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1. The Exchange Rate Pass-Through to Inflation and its Implications for Monetary Policy in Cameroon and Kenya

Author:
Dongue Ndongo Patrick Revelli
Publication Date:
01-2020
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
Understanding how domestic prices adjust to the exchange rate enables us to anticipate the effects on inflation and monetary policy responses. This study examines the extent of the exchange rate pass-through to the Consumer Price Index in Cameroon and Kenya over the 1991-2013 period. The results of its econometric analysis shows that the degree of the exchange rate pass-through is incomplete and varied between 0.18 and 0.58 over one year in Kenya, while it varied between 0.53 and 0.89 over the same period in Cameroon. For the long term, it was found to be equal to 1.06 in Kenya and to 0.28 in Cameroon. A structural VAR analysis using impulse-response functions supported the results for the short term but found a lower degree of pass-through for the exchange rate shocks: 0.3125 for Kenya and 0.4510 for Cameroon. It follows from these results that the exchange rate movements remain a potentially important source of inflation in the two countries. Variance decomposition shows that the contribution of the exchange rate shocks is modest in the case of Kenya but significant in that of Cameroon.
Topic:
Development, Economics, Monetary Policy, Exchange Rate Policy, Economic Policy, and Inflation
Political Geography:
Kenya, Africa, and Cameroon

2. Becoming Urban Humanitarians: Engaging Local Government to Protect Displaced People

Author:
Loren Landau, Caroline Wanjiku-Kihato, Jean Pierre Misago, and Benjamin Edwards
Publication Date:
09-2016
Content Type:
Research Paper
Institution:
Urban Institute
Abstract:
People displaced into urban areas due to war, persecution, or climatic crisis have claimed an increasingly prominent position in humanitarian operations and research. Through an examination of three African municipalities currently hosting displaced persons we study the cognitive, financial, and political incentives that work for and against a proactive response to displacement. We find that in cities where deprivation is widespread, effective engagement with municipal authorities demands a shift in approach. Rather than appeals to domestic or international protection principles, effective engagement with local authorities requires recognizing local authorities’ interests and incentives to develop strategies to align protection concerns with local political economic factors.
Topic:
Economics, Humanitarian Aid, Displacement, Urban, and Cities
Political Geography:
Uganda, Kenya, Africa, and South Africa

3. More Inclusive Decision-making Processes in Foreign Land Leasing: Policy Insights from Kenya

Author:
DAVID JAKINDA OTIENO
Publication Date:
02-2014
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
Foreign land leases could help developing countries to acquire foreign direct investments (FDIs), including technical expertise and income necessary for economic transformation. A lack of local stakeholder consultation and involvement in the design of land leases leads to the rejection or disruption of such leases by local communities and wastes investors' resources due to disruptions. Local public stakeholders in Kenya are willing to accept and participate in leases, provided they include certain provisions: that leases do not exceed 15 years; are renewable subject to mutual negotiations; offer formal employment to landowners' household members; and provide adequate monetary compensation for the leased land. Effective and transparent management of land leases requires the formation of management committees comprising local stakeholders such as youth, women and land experts. To enhance lease transparency, regular consultative meetings should be held, negotiation records must be shared with local community members and landowners should receive direct payment, rather than being paid through intermediaries.
Topic:
Security, Agriculture, Development, Economics, Poverty, and Food
Political Geography:
Kenya and Africa

4. How Should Donors Respond to Resource Windfalls in Poor Countries?

Author:
Alan Gelb, Anton Dobronogov, and Fernando Brant Saldanha
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Natural resources are being discovered in more countries, both rich and poor. Many of the new and aspiring resource exporters are low-income countries that are still receiving substantial levels of foreign aid. Resource discoveries open up enormous opportunities, but also expose producing countries to huge trade and fiscal shocks from volatile commodity markets if their exports are highly concentrated. A large literature on the "resource curse" shows that these are damaging unless countries manage to cushion the effects through countercyclical policy. It also shows that the countries least likely to do so successfully are those with weaker institutions, and these are most likely to remain as clients of the aid system. This paper considers the question of how donors should respond to their clients' potential windfalls. It discusses several ways in which the focus and nature of foreign aid programs will need to change, including the level of financial assistance. The paper develops some ideas on how a donor like the International Development Association might structure its program of financial transfers to mitigate volatility. The paper outlines ways in which the International Development Association could use hedging instruments to vary disbursements while still working within a framework of country allocations that are not contingent on oil prices. Simulations suggest that the International Development Association could be structured to provide a larger degree of insurance if it is calibrated to hedge against large declines in resource prices. These suggestions are intended to complement other mechanisms, including self-insurance using Sovereign Wealth Funds (where possible) and the facilities of the International Monetary Fund.
Topic:
Economics, International Trade and Finance, Natural Resources, and Foreign Aid
Political Geography:
Uganda, Kenya, Tanzania, and Ghana

5. New Report Examines East Africa and the Intergovernmental Authority on Development

Author:
Solomon Dersso
Publication Date:
10-2014
Content Type:
Working Paper
Institution:
International Peace Institute
Abstract:
The Intergovernmental Authority on Development (IGAD), composed of Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan, and Uganda with its secretariat headquartered in Djibouti, covers northeast Africa, a region continuing to experience major changes, arguably more than any other part of the continent. This is the only region of Africa where colonially drawn borders have been redrawn. In contrast to other regions of Africa, this is also where the prospect of further redrawing of borders—with Somaliland seeking international recognition as a separate state—remains a real possibility.
Topic:
Conflict Prevention, Security, Development, Economics, Environment, Regional Cooperation, and Governance
Political Geography:
Uganda, Kenya, Africa, Sudan, Ethiopia, Somalia, and South Sudan

6. Investment Power in Africa: Where from and where to?

Author:
Anton Eberhard and Katharine Nawaal Gratwick
Publication Date:
03-2013
Content Type:
Journal Article
Journal:
Georgetown Journal of International Affairs
Institution:
Georgetown Journal of International Affairs
Abstract:
Economic and social development depends critically on infrastructure, for which electricity may be among the most important inputs. Sub-Saharan Africa (SSA) has among the lowest rates of electricity access in the world - less than 30 percent. Furthermore, excluding South Africa, SSA is the only region for which per capita consumption of electricity is falling. The total installed capacity in the region amounts to less than South Korea's, and this limited supply is costly and unpredictable, imposing heavy tolls on social and economic development. It has been estimated that about 7,000 megawatts (MW) need to be added each year (2005-2015) to meet suppressed demand and provide additional capacity for electrification expansion. Such an investment would cost approximately $27 billion per year. Presently, funding to the electricity sector (for capital expenditure) is estimated at just $4.6 billion a year; hence, an annual funding gap of more than $20 billion exists. Public sources - utility income and fiscal transfers - contribute only about one-half of current capital investments, highlighting the urgent need for increased private investment, including public-private partnerships. Across Sub-Saharan Africa, the push towards private investment in electrical generation dates to the early 1990s, but the journey has not been smooth. Significant lessons may be identified, including: understanding the limited pool of investments, together with the importance of public stakeholders in equity and debt alike; the increasing application of partial risk guarantees (PRGs) to mobilize finance; and the emergence of more non-OECD partners. We note a number of success stories, including Kenya, South Africa and (potentially) Nigeria, whose policy innovations have replication potential in other Sub-Saharan African countries and beyond.
Topic:
Economics
Political Geography:
Kenya, Africa, South Korea, South Africa, and Nigeria

7. And Africa Will Shine Forth: A Statesman's Memoir

Author:
Jean Ping
Publication Date:
08-2012
Content Type:
Book
Institution:
International Peace Institute
Abstract:
Everyone knows that Africa, cradle of humanity, land of the Pharaohs and human civilization, and vast reservoir of human and natural resources, is not doing well. She crosses the deepest crisis that has shaken her since the end of colonial times. The specter of chaos lurks everywhere. She is now seen as the continent of “collapsing states” and “zombie nations”; the continent of extreme poverty, misery, and injustice; the continent of horrors, of the Rwandan genocide and of the worst atrocities committed in Liberia, Sierra Leone, Kenya, Darfur and elsewhere. This brutal reality has been, for quite some time now, analyzed by most observers and experts with certain fatalism, as testified by these book titles with pessimistic or even alarmist tones: “Black Africa Started on the Wrong Foot” (René Dumont), “Can Black Africa Take Off?” (Albert Meister); “And What If Africa Refused Development” (Axelle Kabou); “Africa Down” (Jacques Giri). By now, it is just a chorus of permanent lamentations about the “lost continent,” the “damned continent,” or the “cursed continent” whose past is not passing. And the rest of the world, which sees us as negligible, even contemptible (“all corrupt and all dictators,” they say), consider that henceforth, they no longer need us.
Topic:
Conflict Resolution, Security, Economics, Post Colonialism, Natural Resources, Fragile/Failed State, and Neoimperialism
Political Geography:
Kenya, Africa, Darfur, Liberia, and Sierra Leone

8. The structure and dynamics of cut flower export markets from Kenya and Ethiopia

Author:
Brian D. Perry
Publication Date:
02-2012
Content Type:
Working Paper
Institution:
Norwegian Institute of International Affairs
Abstract:
This report is part of a broad study of trade preferences and market conditions between various developing countries and Norway, conducted under the auspices of the Norwegian Institute of International Affairs and funded by the Norwegian Ministry of Foreign Affairs. Norway's Generalized System of Preferences (GSP) was established in 1971. From 2002 Norway has provided duty and quota free market access (DQF-MA) for all goods from all the 50 least developed countries (LDCs3). In 2005 the results of a review of Norway's GSP were published (Melchior, 20054), which showed that agricultural products from developing countries other than LDCs were still subject to substantial tariffs, and this contrasted dramatically with advantages given to European trading partners. As a result, from 1 January 2008 changes were made to Norway's GSP5. An important adjustment was that 14 low income countries that were not part of the LDC group were included in the provision for duty and quota-free market access (DQFMA). Consequently, 64 low income countries now benefit from DQFMA to Norway for all their goods.
Topic:
Agriculture, Development, Economics, International Trade and Finance, and Markets
Political Geography:
Kenya, Africa, Norway, and Ethiopia

9. Public and Elite Views on Europe vs. China in Africa

Author:
Lorenzo Fioramonti and Patrick Kimunguyi
Publication Date:
03-2011
Content Type:
Journal Article
Journal:
The International Spectator
Institution:
Istituto Affari Internazionali
Abstract:
Europe has been the privileged economic and political partner of Africa, but more recently China has increased its foothold in Africa through important financial investments and trade agreements. Against this backdrop, the empirical research conducted in 2007-08 in Kenya and South Africa as part of a pioneering international project investigates the perceptions of public opinion, political leaders, civil society activists and media operators. While confirming their continent's traditional proximity to Europe, African citizens are increasingly interested in China and its impact on Africa's development. Europe is criticised for not having been able to dismiss the traditionally 'patronising' attitude towards Africa. While African civil society leaders and media operators describe China as an opportunity for Africa to break free of its historical dependence on European markets, other opinion leaders warn against too much enthusiasm for the Asian giant. There is a suspicion that the Chinese strategy might, in the long run, turn into a new form of economic patronage.
Topic:
Civil Society and Economics
Political Geography:
Kenya, Africa, China, Europe, Asia, and South Africa

10. Walking the Talk: Cash transfers and gender dynamics

Author:
Carol Brady
Publication Date:
05-2011
Content Type:
Working Paper
Institution:
Oxfam Publishing
Abstract:
Concern Worldwide (Concern) and Oxfam GB (Oxfam) jointly commissioned this report to look at the impacts of cash transfers (CTs) on gender dynamics both within households and communities. This report was commissioned because of the agencies' concerns that while CTs, now being used in many different emergency contexts, are expected to benefit women and contribute towards their empowerment, there was little evidence being collected to see whether this was in fact happening. The learning from this report will inform future gender sensitive CT programmes.
Topic:
Security, Economics, Gender Issues, and Food
Political Geography:
Kenya, Indonesia, and Zimbabwe