Minority entrepreneurs and firm performance in sub‐Saharan Africa

This study focuses on the role of entrepreneurs in the private sector in sub‐Saharan Africa. Using data from the Regional Program on Enterprise Development (RPED) and controlling for various factors, our analysis compares growth rates of indigenously owned African firms with firms owned by entrepreneurs of Asian or European descent, in Kenya, Zambia, Zimbabwe, and Tanzania. We find that after controlling for firm size and age, various entrepreneurial characteristics, and sector and country differences, minority (or non‐indigenous) entrepreneur firms start out larger and grow significantly faster than indigenously‐owned African firms. Our results are consistent with theories that argue that informational and financial networks created by minority entrepreneurs provide access to credit, information, and technology for members of these networks. We also find that within indigenously‐owned African firms, entrepreneurs with secondary and/or university education realise a higher rate of growth; access to education presumably enables indigenous African entrepreneurs to develop managerial skills that serve as a substitute for the informational and financial networks created by minority entrepreneurs.     

Nutrition,health and mortality in sub‐Saharan Africa: Is there a gender bias?

Anthropometric, mortality, and population data presented by Svedberg [1990] in this journal suggested a slight anti‐male bias in undernutrition in sub‐Saharan Africa. This article re‐analyses some of the same anthropometric, mortality, and population data and supplements them with more recent findings. In contrast to Svedberg's results, it finds evidence of a slight and rising anti‐female bias in sub‐Saharan Africa, which is particularly apparent in mortality and population indicators.     

Tax revenue instability,with particular reference to sub‐Saharan Africa

This article examines the temporal instability of tax revenues across a sample of developed and less developed countries. It is shown that instability is especially high in LDCs and is highest in open economies with low per capita income, high output variance and inflationary problems. Even allowing for these factors, revenue instability appears to be particularly high in sub‐Saharan Africa. Revenue instability can be expected, via the government budget constraint, to be associated with expenditure instability and/or instability in the sources of deficit finance. Cross‐section evidence for LDCs confirms that countries with high tax revenue instability tend also to have high expenditure instability. Time‐series evidence for six African countries however, suggests that revenues and expenditures do not move together in a uniform manner, and the direction of causality is generally ambiguous. There is some evidence however that foreign borrowing is used more to finance expenditure increases than to counteract revenue shortfalls.     

Will HIV become a major determinant of fertility in Sub‐Saharan Africa?

A widely used demographic model of fertility, based on the proximate determinants, is described. The model is fitted for three contrasting sub‐Saharan African countries, using data from the 1980s round of Demographic and Health surveys, to establish a baseline profile of fertility for the period immediately before any widespread behavioural changes in response to the spread of HIV can plausibly have taken place. Regional variations in the relative significance of the different proximate determinants are noted, and considered in a discussion of the mechanisms through which HIV could influence future fertility levels. It is tentatively suggested that severe HIV epidemics are most likely to exert a downward pressure on fertility. More empirical data are required to test this theory.     

Local Fiscal Stress in Sub‐Saharan Africa: The Kenyan Example

Abstract

This article identifies the fiscal weaknesses of local government in Africa, with concentration of the fiscal stress that is endemic to their condition. It then examines Kenya, as a case study in sub‐Saharan Africa. It continues to focus down on three Kenyan cities—Nairobi, Mombasa, and Kisumu, and identifies their six major revenue sources: land based revenues, regulatory revenues, income‐based taxes, service revenues, user charges, and government grants. Although some of the data is problematic, it is possible to determine several reasons for local fiscal stress. These reasons include limited access to stable financial resources, unstable national economic performance, centralized governmental control, mixed results of decentralization, and institutional and managerial weaknesses, including corruption in the collection and use of resources. Four recommendations are advanced to help these local governments: the development of local credit systems, the use of non‐governmental organizations, the clarification of the use of foreign aid, and the development of a greater capacity for governance. This articles main theoretical contribution is the development of an analytic framework for examining the reasons for fiscal stress in sub‐Saharan Africa. By examining revenue and expenditure patterns of the three localities, the article develops a data set that highlights some of the reasons for local government financial problems—the governments do not know how much revenue can be collected from a particular revenue source, they do not have records of existing sources of revenue, and they only collect about 40–60% of their estimated collections.     

Political instability and savings in less developed countries: Evidence from Sub‐Saharan Africa

A four‐equation model is used to investigate the effects of political instability (PI) on the savings rate in Sub‐Saharan Africa. Utilising a comprehensive measure of PI, we find that political instability has a deleterious effect on the savings rate both directly and indirectly through a reduction in investment and economic growth. The negative effects of PI on savings rate occurs contemporaneously as well as with a lag. We also find that economic growth has a stabilising effect on the political system and that not accounting for these effects through a simultaneous equations model results in biased coefficient estimates. These relationships are robust with respect to model specification. The implication of our results is that ‘economic factors’ alone cannot explain the development process in Less Developed Countries.     

Aiding democracy? Donors and civil society in South Africa

During the 1990s the North has increasingly used a new tool, political aid, to influence its relations with the South. More commonly known as 'democracy assistance', political aid is targeted at governmental structures such as parliament, the judiciary and local government, as well as civil society organisations, with the aim of strengthening the institutions and culture of liberal democracy. However, despite its increasing deployment, the shape and extent of foreign political aid in individual countries in the South remain largely undocumented. This article shows the importance of political aid in South Africa since the pivotal elections of 1994. It then critically examines the role assigned to civil society by donors within the 'democratisation' process. Unlike most writers on the new political aid regime, who are often both its chroniclers and mandarins, this author questions the emancipatory potential of the kind of democracy being 'helped along' by democracy assistance.     

Macro development planning in tropical Africa: Technocratic and non‐technocratic causes of failure

Based on the targets given in the development plans and the national income data of twenty‐two tropical Africa countries in the late 1960s, this paper finds a wide consensus among the planners on the structural determinants of the macro variables selected as plan targets, so that difference in targets can be explained largely by the different values assumed by these determinants in the sample countries. The implementation record was poor, and may be traced in part to a domino effect inherent in the recursive structure of target selection. The analysis of the causes of implementation failure shows that most of the causes lie outside of the competence of the planners. Alternative methods to calculate plan targets are not likely to meet with superior fulfilment results.     

Whither the state? Mining codes and mineral resource governance in Africa

In contrast to the early post-independence era in which African states predominantly controlled the mining sector, the 1980s saw African countries update their mining codes to attract foreign capital. These reform measures largely diminished the power of the state, either resulting in its “selective silence” or its retraction. However, after three waves of these reforms, the disparity between natural resources and sustainable development has continued to widen. Two theories offer a nuanced approach to understanding the state of flux of mining codes and mineral governance in Africa: governance theory and the developmental state theory. This article argues that the activist, interventionist state is making a comeback in mineral resource governance throughout Africa. Moreover, regional initiatives such as the African Mining Vision represent a fundamental departure in mineral governance. However, such initiatives will only bring development to the extent that they are owned by African governments and backed by local communities.     

Traditional Food Crop Marketing in Sub-Saharan Africa: Does Gender Matter?

The present study aims to contribute to the scarce literature on traditional food crop marketing by analysing the factors influencing (a) the household’s decision to participate in the market and (b) the selling prices obtained by the household. Using an econometric approach, we analyse household data from 270 finger millet producers in western Kenya. A main focus of the study lies on the role of gender and farmer group participation. Results show that group membership increases the probability of market participation and is of particular importance for female farmers, who obtain higher selling prices when participating in a group.     

Beyond budgetary support: pro‐poor development agendas for Africa

The latest fashion in a sequence of global interventions by donors, designed to make a difference to the lives of poor people, is the use of budgetary support mechanisms. These have emerged afresh at the start of the twenty‐first century as the increasingly dominant mode of desired aid delivery for many donors in the African context. However, this paper argues that such an approach to ‘development’, particularly when combined with an understanding of poverty largely as an absolute concept that can be eliminated through economic growth, will have damaging effects on the lives of the poor and marginalised across the continent. The time is ripe for a new global agenda that seeks to place as much emphasis on equity as it does on economic growth.     

How to lend like mad and make a profit: A micro‐credit paradigm versus the start‐up fund in South Africa

In current debates about micro‐credit, joint‐liability schemes are often viewed as the only viable way to non‐collateralised lending, and are thus seen as almost synonymous with micro‐credit. This article reports about an alternative, non‐participatory approach to micro‐credit. Prompted by the apparent inability of group credit schemes to reign in lending costs, the article sets out the institutional requirements for cheap, ‘mass‐produced’ credit. It argues that such credit can be viable if mechanisms are in place enforcing the self‐selection of potential borrowers and self‐motivation of existing borrowers. The analysis of a ‘mass‐minimalist’ micro‐credit institution from South Africa supports the argument.     

Statistical Tragedy in Africa? Evaluating the Data Base for African Economic Development

Abstract

Measurement is increasingly at the centre of debates in African economic development. Some remarkable upward revisions of GDP, which are signs of statistical systems improving, caused the declaration of a statistical tragedy in Africa. This special issue evaluates the database for African economic development with articles on the quality of the data on GDP, health and education, poverty, labour, agriculture and income distribution.