Department of Economics

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Agrarian Transformation and Rural Development in Tanzania
(1983) Maeda, J. H. J.; Msambichaka, Lucian A.
Social Science Methods, Decision-Making and Development Planning
(1984) Robinson, John; Cotta, Alain; Kassé, Mamadou M.; Msambichaka, Lucian A.; Bagachwa, M. S. D.; Mbele, A. V.; Podesta, Bruno
The Socio-Economic Implications of Structural Changes in Plantations in African Countries
(1986) Lugogo, J. A.; Msambichaka, Lucian A.; Bagachwa, M. S. D.; Dadson, J. A.; Tano, K.
ILO pub. Working paper, case studies of social implications and economic implications of structural change in plantations in Ghana, Cote d'Ivoire, Kenya and Tanzania - examines trends affecting agricultural production of cash crops and agricultural employment; comments on legislation regarding land ownership (inc. Land reform); considers agricultural price, agricultural income, wages and working conditions of plantation workers (incl. Rural women). Map, references, statistical tables, tables.
Agricultural Credit in Tanzania: A Peasant Perspective / Le Crédit Agricole En Tanzanie - Le Point De Vue Des Agriculteurs
(1987) Amani, Haidari K. R.; Msambichaka, Lucian A.; Hedlund, Stefan; Lundahl, Mats
Cet article présente les résultats d'une enquête sur le crédit agricole qui s'est déroulée au mois de décembre 1984 dans les régions de Iringa, Dodoma et Morogoro en Tanzanie. On connait actuellement très peu de choses sur l'expérience des agriculteurs tanzaniens pour ce qui est la demande et l'offre de crédits. Au niveau gouvernemental, on met l'accent sur les besoins en crédits sans trop savoir si les agriculteurs partagent ce point de vue et sans connaître le volume des crédits disponibles dans les campagnes. Le plupart des agriculteurs interrogés n'ont pas d'épargne liquide ou n'épargnent que de petites sommes (il est bon d'ajouter toutefois que le bétail est une forme d'avoir très répandue). Il est indéniable qu'une demande de crédit existe et tout porte à croire que les prêts dont la finalité est la production agricole constituent la part la plus grande de cette demande. D'après les agriculteurs, le manque de capital nécessaire à la production agricole en limite son volume. Le quart seulement des agriculteurs interrogés reconnaissent avoir obtenu un prêt l'année précédant l'enquête et 40% de ces prêts proviennent de sources privées (non-officielles) avec, cependant, de grandes différences entre les régions. Les crédits officiels sont répartis de manière inégale entre les régions. Les connaissances sur les sources éventuelles de crédit à l'intérieur ou à l'extérieur des villages sont rudimentaires. Les possibilités d'emprunt sont ignorées par environ la moitié des agriculteurs interrogés. Les sommes à emprunter sont relativement petites — en règle générale inférieures à 1.000 shillings — et les prêts ne sont pas accordés pour plus d'un an dans la majeure partie des cas. Les taux d'intérêt sont bas pour les sources officielles comme privées et il n'existe aucun système de prêts à usure. Néanmoins, la majorité des agriculteurs interrogés préfère les crédits officiels au prêts accordés par des personnes privées.
Demographic Consequences of the 1984-1985 Ethiopian Famine
(Springer Link, 1989) Kidane, Asmerom W.
This article analyzes demographic responses to the 1984–1985 Ethiopian famine and compares them with Bongaarts and Cain’s (1982) hypothesized responses. After briefly describing the data collection, I estimate the age distribution and the age-specific mortality and fertility rates of Ethiopian famine victims in a resettlement area and compare these with mortality estimates for the 1972–1973 Bangladesh famine and with fertility estimates from the 1981 Ethiopian demographic survey. The results show that the mortality rate among Ethiopian famine victims was about seven times higher than the rate among the Bangladesh victims and that the Ethiopian famine-related mortality was general and not a function of household socioeconomic variables. The data also show a 26 percent lower total fertility rate among famine victims.
Agricultural Credit in Tanzania 1961-1966 / Le Crédit Agricole En Tanzanie 1961-66
(1989) Lundahl, Mats; Msambichaka, Lucian A.
The article deals with the history of formal agricultural credit in Tanzania during the first years of independence, up to the Arusha Declaration in 1967. During this period greater efforts than hitherto were made to reach the small African farmer and make him switch to improved methods of production. The period also saw the emergence of national policies in the monetary sector. Some old credit institutions were abolished and new ones were established. The foundations were laid for present rural lending policies. In quantitative terms little was achieved, however. In 1967-68 no more than 4,5 percent of all loans to rural households came from, inadequately functioning, public institutions
Mortality Estimates of the 1984–1985 Ethiopian Famine
(1990) Kidane, Asmerom W.
A brief summary of famine and drought from a historical perspective is given. In an attempt to estimate the magnitude of deaths due to the 1984-85 famine in Ethiopia, a survey was conducted among the resettled famine victims. The results show that the expected life at birth among the male and female famine victims was 6.2 and 5.7 years, respectively. When compared with the highest mortality rates ever recorded (that is Coale-Demeny, West Model Life Table level 1), the Ethiopian famine induced rate seems to be considerably higher. Regional variations between the two famine affected regions show that mortality in Tigrai was slightly higher than that of Wello. Also prefamine socio-economic differentials between households did not seem to have an effect on mortality. The results suggest that as much as 700,000 excess deaths might have occurred during the 1984-85 famine period in Ethiopia.
A Macroeconomic-Demographic Model for Ethiopia: Specification, Estimation and Simulation
(Initiatives Publishers, 1991) Kidane, Asmerom W.
The population variable was not given due attention by classical and development economists until the early 1950s. The earliest "economic demographer", Malthus, tried to show that a high rate of population growth would eventually lead to a negative marginal product of labour and that this would, in turn, lead to a high mortality rate. Malthus stated that the equilibrium between man, capital and land would be retained through what he called positive and preventive checks
Demand for Energy in Rural and Urban Centres of Ethiopia: An Econometric Analysis
(1991-04) Kidane, Asmerom W.
The paper starts by briefly discussing the current energy situation in Ethiopia. The major source of energy in Ethiopia is traditional and the major consumer is the household. A simple model of household utility function where energy consumption is the major variable is developed and a reduced form is derived. To make the model operational a simultaneous equation system describing the demand for and supply of traditional and modern energy sources has been specified. The model is closed by equating the demand for energy with the supply. Data from the national energy survey were used to estimate the model. The major finding of the study is that price of traditional energy plays an important role in the consumption of fuelwood and other traditional energy sources. By manipulating the price variable the government may be ale to control the high rate of depletion offorest resources.
Scope, Structure and Policy Implications of Informal Financial Markets in Tanzania. AERC Research Paper 18, Nairobi
(1993) Hyuha, M.; Ndanshau, Michael O. A.; Kipokola, J. P.
Studies of financial superstructures in developing countries have shown that financial structures in these countries are dualistic in nature. On the one hand, there exists a set of institutions comprising the formal financial sector (FFS). This is the legally-regulated part of the financial system, and consists of institutions like the central and commercial banks (i.e., the banking system), near-banks, insurance companies, and development banks, to mention a few. Normally, the rest of these formal financial institutions (FFIs) are by law under the direct control of the central bank. On the other hand, there are institutions that are virtually outside the control of the established legal framework. These are the informal financial institutions (IFIs) such as moneylenders, rotating savings and credit associations (ROSCAs), landlords, neighbours, traders, etc. The basic feature of these institutions is that they participate in the saving-investment process on an informal basis, and are the financial part of what is commonly known as the informal sector. The nature, scope, role and technologies of the IFIs appear to differ fundamentally from those of the FFIs, as will become clearer later on in this study
Production Technologies in Ethiopian Agriculture
(Elsevier, 1994) Kidane, Asmerom W.; Abler, David G.
This article examines the characteristics of and choice among two production technologies in Ethiopian agriculture, one with fertilizer and the other without, using 1989-90 farm-level data. For northwest and central Ethiopia, fertilizer usage determinants are estimated simultaneously with technology-specific production functions. For southern Ethiopia, where fertilizer is rarely used, a single production function is estimated. Three conclusions emerge. First, fertilizer use is not significantly affected by a farm's stocks of capital or land. This is consistent with the fact that fertilizer allocation decisions under the deposed Mengistu regime were politicized to the point where farmers had little control over use. Second, fertilizer is associated with a smaller factor share for cattle and a larger share for land, meaning that those who control land may gain relative to the individual farmers who own cattle as the country develops agriculturally. Third, farms without fertilizer in northwest and central Ethiopia tend to be too small, a problem due to population pressures on the land and communal methods of land allocation. This suggests that land allocation institutions should adjust by distributing land to a smaller but more economically viable number of farmers.
The Behaviour of Income Velocity in Tanzania, 1967-1994
(1996) Ndanshau, Michael O. A.
Tanzania's rapid expansion in domestic credit since the late 1960s has resulted in an increasing growth in money supply. This was given particular significance in the structural adjustment programme adopted in 1982 and the three-year economic recovery programme of 1986, commonly referred to as ERP-I, which was extended to ERP-II, also referred to as economic and social action programme.
Economic Liberalization and Its Effect on the Exploitation of Crustaceans in Tanzania
(Ambio, 1998) Lokina, Razack B.; Andersson, J.
A brief analysis is made of the mostly new activity of lobster fishing in Tanzania over the period 1988 to 1996, which includes both traditional and commercial fishing. The major aspects discussed are the current over-exploitation, and demand (including the 'tourist variable').
Dependency Rates, Poverty and Saving Rates in the LDCs: Evidence from Cross-Sectional Household Data in Tanzania
(1998-01) Ndanshau, Michael O. A.
This paper examines the hypothesis that dependency rates and poverty adversely affect private savings in developing countries (LDCs) by using panel data from a one-shot survey of peasant households in Northern Tanzania. Overall, the multivariate regression results demonstrate that dependency rates have a statistically significant influence on savings in poor households and an insignificant positive effect on savings in rich households. The same positive but insignificant influence of dependency rates also obtains in the overall sample results and, by and large, when the dependency ratio is disaggregated. Empirical analysis also shows that wealth and income are determinants of savings in the rich peasant households and only cultivated land (per capita) determines savings in poor peasant households. The estimated income elasticity of savings is greater in the rich household than in the poor households, implying the latter saves less out of current income. The empirical results of this paper fail to support the 'claimed' adverse effect of dependency rates on savings in the LDCs, at least in the sampled area in Tanzania. This empirical finding undermines birth control policy measures in Tanzania. Besides, to the extent that rich households save more out of income and wealth underscores targeting of financial saving instruments to the rich rural households and, the adoption of policies that would increase saving capacities of poor households is implicit from the results. The findings and the main conclusions of this study need, however, to be treated cautiously because of the specificity of the area covered. Further exposure to data of the dependency ratios-savings nexus to household budget survey data is required
Life-Cycle Hypothesis of Savings: Empirical Evidence from Rural Households in Tanzania
(1998-12) Ndanshau, Michael O. A.
Major Turns in Tanzania's Exchange Rates, 1967-97
(Tanzania Economic Trends, 1999) Rutasitara, Longinus
The Inflationary Impact of Exchange Rate Policy Shift in Tanzania
(African Journal of Economic Policy, 1999) Rutasitara, Longinus
The inflationary impact of exchange rate changes has been controversial in the wake of adjustment/stabilisation policies in many developing countries. One view held that currency devaluation associated with structural adjustment of the 1980s was one of the causes of inflation. However, empirical results regarding the inflationary effects of official and parallel market exchange rate changes are not unanimous. This paper examines the relative impact of both official and parallel market exchange rate changes on inflation in Tanzania. A model of inflation is estimated for the period 1967-1995 and divided into the "controlled" regime (up to mid-1980s) and a more liberalised regime (mid-1980s to 1995). It is found that while the official exchange rate generally had a direct influence on domestic prices overall both regimes, the parallel exchange rate had a dominant influence during the controlled regime; but eliminating the parallel market was compelling
Real Exchange Rate Price and Agricultural Supply Response in Ethiopia: The Case of Perennial Crops
(The African Economic Research Consortium, 1999-11) Kidane, Asmerom W.
In this study the relationship between RER, price and supply response of coffee is described in detail. The objective is to see if devaluation affects RER agricultural price and supply of coffee—a perennial crop that is the major source of foreign exchange of Ethiopia. After developing a model of perennial crop supply, panel data were gathered from small-scale farmers. Both descriptive statistics as well as the econometric estimates (where fixed effect model was applied) showed that there was positive response for both the short run and the long run. In the former farmers were able to increase yield through increased use of labour and fertilizer on existing stock of trees. There was also an increase in the uprooting of old trees and replacing them by new ones, as well as the use of extra acreage at the expense of other perennials and annuals
Essays on Purchasing Power Parity, Real Exchange Rate, and Optimum Currency Areas
(2000-11) Mkenda, Beatrice K.
This thesis contains three separate papers. Paper I tests whether the theory of Purchasing Power Parity holds in a selected sample of twenty African countries. The paper employs a panel unit root test to test whether the real exchange rates in the panel are mean reverting or not. The test employed is the Im et al (1997) test. Results show that the null of a unit root is rejected for the three real exchange rate indices, namely, the import-based and trade-weighted multilateral indices, and the bilateral indices, while for the export-based indices, the null hypothesis is not rejected. That is, Purchasing Power Parity is confirmed for the import-based and trade-weighted multilateral indices, and the bilateral indices, while it is rejected for the export-based multilateral indices. After performing the demeaning adjustment to account for cross-sectional dependence, our results show that the null hypothesis of a unit root is rejected for the import-based multilateral indices and the bilateral indices, while the null is not rejected for the trade-weighted multilateral indices. Purchasing Power Parity is therefore only confirmed for the import-based multilateral indices and bilateral indices, while it is rejected for the trade-weighted multilateral indices.
Exchange Rate in Zambia
(2000-12) Mkenda, Beatrice K.
The paper analyses the main determinants of the real exchange rate in Zambia. It first gives a brief review of the Zambian economy and a review on real exchange rate studies. Then an illustrative model is presented. The study employs cointegration analysis in estimating the long-run determinants of the real exchange rates for imports and exports, and of the internal real exchange rate. The finding is that terms of trade, government consumption, and investment share all influence the real exchange rate for imports, while terms of trade, central bank reserves and trade taxes influence the real exchange rate for exports in the long-run. The internal real exchange rate is influenced by terms of trade, investment share, and the rate of growth of real GDP in the long-run. Error-correction models are then estimated. Besides the difference of the fundamentals mentioned above, aid and openness are found to impart short-run effects on the real exchange rate indices. The coefficients of adjustment are found to be-0.38,-0.79 and-0.80 respectively for the real exchange rates for imports and exports, and for the internal real exchange rate.

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