3. Electronic Theses and Dissertations (ETDs) - All submissions
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Item The curse that plagues the content of Africa: in-depth analysis of the resource curse and policy recommendations to avoid it(2020) Feldman, ZacThe resource curse is a phenomenon that is both paradoxical and controversial. It is argued that the curse both exists and is a construct of western discrimination. The resource curse as coined first by Auty (1993) claims that an increase in natural resource growth will cause a decrease in domestic growth should certain factors exist. This paper examines the nature of the curse and empirically demonstrates the true nature of this occurrence. Furthermore, this paper engages with some of the factors that cause this curse to rear its head. It proposes policy recommendations that will help nations create GDP growth when faced with increasing resources and avoid some of the pitfalls other economies have suffered. The first section of this paper tests the existence of the resource curse empirically using Sachs and Warner(Warner, 1997), Gylfason (2001) and Manzano and Rigabon (2001). We prove the existence of the curse in African developing countries and show the severity of the curse. Moreover, the section assesses the severity of the curse in each economy and provides indications as to how drastic the presence of the curse is. Moreover, section two of the paper examines some of the root causes of the resource curse. We examine the resource pull effect, degrading of human capital as well as lack of savings. We test these results empirically using Mehlum Moene Torvik (2006), Oskenbayev et al (2013) and Gylfason and Zoega (2004). Furthermore, we construct an optimum model that both diagnoses the resource curse as well as indicates some of the potential causes in the given economy. We provide some Policy recommendations that can be taken in order to avoid some of these causesItem Determinants of intra-East African Community (EAC) trade(2018) Majara, MaleshoaneWorld trade has become a significant factor in improving standards of living, creating employment, improving countries’ balance of payments and making it possible for consumers to have a wide variety of goods and services to choose from (Vijayasri, 2013). Living examples of some of the benefits of world trade are those brought by the African Growth and Opportunity Act (AGOA) initiative. [No abstract provided. Information taken from introduction].Item China and Japan in Africa: the case of FOCAC and TIDAL(2017) Monyae, LennonThis dissertation investigates FOCAC and TICAD contributions towards development on the African continent. The research explains the architecture of the latter conference diplomacy institutions. Japan and China are argued to be competing through evidence from the different fields that give foreign assistance to. Jospeh Nye’s soft power as theoretical framework will guide the research’s understanding of Chinese and Japanese engagements in African development. The research found that FOCAC outweighed TICAD in financial contributions however TICAD through JICA had more grassroots level contributions. China was seen to be focused on bilateral relations aimed at supporting state-led companies in big infrastructure development. Japan is argued to be more engaging with external actors while supporting African development and in addition, showed more support for the African Union’s policies. China has ‘win-win’ and Japan has ‘partnership’ both in line with African Pan -African ideals. Africans are lacking policy and guidelines in dealing with foreign partners and argued to organise themselves and respond to Japanese and Chinese interests collectively. Agenda 2063 that mentions external partners as a source of funding for development is not enough to use a policy. African development policies are seen to have failed previously due to unfulfilled promises from external partners. The research argues that African people should take FOCAC and TICAD as learning spaces and take a leadership role in their own development.Item The role of financial market development in foreign direct investment and foreign portfolio investment in selected African economies(2016) Makoni, Patricia Lindelwa RudoThe primary objective of this study was to investigate the role played by financial market development (FMD) in harnessing international capital flows of foreign direct investment (FDI) and foreign portfolio investment (FPI) in nine selected African economies, from 1980 to 2014. The study employed various econometric techniques such as the Generalised Method of Moments (GMM) for the dynamic panel data, Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration, Vector Error Correction Models (VECM) as well as Granger-causality tests. Using Principal Components Analysis (PCA), we also developed an infrastructural development index, as well as one for financial market development. The results highlighted that FDI to sampled African countries are determined by agglomeration effects, FPI, human capital development, real gross domestic product (GDP) growth, interest rates, inflation, infrastructure, trade openness, institutional quality, natural resources, and only certain individual financial market variables. FDI determinants are magnified by the application of the infrastructural and financial market development indices. FPI inflows, on the other hand, are influenced by FDI, exchange rates, stock market capitalisation, financial system liquidity, FPI agglomeration effects, capital account openness, and real GDP growth rates. The composite FMD index has a positive and highly significant effect on both FDI and FPI inflows to the selected African countries. There is reasonable evidence of bi-directional Granger causality between FDI and FPI, and FPI and overall FMD (FMD index), thus implying complementarity, as well as uni-directional Granger causality emanating from FDI to stock market capitalisation, FDI to domestic credit to the private sector by banks and also from FDI to overall financial market development in Botswana, Cote d’Ivoire, Egypt, Kenya, Mauritius, Morocco, Nigeria, South Africa, and Tunisia. In light of these findings, the policy implications are that African governments need to be conscientised on the benefits of financial market liberalisation and development. An open economy, complemented by adequate infrastructural and financial market development, plus appropriate regulation would play a significant role in attracting the type of international capital flow desired by the African host country’s level of economic development, without the concern of depleting other non-renewable natural resources.Item Essays on sectoral growth composition, foreign debt and social welfare in selected African economies(2016) Chukwu, Anayochukwu BasilThis thesis focuses on sectoral growth composition, foreign debt and social welfare in selected African economies. Data for the study were obtained from International Financial Statistics (IFS), the World Bank (WB), United Nations Conference on Trade and Development (UNCTAD), United Nations Development Programme (UNDP) annual reports, and the Penn World Table (PWT). The thesis has 5 chapters. Chapter 1 is the general introduction. Chapters 2, 3, and 4 are stand-alone related papers on social welfare, external debt, and real exchange rate. Chapter 5 is the conclusion of the study. Chapter 1 presents the background to the study, the motivating problems, the research objectives and questions, the significance of the study, the literature gaps, and contributions. The chapter ends with an outline on the organization of the study. Chapter 2 examines the impact of the composition of growth on poverty and inequality in 36 African countries. Specifically, the study demonstrates how changes in the composition of growth can affect the welfare of the segments of the population that are socially and economically deprived. While previous studies have presented different results for different continents, much of the findings show that in Africa, the primary sector is the most effective sector that improves the levels of poverty and inequality. This study re-examines this claim based on the belief that previous findings suffer from measurement bias in the estimation of parameters. This study employed a measurement approach that corrected for the observed differences. The generalized method of moments (GMM) estimation technique was adopted, and the findings were robust, showing that rather than the much-touted primary sector, the secondary and tertiary sectors are actually the main drivers of welfare improvement in the African continent. It is therefore recommended that for a sustained welfare improvement strategy, policy-making institutions in Africa should as a matter of urgency adopt appropriate industrial policy targets on the secondary and tertiary sectors with specific focus on the construction, manufacturing, mining, wholesale, retail, and hotel sectors. vii Chapter 3 investigates the impact of growth composition on external debt (ED) in selected African countries. Precisely, the study examines how each of the three productive sectors (agriculture, industry, and services) impacts on the level of ED in Africa. While many development studies have relied on aggregate output growth to investigate debt-growth dynamics, received literature shows that studies which examine the impact of growth on ED are scarce. Relying on two frameworks – “perfect capital mobility” of the Neoclassicals, and the “Dualism” theory, this study investigates the composition of the growth-debt relationship in Africa. The study applies the dynamic generalized method of moments (GMM) estimation technique to conduct its analysis. The results show that the composition of growth has significant effect on the levels of ED a country can maintain. Although, the results were lagged at different periods, the outcome suggests that the industrial (construction and manufacturing) and services sectors (wholesale, retail, and hotels ‒ WRH) are the leading sectors that drive the growth-ED relationship. The result shows more robustness when a country’s institutional quality, real interest rate, and current account balance were controlled for. Chapter 4 examines the effectiveness of real exchange rate (RER) as a policy tool for industrial diversification. Economic experts have emphasized the need for industrial diversification, especially for developing countries. However, in spite of the numerous socio-economic gains associated with industrial diversification, little effort has been made in Africa to identify and develop the sectors that achieve higher output growth for the region. The effective management of real exchange rate (RER) has provided economies with the needed tool for achieving these growth objectives. Recent empirical literature finds that undervalued RERs help countries to achieve faster economic growth, while overvaluation of the RER slows economic growth. Furthermore, recent growth studies have shown that different sectors respond differently to changes in RER. This study shows that even though many of the previous works have drawn up policy recommendations from these researches, the findings may be driven by inappropriate estimation assumptions, which inevitably results in biased findings. When these assumptions are re-specified, the empirical findings for a sample of 36 countries suggest that in Africa, sectors such as agriculture, construction, mining and utility lead to appreciation of the RER, while the manufacturing, transport and communications, “WRH” sectors, and “other” lead to depreciation of RER among countries. Although the coefficients for manufacturing, and transport and communications are not significant, this is probably due to the levels of development of the sectors within the African continent. Improving the level of development in these sectors therefore through appropriate economic policy framework will certainly impact on the strength of the coefficients of the three sectors, thereby leading to industrial revolution. Chapter 5 concludes the study with a summary of the key findings from Chapters 2, 3, and 4 with highlights of the policy implications of the findings. The highlights include: (1) the need for policy frameworks that discourage continual channelling of resources into sectors other than the industrial and services sectors. (2) A policy thrust in favour of improving domestic sources of revenue through targeting specific subsectors of the industrial and services sectors with appropriate policy instruments. This will provide the needed resources that will reduce the high debt stock per aggregate national income of African countries. (3) A policy thrust that reverses the undermining of development in the manufacturing, and transport and communications sectors. The reversal will stimulate exports and aggregate economic growth through the policy of undervaluation of the RER. Concluding the chapter, the study suggests areas for further research.