will look into formulating economic policy recommendations for African countries in the area of diversification

Looming Debt Crisis in Sub-Saharan Africa: Drivers, Implications and Policy Options

This study explores the trends, patterns and drivers of recent debt accumulation in Sub-Saharan African countries with a view to sheding light on possible strategies to minimize adverse effects on the economies and ensure sustainable development financing. This is in light of concerns about a possible ‘looming debt crisis’ in the developing world, which have been exacerbated by the Covid-19 pandemic. The analysis in this study is based on existing data, supplemented by detailed information obtained from government sources for the cases of Ghana, Kenya, and Uganda. The evidence shows that Sub-Saharan African countries have experienced rapid accumulation of both domestic and external public debt since the 2008 global financial crisis. Governments have resorted increasingly to non-concessional borrowing and high-cost private short-term loans including Eurobonds, which has contributed to increasing the overall cost of debt servicing. The debt sustainability analysis by the IMF/World Bank completed before the Coronavirus pandemic suggested that debt ratios in SSA would stabilize or decline by 2023, assuming that appropriate fiscal consolidation plans are implemented and that most drivers of the debt acceleration dissipate in the medium term. With the Covid-19 pandemic, debt ratios in SSA are likely to rise and would only stabilize at a much later period if African economies are hit with a full-blown crisis as witnessed by advanced economies. Most importantly, the coronavirus crisis will exacerbate debt distress in countries that were already in weak conditions. It is imperative for Africa’s creditors and the donor community in general to assist African countries in combatting the pandemic and minimizing its impact on the economies by alleviating the debt burden through an expanded debt relief and a robust debt restructuring program. Going forward, given that African countries need high levels of financing to reach sustainable development goals, they must devise a strategy for ‘growing with debt’ in the post-crisis period. The paper offers some suggestions to achieve this goal

Measuring Potential Output and Output Gap and Macroeconomic Policy: The Case of Kenya

Measuring the level of an economy.s potential output and output gap are essential in identifying a sustainable non-inflationary growth and assessing appropriate macroeconomic policies. The estimation of potential output helps to determine the pace of sustainable growth while output gap estimates provide a key benchmark against which to assess inflationary or disinflationary pressures suggesting when to tighten or ease monetary policies. These measures also help to provide a gauge in the determining the structural fiscal position of the government. This paper attempts to measure Kenya.s potential output and output gap using alternative statistical techniques and structural methods. Estimation of potential output and output gap using these techniques shows varied results. The estimated potential output growth using different methods gave a range of .2.9 to 2.4 percent for 2000 and a range of .0.8 to 4.6 for 2001. Although various methods produce varied results, they however provided a broad consensus on the over-all trend and performance of the Kenyan economy. This study found that firstly, potential output growth is declining over the recent time and secondly, the Kenyan economy is contracting in the recent years

Measuring Potential Output and Output Gap and Macroeconomic Policy: The Case of Kenya

Measuring the level of an economy.s potential output and output gap are essential in identifying a sustainable non-inflationary growth and assessing appropriate macroeconomic policies. The estimation of potential output helps to determine the pace of sustainable growth while output gap estimates provide a key benchmark against which to assess inflationary or disinflationary pressures suggesting when to tighten or ease monetary policies. These measures also help to provide a gauge in the determining the structural fiscal position of the government. This paper attempts to measure Kenya.s potential output and output gap using alternative statistical techniques and structural methods. Estimation of potential output and output gap using these techniques shows varied results. The estimated potential output growth using different methods gave a range of .2.9 to 2.4 percent for 2000 and a range of .0.8 to 4.6 for 2001. Although various methods produce varied results, they however provided a broad consensus on the over-all trend and performance of the Kenyan economy. This study found that firstly, potential output growth is declining over the recent time and secondly, the Kenyan economy is contracting in the recent years.