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Zeufack, Albert G.

Office of the Chief Economist for Africa Region

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Zeufack, Albert (ed.)

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Micro-foundations of macroeconomics

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Office of the Chief Economist for Africa Region

Last updated April 3, 2023

Biography

Albert G. Zeufack is the World Bank Country Director for Angola, Burundi, the Democratic Republic of Congo, and Sao Tome and Principe. Prior to this assignment, from 2016 to 2022, Dr. Zeufack held the position of Chief Economist for the World Bank’s Africa region. A Cameroonian national, Dr. Zeufack joined the World Bank in 1997 as a Young Professional and started his career as a research economist in the macroeconomics division of the research department. Since then, he has held several positions in the World Bank’s Africa, East Asia and Pacific, and Europe and Central Asia regions. Between 2008 and 2012, when on leave from the World Bank, he served as Director of Research and Investment Strategy/Chief Economist for Khazanah Nasional Berhad, a Malaysian Sovereign Wealth Fund. He previously worked as Director of Research at the Natural Resource Governance Institute, and before that he co-founded the Natural Resource Charter.

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Publication Search Results

Now showing 1 - 10 of 24

Risk Sharing in Labor Markets

(Washington, DC: World Bank, 2003-09) Bigsten, Arne ; Collier, Paul ; Dercon, Stefan ; Fafchamps, Marcel ; Gauthier, Bernard ; Gunning, Jan Willem ; Oduro, Abena ; Oostendorp, Remco ; Pattillo, Cathy ; Soderbom, Mans ; Teal, Francis ; Zeufack, Albert

Empirical work in labor economics has focused on rent sharing as an explanation for the observed correlation between wages and profitability. The alternative explanation of risk sharing between workers and employers has not been tested. Using a unique panel data set for four African countries, Authors find strong evidence of risk sharing. Workers in effect offer insurance to employers: when firms are hit by temporary shocks, the effect on profits is cushioned by risk sharing with workers. Rent sharing is a symptom of an inefficient labor market. Risk sharing; by contrast, can be seen as an efficient response to missing markets. Authors evidence suggests that risk sharing accounts for a substantial part of the observed effect of shocks on wages.
Market Access, Supplier Access, and Africa's Manufactured Exports : An Analysis of the Role of Geography and Institutions

(World Bank, Washington, DC, 2006-06) Elbadawi, Ibrahim ; Mengistae, Taye ; Zeufack, Albert

In a large cross-country sample of manufacturing establishments drawn from 188 cities, average exports per establishment are smaller for African firms than for businesses in other regions. The authors show that this is mainly because, on average, African firms face more adverse economic geography and operate in poorer institutional settings. Once they control for the quality of institutions and economic geography, what in effect is a negative African dummy disappears from the firm level exports equation they estimate. One part of the effect of geography operates through Africa's lower "foreign market access:" African firms are located further away from wealthier or denser potential export markets. A second occurs through the region's lower "supplier access:" African firms face steeper input prices, partly because of their physical distance from cheaper foreign suppliers, and partly because domestic substitutes for importable inputs are more expensive. Africa's poorer institutions reduce its manufactured exports directly, as well as indirectly, by lowering foreign market access and supplier access. Both geography and institutions influence average firm level exports significantly more through their effect on the number of exporters than through their impact on how much each exporter sells in foreign markets.
Inequality of Outcomes and Inequality of Opportunity in Tanzania

(World Bank, Washington, DC, 2015-05) Zeufack, Albert G. ; Hassine, Nadia Belhaj ; Zeufack, Albert

The paper investigates the structure and dynamics of consumption inequality and inequality of opportunity in Tanzania. The analysis covers the period 2001 to 2012. It reveals moderate and declining levels of consumption inequality at the national level, but increasing inequalities between geographic regions. Spatial inequalities are mainly driven by the disparities of households’ characteristics and endowments across geographic locations. An important part of these endowments results from intergenerational transmission of parental background. Father’s education appears as the most important background variable affecting consumption and income in Tanzania. Without appropriate policy actions, there are few chances for the next generations to spring out of the poverty and inequality lived by their parents, engendering risks of poverty and inequality traps in the country.
Structural Transformation and Productivity Growth in Africa: Uganda in the 2000s

(World Bank, Washington, DC, 2015-12) Ahmed, Sabin ; Mengistae, Taye ; Yoshino, Yutaka ; Zeufack, Albert G.

Uganda’s economy underwent significant structural change in the 2000s whereby the share of non-tradable services in aggregate employment rose by about 7 percentage points at the expense of the production of tradable goods. The process also involved a 12-percentage-point shift in employment away from small and medium enterprises and larger firms in manufacturing and commercial agriculture mainly to microenterprises in retail trade. In addition, the sectoral reallocation of labor on these two dimensions coincided with significant growth in aggregate labor productivity. However, in and of itself, the same reallocation could only have held back, rather than aid, the observed productivity gains. This was because labor was more productive throughout the period in the tradable goods sector than in the non-tradable sector. Moreover, the effect on aggregate labor productivity of the reallocation of employment between the two sectors could only have been reinforced by the impacts on the same of the rise in the employment share of microenterprises. The effect was also strengthened by a parallel employment shift across the age distribution of enterprises that raised sharply the employment share of established firms at the expense of younger ones and startups. Not only was labor consistently less productive in microenterprises than in small and medium enterprises and larger enterprises across all industries throughout the period, it was also typically less productive in more established firms than in younger ones.
Africa in Manufacturing Global Value Chains: Cross-Country Patterns in the Dynamics of Linkages

(World Bank, Washington, DC, 2020-10) Abreha, Kaleb ; Lartey, Emmanuel ; Mengistae, Taye ; Owusu, Solomon ; Zeufack, Albert

Africa's linkages in manufacturing global value chains are reasonably high compared with other developing regions. Still, linkage rates have declined steeply in recent years in non-resource rich countries in the region although they have increased sharply in countries that are rich in natural resources. Moreover, the level and dynamics of linkages to manufacturing global value chains vary significantly between countries within each group of natural resource endowments. The current levels, activity structure, and geographic configuration of linkage rates evolved over the past 20 years. In addition, these linkages cut across broad activity categories, including manufacturing textiles and apparel, metal products, transport equipment, and electrical goods. This paper analyzes the sources of the variation in linkage rates in the framework of an estimated gravity and linear probability model. It is shown that the domestic actors in these linkages are typically relatively large establishments (100 or more employees) and have been in operation for five years or longer. These manufacturers are also more likely to have foreign equity holders or foreign technology licenses. These findings should be seen in the light of policies that promote industrialization by facilitating integration into manufacturing global value chains at links that maximize job and productivity gains.
Africa's Pulse, No. 23, April 2021: An Analysis of Issues Shaping Africa’s Economic Future

(World Bank, Washington, DC, 2021-04) Zeufack, Albert G. ; Calderon, Cesar ; Kambou, Gerard ; Kubota, Megumi ; Korman, Vijdan ; Cantu Canales, Catalina ; Aviomoh, Henry E.

The economic impact of the COVID-19 pandemic in Sub-Saharan Africa has been severe; however, countries are weathering the storm so far. Real GDP is estimated to contract by 2.0 percent in 2020—close to the lower bound of the forecast range in April 2020, and less than the contraction in advanced economies and other emerging markets and developing economies, excluding China. Available data from the second half of 2020 point to rebound in economic activity that explain why the contraction in the region was in the lower bound of the forecasts. It reflected a slower spread of the virus and lower COVID-19-related mortality in the region, strong agricultural growth, and a faster-than-expected recovery in commodity prices. Economic activity in the region is expected to rise to a range between2.3 and 3.4 percent in 2021, depending on the policy measures adopted by countries and the international community. However, prospects for a slow vaccine rollout, the resurgence of pandemic, and limited scope for additional fiscal support, could hold back the recovery in the region. Policies to support the economy in the near term should be complemented by structural reforms that encourage sustained investment, create jobs and enhance competitiveness. Reducing the countries’ debt burden will release resources for public investment, in areas such as education, health, and infrastructure. Investments in human capital will help lower the risk of long-lasting damage from the pandemic which may become apparent over the longer term, and can enhance competitiveness and productivity. The next twelve months will be a critical period for leveraging the African Continental Free Trade Area in order to deepen African countries’ integration into regional and global value chains. Finally, reforms that address digital infrastructure gaps and make the digital economy more inclusive –ensuring affordability but also building skills for all segments of society, are critical to improve connectivity, boost digital technology adoption, and generate more and better jobs for men and women.
Africa's Pulse, No. 24, October 2021: An Analysis of Issues Shaping Africa’s Economic Future

(Washington, DC: World Bank, 2021-10-06) Zeufack, Albert G. ; Calderon, Cesar ; Kubota, Megumi ; Korman, Vijdan ; Cantu Canales, Catalina ; Kabundi, Alain Ntumba

In 2021, Sub-Saharan Africa emerged from the recession, but its recovery is still timid and fragile. The region is projected to grow at a rate of 3.3 percent—a weaker pace of recovery than that of advanced and emerging market economies. In 2022–23, the region is projected to grow at rates below 4 percent; however, growth above 5 percent is attainable with rapid vaccine deployment in the region and thereby withdrawal of COVID-19 containment measures. In response to the pandemic, African countries are undertaking structural and economic reforms. Countries have been relatively disciplined on monetary and fiscal policies. However, limited fiscal space is handicapping African countries in injecting the fiscal resources required to launch a vigorous policy response to COVID-19.Accelerating the economic recovery in the region would require significant additional externalfinancing, in addition to rapid deployment of the vaccine. Africa’s unique conditions, such as low baseline development, preexisting climate vulnerabilities, low use of fossil fuel energy, and high reliance on climate-sensitive agriculture, pose additional challenges from climate change, but also provide opportunities to build and use greener technologies. Climate change should be considered by policymakers as a source of structural change. For instance, the energy access problem in the region can be solved by the adoption of renewable energy alongside expansion of the national grid. Policy makers need domestic and international financing to create new jobs—including green jobs. For example, in a region where much of the infrastructure, cities, and transportation systems are yet to be built, investments in climate-smart infrastructure can help cities create jobs. In resource-rich countries, wealth exposure to carbon risk can be reduced by fostering asset diversification that supports human and renewable natural capital accumulation. Financing climate change adaptation in Sub-Saharan Africa is essential, and policies to mobilize resources are critical to create more, better, and sustainable jobs.
Africa's Pulse, No. 21, Spring 2020: An Analysis of Issues Shaping Africa’s Economic Future

(World Bank, Washington, DC, 2020-04-08) Zeufack, Albert G. ; Calderon, Cesar ; Kambou, Gerard ; Djiofack, Calvin Z. ; Kubota, Megumi ; Korman, Vijdan ; Cantu Canales, Catalina

The COVID-19 pandemic has taken a toll on human life and brought major disruption to economic activity across the world. Despite a late arrival, the COVID-19 virus has spread rapidly across Sub-Saharan Africa in recent weeks. Eeconomic growth in Sub-Saharan Africa is projected to decline from 2.4 percent in 2019 to -2.1 to -5.1 percent in 2020, the first recession in the region in 25 years. The coronavirus is hitting the region’s three largest economies —Nigeria, South Africa, and Angola— in a context of persistently weak growth and investment. In particular, countries that depend on oil and mining exports would be hit the hardest. The negative impact of the COVID-19 crisis on household welfare would be equally dramatic. African policymakers need to develop a two-pronged strategy of “saving lives and protecting livelihoods.” This strategy includes (short-term) relief measures and (medium-term) recovery measures aimed at strengthening health systems, providing income support to workers and liquidity support to viable businesses. However, financing of these policies will be challenging amid deteriorating fiscal positions and heightened public debt vulnerabilities. Therefore, African countries will require financial assistance from their development partners -including COVID-19 related multilateral assistance and a debt service stand still with official bilateral creditors.
Market Size, Sunk Costs of Entry, and Transport Costs: An Empirical Evaluation of the Impact of Demand-Side Factors versus Supply-Side Factors on Manufacturing Productivity

(World Bank, Washington, DC, 2019-06) Jones, Patricia ; Lartey, Emmanuel ; Mengistae, Taye ; Zeufack, Albert

This paper uses plant-level, panel data from the Ethiopian manufacturing census to estimate the effects of demand-side and supply-side factors on industrywide aggregate productivity. The paper focuses on the effects of three factors: (1) local market size, (2) the value of transportation costs that firms incur in selling to customers outside their market, and (3) licensing fees needed to enter the market. Identification is based on a model of production under monopolistic competition, which enables interpreting the estimated coefficients of a reduced form, dynamic productivity equation. The paper analyzes 11 industries in Ethiopia over 2000 to 2010. Several interesting results emerge. In the most parsimonious specification, the estimated coefficients are consistent with all three predictions of the model—but only for one industry: cinder blocks. In this industry, the expansion of the local market boosts industrywide total factor revenue productivity, while increases in transport costs and licensing fees reduce it. The picture is somewhat mixed in the other 10 industries but broadly consistent with the predictions of the model.
Sovereign Wealth Funds and Long-Term Investments in Sub-Saharan Africa

(World Bank, Washington, DC, 2016-12) Diallo, Boubacar ; Tchana Tchana, Fulbert ; Zeufack, Albert G.

This paper explores the landscape, contributions, and determinants of sovereign wealth funds' long-term investments in Sub-Saharan Africa. The study finds that of all regions, Africa receives the lowest share of investment from sovereign wealth funds, and the landscape is dominated by Asian funds. The investment strategies of sovereign wealth funds established by African countries tend to be to invest less domestically and more abroad, contrary to Asian funds. In addition, using an enriched simple mean-variance portfolio model with an exponential utility function, the analysis shows that the investment rate of return and political connections have a positive and significant effect on sovereign wealth fund investments, and risk exerts a negative but not significant effect. The paper confirms these results empirically, using a database that includes 26 sovereign wealth fund investments over 1985-2013. Hence, sovereign wealth funds investing in Africa care more about high returns and the political interests of their country of origin than the risk of their investment.