Social and Economic Development in Sub-Saharan Africa, and Economic Implications of EU Regulations on Agricultural Products

Abstract

This dissertation comprises of three chapters exploring topics focussing on social and economic development, and on economic implications of EU regulations on products. Chapter One explores the contribution of value-added agriculture on economic and social development in sub-Saharan Africa (SSA). Primary commodity production and exports are the primary drivers of growth in SSA. Thus, value-added agriculture and the resulting market linkages to other sectors are limited. These limitations constrain the ability of SSA to lift its population out of poverty. To evaluate the contributors to growth, we apply the augmented Solow growth model using a system GMM approach. The two findings of this analysis are that value-added agriculture contributes substantially to GDP and overall human development in SSA and the total effect of the agricultural sector exceeds that of the non-agricultural sector, suggesting the need for developing countries in SSA to promote market linkages for economic transformation. As the first chapter looks at important factors contributing to the economic development in sub-Saharan Africa, arguing against the primary commodity focus of SSA economies, chapter two focuses on the impact of EU food standards on bilateral trade looking at all developing countries. Specifically, this chapter examines the impact of EU standards on raw and processed food trade, separating the trade impact of standards implementing an international harmonization (ISO) to those that are not (Non-ISO). EU standards inhibiting can often be trade-inhibiting. Using Pseudo-Poisson Maximum Likelihood (PPML) fixed effects models to estimate a gravity model, the results suggest that more standards from the International Standards Organization (ISO) on raw products inhibit trade of raw products, while EU-specific, non-ISO standards on raw products promote bilateral trade. In addition, more ISO standards on processed commodities increase the volume of trade of raw products. These results are consistent with the fact that food safety standards imposed by developed countries tend to act as barriers sometimes and sometimes as catalysts. Unlike the two preceding topics, chapter three is an impact evaluation of microcredit participation in Tanzania, focusing on gender differences. This study evaluates the impact of membership in Savings and Credit Cooperatives Societies (SACCOS) on household outcomes. Using household data from the Tanzanian national panel survey from 2012-2013, we employ a propensity score matching to address and evaluate the impact of accessibility to credit services on the poor population in Tanzania. The main findings indicate that members in SACCOS have a higher monthly net income of 16,700 TZS (US$ 10.43) compared to those who are not members. Results also show that men members of ACCOS tend to generate a higher income than Women members. For instance, among the female sample, monthly net income is likely to be 15,600 TZS (US $9.75) more for those who joined SACCOS. However, men who are SACCOS members are likely to have a higher monthly net income of 26,500 TZS (US$ 16.55) compared to the non-SACCOS members. Overall, evidence suggests that microcredit services improve the standard of living of the people who have access to credit, especially men.