Table Of ContentRegional Integration and Policy Challenges in Africa
Regional Integration and
Policy Challenges in Africa
Edited by
Adam B. Elhiraika
Director, Macroeconomic Policy Division, United Nations Economic
Commission for Africa
Allan C. K. Mukungu
Senior Economic Affairs Officer, Special Envoy, United Nations Economic
Commission for Africa
and
Wanjiku Nyoike
Development Planning Consultant, Capacity Development Division, United Nations
Economic Commission for Africa
Selection and editorial matter © Development Research Department 2015
Individual chapters © Respective Authors 2015
Foreword © Abdalla Hamdok 2015
Softcover reprint of the hardcover 1st edition 2015 978-1-137-46207-7
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First published 2015 by
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ISBN 978-1-349-69033-6 ISBN 978-1-137-46208-4 (eBook)
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Library of Congress Cataloging-in-Publication Data
Regional Integration and Policy Challenges in Africa / [edited by] Adam B.
Elhiraika, Director, Macroeconomic Policy Division, United Nations Economic
Commission for Africa, Allan C. K. Mukungu, Senior Economic Affairs Officer,
Special Envoy, United Nations Economic Commission for Africa, Wanjiku
Nyoike, Development Planning Consultant, Capacity Development Division,
United Nations Economic Commission for Africa.
pages cm
Includes bibliographical references.
1. Africa – Economic integration. 2. Africa – Economic policy. 3. Finance –
Africa. I. Elhiraika, Adam B. II. Mukungu, Allan. III. Nyoike, Wanjiku.
HC800.R439 2015
337.196—dc23 2014028339
Transferred to Digital Printing in 2014
Contents
List of Figures x
List of Tables xiii
Foreword xvi
Dr Abdalla Hamdok
Preface xviii
Acknowledgments xix
Notes on Contributors xxi
List of Abbreviations xxviii
Overview 1
Adam B. Elhiraika, Allan C. K. Mukungu, and Wanjiku Nyoike
1 I ntroduction 1
2 C onvergence, monetary policy, and economic growth 1
3 I nstitutional integration and policy coordination 6
4 F inancial integration and regulation 9
5 F iscal policy and regional integration 14
Part I Convergence, Monetary Policy, and
Economic Growth
1 Can Inflation in WAMZ Converge without Monetary
Policy Coordination? 23
Emmanuel Dele Balogun
1 I ntroduction 23
2 R elated literature 24
3 T he theoretical and analytical framework 27
4 E mpirical models 28
5 E mpirical results 30
6 W AMZ area and country-specific inflation and
monetary conditions 33
7 E ffect of ex ante uncoordinated monetary conditions
on the WAMZ’s inflation differential 34
v
vi Contents
8 Country-specific monetary condition and
the implications for the inflation differential 38
9 S ummary and implications for unionization efforts 40
2 Economic Integration in WAEMU: Nominal
Convergence and Growth Dynamics 43
William Gbohoui
1 I ntroduction 43
2 M ethodology and data 45
3 E mpirical results 47
4 C oncluding remarks 63
Annexes 65
3 Monetary Policy and Economic Growth in CEMAC:
A Panel Data Approach 69
Simon Yannick Fouda Ekobena
1 I ntroduction 69
2 L iterature review 70
3 B EAC’s monetary policy 72
4 M ethodology 76
5 R esults, analysis, and lessons 79
6 C onclusion 81
Annexes 82
Part II Institutional Integration and
Policy Coordination
4 The Challenges of Regional Integration in the
East Africa Community 89
Patricia Mukiri Mwithiga
1 I ntroduction 89
2 B ackground to the research problem 90
3 O bjectives of the study 92
4 M ethodology of the study 93
5 O rigins of the East Africa Community 98
6 C onclusion 104
5 Regional Integration in Africa through the
Harmonization of Laws 109
Regis Y. Simo
1 I ntroduction 109
2 O HADA as a “new” law and development in Africa 111
Contents vii
3 O HADA as an “instrument” of regional
integration in Africa 117
4 A Short appraisal of OHADA’s 20 years of existence 119
5 C onclusion 120
6 External Debt, Quality of Institutions, and
Economic Growth in WAEMU 124
Jérôme Ouedraogo
1 I ntroduction 124
2 L iterature review 125
3 D escriptive analysis 129
4 E conometric modeling 132
5 C onclusion 139
Annexes 140
Part III Financial Integration and Regulation
7 Financial Integration and Economic Growth:
Portfolio Equity Flows to Sub-Saharan Africa 145
Eric Osei-Assibey and Seth Obeng Adu
1 I ntroduction 145
2 T rends in economic growth rate and portfolio
equity flows in SSA 147
3 F inancial integration and economic growth 150
4 E mpirical framework and model specification 154
5 E stimation results and discussions 158
6 S ynthesis of the results 163
7 C onclusion 164
8 Financial Frictions and Exchange Rates in ECOWAS’s
Prospective Monetary Union 168
Lacina Balma
1 I ntroduction 168
2 T he model 171
3 C alibration and estimation strategies 176
4 C onclusion 183
Annexes 184
9 Financial Deepening Dynamics and Implication for
Financial Policy Coordination in WAEMU 201
Christian Nguena and Temilade Abimbola
1 I ntroduction 201
viii Contents
2 Financial deepening dynamics and financial policy
coordination in a monetary union: a literature review 203
3 Financial deepening dynamics and implication for
financial policy coordination in WAEMU: an empirical
investigation 205
4 Conclusion 215
Annexes 216
10 I llicit Financial Flows, Trade Mispricing, and their
impact on African Economies 220
Simon Mevel, Siope Vakataki ‘Ofa, and Stephen Karingi
1 I ntroduction 220
2 K ey concepts and background on IFF 222
3 Q uantifying IFF from Africa: method and results 225
4 Impact of IFF on African economies: method and findings 234
5 C onclusions and policy implications 243
Annexes 245
Part IV Fiscal Policy and Regional Integration
11 Harmonized Budget Programming Reforms in
Africa: Senegal’s Experience with MTEF 255
Ligane Massamba Sene and El Hadji Fall
1 I ntroduction 255
2 T he MTEF as a multi-year budgetary programming tool 257
3 T he MTEF in Africa 258
4 T he impact of MTEF on budgetary programming in
Senegal 261
5 C onclusion 272
Annexes 273
12 Monitoring Fiscal Sustainability in Africa 278
Moses Obinyeluaku
1 I ntroduction 278
2 R evenue and expenditure developments in Africa 279
3 C ausal link between revenues and expenditure: theory
and evidence 282
4 G ranger causality in a panel framework 284
5 A pplication to government revenue and expenditure 287
6 E conometric investigation 289
7 B udget deficits and budget institutions 292
Contents ix
8 C onclusion 295
Annexes 297
13 Fiscal Rules in WAEMU: Limiting Public Deficits 302
Mohamed Coulibaly
1 I ntroduction 302
2 M odel and methodology 304
3 S BBHD analysis 310
4 C onclusion 313
5 R ecommendations 314
Annexes 315
Conclusion 326
Adam B. Elhiraika, Allan C. K. Mukungu, and
Wanjiku Nyoike
Index 329
