African Continental Integration, Debt Market and Economic Growth
Paper Session
Sunday, Jan. 3, 2021 12:15 PM - 2:15 PM (EST)
- Chair: Mina Baliamoune, University of North Florida
Trade in Services and Regional Economic Integration in COMESA and SADC
Abstract
The study comparatively examines how regional integration influences the performance of services trade in Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Community (SADC). The results from the study reveal that the degree of integration in COMESA and SADC differ markedly, among other things. Based on the findings from this study, regional economic integration is fundamental in enhancing the level of services trade in Africa’s RECs. Thus, cooperation among members of a given RECs and across RECs in terms of infrastructural development and building more reliable institutional framework are essential to boost services trade and are critical for the successful implementation of the launched African Continental Free Trade Area (AfCFTA).Mispricing of Sovereign Risk and Herd Behavior in African Debt Markets
Abstract
In light of the limited evidence on herd behavior in frontier debt markets, this paper examines if African sovereign risk is mispriced due to international investor herding and discrimination rather than poor macroeconomic fundamentals. Exploiting high frequency financial datasets of 55 countries between 2004 to 2019, we estimate several regression specifications and apply the Blinder-Oaxaca decomposition approach to reflect the determinants of sovereign risk pricing in Africa compared to other world regions. The results confirm an asymmetric and herd behavior in African debt markets and verify that African debt assets are treated as one category or class. Our results also indicate that the mispricing of Africa’s sovereign risk is mainly due to a discriminatory behavior by international investors rather than differences in the quality of macroeconomic fundamentals between Africa and non-Africa regions. The findings of this paper suggest that the market sentiment has largely moved Africa’s debt market over the last decade.Quantitative Impact of African Continent Free Trade Area (AfCTA) on African Economies
Abstract
We evaluate the impact of African Continent Free Trade Area (AfCTA)agreements on welfare and terms of trade of African economies. We use a three-region (Two African Economies and the rest of the world) New Keynesian DSGE model to quantify the impact of AfCTA agreements on welfare and terms of trade. Our results suggest that one percent cut on tariff has 1.2% to 2.8% increase on welfare, measures here by the utility function of representative household due to the terms of trade effect (improvement).The Effects of Mining on Health: Evidence from Copper Mining in Zambia
Abstract
Many recognize the opportunities natural resources provide for economic growth and development and thus ensuring that natural resource wealth leads to sustained economic growth and development. Mining can be an engine and catalyst for economic growth, but often results in heavy metal releases, that could negatively impact human health. High levels of pollution may cause temporary illness, which in turn may cause lost work hours. This paper uses a novel panel dataset on living conditions in Zambia, aggregated at constituency level. Using a 2SLS fixed effects approach, results show that an increase in copper mining which led to a copper boom from 2003 induced some changes in health outcomes for constituencies located close to the mining operations after the privatization of the mines. It also finds that the probability of suffering from general sicknesses becomes less likely if a constituency is located close to an open pit mine or in a rural area while it increases if a constituency is located close to an underground mine. The results illustrate that copper mining somehow reduces the prevalence of certain health conditions, for example, anemia and chest infections.Discussant(s)
Boniface Yemba
,
Central State University
Evans Osabuohien
,
Covenant University
Ben Onyumbe Lukongo
,
Southern University and A&M College System
Eman Moustafa
,
African Development Bank
Amira El-Shal
,
African Development Bank
JEL Classifications
- O1 - Economic Development
- F1 - Trade