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721. The Expansion of Regional Supermarket Chains: Implications for local suppliers in Zambia

Author:
Francis Ziba and Mwanda Phiri
Publication Date:
03-2017
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
The last two decades have seen rapid economic growth in Zambia and the proliferation of foreign supermarket chain stores. However, this growth has translated into neither significant job creation nor significant poverty reduction. Furthermore, while the expansion of supermarket chains in Zambia has continued, local processing firms’ participation in supermarket value chains remains limited. This paper assesses the hindrances to local processing firms’ participation in supermarket value chains and how those firms’ participation might stimulate growth through regional trade. Our results show that local processing firms’ participation in regional supermarket value chains is constrained by a number of factors that pose either strategic or structural barriers to entry.
Topic:
Economic Growth, Private Sector, Retail, Regional Economy, and Value Chains
Political Geography:
Africa and Zambia

722. Zambia’s Bilateral Investment Treaties Review and Evaluation

Author:
Joseph Simumba
Publication Date:
11-2017
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
Zambia attracts foreign direct investments (FDI) from many countries that vary in terms of income levels and geographical location. In the last two decades, the country witnessed a rapid increase in bilateral investment treaty (BIT) activities triggered by massive economic liberalisation of the early 1990s. From a single ratified BIT with Germany prior to 1990, there are now 31 BITs locally called Investment Promotion and Protection Agreements (IPPAs) of which two (2) are ratified, eleven (11) are signed and eighteen (18) exist in draft form. However, BIT activities in Zambia have plummeted in line with a post 2010 global slowdown, a situation linked to rising uncertainty caused by a surge in the number of investment treaty-based cases at international tribunals. Foreign investors are suing host states over disputes ranging from direct expropriation to claims of adverse business regulation especially in the energy and extractives sectors. This study reviews Zambia’s BITs and evaluates their impact on the accumulation of FDI stocks using data collected from the Private Investment and Investor Perception Surveys conducted by Bank of Zambia, Central Statistical Office and Zambia Development Agency for the period 2007-2014 were data is publicly available. The findings show that BITs significantly matter for accumulation of FDI stocks in Zambia. The group of countries with a ratified BIT (Germany and Switzerland) maintain 1.6 times more FDI stocks than the corresponding group with only signed BITs controlling for income groups and geographical location and their interactions based on the World Bank classification. The groups of countries with a draft or without a BIT maintain FDI stocks that are less than four times lower than FDI stocks maintained by the group of ratified BITs countries. This evidence is robust to several potential confounders of the relationship between BITs and FDI stocks. Therefore, ratified BITs work for Zambia’s FDI stocks, a result that challenges some pessimism against IPPAs in Zambia.
Topic:
Treaties and Agreements, Foreign Direct Investment, Economy, and Investment
Political Geography:
Africa and Zambia

723. Scaling the Eurobond Debt Wall

Author:
Shebo Nalishebo and Florence Banda-Muleya
Publication Date:
11-2017
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
The writing is on the wall - Zambia is at a high risk of debt distress: The country risks defaulting on repaying the principal amounts of the three Eurobonds due during 2022-2027. A default could lead to exclusion from the international capital markets, a dented reputation which would culminate into a decline in Foreign Direct Investments and reduced credit to the private sector and credit rating downgrades. This would ultimately result in an economic contraction which would affect future payments and further compounding the default. Government has to pay back US$750 million in 2022, US$1 billion in 2024 and US$1.25 billion over 2025-2027. Between 2018 and 2022, Government will spend about US$237.4 million per annum in interest payments towards the three Eurobonds – this annual amount is about the same as the entire social protection budget in 2017. Policy measures have been put in place to manage the debt, but they seem inadequate: The measures include a debt management strategy that will guide borrowing decisions in the medium term. The Government has also signalled its intensions to set up a sinking fund and/or refinance the debt – essentially replacing the old loans with a new loan offering different, perhaps more favourable, terms. To set up the sinking fund, Government intends to set aside K100 million in 2018, K800 million in 2019 and K3.97 billion in 2020. But setting up the fund requires an excess of K6 billion per annum between 2018 and 2022. No clear indication has been given with regard to when refinancing will be considered. So the plans put in place may not be adequate to pay back the Eurobonds. Government should not wait until it is too late: In order to meet the principal and interest payments on the three Eurobonds, Government needs to start the strategies for paying back the Eurobonds sooner rather than later. Government has already lost time as a pay-back plan should have been instituted for the Eurobonds as soon as they were issued. But without any budget surpluses, and with foreign financing having somewhat dried up, Zambia has to look to more domestic resource mobilisation to raise the funds needed to pay back the Eurobonds.
Topic:
Government, Economy, Public Debt, and Eurobonds
Political Geography:
Africa and Zambia

724. Towards An Inflation Targeting Regime in Zambia

Author:
Caesar Cheelo and Thulani Banda
Publication Date:
06-2017
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
In this paper, I seek to discuss the conduct of monetary policy in an inflation targeting framework. The objective is to understand structural and institutional nuances in settings where this framework is successful in controlling inflation and challenges that emerge in the implementation of inflation targeting. I deal with the question: which institutional conditions should exist to support the successful implementation of inflation targeting in countries that use it? I find several institutional and legal elements which are common and can potentially explain much of the success in the implementation of inflation targeting among their monetary authorities. I benchmark these elements with the concepts of transparency and accountability of the central bank which are central tenets in the discussion of inflation targeting. I note that central bank credibility is a key outstanding element in explaining the success of inflation targeting. Components such as central bank independence and commitment to low stable inflation as the overriding objective of monetary policy represent critical preconditions for inflation targeting and can sustain the credibility of monetary policy.
Topic:
Monetary Policy, Inflation, Central Bank, Transparency, and Financial Institutions
Political Geography:
Africa and Zambia

725. A Tightening Balancing Act: Economic Implications of Zambia's Balance of Payments Performance

Author:
Caesar Cheelo and Thulani Banda
Publication Date:
06-2017
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
International trade and investment are primary drivers of globalization, international trade and development. In 2014, Zambia’s trade openness – in terms of total monetary flows on all export and import transactions combined – was estimated at 79.6% of GDP while the total (cumulative) stock on inward FDI was 66.5% of GDP. The recent economic headwinds in Zambia and abroad motivated this review of the country’s external position relative to the rest of the world. This paper highlights the changes in the balance of payments (BOP), a key tool for monitoring Zambia’s economic performance vis-à-vis the rest of the world. The balance of payments shows the Zambia’s financial transactions with other countries in the world, recoding the flows of money into and out of the economy through a number of payments accounts. Checking the economy’s balance of payments position offers useful insights about its external sector’s health. In a sense, the monetary flows through the balance of payments reflect Zambia’s net dependency on the rest of the world. The context of the analysis in the paper is the economic malaise of 2015. The paper thus demonstrates that the economic debacle of 2015 is not an unfamiliar experience for Zambia. It draws on the country’s economic recent history, identifying parallels between the past and the present. It seeks to offer guidance to policy-makers, towards fostering foster effective and reliable responses to the external balance challenges. Particularly, the paper analyses the fundamental elements of Zambia’s balance of payments, describing their recent behaviour and highlighting some of the main drivers of imbalances in the different payments accounts. It recommends measures for correcting some of the imbalance in the balance of payments, seeking to contribute to the improvement of the external sector’s performance.
Topic:
Economics, International Trade and Finance, and Trade
Political Geography:
Africa and Zambia

726. Post-conflict Stabilization in Africa

Author:
Anke Hoeffler
Publication Date:
06-2017
Content Type:
Working Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
Post-conflict peace is fragile, about half of all conflicts break out again during the twelve post-conflict years. In Africa this risk is even higher. Using survival analysis this paper suggests that while it is difficult to find correlates of peace stabilization, there are some policy relevant results. How a conflict ends is important. Negotiated settlements are fragile but the chances of peace surviving can be significantly improved through the deployment of UN peacekeeping operations. The data suggest that many operations start before the end of the armed conflict, thus they should be viewed as ‘peace preparation’ operations. The paper recommends the use of additional case studies, given that the small sample size prevents further quantitative examination of these important issues.
Topic:
Conflict Resolution, Conflict Prevention, Economics, Peacekeeping, Conflict, and Peace
Political Geography:
Africa and Global Focus

727. Intra-Regional Foreign Direct Investment In SADC: South Africa and Mauritius Outward Foreign Direct Investment

Author:
Onelie B. Nkuna
Publication Date:
06-2017
Content Type:
Working Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
This paper looks at intra-SADC (Southern African Development Community) Foreign Direct Investment (FDI) and focuses on Mauritius and South Africa’s outward FDI. Data from 1999 to 2010 are collated and qualitative analyses conducted. The study reveals that Mauritius’ outward FDI was mainly in the service sector and largely went to Madagascar, Seychelles and Mozambique, which were also the country’s main trading partners, except for Botswana. Meanwhile, South African investments were mainly in Mauritius, Tanzania and Mozambique, while the country’s main trading partners were Botswana, Zambia, Zimbabwe, Swaziland and Angola. The study also found the following to be potential drivers of Mauritian and South African outward investments, and hence intra-SADC FDI flows: geographical proximity, market access, liberalized markets, stable macroeconomic and political environment, natural resource availability, and policy and institutional framework. Graphical analyses and simple correlations reveal that trade and FDI are positively correlated for Mauritius and South Africa’s outward investment, suggestive of a complementarity relationship.
Topic:
Economics, International Political Economy, International Trade and Finance, Regional Cooperation, Foreign Direct Investment, and Regional Integration
Political Geography:
Africa, South Africa, and Mauritius

728. Ethnic Politics and Ebola Response in West Africa

Author:
Souleymane Soumahoro
Publication Date:
05-2017
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In this paper, I examine the effects of power sharing on vulnerability to adverse shocks in a multiethnic setting. Combining a unique dataset on the allocation of ministerial posts across ethnicities with the spatial distribution of Ebola, I provide evidence that ethnic representation mitigated the transmission of Ebola in Guinea and Sierra Leone. The findings suggest that one percentage point increase in proportional cabinet shares reduced Ebola transmission by five percent, as reflected in the total number of confirmed cases. I also provide suggestive evidence that this relationship goes beyond a simple correlation and operates through public resource capture and trust in political institutions.
Topic:
World Health Organization and Health Care Policy
Political Geography:
Africa

729. Localising Sovereign Debt: The Rise of Local Currency Bond markets in Sub-Saharan Africa

Author:
Florence Dafe, Dennis Essers, and Ulrich Volz
Publication Date:
01-2017
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
This paper analyses the development of local currency sovereign bond markets (LCBMs), a potentially important but often overlooked source of longer-term public finance, in Sub- Saharan Africa (SSA). We construct a novel dataset comprising 28 SSA countries for the period 2000-2014 to identify the main correlates of LCBM capitalization, of local currency bond (LCB) tenors and of LCB issue yields. Our econometric analysis is complemented by case studies of Ghana, Kenya and Nigeria, where we further investigate the drivers of LCBM development and place LCBMs in a broader public debt context. We find that LCBMs have become important sources of financing in SSA but that new vulnerabilities emerge from the costs of domestic borrowing, short bond tenors and the composition of the investor base.
Topic:
Debt, Finance, Local, and Bonds
Political Geography:
Africa and Sub-Saharan Africa

730. Implementing the Responsibility to Protect: Domestic Processes and Foreign Assistance

Author:
Cecilia Jacob
Publication Date:
07-2017
Content Type:
Working Paper
Institution:
Australian National University Department of International Relations
Abstract:
On 28–29 October 2016, the Department of International Relations at The Australian National University, along with the Asia Pacific Centre for the Responsibility to Protect at the University of Queensland, and with support from the Australian Department of Foreign Affairs and Trade, hosted the conference Implementing the Responsibility to Protect: Domestic Processes and Foreign Assistance. The conference was attended by academics, including leading experts in the field, and members and representatives of a wide range of government agencies, the diplomatic community, international organisations, and civil society organisations. Two distinguished keynotes were delivered by the Honorable Gareth Evans, ANU Chancellor and co-chair of the International Commission on Intervention and State Sovereignty (ICISS), and Ivan Šimonović, Special Adviser on the Responsibility to Protect to the UN Secretary-General (SASG). The purpose of the conference was to bring together policymakers, practitioners, and scholars working on areas related to the implementation of the Responsibility to Protect (R2P), primarily in the areas of state-level responsibility to prevent mass atrocities and protect civilian populations (what we call Pillar One of the R2P), and international assistance to states to fulfil this responsibility (Pillar Two). Recognising that the principle of R2P has gained significant traction within the international community since it was first introduced in the 2001 report The Responsibility to Protect, the conference sought to transcend longstanding debates over acceptance and legitimacy of R2P as a norm. Rather, it sought to clarify what the implementation of R2P entails for the policy and practitioner community, and to push forward new lines of academic inquiry and research that could support the implementation agenda. At its heart, R2P implementation is about strengthening the capacity of states to prevent atrocities from occurring in the first place. Prevention requires enhancing the resilience of societies that face the risk of atrocities through improved access to security, justice, and the rule of law. Effective mass atrocity prevention requires going local – understanding the dynamics of mass atrocities in their specific historical and social contexts; and going international – ensuring that international actors effectively align their priorities, strategies, and resourcing on atrocity prevention in ways that support local and national needs. This is an ambitious agenda, and experts from a range of fields were invited to address the practical implications of implementing R2P across numerous sites. The central themes included atrocity prevention, international accountability, human rights, international humanitarian law, justice for legacies of violence, foreign policy, development cooperation, peacekeeping, and civil–military assistance. The conference brought together different communities working on aspects that support the goals of R2P in order to enhance knowledge across thematic divides, and contributed to clarifying the practical implications that commitment to R2P implementation entails for these communities across the spectrum. This report contains the text of the keynote speeches, and condensed summaries of the panel discussions. These can be read together to provide a comprehensive synthesis of the debates occurring across the spectrum, or can be read as stand-alone sections for those with specific interest in a particular aspect of the R2P implementation.
Topic:
Genocide, Human Rights, International Cooperation, and United Nations
Political Geography:
Africa, Middle East, Asia, North Korea, Philippines, Syria, and Congo