African J. of Economic and Sustainable Development (8 papers in press)
Choice of Environmental Policy Instruments and Welfare in Middle-income countries: the case of Cote dIvoire
by Boka Assa, Zie Ballo, Mbaye Diene
Abstract: The purpose of this paper is to determine among pollution taxes, rules and a combination of taxes-rules instruments, one that allows increasing welfare in middle-income countries (MICs) that face economic and environmental shocks. To do this, we used a micro-founded dynamic stochastic general equilibrium (DSGE) model whose parameters are estimated on the Ivoirian economy by the Bayesian method. The results of welfare comparison under three regimes show on the one hand that when public abatement spending is effective, welfare under pollution taxes are higher than pure rules if shocks are strong. But when rules are combined with output taxes for public clearance spending (mixed instrument), welfare under mixed instrument become better than pollution taxes regardless of the type of shock. On the other hand, when the government intervention is inefficient, welfare under pollution taxes are almost equivalent to pure rules but remain lower than the mixed instrument. Our findings suggest that rules combined with output taxes for public clearance spending are appropriate to deal with the economic and environmental shocks in MICs.
Keywords: Middle-income countries; environmental policy instruments; general equilibrium; shock.
Positive and Negative Impacts of Natural Gas Consumption on Economic Growth in Nigeria: A Nonlinear ARDL Approach
by Mukhtar Danladi Galadima, Abubakar Wambai Aminu
Abstract: The paper has examined positive and negative effects of natural gas on economic growth in Nigeria using Nonlinear Autoregressive Distributed Lag (NARDL) model. The findings revealed that the negative and positive impacts of natural gas consumption on economic growth are asymmetric in the long run whereas in the short run such evidence has not been found. However, in the long run, the positive impact is 0.15% per 1% increase while the negative impact is insignificant. The implication of the results is that an increase in natural gas consumption can stimulate growth in the long run and, energy efficiency / energy saving policies is not a limiting factor to growth, thus, it does not engender a fall in the rate of economic growth. Therefore, the paper recommends that authorities of the Nigerias economy boost the domestic demand for natural gas, and chart out energy efficiency strategies such as using a light-emitting diode (LED) light bulb or a compact florescent light (CFL) bulb that requires less energy than an incandescent light bulb, and water booster heaters. This way, sustainable economic growth, curbing the issue of global warming and, minimizing costs of energy consumption can be achieved.
Keywords: Non-linear ARDL; Natural Gas Consumption; Economic Growth.
Effect of Credit Supply Constraint on Labor Productivity in sub-Saharan Africa
by Kwame Acheampong
Abstract: This paper investigates the effect of credit supply constraint of risk on labor productivity in 33 sub-Saharan Africa (SSA) countries spanning 1990-2013. It estimates the long run effect of credit supply constraints on labor productivity using the Pooled Mean Group (PMG) estimator. The results revealed that a reduction in both actual and expected risk premiums increased labor productivity in SSA. This findings suggest that in order to relax the credit supply constraints with the intent to improving labor productivity, domestic interest rate should account for changes in foreign interest rate to enhance the needed capital inflows.
Keywords: productivity; credit; risk; interest-rate.
JEL: F65. F66. G11.
MONEY SUPPLY, INFLATION AND ECONOMIC GROWTH IN LIBYA
by Ahmed Krouso, Dilek Temiz Dinc, Aytac Gokmen, Mehmet Yazici
Abstract: The aim of this study is to examine the relationship between money supply, inflation and economic growth in Libya. Vector Auto-regression Model, Johansen co-integration test and Granger causality were used in the analysis for the sample period of 1960-2016. The results indicate that all the variables are co-integrated in long-term. Furthermore, the increase in economic growth by 1% decreases inflation by 1.55%. While the growth in money supply by 1 percent will increase the price level by 1.15 %. According to the results of the causality test, there is no causality direction in short-run among the variables except unidirectional causality among economic growth and money supply running from RGDP to RM2 at the to 5% significance level. In addition, the response of inflation on the economic growth is negative all throughout the ten periods. Also, the same applies to money supply and economic growth. Besides, economic growth has an early and positive impact on money supply.
Keywords: Money supply; Inflation; Economic Growth; Co-integration; Libya.
Through a Systems Looking Glass: Strategies for Enhancing the Diffusion of Innovations in Artisanal Yam Flour Processing in Nigeria
by Tomilola Oguntunde, Olawale Adejuwon, Ibikunle Ogundari
Abstract: The study attempts to show the merits of using an innovation systems approach to inform public action on addressing the lack of technology diffusion in artisanal yam flour processing in Nigeria. The study utilized systems analysis to execute an assessment of linkages among actors in the sector. Data collected from questionnaire administration showed that there were technologies available for all five stages of yam flour processing. However, only the milling stage was fully mechanized. Systems analysis revealed a weak innovation system characterised by network failure between innovating units and processors on one hand and among innovating units on the other. This led to inappropriate processing technologies and lack of competence in developing efficient technologies. The study recommended with modifications to existing practices, the use of innovation brokers and platforms to strengthen linkages among actors towards building innovative capability among innovating units and facilitating the alignment of processing technologies to the needs of processors.
Keywords: Artisanal Yam flour processing; Innovation diffusion; Innovation Systems view; Policy strategies; Agricultural innovation systems; Nigeria.
SAVINGS PREFERENCE OF RURAL HOUSEHOLDS: EMPIRICAL EVIDENCE FROM TOMATO FARMERS IN GHANA
by DANIEL AIDOO-MENSAH
Abstract: The study examined the choice of mode of savings between formal and informal financial arrangements among tomato farmers. A total of 562 farmers were randomly selected from 6 districts in 3 regions: Ashanti, Brong Ahafo and Upper East of Ghana. Descriptive statistics in the form of frequencies and percentages were computed for the preferred mode of savings. Binary logistic regression and Kendall coefficient of concordance were employed to identify factors underlying the choice of mode of saving and reasons for the preferred mode of savings respectively. The results showed that years of education, respondents total income, gender and amount saved per period significantly influenced farmers choice of mode of saving. The study established the fact that gender roles and norms play a significant role in the choice of mode of savings. The results of the study revealed that women are more likely to adopt precautionary savings behaviour, hence, their financial surpluses are kept in more illiquid forms of savings in the informal savings mode. The study also revealed that there is direct movement of consumers of financial services across the various sectors, hence, indifference to the use of formal or informal means to save.
Keywords: Savings; Formal; Informal; Gender; Indifference; Tomatoes; Ghana.
Forecasting The Government of Lesothos Budget: An AR-MIDAS Approach
by Moeti Damane
Abstract: This study uses an Autoregressive Mixed Data Sampling (AR-MIDAS) regression technique and monthly fiscal variable sub-components sampled from 1993Q1 to 2017Q4 to forecast quarterly aggregated key fiscal variables (i.e. total revenues and expenditures). Results of forecast evaluation criteria show that quarterly forecasts of total government revenue and total government expenditure are best performed by a PDL/Almon weight variant of the AR-MIDAS model with monthly values of indirect taxes and compensation of employees as predictor variables, respectively. The study recommends that the PDL/Almon weight variant of the AR-MIDAS model be used to complement techniques currently in place at the Central Bank of Lesotho and the Ministry of Finance for macro-fiscal forecasting. This will help support the Government of Lesothos Public Financial Management system as well as its Medium Term Expenditure Framework.
Keywords: Mixed frequency data; Fiscal time series; Short-term forecasting; RMSE; Lesotho.
Economic dependence of rural households on the riparian zones in Burkina Faso
by Achille Diendere
Abstract: This study aims to quantitatively examine the economic dependence of rural households on riparian zones. Data were collected from 536 households across 8 villages in the Dissin area, Burkina Faso. Descriptive statistics were used to analyse the data collected, while Ordinary Least Squares Analytical Procedure was used to determine the parameter estimates of riparian income and economic dependence. The economic dependence of both very-low and high-income households is relatively low at 35.53% and 26.39%, respectively. Low-income and middle-income households have higher economic dependencies of 67.21% and 65.73%, respectively. In addition, the factors that contribute to the economic dependence are related to sex, the proximity of the riparian zone, the occurrence of negative idiosyncratic shocks, and the increased importance of other sources of income. In addition, when the riparian income is excluded, the Gini coefficient increases from 0.35 to 0.56, and the incidence of poverty increases from 40.2% to 75.4%.
Keywords: economic dependence; determinant of riparian income; rural households; poverty; income inequality; Burkina Faso.