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1. Optimal Investments in Africa’s Road Network

Author:
Sebastian Krantz
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper characterizes economically optimal investments into Africa's road network in partial and general equilibrium - based on a detailed topography of the network, road construction costs, frictions in cross-border trading, and economic geography. Drawing from data on 144 million trans-continental routes, it first assesses local and global network efficiency and market access. It then derives a large network connecting 447 cities and 52 ports along the fastest routes, devises an algorithm to propose new links, analyzes the quality of existing links, and estimates link-level construction/upgrading costs. Subsequently, it computes market-access-maximizing investments in partial equilibrium and conducts cost-benefit analysis for individual links and several investment packages. Using a spatial economic model and global optimization over the space of networks, it finally elicits welfare-maximizing investments in spatial equilibrium. Findings imply that cross-border frictions and trade elasticities significantly shape optimal road investments. Reducing frictions yields the greatest benefits, followed by road upgrades and new construction. Sequencing matters, as reduced frictions generally increase investment returns. Returns to upgrading key links are large, even under frictions.
Topic:
Emerging Markets, Globalization, International Trade and Finance, Infrastructure, Economic Growth, Investment, and Roads
Political Geography:
Africa

2. Urbanized and Savvy – Which African Firms are Making the Most of Mobile Money?

Author:
Charles Ackah, Aoife Hanley, Lars Hecker, and Michael Kodom
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Our analysis of over 500 Ghanaian firms sheds light, for the first time, on how certain firms managed to extract value from mobile money. Our regressions point to the usefulness of this form of cashless payments in stabilizing sales during the COVID pandemic. Perhaps the most important message from our analysis is the recognition that the benefits from mobile money extend beyond its purpose as a tool for transacting cashless payments. We reveal that firms using these additional tools supported by MoMo (e.g. for planning or saving purposes) report higher sales resilience, all things equal. Our findings appear to echo the literature on private householders (e.g. Jack and Suri, 2014). However, while the latter report a positive effect due to remittances, our finding is more likely driven by enhanced ability of businesses to streamline their planning and sales.
Topic:
Emerging Markets, Globalization, Urbanization, Money, Innovation, and Digitalization
Political Geography:
Africa

3. Patterns of Global and Regional Value Chain Participation in the EAC

Author:
Sebastian Krantz
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Using global Multi-Region Input-Output (MRIO) data from 2005-2015, this paper empirically investigates the extent and patterns by which East African Community (EAC) countries have integrated into Global Value Chains (GVCs) and Regional Value Chains (RVCs). Results imply that the foreign content of exports (I2E) and the share of exports being re-exported (E2R) are stably between 10% and 20% in most EAC countries. Trade in intermediates with the rest of the world remains 12-14 times greater in value-added (VA) terms than the trade in intermediates inside the EAC. During 2005-2015, Kenya expanded its role as a regional supplier of manufactured inputs (higher E2R with EAC partners), and Uganda slightly increased its agricultural input to the Kenyan and Rwandan food processing sectors. Overall, however, a downstream shift is evident, by which more VA (both domestic and foreign) is used for the production of final goods while maintaining high levels of exports in primary agriculture and mining. This shift goes alongside a loss of comparative advantage in manufacturing in all EAC countries apart from Kenya. Econometric analysis suggests that higher I2E and E2R shares increase GDP with an average elasticity of ≥ 0.25 over 2 years. Estimates for manufacturing sectors were slightly higher at elasticities ≥ 0.3 in response to E2R shifts. These results imply that policy measures to increase manufacturing competitiveness and promote more horizontal RVCs would benefit EAC economic growth in the medium run.
Topic:
Globalization, Regional Integration, and Global Value Chains
Political Geography:
Africa

4. Africa’s Businesswomen – Underfunded or Underperforming?

Author:
Charles Ackah, Holger Görg, Aoife Hanley, and Cecília Hornok
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
While the recent success of Africa’s ‘Lionesses’ – successful female entrepreneurs - is internationally celebrated, less is known about how liquidity can fuel the success of the ‘Lionesses’ and other businesswomen. Using information from a panel of over 800 male- and female-owned businesses in Ghana (ISSER-IGC survey), we capture a measure of underfunding, in addition to data on supplier credit, equity and other finance sources. Our regressions reveal a female-to-male productivity gap of between -11 to -19 percent, values similar to estimates for other African countries. However, when the relationship between gender and productivity is mediated by financial constraints, the gender performance gap disappears. Accordingly, female business-owners who indicate that funding is not a problem, are associated with higher productivity than males, all things equal. In a finding new to the literature, our regressions reveal the importance of supplier credit for Africa’s businesswomen.
Topic:
Globalization, International Trade and Finance, Women, Business, Productivity, and Liquidity
Political Geography:
Africa and Ghana

5. Times they are A-changin’: Africa at the Centre Stage of the new (II) Liberal World Order

Author:
Nina Wilen
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
Amid a renewed Global Power competition, Africa’s abundance of natural resources, its exponential demographic development, and the current expansion of militant Islamist groups in the region, increases its strategic importance and pushes the continent to the center stage of international relations. This brief explores Africa’s position in this changing global context and examines major actors’ presence in, and stance towards, Africa on the global arena. It does this while arguing that as the competition for influence and access to resources in Africa is intensified, Western actors need to become clearer about their interests, avoid ill-perceived imposition of conditionalities – unless they are willing to risk access and follow them through – and adopt a case-by case approach to states on a continent as diverse as Africa.
Topic:
Globalization, International Cooperation, Liberal Order, and World System
Political Geography:
Africa

6. China en África: Objetivos, instrumentos e implicaciones estratégicas

Author:
Fernando Delage
Publication Date:
10-2022
Content Type:
Journal Article
Journal:
Revista UNISCI/UNISCI Journal
Institution:
Unidad de investigación sobre seguridad y cooperación (UNISCI)
Abstract:
Desde el fin de la Guerra Fría, cuatro grandes prioridades definieron la estrategia de la República Popular China hacia África: el acceso a recursos naturales y materias primas; la consecución de mercados para sus exportaciones de manufacturas; la obtención de apoyo a sus objetivos políticos; y la consolidación de un estatus como líder del mundo en desarrollo. A partir de la primera década del siglo XXI China se ha convertido asimismo en un importante socio financiero y en impulsor del desarrollo de infraestructuras en el continente, a la vez que ha adquirido una creciente presencia militar. La relación multidimensional construida por la China de Xi Jinping con África forma parte integral de su estrategia de ascenso global, con implicaciones económicas y geopolíticas que han atraído la atención de las restantes potencias.
Topic:
Foreign Policy, Development, Globalization, Infrastructure, Geopolitics, Xi Jinping, and Strategic Competition
Political Geography:
Africa and China

7. Neoextractivism in the Democratic Republic of the Congo and Angola: Between Neoliberal Globalization, Regional Trends and Local Particularities

Author:
David Mouzo Williams
Publication Date:
07-2022
Content Type:
Journal Article
Journal:
Brazilian Journal of African Studies
Institution:
Brazilian Journal of African Studies
Abstract:
This article aims to investigate the formation of extractive enclaves in the Democratic Republic of the Congo (DRC), and its possible projections in the rest of Africa, mainly through comparison with another case, that of the Republic of Angola. For this, the African continental insertion within the neoliberal globalization in the period 1970-2000 will be taken into account, particularly the imposition of the Structural Adjustment Programs, by inter- national financial institutions such as the World Bank and the International Monetary Fund. Understanding that this is part of the same capitalist restruc- turing, the contributions of extractivism in Latin America will be used as part of the same global South.
Topic:
Globalization, Neoliberalism, Global South, and Extractivism
Political Geography:
Africa, Democratic Republic of the Congo, and Angola

8. Nigerian Confraternities To Conquer The World

Author:
Corentin Cohen
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Centre d'Etudes et de Recherches Internationales (CERI)
Abstract:
While the Nigerian brotherhoods have become increasingly prominent in the media given the criminal threat they are said to represent, they have not been the subject of any field research in Nigeria or Europe. This media coverage is fueling a growing confusion between the legal and police categorizations that are used to define these brotherhoods and the pan-African practices and discourses of solidarity and emancipation that they promote. The socio-historical approach developed in this study makes it possible to put into perspective the global expansion of confraternities since the 2000s. It offers another perspective on the role of these secret societies and their inclusion in political economies and different territories. In Europe, the Nigerian confraternities are first and foremost social institutions for the youth and the diasporas. They ensure the reproduction of the power of traditional and political elites abroad by capturing incomes linked to migration (remittances), and therefore play a key role in the production of a form of globalization of Nigerian society from below. They participate in the establishment of moral and social institutions from the south of Nigeria in Europe. Behind a discourse of empowerment and solidarity, the confraternities are thus a transnational network which perpetuates a conservative order, a social hierarchy and the inequalities which they help to naturalize.
Topic:
Globalization, Diaspora, Inequality, transnationalism, and Pan-Africanism
Political Geography:
Africa and Nigeria

9. Rethinking Stability in Africa

Author:
Michelle D. Gavin
Publication Date:
11-2021
Content Type:
Journal Article
Journal:
The Ambassadors Review
Institution:
Council of American Ambassadors
Abstract:
In practice, shaking off unhelpful ideas about stability does not necessarily mean abrupt policy reversals; nor does it solve thorny dilemmas in which immediate security interests dictate one course, while commitment to sustainable and accountable governing regimes dictates another. But rethinking stability should inform diplomatic strategies that pay more careful attention to the tensions between the governed and the governing and the degree to which governing institutions are responding to or resisting popular demands. The United States should take care to conceive of, implement and publicly frame our partnerships on the continent as relationships with societies, not with specific leaders. Finally, if every challenge to a given leader or party is understood as a harbinger of chaos, alarms should be going off in Washington. Evidence of growing state fragility is not a reason to double down on supporting an individual or system of governance that engendered that weakness. When a head of state or government is deemed indispensable, policy has lost its way. Policymakers need to reckon with the truths that change is not synonymous with instability, and that the apparent safety of working with known quantities is often a costly illusion.
Topic:
Globalization, International Cooperation, Hegemony, and Strategic Stability
Political Geography:
Africa, North America, and United States of America

10. Africa and the 'Globalization Bargain': Towards a Collective Economic Sovereignty

Author:
Al-Chukwuma Okoli and Atelhe George Atelhe
Publication Date:
01-2021
Content Type:
Journal Article
Journal:
AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:
Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:
Africa’s existential situation in the prevailing global order is such that no state thereof can afford to take national sovereignty too seriously. Apart from the myriad of structural challenges imposed on the continent by globalization, Africa is faced with a gamut of political and economic problems that can only be meaningfully addressed through some form of strategic multilateral collaboration. Africa’s aspiration to economic sovereignty has been constrained by the structural conditionalities of globalization, which have kept the continent overly weak, dependent and underdeveloped. The constraint is so immanent that individual African states can hardly afford even the relative sovereignty to harness a strategic balance in the fast ossifying asymmetries of interdependence that characterize the contemporary global political economy. It is posited in this paper that the remedy for Africa lies in the ability of her states to transcend their disempowering territorial-cum-nationalistic divides and capitalize on the existing continental multilateral mechanisms towards mainstreaming collective sovereignty, based on the principle of pan-African supranationalism. To that end, leveraging and maximizing the gains and prospects of extant regional and continental supranational organisms would become both salient and expedient.
Topic:
Economics, Globalization, Sovereignty, and Collective Bargaining
Political Geography:
Africa