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CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 MEMBERS OF THE CONSORTIUM

Department for International Development (DFID) US Agency for International Development (USAID)

International Development Research Centre (IDRC) The World Bank (IBRD)

John D. and Catherine T. MacArthur Foundation

Ministry of Foreign Affairs, Denmark Non-member funders:

Ministry of Foreign Affairs, the Netherlands African Capacity Building Foundation (ACBF)

Ministry of Foreign Affairs, France African Development Bank (AfDB)

Norwegian Agency for Development Cooperation (NORAD) Commission of the European Union

Rockefeller Foundation Ford Foundation

Swedish International Development Cooperation Agency (Sida) William and Flora Hewlett Foundation

Swiss Agency for Development and Cooperation (SDC)

BOARD OF DIRECTORS PROGRAMME COMMITTEE

Caroline Pestieau*, Chair and Director at large; Canada Caleb Fundanga, Chair; Governor, Bank of Zambia Kerfalla Yansane*, Vice Chair and Director at large; Ernest Aryeetey, Director, Institute for Statistical, Scientific Consultant, Guinea and Economic Research (ISSER), University of Ghana – Ulrich Camen*, Secretary; Programme Director, Mon- Legon etary Policy and Financial Reform Programme, Graduate Manana M. Bakane-Tuoane, Director General, Office of Institute of International Studies; Representing the Swiss the Premier, North West Province, South Africa Agency for Development Cooperation (SDC) Arne Bigsten, Professor of Economics, Gothenburg Antoine Hawara*, Treasurer and Director at large; amh University, Sweden Consulting, Canada Paul Collier, Professor of Economics, Centre for the Study Mthuli Ncube*, Director at large; Professor of Finance, of African Economies (CSAE), University of Oxford, UK Wits Business School, University of Witwatersrand, South Akpan Ekpo, Professor of Economics, University of Uyo, Africa Nigeria Shamsuddeen Usman, Director at large; Deputy Joseph Kinyua, Permanent Secretary, Ministry of Finance, Governor, Central Bank of Nigeria Kenya Ole Winckler Andersen, Head, Technical Advisory Patrick Guillaumont, President of CERDI, Université Service, Department of UN Development Aid, Royal d’Auvergne, France Danish Ministry of Foreign Affairs, Government of Allechi M’Bet, Professor of Economics and Chief Economic Denmark Advisor to the President, Côte d’Ivoire ThorbjØrn Gaustadsæther*, Norwegian Ambassador to Benno J. Ndulu, Senior Advisor to the Vice President, Mozambique, representing NORAD, Norway Africa Region, The World Bank, USA Susan Horton, Vice-President Academic, Wilfrid Laurier Machiko K. Nissanke, Professor of Economics, School of University; Representing the International Development Oriental and African Studies (SOAS), University of London Research Centre (IDRC) Luc Oyoubi, Member of Parliament, President of Financial Tony Killick, Senior Research Associate, Overseas Committee, Gabon Development Institute; Representing the Department for William Lyakurwa, Ex-officio member; Executive Director, International Development (DFID) AERC Joyce Moock*, Associate Vice President, Rockefeller Olu Ajakaiye, Secretary; Director of Research, AERC Foundation, USA Njuguna Ndung’u, Assistant Secretary; Director of Milena Novy-Marx, Program Officer, Global Challenges, Training, AERC The MacArthur Foundation, USA Anna Maria Oltorp, Head of Division, Thematic Programmes, Department for Research Cooperation, SAREC, Swedish International Development Cooperation Agency John Page, Chief Economist, Africa Region, The World Bank, USA Caleb Fundanga, Ex-officio Member of the Board; Chair, Programme Committee; Governor, Bank of Zambia William Lyakurwa, Ex-officio Member of the Board: Executive Director, African Economic Research Consor- tium

*Member of the Executive Committee

ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM AFRICAN ECONOMIC RESEARCH CONSORTIUM CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE

A NNUAL REPORT For the period 1 April 2005 to 31 March 2006

2005/06

CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 AERC Annual Report 2005/2006

Published by: African Economic Research Consortium P.O. Box 62882 City Square Nairobi 00200, Kenya

ISBN: 9966-944-91-5

© 2006 African Economic Research Consortium

ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM Contents

Members of the Consortium inside front cover

Board of Directors inside front cover

Programme Committee inside front cover

Foreward vii

Overview 1

The Research Programme 9

Communications 15

The Training Programme 19

Management and Administration 27

Financial Report 31

Annexes 35

Secretariat Staff Inside back cover

CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 vi ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM Foreword

t is with pleasure that I present this report of the efforts made by the Secretariat in the last year to lay a solid groundwork for the five years of the Strategic Plan for 2005–2010. As noted within, there have been Isignificant achievements in all four areas envisioned in the plan. We have approached the objectives set for the plan period with a singleness of purpose that has en- abled us to escalate capacity building and partnership efforts, enhance the performance and integration of our programmes, increase our outreach, and maintain our emphasis on quality. The staff of the Secretariat are to be commended for their dedication and commitment to these goals. The staff contribution is particu- larly important in view of our determination to remain as “lean and keen” as possible, but the growing workload has often stretched our capacity to the limit. As always, implementation efforts encountered a number of challenges. The inclusion of our Collabora- tive PhD Programme students and their supervisors in the biannual research workshop framework, for example, revealed the need for more effective integration of the thesis supervisors and thematic research resource persons for better cohesion while guiding students. The CPP continues to face resource mobilization hurdles, particularly as its longer-term period of study requires firm funding commitments to see the students through the four-year cycle. The CPP is immensely popular, registering an average application of 80 qualified students annually against 20 available AERC scholarships. Qualified students were thus encouraged to seek funding from other sources and ten students in the pipeline are privately sponsored. Overall, however, we are happy to note that initial fund raising efforts have yielded good results. We are grateful to the William and Flora Hewlett Foundation and the Central Bank of Nigeria for adding their support and confidence to our programme efforts. Besides the programmatic evidence, this Annual Report for 2005/06 contains a summary of what is a healthy financial statement prepared by our auditors. I am therefore pleased to present the report to the members of the Consortium, the Board of Directors, the Programme Committee, the network and other AERC stakeholders. You and your support have made the year’s accomplishments possible.

William Lyakurwa Executive Director

vii CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 Overview

AERC’s vision is of sustained development in sub-Saharan Africa, grounded in sound economic management and facilitated by well- trained, locally based professional economists. his first year of the strategic plan period 2005–2010 rushed by in a AERC’s mission is to strengthen local capacity for independent, rigorous fast-paced series of activities and events that marked both continu inquiry into problems pertinent to the ity and innovation – the two underlying themes of the strategy. In management of African economies, T our judgement, we have started well, and here in the introductory section through a synergetic programme combining economic research with of this Annual Report we highlight a number of the year’s postgraduate training in economics. accomplishments according to the Consortium’s four overall strategic objectives for the plan period. The section concludes with a brief look at AERC’s institutional objectives are some of AERC’s impacts, most achieved over a long period but explicitly threefold: visible during fiscal year 2005/06. Subsequent sections of the report ♦ Enhance the capacity of locally based researchers to conduct provide an in-depth look at activities and accomplishments organized policy-relevant economic inquiry, around the respective programmatic objectives. ♦ Promote the retention of such capacity, and ♦ Encourage its application in the policy context. Objective 1: Scale up the development of African capacity to conduct policy relevant economic research in a rapidly changing environment

Maintaining continuity with innovation n line with innovating to add value, the Research Programme convened I the year’s biannual research workshops with a difference – the gradual shift towards paperless workshops. Research proposals and plenary papers were distributed on compact discs (CD), an innovation that reduced the volume of workshop paper by 40%, thereby reducing costs and significantly improving coordination of logistics. The December 2005 workshop, held in Johannesburg, saw an additional innovation with the first presentation of preliminary PhD theses by 19 students participating in the AERC Collaborative PhD Programme (CPP). An extra concurrent session was created to accommodate the students, resulting in five sessions instead of the usual four. The years two biannuals saw a total of 160 presentations by resarchers and students who hailed from nearly 20 countries. The Research Programme’s building of individual capacities through the biannual research workshops was complemented by grants to policy research institutes and the Training Programme’s grants to universities to build institutional capacity. Enhanced institutional partnerships are expected to strengthen our network base while supporting the institutions’ capacities to undertake much-needed policy relevant research in Africa. Thirty-four thematic research grants were awarded during the year and in a marked improvement from previous years, 81% of the 52 new and

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2005–2010 Objectives

1. Scale up the development of African capacity to conduct policy relevant economic research in a rapidly changing environment. 2. Incorporate economic policy research institutions and university departments of economics into the AERC network through innovative partnerships and support. 3. Consolidate CPP and dovetail CMAP into it to enhance synergy between the Research and Training Programmes. 4. Foster recognition of “Brand AERC” in Africa and beyond.

revised proposals presented at the biannuals were rejected. The Programme Committee additionally approved 14 PhD thesis research grants and two partial PhD fellowships. Nineteen new scholarships and 16 others to continuing students were awarded to students participating in the Collaborative Master’s Programme (CMAP). Another 20 went to new students of the CPP and 62 to continuing students. The May biannual workshop featured the 22nd plenary session, which took the theme, International Migration and Economic Development: A Review of Global and African Evidence. , Many of the 200 participantswere policy makers, staff of UN organizations and senior members of the diplomatic corps. The papers presented an academic assessment of global and African evidence of the relationships between international migration and economic development. The 23rd Plenary Session, in December, focused on Services in Africa in recognition of the inherent potential of services to contribute to Africa’s economic development. The session attracted participation by high level policy makers from government Senior members of the AERC network are symbols of ministries and central banks as well as academics. In addition, six AERC achievement to many young Board members attended the session – the largest representation of the aspiring African economists. Board ever at a biannual. A policy roundtable discussion on Financial Their experiences and contacts with other institutions, Services in Africa with central bank governors as the panellists reviewed in Africa and internationally, various country experiences with the contributions of financial services to greatly facili-tate collaborative economic development. ventures. Capitalizing on built capacity while networking to enhance impact rants were issued to three individual network members for Gparticipation in regional and international conferences to present the results of their AERC-funded research. Two grants were awarded to professional associations, one to the Nigerian Economic Society to participate in the African Econometric Society Conference and another to the Economic Research Bureau of the University of Dar es Salaam, Tanzania, for institutional capacity building. Four paper presenters and discussants of the 2005 plenary sessions are active members of the AERC research network, having progressed as junior researchers in the biannual research workshops to become well- grounded, reputable senior African researchers, participating in and coordinating cross-country collaborative research projects and worthy of international recognition. At the May plenary, Bernadette Dia Kamgnia of the University of Yaoundé II, an active thematic researcher, ably discussed a paper on Migrant Remittances and the Household: A Review of Global Evidence, by Richard H. Adams, World Bank, USA. In that same forum,

2 ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM OVERVIEW

Leonce Ndikumana from the diaspora and a member of the AERC resource persons group, revealed interesting African dimensions to a paper on Migrant Remittances and Economic Development in Africa by Jean- Paul Azam of the University of Toulouse in France. Melvin Ayogu of the University of Cape Town and Mthuli Ncube from the University of Witwatersrand presented papers at the December plenary, the former on Infrastructure and Economic Development in Africa and the latter on Financial Services and Economic Development in Africa. Both are senior members of the research network and have participated in several AERC collaborative research projects. Professor Ncube is now a Director-at-large of the AERC Board. These network members, held in high regard in economic circles, are symbols of achievement to many young aspiring African economists. Their experiences and contacts with other institutions, in Africa and internationally, greatly facilitate collaborative ventures, particularly for scholarly attachments.

Objective 2: Incorporate economic policy research institutions and university departments of economics into the AERC network through innovative partnerships and support

Welcoming the Collaborative Master’s Programme in Agricultural and Applied Eco- nomics n support of other initiatives to scale up African economic research I capacity, and to enhance partnerships, the AERC Board approved the accommodation of the African Agricultural Economics Education Network (AAEEN) to run a Collaborative Master’s in Agricultural and Applied Economics (CMAAE). Initiated in 16 sub-Saharan Africa universities by the African Economic Education Board (AEEB), this programme has potential for synergies with AERC’s activities. The AAEEN secretariat moved into the AERC premises on 1 May 2005 and will be accommodated for a limited period during which AERC will exercise oversight of CMAAE’s resource management in accordance with a programme of work and budget approved by the AEEB and Programme Executive Committee, which will manage the substantive aspects of the programme. The programme’s accounting and administrative systems are well set up and a Programme Administrator was engaged in October 2005 while the recruitment for the Programme Director was concluded by the close of the financial year. The financial year 2005/06 marked the first year of implementation of the programme in the accredited universities (University of Nairobi, University of Zimbabwe, Makerere University, Egerton University and University of Pretoria), with the first intake of students in September 2005. The second intake is planned for September 2006 and the first contingent of CMAAE graduates is expected in 2007.

Supporting national policy workshops ther strategic partnerships were undertaken through support for Ofour national policy workshops. These were convened by the University of Cocody, Côte d’Ivoire; the Institute of Economic Affairs, Kenya; the Cellule de Suivi du Programme de Lutte Contre la Pauvreté, Senegal; and the Development Policy Centre, Nigeria. Under the poverty project, one national policy workshop was supported for each of the 12 country case studies during the fiscal year.

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Objective 3: Consolidate CPP and dovetail CMAP into it to enhance synergy between the Research and Training Programmes

Implementing joint activities subject specialist workshop to review electives and the Joint Facility A for Electives (JFE) for the CMAP and CPP are key examples of action towards this objective. The subject specialist workshop was convened in June 2005 to review three electives – Health Economics, International Economics, and Econometric Theory and Practice. The recommendations of the review were implemented immediately in the teaching of electives at the 2005 JFE, which ran from June to September for CMAP and July to November for the CPP. The 125 CMAP and 26 CPP students were taught by more than 40 lecturers, who delivered ten electives for CMAP and seven for CPP. Owing to the size of the group, the training facility was once again reserved for full use by the students, thereby promoting collegiality and the seeds of a true “African union” based on the diversity of the student profiles.

Upgrading instructors through short-term train- ing he Training Programme convened a retooling workshop in February T2006 for CMAP and CPP core course lecturers to raise the quality and currency of teaching while promoting their retention in the universities. Participants commended the workshop for enhancing their capabilities in the various courses and for bringing to the fore developments in the discipline. It is hoped that this training will improve delivery of the core courses as well as strengthen supervision capabilities of the lecturers.

Reorganizing the CMAP Academic Board s recommended by the report of the Evaluation of Phase V, the ACMAP Academic Board is currently undertaking a critical review of the programme functions. The third day of the CMAP Academic Board meeting in November 2005, for example, was dedicated to a brainstorming session on the management restructuring action plan. The session commissioned an ad hoc committee to review the mandate, coverage, founding assumptions and resource envelope/cost-sharing avenues for CMAP. The Committee presented its preliminary findings at the April 2006 Academic Board meeting, with the final report due in November 2006.

4 ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM OVERVIEW

Objective 4: Foster recognition of “Brand AERC” in Africa and beyond

Targeting under-represented countries and groups amibia, Mozambique and The Gambia – countries deemed under- Nrepresented in AERC’s activities – were targeted for sensitization visits by staff of the Training Programme. The visits presented AERC research and training opportunities to the economic research, training and policy communities in these countries to make them more aware of AERC and elicit their participation in AERC’s activities. It is noteworthy that women’s participation in training activities has been improving over the past three years. At JFE 2005 the proportion of women rose to 23%, while MA scholarships and PhD thesis grants to female students stood at 31% and 29%, respectively. To roundly address female participation in all activities, a Situation Analysis of Women in Economic Research and Graduate Training in SSA was launched jointly by the Research and Training programmes. It is hoped that the study will suggest innovative ways of enhancing women’s participation in AERC activities.

Facilitating resource mobilization he Executive Director, assisted by the Director of Research and TDirector of Training, presented several papers and proposals in national and international forums to publicize AERC’s capacity building efforts and impacts on the economic policy environment in Africa. These efforts resulted in donations of US$100,000 from the Central Bank of Nigeria and Canadian $500,000 from the International Development Research Centre to the Research Innovations Endowment Fund (RIEF), plus support of US$1 million for two years from the William and Flora Hewlett Foundation for collaborative research on Population Dynamics and Poverty Reduction in Africa.

Building AERC’s visibility and policy impact esponding to the recommendations of the report of the Evaluation of RPhase V, the AERC Secretariat took proactive measures to broadcast its activities and research output through wide press coverage before and during major events such as the biannual research workshops in Nairobi and Johannesburg, Senior Policy Seminar VIII in Dakar, and the four national policy workshops in Kenya, Côte d’Ivoire, Senegal and Nigeria. The success of these events is evidenced in the proportional matching of website traffic, which revealed a 13% increase in “hits” from the African continent. Publication of outputs from thematic and collaborative research contributed to building AERC’s visibility in the francophone community. The most talked about publication event in the period was the June 2005 launch in Cameroon of the book, African Imperatives in the New World Trade Order. The launch received widespread media coverage and was well attended by the research and policy community. Two hundred copies of the publication, L’Afrique et les défis de l’OMC, published by Karthala in Paris, were received at the Secretariat library for distribution to selected network members. The volume represents updated output of the Yaoundé trade project dissemination workshop.

5 CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 OVERVIEW

Five Research Papers and their accompanying Executive Summaries were produced and distributed during the year. The summaries, routinely translated into French, provide concise synopses of research output and are particularly intended for policy makers who may not have the time to peruse full research papers. Other publications completed in the year include Continuity and Innovation: AERC Strategic Plan for 2005–2010, as well as the report of AERC’s achievements in Phase V, the report of Senior Policy Seminar VII and the volume of papers presented at Senior Policy Seminar VI, and Issue No. 24 of the AERC Newsletter. Many of these are available on the AERC website.

Situating information technology at the centre of information sharing The distribution of biannual workshop material on compact discs was a first for AERC and was highly rated by all participants – researchers, resource persons, policy makers, and current and potential donors. The AERC website, despite connectivity limitations in Africa, registered 1,655,031 visits in the period January to December 2005, working out to a monthly average of 137,919. These encouraging statistics imply that a broad audience has access to 245 AERC research publications as well as other information items such as newsletters and seminar reports – with the added bonus of linking to key partners, economic institutions and information resources.

What is the impact – Contributing to the evolving policy environment

he Research Programme alone mentored 1,009 African researchers Tfrom 37 countries in the period 2000–2005. The Training Programme has produced 1,340 master’s graduates since its inception and supported 261 PhD graduates through thesis research and fellowship awards spreading across 23 African countries. Building capacity is only part of the equation and AERC’s mandate insists that once built, the capacity must be retained in positions and areas that contribute to economic management of the continent. A tracer survey to determine the occupations of AERC alumni and network members is in progress, but a few selected examples indicate that this is indeed happening.

Tracking network members embers of the AERC network occupy high level positions in Mgovernments and regional bodies across sub-Saharan Africa. Several beneficiaries of PhD thesis grants are in gainful employment within the economics profession. Among these are Barfour Osei, Manager of the Research Division of the African Development Bank Group, and Adeboye Adeyemo, Programme Officer for East and Southern Africa Operations at the African Capacity Building Foundation. At the United Nations Economic Commission for Africa, senior staff such as Augustin Fosu, Janvier Nkurunziza and Leonce Ndikumana are active AERC network members, the first being a former Research Director and the others recipients of grants through the research and training programmes. The Commissioner for Economic Affairs at the African Union, Maxwell M. Mkwezalamba, is also an alumnus of the AERC network. Nationally, the Deputy Executive Director of the Burundi Economic Institute is an AERC alumnus, while the Burundian and Rwandese Deputy Governors – Speciose Baransata and Consolate Rusagara, respectively –

6 ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM OVERVIEW

participate actively as paper presenters and discussants at AERC plenaries. The Governor of the Central Bank of Nigeria, Charles Soludo, epitomizes AERC capacity building, as he started off as a junior researcher at the biannual research workshops, and through steady progression and training is at the peak of his career. Other staff of the Nigerian Planning Commission are also members of the AERC network. In Côte d’Ivoire, the Minister of Finance, the Speaker of the National Assembly, the Permanent Secretary in the Ministry of Finance, and the economic advisors to both the President and the Prime Minister are all products of the AERC system. In Kenya, the Permanent Secretary in the Ministry of Finance, Joseph Kinyua, and several staff of the Kenya Institute for Public Policy Research and Analysis (KIPPRA) are active members of the network. In South Africa, AERC alumni include the Deputy Director of Budget in the Ministry of Finance, the economic adviser to the government of Kwazulu- Natal and the Director General of North West Province, Manana Bakane- Tuoane. Ms. Bakane-Tuoane is also a member of the AERC Programme Committee. Recognizing the quality, cost-effectiveness and Africa-relevance of AERC training programmes, some African central banks routinely send staff members to CMAP and CPP for studies rather than abroad. As a result, several members of staff of the central banks of Tanzania and Uganda are active researchers, mainly supported through the AERC Research and Training Programmes. The Deputy Minister of Foreign Affairs and International Cooperation in Tanzania, Cyril Chami, started off as a CMAP and PhD fellow and is now an active member of the research network, as are staff of the Tanzanian Economic and Social Research Foundation (ESRF), the Research on Poverty Alleviation (REPOA) group, and the University of Dar es Salaam. Louis Kasekende, Chief Economist of the African Development Bank and former Deputy Governor of the Central Bank of Uganda, is another classic example of AERC’s capacity building efforts; he started in the network as a junior researcher and is still participating in biannual workshops in the role of policy discussant at plenary sessions. In Namibia, staff of the Central Bank and the Namibia Economic Policy Research Unit (NEPRU) are active members of the AERC research and training network. In Mozambique, the National Director for Research and Policy Analysis at the Ministry of Planning, Jos Sulemane, is an AERC alumnus, as are Pedro Couto, the Deputy Minister of Finance, and Clara DeSouza, a former General Manager of the Bank of Mozambique who is now employed at a multilateral institution. In Mali, Cameroon, Kenya, Tanzania, Ethiopia and Chad, meanwhile, AERC researchers have been leaders in the development of their respective countries’ poverty reduction strategy papers. Some international financial institutions underwrite the salaries of some of these advisors, rather than imposing their own staff, which itself is a tribute to AERC quality.

Going beyond capacity building apacity building is more than training, and AERC’s effort to build C institutional capacity goes beyond training teachers to building a satisfying working environment with access to computers, the latest journals and other amenities. The AERC network stretches beyond the continent to reach members of the African diaspora wherever they are to participate in network activities. Some are resource persons, some are part of collaborative research projects, and others serve as lecturers and external examiners for CMAP and CPP, as well as reviewers of AERC research reports. Some prominent economists in the diaspora who continue to be associated with the AERC Research Programme as resource

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persons are Lemma Senbet of the University of Maryland, USA; Mwangi Kimenyi of the University of Connecticut, USA; and John Mbaku of Weber State University, USA. Professor Senbet was recently named a fellow of Financial Management Association International for his contributions to the profession. Others participating in teaching at the Training Programme’s Joint Facility for Electives include Mougoue Mbodja of Wayne State University, USA; Oluwole Owoye of the State University of Western Connecticut, USA; and Victor Murinde of the University of Birmingham, UK, who is also an active participant of the Research Programme. AERC has thus contributed to a professional esprit de corps that did not exist before. The biannual research workshops, the Joint Facility for Electives, the senior policy seminars, national policy workshops and other AERC activities assemble economists from across the continent to exchange views and explore common problems. Besides the research and training network, we are moving closer to creating a high-level policy network through the senior policy seminars, which bring together governors and deputy governors of central banks, ministers of finance, and heads of government departments. In all these ways, association with AERC means that participants are able to apply their expertise as economists, thereby contributing to professional pride and independence.

8 ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM Research Programme

New AERC research themes: • Poverty, income distribution and labour market issues • Macroeconomic policies, invest- ment and growth he period saw the successful convening of the first two • Finance and micro/sectoral issues biannual workshops of the strategic plan period, the • Trade, regional integration and development and approval by the Programme Committee of political economy issues T concept notes for three new collaborative research projects and one commissioned study, and the articulation of the AERC Research Fellows distinction. Complementing these and other achievements were the delineation of the scope of the new thematic research groups and the first steps towards the establishment of formal partnerships with national and regional institutions.

Research Objective 1: Build and retain credible local capacity for policy- oriented economic research

Thematic research mproved staff capacity in the Research Department meant that a Inumber of research proposals submitted to the Secretariat were reviewed internally. Others were promptly sent out for external review. Where a proposal failed to meet the minimum criteria for acceptance, authors were advised to take different lines or methods of inquiry and submit new proposals. The screening yielded 34 proposals that were then approved by the Programme Committee for new grant awards during the year. Among those who qualified were researchers from several hitherto under-represented countries in the research network, including Benin, Malawi, Rwanda, Sierra Leone and Togo. Of the 52 new and revised proposals presented at the year’s biannual research workshops, only 10 (19%) were rejected, an improvement over the 2004/05 average rejection rate of 30%. The list of grantees, their research topics and thematic groups is presented in Annex Table A1. The biannual workshops provide an avenue for quality control of thematic research projects through a process of peer review and technical assistance by international resource persons. A record 60 presentations were made in four concurrent sessions of the first biannual, held in Nairobi from 28 May to 2 June. All available workshop presentation slots were engaged – there were 23 new proposals and 6 revised proposals, 23 interim reports, and 8 final reports. The 82 participating researchers represented 18 different nationalities. Thirty-two were participating for the first time.

9 CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 RESEARCH PROGRAMME

The year’s second workshop was held in Johannesburg, South Africa, from 3 to 8 December. The workshop also featured the first presentation of preliminary PhD theses by students in the Collaborative PhD Programme (CPP). To accommodate the CPP students and also respond to issues raised by various stakeholders regarding political economy, the Secretariat experimented with a restructuring of this workshop. The 78 presentations, made in five concurrent sessions instead of the usual four, consisted of 22 new proposals and 1 revised proposal, 16 interim reports, 20 final reports, and 19 CPP interim theses. In total, 97 researchers and 19 CPP students participated, together representing 17 countries. Eighteen researchers took part for the first time and 17% of the participants were women. Annex Table A2 shows the breakdown of the 2005/06 researchers by thematic group, gender and country.

Plenary sessions he 22nd Plenary Session (May T 2005) focused on International Migration and Economic Development: A Review of Global and African Evidence. Chaired by the Netherlands Ambassador to Kenya, Mrs. M.W.J.A. Van Gool, Thematic research sampler, 2005/06 the session elicited considerable interest, attracting more than 200 participants for the From the Poverty, Income Distribution and Labour Market Issues full-day event. Among those attending were group, Folasade Lillian Ayonrinde presented a proposal that sought high commissioners and ambassadors to to examine the interrelationships among gender, poverty, user fees and health care decisions in Nigeria. In particular, she proposed to Kenya, as well as senior staff of several examine the effects of income, prices, quality of service and house- embassies, UN organizations and the hold distance to health facilities. Her intention is to provide useful International Organization for Migration. guidelines to policy makers interested in alleviating the suffering and poverty of women in Nigeria and the sub-region as a whole. The Several participants commented that the project is based on a survey of households and health facilities that session enhanced their understanding of the will provide data to be analysed using a discrete and continuous links between African development and choice model consistent with utility maximization. Peter Quartey, a researcher from Ghana in the Macroeconomic international migration and provided insights Policies, Investment and Growth group, presented his final report on into how to manage both to the benefit of the “Impact of Migrant Remittances on Household Welfare in Africa and Africans. Ghana”. He investigated whether migrant remittances significantly affect household welfare and tried to ascertain whether during The 23rd Plenary Session, in December periods of economic shocks, households that receive remittances are 2005, focused on Services in Africa. The session able to cope better than those that do not. Quartey found that the attracted the participation of high level policy flow of remittances increases during periods of economic shocks and concluded that the remittances not only improve household welfare, but have become an important source of income for consumption smoothing in Ghana. He recommends that government policies focus on reducing the cost of transferring funds from relatives abroad to the poor. In addition, policies should ensure that migrants can invest in financial assets with competitive interest rates. From Mauritius, one of the countries that are under-repre- sented in the AERC network, Sunil Bundoo of the Finance and Resource Mobilization group presented his final report on Asset Price Development in an Emerging Stock Market. The study found that the systematic risk of stocks in the Stock Exchange of Mauritius (SEM) is influenced by its thin trading characteristic and that SEM behaves like a small market capitalization index. The results of this study will be useful to the investment community who could use them to set up better information systems at the SEM and develop more informed investment strategies. Corruption loomed large in the group focusing on Trade, Regional Integration and Political Economy Issues. Joseph-Pierre Timnou and Dorine Feunou presented a proposal to study corruption in Cameroon, which they consider a major cause of poverty in the country. A second proposal, by Oscar Obayemi, addressed the question of corruption in Cameroon’s public hospitals. Also in this group was Janet Adelagan, who proposed to study the impact of board changes on shareholders’ wealth. From Benin, another under- represented country with little participation in the research network, Ulrich Gnansounou proposed to investigate the determinants of private investment in his country. All these new researchers were provided with pertinent suggestions on how to proceed with their projects to produce quality research output.

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makers from government ministries and central banks as 22nd Plenary Session – May: International Migration

well as academics. It was chaired by the Deputy Governor of • International Migration and Economic Development: A the Reserve Bank of South Africa, Dr. X.P. Guma. Capping Review of Global Evidence, by John Page, World the proceedings was a roundtable on Financial Services in Bank, USA. The discussant was Dhananjayan Africa that reviewed various country experiences with the Sriskandarajah, Institute of Public Policy Research, London, UK. contributions of financial services to economic development. • International Migration and Economic Development: A The discussion covered structural, institutional and Review of African Evidence, by Robert E. Lucas, operational factors in – or constraints to – the sector’s Boston University, USA. The discussant was Christiana Okojie, University of Benin, Nigeria. contribu-tion to the develop-ment process. The presenters • Migrant Remittances and the Household: A Review of and panellists highlighted areas for further research on the Global Evidence, by Richard H. Adams, World Bank, linkages between financial services and economic USA. The discussant was Bernadette Dia Kamgnia, University of Yaoundé II, Cameroon. development in Africa. Panellists were: • Migrant Remittances and Economic Development in • Charles Soludo, Governor, Central Bank of Nigeria Africa: A Review of Evidence, by Jean-Paul Azam, • Speciose Baransata, 1ére Vice Gouverneur, Banque de la University of Toulouse, France. The discussant was Leonce Ndikumana, University of Massachusetts, USA. République du Burundi • Consolate Rusagara, First Vice Governor, Bank of 23rd Plenary Session – December: Services in Africa Rwanda • Louis Kasekende, Deputy Governor, Central Bank of • Social Services and Economic Development in Africa, by Tim Besley, London School of Economics, London, Uganda UK. The discussant was John Mbaku, Weber State The participation of Professor Soludo and Dr. University, USA. Kasekende, active members of the research network, • Infrastructure and Economic Development in Africa, by Melvin Ayogu, University of Cape Town, South Africa. inspired several young researchers, who remarked on their The discussant was Ngila Mwase, UNDP, abiding commitment to AERC. The policy roundtable Mozambique. afforded the network members an opportunity to hear first • Financial Services and Economic Development in Africa, by Mthuli Ncube, University of Witwatersrand, hand how their experiences and participation in AERC South Africa. The discussant was Victor Murinde, research may have informed the execution of their roles in University of Birmingham, UK. policy making.

Policy Relevance • Policy round table chaired and panelled by African Central Bank Governors and Deputy Governors • Currency of topics – Migration and Economic Development; and Services in Africa • More than 200 participants, including policy makers, exposed to frontier research output on the two topics

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Evaluation of Phase V

Recommendation Action taken

Shorten the pre-workshop proposal Apply in-house capacity to some review. While good progress was made extent but complement with during Phase V, AERC needs to make expansion of external reviewers further efforts to improve performance in this phase.

A preferred option would be an in- Increase use of ICT to improve house capacity to perform quick communication with network screening using simple elimination members criteria to reduce the number of proposals received to a more manageable short list before sending out for external review.

Special sessions he May biannual included special sessions on TDesign of IMF-Supported Programmes by Atish Alex Ghosh, International Monetary Fund, and World Development Report 2006 by Francisco H.G. Ferreira, World Bank. Ademola Oyejide, University of Policy Relevance Ibadan, Nigeria, and Andy McKay, University of Bath, UK, discussed the • Currency of topics – Design of IMF Supported Programmes; former, while Mwangi Kimenyi, University of Connecticut, USA, and Finn World Development Report Tarp, University of Copenhagen, Denmark, discussed the latter. The 2006; and African Economic workshop also featured a concept and methodology session by Anke Outlook 2004/05 – addressed Hoeffler, University of Oxford, UK, on Estimation of Cross–Country Growth policy makers’ information needs. Regressions. • Methodology sessions on The special sessions at the December workshop focuse on African estimating cross–country Economic Outlook 2004/05, presented by Desire Vencatachellum of African growth regressions and poverty and equity measurement Development Bank (AfDB), and Economic Report of Africa, presented by exposed researchers and Janvier Nkurunziza of the UN Economic Commission for Africa (UNECA). policy makers to new The reports were discussed by Ibi Ajayi, University of Ibadan, Nigeria, techniques. and Ernest Aryeetey, Institute of Statistical, Scientific and Economic Research (ISSER), Ghana, respectively. The workshop also featured a concept and methodology session by Jean-Yves Duclos on Poverty and Equity: Measurement, Policy and Estimation with DAD. The presentations by AfDB and UNECA are quite significant as they signal the re-invigoration of the links between AERC and the two premier regional organizations.

Biannual workshop evaluations n routine administration of workshop evaluations, 74% of the May Iworkshop respondents rated the overall workshop organization as “excellent” and 26% as “good”. Difficulties experienced obtaining South African entry visas – although no fault of AERC – reduced the “excellent” approval rating of the December workshop to 50%.

Collaborative research project on Poverty, Income Distribution and Labour Markets in SSA The Poverty II Project moved closer to completion during the year with all final reports submitted in February 2006 and four successful twinning arrangements concluded with Cornell University. A national policy workshop was supported in each of the 12 case study countries during the fiscal year and a regional dissemination workshop is planned for 2006/07. Proceedings of the policy workshops will be published by the country teams for distribution among policy makers and other stakeholders in each country. A few copies of each will be made available to the AERC library.

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Collaborative research project on Explaining Africa’s Economic Growth Performance oncluding project activities progressed well with the first Cpresentation of findings taking place at a special half-day plenary session during the May biannual research workshop. Following this interaction, the editors met in Bellagio, Italy, to finalize the editorial work. It is anticipated that Cambridge University Press will finalize publication arrangements for the four-volume book by August 2006.

New collaborative research projects oncept notes on two new collaborative research projects, Export CSupply Constraints and Institutions and Service Delivery, were prepared by the Secretariat with the assistance of Ademola Oyejide and Mwangi Kimenyi, respectively, and approved by the Programme Committee in June 2005. Steering committees were set up for the two projects and implementation is on course. A concept note on a new project on Linkage between Growth and Poverty Reduction was prepared with the assistance of Ernest Aryeetey and approved by the Programme Committee in December. And with the input of Germano Mwabu and Erik Thorbecke, a solicited proposal on Population Dynamics and Poverty Reduction was funded by the William and Flora Hewlett Foundation. The project will investigate interactions among reproductive health, growth and poverty reduction in Africa as a component of the new collaborative project on the Growth–Poverty Nexus.

Technical workshops workshop on Economic Modelling, held in November, built capacity Aof researchers on techniques for evaluating the impacts of macroeconomic policies with a special emphasis on computable general equilibrium models (CGEM). Of the 64 individuals who expressed an interest, budgetary constraints limited participation to 14 researchers from nine African countries. Five of these were francophone and two were women, with notable participation of researchers from Liberia, Congo and

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Togo. It is hoped that their experience at this workshop will encourage Call-for-proposals: ICT Policy and Economic Development in Africa further participation in AERC activities. The workshop instructors were Bernard Decaluwé, University of Laval, Canada, and Christian Arnault Closing the digital divide remains a Emini, University of Yaoundé II, Cameroon. In collaboration with the significant challenge to Africa as the continent lags behind other regions of the World Bank, AERC convened a one-week workshop in March 2006 on world in the development of the analysis of the Bank’s Investment Climate Survey (ICS) data. Participants information and communications were drawn from those countries where the Bank has assembled ICS data. technology sector. The policy environment plays a big role, prompting the Programme Committee to approve this focus as the The AERC/International Monetary Fund first research topic in AERC’s new “call-for- proposals” series. visiting scholars programme The Secretariat commenced his programme had by June 2005 benefited 124 researchers and implementation of the studies by engaging Samuel Wangwe to assist with the Tcontinues to assist AERC researchers to access the facilities and staff preparation of a concept note. The of the Fund. As the numbers of qualified applicants were too numerous to International Development Research fit the intake for 2005/06, some names will be rolled over to 2006/07. The Centre (IDRC) will collaborate with AERC on the project through its ACASIA project, following researchers participated in the programme this year: which focuses on ICT adoption and access • Oluwatoyin Chete, Nigerian Institute of Social and Economic issues in several African countries. A full Research proposal on Impact Analyses of ICT on Economic Development in Africa has been • Olumide Steven Ayodele, University of Calabar, Nigeria prepared. Framework papers to guide the • Anthony Kyereboah-Coleman, University of Ghana, Legon, Ghana country case studies were commissioned • Alayande Babatunde, Development Policy Research Centre, Nigeria and are expected by July 2006. • Martin Bizeme Ezo’o, Universit deYaound II, Cameroon • Olayinka Adenikinju, National Centre for Economic Management and Administration (NCEMA), Nigeria • Adeola Adenikinju, University of Ibadan • Lloyd Ahamefule Amaghionyeodiwe, University of Ibadan, Nigeria • Jane Kabubo-Mariara, University of Nairobi, Kenya

Reproductive Health, Economic Growth and Poverty Reduction in Africa

Poverty in sub-Saharan Africa remains a seemingly intractable obstacle to growth: • Human development indicators for SSA are the worst in the world. • Growth – where it has occurred – has not alleviated poverty. • Achievement of the Millennium Development Goals is threatened. • Interactions among reproductive health, economic growth and poverty remain empirical questions. • Initial conditions, policy environment, governance are all factors. • Inequality – especially gender bias – plays a leading role. • Status and quality of reproductive health care have major implications.

AERC’s new collaborative project on the Growth–Poverty Nexus links the existing poverty and growth studies with added emphasis on the role of reproductive health issues. The project will explore the effects of demographic variables – especially fertility and mortality rates – on poverty so as to provide an evidence base for poverty and population policies. We are grateful to the William and Flora Hewlett Foundation for their support of the reproductive health component of this project. The role of AERC is to build capacity for better economic policy – which will ultimately improve economic growth and reduce poverty. AERC, as usual, also provides strong research support to the investigation of the roots of poverty and growth in SSA. Yet even as the programme gets under way we are already looking ahead: • We will build reproductive health, economic growth and poverty reduction into the health economics electives for our collaborative postgraduate studies programmes. • We will build gender issues into the terms of reference for all research projects.

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CSAE conference participation ERC and the Centre for the Study of African Economies (CSAE) Alaunched an initiative through which the CSAE Annual Conference will reserve slots for AERC researchers. Participating researchers will be selected from among those whose final thematic research reports are recommended for acceptance without further revisions and which are also considered suitable for presentation in an international forum. Ten researchers who presented their final reports at the December CSAE conference commentary 2004 and May 2005 biannual workshops were Participants in the CSAE conference reported that they selected to participate in the March 2006 valued the opportunity to present their work to an CSAE conference: international audience of experts in the economics field. • Jane Kabubo-Mariara, Kenya They received very helpful comments on their papers and • Victor O. Okoruwa, Nigeria listened to presentations by world class experts in various • Munacinga Simatele, Zambia fields. This exposed them to new research methods and • Michael Dumba Ndaferankhande, Malawi also new areas of research while their research networks • Guy Blaise Nkamleu, Cameroon were enhanced. • Sylvanus I. Ikhide, Namibia In addition to building their research capacity, • Mbaye Diene, Senegal participation in such a high-level conference whetted their • Peter Quartey, Ghana appetites to undertake further research even as it • Harry Albert Sackey, Ghana motivated them to aspire for excellence. Some were • Sunil K. Bundoo, Mauritius particularly happy to note that their participation in AERC pr has enhanced their research capability to levels Aderoju Oyefusi, an AERC funded comparable to others outside Africa. They all doctoral student at the Department of recommended that more AERC researchers be Economics and Statistics at the University of encouraged to participate. One way to achieve greater Benin, Nigeria, joined these ten at the participation is for groups to encourage researchers to conference. Aderoju’s presentation was well submit their papers directly to the conference organizers. received and resulted in an invitation to present at a conference in Norway organized

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Capacity Retention 1 – AERC Research Fellows Following the approval of eligibility criteria by the Programme Committee, two categories of fellows were developed – AERC Distinguished Research Fellow and AERC Research Fellow. Lists of persons to be included in the two categories are being developed. Selection criteria are based on the individual’s publishing track record and participation in AERC activities. Those nominated will have their biographical profiles posted on the AERC website and will be included in the distribution list for AERC publications. AERC may also propose them to third parties for possible participation in research projects, seminars and workshops, engagement as a consultant, or other roles as requested. For AERC, they may also: • Serve as resource persons in thematic research • Review research proposals and final reports before they are posted to the website as Working Papers or published as AERC Research Papers • Play leadership roles in collaborative research projects • Serve as presenters, discussants and chairs for plenary sessions, special workshops, commissioned research and similar AERC research activities • Serve as instructors at AERC technical workshops • Participate in aspects of CMAP and CPP • Participate in reviews of AERC activities

by the World Bank.

AERC/Journal of African Economies visiting scholars programme ERC recently reached an agreement with the Journal of African AEconomies to start a programme that will provide for short-term fellowships to CSAE. The programme will enable network members who have recently completed an AERC supported research project to visit Oxford and distil a publishable journal article from their research reports. Visiting fellows will interact with scholars and participate in the intellectual life of the Centre and the Department of Economics. They are expected to attend all CSAE seminars and to present at least one seminar on their own research while at Oxford. Each visit will normally last for a period of two months, coinciding with one academic term at Oxford. The CSAE selected two participants – Rosemary Atieno for the January to March 2006 term and Afeikhena Jerome for the April–June term.

Research Objective 2: Build partnerships with academic, national and regional policy research institutes for the generation and dissemination of economic policy research output and strengthen the capacity of these institutions as necessary

Analytical Trust Fund n award from this fund enables AERC to provide independent Asupport to the work of Executive Directors representing sub-Saharan Africa at the World Bank and the International Monetary Fund. The ATF Steering Committee developed and agreed on the operational modalities of the project in August 2005. Since then 13 country case studies have been commissioned for three research topics.

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Partnerships with national policy research institutes he Secretariat also held Tdiscussions with the Namibia Economic PolicyResearch Unit (NEPRU), the Institute of Applied Economic Analysis (IAEA), Nigeria, and Consortium pour la Recherche Economique et Sociale (CRES), Senegal, on possibilities for future collaboration. Memorandums of understanding have been concluded with these three institutes and institutional support grants have been awarded.

Other activities ERC is partnering with several institutions in a multi-country study Aon Improving Institutions for Pro-Poor Growth. These are the London School of Economics (LSE), the Council for the Development of Social Science Research in Africa (CODESRIA), the Consumer Unity and Trust Society Capacity Retention 2 – AERC Eminent Persons Group (CUTS) of India, the Latin American Centre for Rural The Secretariat noted that it is important to also recognize Development (RIMISP) of Chile, the Development the contributions of senior members of the network who have dedicated their time and contributed immensely to the Studies Institute (DESTIN) of UK, the National growth and development of the Consortium. Among others, Resources Institute of the University of Greenwich they include past and serving members of the AERC Board (NRI) of UK, the Overseas Development Institute and Programme Committee. Upon the request of the Secretariat, the Programme (ODI) of UK, and the University of York, UK. This Committee at its December meeting endorsed the idea of project is at the pilot stage. AERC is responsible for the honouring these personalities. AERC Eminent Persons will Tanzanian case study, which is being led by Ali Kilindo serve basically as Goodwill Ambassadors for the of the University of Dar es Salaam, while CODESRIA is Consortium in addition to other roles they may be requested to play in furtherance of AERC growth and responsible for the Mali study. development. At the request of UNDP, moreover, four country case studies (Cameroon, Kenya, Nigeria and Tanzania)

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were commissioned on Trade and Investment Policy Reforms. The studies were completed in December 2005 and final reports submitted to UNDP. Finally, AERC partnered with the World Bank, African Development Bank, UN Economic Commission for Africa and the New Partnership for Africa’s Development to co-convene a workshop on African Export Diversification. The workshop was held in Tunis in October 2005.

Research Objective 3: Enhance the participation of under-represented categories of AERC stakeholders in research activities

Field visits he selection of countries for field visits was undertaken with the Tobjective of enhancing the participation of under-represented categories in AERC activities. Visits to Mozambique and Namibia featured presentations on AERC research opportunities to the economic research and policy communities so as to sensitize them about AERC and elicit their interest in participating in Consortium activities.

Situation Analysis of Women in Economic Research and Graduate Training in Sub- Saharan Africa he Research Programme, jointly with the Training Programme, Tcommissioned a study in February 2006 to shed light on the causes of low participation by women in graduate training and economic research and suggest ways in which AERC can contribute to ameliorating the situation.

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o facilitate the impact of AERC research and training products on economic policy in Africa, Communications activities focus Ton events, print and electronic publication, e-reach, library and information services, and quality control.

Communications Enhance the profile and policy Objective 1: relevance of AERC and AERC products – by increasing awareness of AERC/AERC activities,building interaction among researchers, academics and policy makers, and contributing to capacity building of network members

Senior policy seminars ork on three senior policy seminars progressed during the year. W In line with the strategic theme of innovation, the complete set of papers presented at Senior Policy Seminar VI (March 2004) was published, along with the report of the proceedings of SPS VII. The papers from SPS VII (March 2005) were also edited in preparation for publication pending authors’ revisions. In the meantime, Senior Policy Seminar VIII, on Governance and Pro-Poor Growth in Sub-Saharan Africa, was convened from 7 to 9 March 2006 in Dakar, Senegal. The theme

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highlighted the role of governance in efforts to reduce poverty in sub- Saharan Africa and attracted senior government officials. The seminar was even more of a protocol challenge than usual – the president of Senegal initially agreed to open the event, but was forced to cancel at the last moment. Even without that highest level representation, the 72 participants included four ministers, nine governors, seven special advisors, four permanent secretaries and five parliamentarians. The rest were also very senior policy makers, scholars and directors of various Policy Relevance research institutes. Following the national policy workshop in Nigeria, the Nigerian government’s National policy workshops independent Corrupt esides the national policy workshops for the collaborative research Practices Commission Poverty Project, four other workshops were sponsored to provide requested the Development B policy centre, which national level forums for discussing policy-oriented syntheses of AERC convened the workshop, to research and obtaining feedback from policy makers on the AERC research be a strategic partner in the agenda. The following institutions received modest grant support for fight against corruption in Nigeria. these workshops: • Development Policy Centre, Nigeria, on Fighting Corruption in Nigeria: Challenges for the Future (Ibadan, January 2006) • Cellule de Suivi du Programme de Lutte Contre la Pauvreté, Senegal, which considered Mise en oeuvre du document de stratégie de réduction de la pauvreté (Implementation of Poverty Reduction Strategy Paper) (Saint Louis, December 2005) • The Institute of Economic Affairs, Kenya, whose theme was National Economic Policy on Trade (Mombasa, November 2005) • The University of Cocody, Côte d’Ivoire, which convened a workshop on Performance Factors of the Ivorian Economy after the Crisis (Abidjan, August 2005)

Here, too, participants included senior government officials – ministers of finance, members of parliament, central bank officials, anti- corruption and anti-fraud chiefs, and High Court officials, among others.

Research Feedback on policy Dissemination of relevance research findings Senior Policy Seminars and National Policy Workshops Policy

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Nobel laureate Wole Soyinka was the guest of honour at New publications, 2005/06 the Nigeria workshop and gave the keynote address. AERC Research Papers No. 153: Land Conservation in Kenya: The Role of Awareness raising Property Rights, by Jane Kabubo-Mariara everal dissemination packages were produced to No. 152: Determinants of Technical Efficiency Spublicize AERC’s activities at the May and Differentials amongst Small- and Medium-Scale December biannual research workshops, and in country Farmers in Uganda: A Case of Tobacco Growers, by Marios Obwona specific activities. The dissemination packages highlighted the work of AERC researchers and network No. 151: The Integration of Nigeria’s Rural and members on the continent, thus showcasing them as key Urban Foodstuffs Markets, by Rosemary N. Okoh products of the Consortium and serving the broad and P.C. Egbon purpose of promoting Brand AERC. No. 150: Female Labour Force Participation in The May biannual was publicized through a press Ghana: The Effects of Education, by Harry A. Sackey conference at the AERC offices that attracted journalists No. 149: Corporate Governance Mechanisms and from local media and international outlets. A prime time Firm Financial Performance in Nigeria, by Ahmadu spot advertorial on the workshop was aired on one of Sanda, Aminu S. Mikailu and Tukur Garba the major television stations in the country, while a External publications leading local newspaper published several news articles Dominique Njinkeu, ed. 2005. L’Afrique et les défis on AERC activities during and after the workshop. de l’OMC, Paris: Karthala Publishers For country specific targeted dissemination, a Others press release and news articles were produced for the AERC. 2005. AERC Continuity and Innovation: launch of the book, African Imperatives in the New World Strategic Plan for April 2005 – March 2010. Nairobi: Trade Order, in June 2005 in Yaoundé, Cameroon. The AERC. launch received significant press coverage in the AERC. 2005. AERC in Phase V: A Report on the country’s two major daily newspapers. Activities and Accomplishments of the African Economic Research Consortium 2001/01–2004/05. Publication of outputs from Nairobi: AERC. AERC. 2005. Financing Pro-Poor Growth in Africa, thematic and collaborative research AERC Senior Policy Seminar VI Kampala, Uganda, he thematic Research Paper pipeline 2–4 March 2004 – The Seminar Papers. Nairobi: Tcurrently features 57 research papers, of which 10 AERC. final papers are with authors to incorporate editorial Margaret Crouch, ed. 2005. The Publications queries. Others are in various stages of review or Variable: A Guide to AERC’s Publication and production. Five Research Papers were published and Dissemination Services and Requirements, Second distributed during the year. Executive Summaries of the Edition. Nairobi: AERC. Research Papers were produced as well, in a bid to Matthew Martin, Joseph Karugia and Marjory provide concise synopses of research output. These Gichohi. 2005. Poverty, Growth and Institutions: briefs are particularly useful for policy makers, who AERC Senior Policy Seminar VII, Cape Town, South Africa, 22–24 March 2005 – The Seminar Report. Nairobi: AERC

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may not have the time to peruse full research papers. And to ensure continued outreach to the francophone policy community, the summaries are routinely translated into French. The second volume of the collection arising from the project on Africa and the World Trading System is in the final stages of publication by Africa World Press. As noted above, African Imperatives in the New World Trade Order was launched in Yaoundé, Cameroon. Two hundred copies of the title L’Afrique et les défis de l’OMC Figure 1. Trends in access of the AERC website were delivered from Karthala publishers; this collection contains updated materials presented at the Yaoundé trade project dissemination workshop. The volume on the Geneva WTO Trade Negotiations Seminar will also be published by Africa World Press, while the manuscript of the volume, Poverty in Africa, was sent to the University of Nairobi Press for review and publication.

Other publications he Journal of African Economies published TVolume 15 Supplement 1 for 2006, containing the papers from the December 2003 plenary session on Governance and Economic Development. Other publications included Continuity and Innovation: AERC Strategic Plan for 2005–2010 plus AERC in Phase V: Responsiveness, Focus, Synergy and Partnership – A Report of the Activities and Accomplishments of the African Economic Research Consortium 2000/01–2004/ 05, the revised edition of The Publications Variable (a style and formatting guide for researchers), and the senior policy seminar publications mentioned earlier. Besides these, the 2004/05 AERC Annual Report and issue No. 24 of the AERC Newsletter were distributed in hard copy and electronically during the year. To enhance quality control, AERC’s in- house editorial style guide and the Communications Handbook were posted to the intranet. A draft publication strategy to guide the publication and distribution of AERC publications is in the preparation stage to complement the communications strategy.

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Contributing to capacity building of network members his was achieved through the award of small grants to network Tmembers and institutions so as to increase or enhance their contribution to the economics profession on the continent. Six conference participation grants were awarded, to Sam Olofin of Nigeria, Jean-Claude Saha of Cameroon, Honest Prosper Ngowi of Tanzania, Vijay Bhasin and Camara Obeng of Ghana, and Aly Mbaye of Senegal. The grants expressly facilitate researchers’ travel to present the results of their AERC-funded research at regional and international conferences. Two grants to professional associations were issued, one to the Nigeria Economic Society for participation at the African Econometric Society conference in June 2005, and one to the Economic Research Bureau of the University of Dar es Salaam, Tanzania, for institutional capacity building. These grants are meant to strengthen the economics profession in Africa and foster links among academic policy communities as well as provide forums for the discussion of research results. The Secretariat also gave a small grant to the African Journal of Economic Policy to distribute publications to researchers. This grant is normally used to support regional economics journals to help ensure their financial and management sustainability over the longer term.

Communications Objective 2: Harness information technology in the service of the AERC network – by judicially applying connectivity principles in an electronically challenged region

E-reach he posting of AERC publications, announcements of events, Tnotifications and other relevant information to the website is a continuous process. There are now 245 AERC publications available on the website – 69 Research Papers along with 176 collaborative research reports and other materials. Trade policy working papers, WTO working papers and special papers are among these, as well as AERC Newsletters, Research News, annual reports, senior policy seminar reports, the general brochure and the Collaborative Master’s Programme (CMAP) prospectus. Figure 1

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shows the trend in access of the AERC website for the period January to December 2005. Although most website traffic emanates from North America and Europe, African visitors now represent 17% of the traffic, compared with 4% before the relocation of the website in August 2003 to a server in New Jersey (see Figure 2). It is notable that most traffic comes from anglophone countries. The French window on the website is used to host materials that are available in the French language to make them more accessible to French speakers. This is expected to increase the number of visits from francophone countries. The most frequented area of the website remains the publications section, as depicted in Figure 3. In addition to online access to published information, the website now also features easily accessible links to the websites of key partners and economic institutions.

Information services he first phase of the library automation is complete. This stage Tcomprises an internal system that can be accessed and used from the Secretariat library. Next will be wider linkages, including with the JFE library. The system supports all core library systems and processes and avails computer-based techniques for identifying, locating, accessing and transferring text and data. It also facilitates management functions by allowing for production of various customized library reports. A new subscription to ECONLIT now complements the online Journal Storage (JSTOR) facility. This cost-effective and space saving initiative will reduce subscription costs for printed bibliographies as library users will be able to access, use and transfer material more conveniently than with paper versions. Other possibilities include electronic journals from SABINET, the Firstsearch Business/Finance/Economics collection, and Proquest. In spite of the limited capacity of the library’s reading area, a significant number of patrons use the facility. Approximately 79% of the library visitors are from academic institutions (mainly universities), 12% from local research institutions, and 9% from other institutions like banks, private companies, embassies and not-for profit organizations.

News 8% Publications South 19% America Australia & Communications Asia 1% 8% Oceania 4% Research Africa 1% Announcement North 15% 17% s America 17% 47% Affiliate Links Training Europe 8% About AERC 15% 30% 10%

Figure 2. Website traffic by continent Figure 3. Website access by section

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Five of the CMAP 2005 JFE lecturers were CMAP alumni, and CMAP alumni head he main components of the Training Programme are the departments of economics at Collaborative Master’s Programme for Anglophone Africa Makerere, Lesotho, Namibia, T(CMAP) and the Collaborative PhD Programme for Sub- Kenyatta and Swaziland Saharan Africa (CPP). In this section we consider how these and other universities. training activities contributed to the Consortium’s strategic objectives in the first year of the 2005–2010 planning cycle.

Training Objective 1: Sustain the implementation of CMAP and dovetail it to CPP

The activities under this objective focused on individual and institutional capacity building, curriculum development, and building synergy between CMAP and CPP. All of these relate directly to the first and second of the overall plan objectives.

Award of scholarships MAP scholarships target qualified students from Category A Cuniversities to study in another country within a category B institution. Special consideration is given not only to personnel from national policy research institutions and the civil service, particularly qualified women, but also to applicants from under-represented countries. This is in line with the strategic objective to reach under- CMAP Universities- represented groups/countries. CMAP awarded 19 new scholarships to “Category B”: offer their own students joining the first year, with an additional 16 scholarships for master’s degrees under the those continuing to the second year of study. Thirty-one per cent (31%) collaborative programme of these scholarships went to students from under-represented areas, “Category A”: send students to with Sierra Leone and Liberia taking the lion’s share of three and four Category B institutions for MA awards, respectively. Women represented 29% of scholarship studies. recipients. In future, proactive measures will be undertaken to increase the number of awards to other under-represented areas, notably Swaziland and Lesotho, and those likely to join the CMAP, e.g., The Gambia. Efforts at channelling these scholarships to Category A universities were also discernible, with Makerere University in Uganda and the University of Zambia taking 17% and 11%, respectively. It is expected that these two universities could be considered for elevation to Category B status in the near future. The CPP issued 20 new scholarships and 62 awards for continuing students in the CPP participating universities. The distribution of awards of CPP scholarships has been conscious of geographical considerations

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Evaluation of Phase V

Recommendation Action taken

Capitalize on built capacity and network Teachers at the JFE 2005 (CMAP to enhance impacts. This includes alumni and PhD thesis grant incorporating capacity building more recipients): explicitly into all activities undertaken. • Anthony Wambugu • Adam Mugume • Edwin Muchapondwa • Dejene Aredo • Hamisi Mwinyimvua • Eliab Luvanda • Gebrehiwot Ageba • Rose Ngugi • Manda Kulundu

and gender balance. It was noted that CMAP alumni continued to dominate applications and admissions to CPP. The 20 new scholarships span 12 countries and include six women. (Refer to Annex tables A3 and A4, respectively, for the CMAP and CPP students in 2005/06.)

The Joint Facility for Electives he second joint CMAP and CPP JFE was convened from 27 June to 30 TSeptember 2005. The CMAP JFE had 125 students – 114 from seven Category B universities in addition to 11 from the University of Pretoria. The University of Ghana had the largest number of students at 21. Ethiopia and Nairobi also continued to register a large number of students with 18 from the former and 19 from the latter. They were followed closely by the University of Zimbabwe with 15 students. Participation by students from under-represented countries (Burundi, Democratic Republic of Congo, Sierra Leone, Lesotho, Liberia and Swaziland) was low, however, at only 6.4%. Seven examiners were recruited to externally moderate the ten electives for CMAP and to make sure that they are consistent with the course outlines and international standards. There was high demand for three of the elective courses – Corporate Finance and Investment Theory, Econometrics Theory and Practice, and Monetary Theory and Practice. These courses are particularly attractive to students sponsored by central banks and ministries of finance and planning because of their policy relevant content. The demand for the courses is therefore expected to remain high in the near future. The challenge for the Secretariat is thus not only how to deal with this demand, but also to explore ways of making other courses equally attractive and to develop new courses. This will continue to be done through regular review of the courses at subject specialist

26 ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM TRAINING PROGRAMME

workshops. In addition to the electives, a service course on Research Methods and Computer Applications was offered to all CMAP students. Inaugural CMAP Academic Board Prizes This course supplements students’ capabilities in research and empirical The first CMAP Academic Board work after JFE. Prizes were awarded during the fiscal The CPP JFE 2005 featured seven elective fields taught by 16 year, both to women. Beliyou Asatike from Addis Ababa University scooped lecturers. A language module that offers French training to anglophone the award for 2003/04, while Thuto D. students and English training to francophone students was offered for the Botlhole of the University of Botswana second year running. This, it is hoped, will help to break the language was ranked first for 2004/05. Board barrier by the time the PhD students graduate. members make a financial input towards this competition, which will be an annual event. It was initiated by the Support for PhD thesis research Academic Board to recognize the contribution of the universities and to ERC provides grants to African students registered in postgraduate encourage students to write high Adegree programmes at institutions within and outside the region to quality theses. facilitate completion of their thesis research on issues pertinent to economic policy in sub-Saharan Africa. These grants have so far supported 198 candidates in SSA, with over 130 completing their PhDs. This year 14 of the 38 proposals for such support met the minimum criteria for consideration – exceeding the ten projected because of faster reviews. Of these awards, 29% went to women while 14% were awarded to applicants from under-represented areas (Namibia and Sierra Leone). One of the two partial fellowships was awarded to a woman candidate. The grants are an important vehicle for building the capacity of both universities and individuals in the AERC network, in particular because the individuals return to institutions in Africa to support teaching at the JFE and other aspects of the Training Programme.

CMAP and CPP Academic Boards he CMAP Academic Board held its meetings in April and November. TIn April the Board selected and approved lecturers and electives to be taught at the JFE; approved external examiners for the elective courses; and reviewed preparations for the 2005 JFE session. At the November meeting they reviewed the JFE 2005 report and approved the examination results. The November meeting of the CMAP Board also convened a brainstorming session on the programme’s management restructuring action plan, which resulted in the formation of an ad hoc committee to review the mandate, coverage, founding assumptions and resource envelope/cost-sharing avenues for CMAP. The committee presented its preliminary findings at the April 2006 Academic Board meeting; its final review and report are due in November 2006. The eighth CPP Academic Board meeting was convened in May and the ninth in November 2005. The meetings approved the content of comprehensive examinations; reports on progress of teaching; and preparations for and report of the CPP 2005 JFE. At the November meeting, the Board deliberated on issues relating to the JFE and its completion as well as the CPP thesis workshop held in the same month. The Board commended the Secretariat for positive lecturer and student evaluations of the management of JFE.

Evaluation of Phase V

Recommendation Action taken

Change the composition and structure The Academic Board constituted an of the CMAP Academic Board ad hoc committee to review the CMAP governing structure and submit its recommendations by November 2006

27 CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 TRAINING PROGRAMME

JFE breakthrough: ACBF monitoring missions • Liberalization of airwaves and he African Capacity Building Foundation programme officer visited internet connectivity in Kenya the Secretariat in April to review the implementation of the CMAP allowed for the sourcing of T 2004 work plan, the proposed activities for 2005, the closure of CMAP Internet providers to the JFE and made access easier and Phase III and the way forward for CMAP Phase IV. The ACBF additionally less costly conducted a special financial supervision mission in July to evaluate the • Computers in CPP and internal control systems of CMAP and CPP. The mission considered the CMAP laboratories were connected programmes’ compliance with ACBF policies and procedures and the • Access to AERC electronic efficiency of the financial operations. In both instances, the ACBF aide library was facilitated mémoire indicated satisfaction with the progress and management of the two graduate programmes.

Monitoring and evaluation onitoring visits to the universities of Dar es Salaam and Zimbabwe Massisted with grant accounting while ensuring that all expenditures were in accordance with AERC procedures. The mission to Zimbabwe commended the Department of Economics for continuing to mount a quality programme despite the adverse economic and political conditions prevailing in the country. That quality was evident in the performance of the students at JFE 2005, where the university was ranked second overall.

Dovetailing the CMAP and CPP hese efforts intend to make sure that the two programmes Tcomplement and benefit each other, and together raise the profile of graduate training in economics in SSA. In June a joint CMAP/CPP subject specialist workshop reviewed three electives – International Economics, Health Economics, and Econometrics Theory and Practice. Key among the findings were some overlaps in course curricula, and the reading lists were revised accordingly to permit appropriate pitching at each level. The workshop recommendations were implemented at the joint CMAP and CPP JFE 2005. At the JFE, a joint seminar series was initiated to enhance synergy between the CMAP and CPP students and lecturers in the discussion of various topics. A re-tooling workshop convened in March 2006 targeted both CMAP and CPP lecturers who teach core courses to update their skills in specific areas, thus ensuring uniform teaching of core courses.

Training Objective 2: Consolidate CPP and enhance the synergy between the Training and Research programmes

Exposing CPP students and their teachers to frontier knowledge fforts to provide international exposure to CPP students through a Evisiting scholar modality are bearing fruit. Two students were posted to the World Trade Organization (WTO) for three months in June 2005 and three others are expected to benefit in 2006. These students are in the process of preparing the analytical chapters of their theses, they presented and defended their post-fieldwork reports at the December 2005 biannual research workshop in Johannesburg. To keep students abreast of the latest changes in techniques, particularly in the field of econometrics, a technical workshop was convened in November 2005 for the 2003 and 2004 CPP cohorts. An expert in the field, Ali Tasirani from the University of Gothenburg, Sweden,

28 ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM TRAINING PROGRAMME

Challenge Resolution • The need to continuously attract • Actively headhunting and inviting high quality lecturers at the JFE specific lecturers to apply for the opportunity • Large student popula-tion of at • Review of physical facilities JFE • Resource mobilization for the CPP • Initiation of funding proposals with potential and current donors • Increased student cost-sharing

conducted the workshop, which went on successfully according to students’ evaluations. A retooling workshop for trainers in three core courses – Microeconomics, Macroeconomics and Quantitative Methods – was convened in February 2006. The intent was to expand the number of lecturers capable of teaching these courses while evolving a common course pedagogy.

PhD thesis workshops embers of the 2003 cohort of CPP students presented and defended Mtheir thesis proposals to fellow students, thesis supervisors and resource persons at a workshop convened in November 2005. The post- fieldwork workshop for the 2002 cohort – the pioneer students – was held in Johannesburg in December 2005. It has become clear that positioning the CPP thesis workshops within the biannual research workshops has the advantage of not only shaping the thesis quality and aiding supervision, but also transforming the students into researchers at an early stage.

Training Objective 3: Enhance the participation of under- represented groups/countries in training activities

Sensitization visits ensitization visits to three under-represented countries during the year S– Namibia, Mozambique and The Gambia – afforded the opportunity to market AERC research and training opportunities to researchers and the policy communities in these countries. Participation was broad-based, with heightened interest both from universities and from government officials in ministries of finance and trade and the central banks. The visit to The Gambia, conducted in January 2006, also featured an invitation to the university to join the CMAP network. The university was expected to submit a formal expression of interest early in the 2006/07 fiscal year.

29 CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 TRAINING PROGRAMME

Encouraging the participation of women he successes of several years’ work in encouraging women to Tparticipate in AERC programmes is reflected in the results of the merit-based Academic Board Prize, awarded for the first time in November 2005: both of the first two candidates were women. Furthermore, the participation of women in training activities has been rising over the last three years. At JFE 2005, women accounted for 23% of participants, while MA scholarships and PhD thesis grants to women stood at 31% and 29%, respectively. Female participation will hopefully be boosted even more by the findings of the Situation Analysis on the Status of Women in Economics Research and Graduate Training in SSA, launched in March 2006 jointly with the Research Programme.

Training Objective 4: Develop and implement targeted short-term training courses

PP’s experience over the last three years suggests that there is a C dearth of qualified instructors from Africa for many of the CPP fields of study. This scarcity of qualified instructors is most pronounced in two of the core fields (Microeconomics and Macroeconomics), but also shows up in several elective fields like Environmental Economics, Financial Economics, Health Economics, Monetary Economics and Public Sector Economics. In fact, this is actually not surprising because most of what is being taught is at the cutting edge of knowledge in the various fields. Besides, given the design of the programme, only a select group of instructors – those at the ranks of senior lecturer, associate professor and professor – can teach on the programme. This problem also applies for CMAP universities and is even more severe where the universities participate in both collaborative programmes. Complicating things further, most of the instructors have also been around for a long time and will likely be retiring in the next five to ten years – the period of peak of activity for CPP. A concerted effort is necessary to reverse the first outcome and step up training to safeguard against the impact of the second so that the number of eligible instructors does not dwindle over time. As part of this effort, a retooling workshop for 36 CMAP and CPP core course lecturers was convened in February 2006. Participants found the workshop to be very useful, with many indicating that it was an initiative that was long overdue. An evaluation of the workshop also indicated that participants desired a longer course so that they could cover the material in greater depth, and most recommended that another re- tooling course be conducted in the very near future. These comments will be used to shape the next re-tooling course. Besides improving delivery of the core courses and strengthening supervision capabilities of the lecturers, it is expected that the lecturers will use their new skills to prepare appropriate teaching materials for their courses.

30 ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM Management & Administration

Hail and Farewell

New to the Secretariat: Lydia Auma, Programme Assistant, olidifying funding support for the strategic period 2005–2010 Research was a major focus during the year. Two new donors came Lynette Onyango, Programme Assistant, aboard, the William and Flora Hewlett Foundation and the Training S Damaris Michoma, Human Resources Central Bank of Nigeria, while most existing funders made firm and Administration Assistant commitments of support. The Secretariat was honoured by a visit by Charles Bett, Librarian the Chair of the AERC Board, Mrs. Caroline Pestieau, in mid September 2005. She took the opportunity to interact with all staff. Moving on: Angelina Chikombe, Secretary, Research Programme Zaddock Onyiego, JFE Administrator Management Objective 1: Apply performance Lucy Mbugua, Programme Administrator, Training management principles to achieve more for less Moving across the corridor: Paul Mburu, from Human Resources Administrator to JFE Administrator Human resource management hree new staff positions were created to ensure capacity to meet Tthe objectives for the strategic plan period. Those positions were filled during the year: an additional manager for the Research Programme, a Librarian in the Communications Division, and a Human Resources and Administration Assistant for the Resources Division. Following the resignation of one of the secretaries in the Research Department in August, the position she occupied was upgraded to Programme Assistant to better cater for the needs of the Department. Two other staff members left the Consortium towards the end of 2005, the JFE Administrator and the Programme Administrator, Training. The first was filled through an internal transfer while the second was recruited from outside. A staff training and development plan was formulated on the basis of the training needs assessment undertaken in 2004/05 with input from the completed staff performance appraisals. So far, 11 staff members have benefited from a workshop on the 7 Habits of Highly Effective People. Two seminars were held for the full staff – one in April 2005 to increase efficiency in the implementation of the new strategy and the second in October 2005 that emphasized enhancing individual and organization development through performance monitoring and team building. These were complemented by social events to build camaraderie. The Staff Committee provides an alternative channel of communication between management and staff to complement existing instruments. The Committee operates exclusively to promote the social welfare of its members and further their common good. A significant reduction over time in the number of issues raised by staff has been noted and this is attributed to the structure, culture, systems and procedures in place, as well as an increasingly open and conducive environment. In addition to its usual functions, this year the

31 CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 MANAGEMENT & ADMINISTRATION

Evaluation of Phase V Committee finalized funeral expense cover and arranged Recommendation Action taken for a guest speaker who made a presentation on the Outcome and impact indicators are not A performance management articulated well, making it difficult to framework was built into the Strategic provident fund. evaluate effectiveness of procedures Plan for 2005–2010 to link goals to The Human Resources used in managing AERC’s resources. objectives and performance Policies and Procedures assessment of outputs, outcomes and impact at different levels of the AERC Manual, the Finance and structure. Administration Policies and Procedures Manual, and the Policies and Procedures for Programme Administration were revised and approved by the Executive Committee of the Board in November 2005. In addition, a draft policy developed to address HIV and AIDS in the workplace was approved by the Board at its March 2006 meeting.

Financial management he Statutory Audit and USAID OMB Circular A133 audit were Tsuccessfully conducted in May 2005 and the resulting financial statements for 2004/05 approved by the Executive Committee in July. Special audits for the African Capacity Building Foundation (ACBF) were done in May and November 2005 to facilitate reimbursement of expenditures. An internal audit to review the soundness of the internal control on grant accounting and management was carried out by PricewaterhouseCoopers in September 2005 and its report approved by the Executive Committee of the Board in November 2005. Management has drawn an action plan for all the areas that require streamlining and strengthening and incorporated some aspects into the revisions to the policies and procedures manuals.

Management Objective 2: Enhance the use of information and communications technology (ICT) in the Consortium’s operations

he design of an integrated, web-based relational database with key Tfeatures required by departmental databases (research, training, finance, human resources and administration, and communications) as well as bio-data of AERC network members is ongoing. The move was prompted by the evaluation of the Research Programme, as well as the Secretariat’s recognition of the need for seamless information availability. This involved extensive meetings with AERC staff to present and discuss the database design, structure of the tables, queries, forms, reports and programming modules. Moving data from the old systems to this new database is currently in progress and will be followed by data cleaning, testing and user acceptance before the system is commissioned. This process will continue into the next fiscal year when the system is expected to be operated on a parallel basis until it is fully functional. An Information Security Policies document is being developed to provide direction for safeguarding the confidentiality, integrity and availability of information. The intention is to establish responsibility and accountability for information security in the organization, so as to encourage management and staff to maintain an appropriate level of awareness, knowledge and skill and ultimately minimize the occurrence and severity of information security incidents. This is in line with the recommendations made in the internal audit report on grant accounting and management.

32 ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM MANAGEMENT & ADMINISTRATION

Management Objective 3: Develop and roll out a long- term resource mobilization strategy

he first order of priority here was to maintain the interest and Tengagement of existing funders through formal and informal discussions, seminars and presentations. The Secretariat additionally laid the groundwork to revisit a number of prospective funders and to bring on board a variety of African governments and institutions. One result of the efforts was a grant of US$1 million from the William and Flora Hewlett Foundation for the support of a new collaborative research project on Population Dynamics and Poverty Reduction in Africa. Others were contributions of US$100,000 from the Central Bank of Nigeria and Canadian $500,000 towards the Research Innovations Endowment Fund. Underlining these efforts were activities to build staff capacity, and presentations by senior staff at a number of carefully chosen events that afforded the opportunity to highlight AERC programmes. In the first instance, the Executive Director, Director of Research, Director of Training and Chief of Resources participated in a one-day resource mobilization workshop. Held in Dakar, to coincide with the Senior Policy Seminar, the workshop was coordinated with the assistance of the IDRC Partnership and Business Development Division and specifically tailored to the needs of AERC. The Executive Director participated in a conference on Scaling up the Success of Capacity Building of Economic Education and Research, held in Budapest in June by the Central European University and the World Bank. The Executive Director, Director of Research and Director of Training took part in a variety of other resource mobilization and collaborative meetings as well.

Financial Management Aspects ncome for the year 2005/06 was US$10.5 million. This is a 31% increase I over the 2004/05 income, with a significant component of the increase relating to income for the new Collaborative Master’s in Agricultural and Applied Economics (CMAAE). The expenditure for the period was US$11.4 million, a 12% increase over the expenditure for 2004/05; again, the increase is mainly attributed to the implementation of the programme activities for the CMAAE as well as increased level of activities under the CMAP programme. The net assets of the Consortium at year end amounted to US$13 million. The major components of expenditure in the year relate to grants (39%) and travel and workshop related expenses for researchers and students (27%). Personnel costs accounted for 13% of the total expenditure. The market value of the Consortium’s investments as at 31 March 2006 was US$3,747,331 for the Reserve Fund and US$2,648,120 for the Research Innovations Endowment Fund. Excerpts from the statutory audit for the 2005/06 fiscal year are presented on the following pages.

33 CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 FINANCIAL REPORT

Financial Report

Report of the Independent Auditors To the Members of African Economic Research Consortium, Inc.

We have audited the financial statements of the African Economic Research Consortium for the year ended 31 March 2006 from which the summarized financial statements on pages 34 to 36 were derived, in accordance with International Standards on Auditing. In our report dated xxxx xxxx, we expressed an unqualified opinion of the financial statements from which the summarized financial statements were derived.

In our opinion, the accompanying summarized financial statements are consistent, in all material respects, with the financial statements from which they were derived.

For a better understanding of the Consortium’s financial position and statement of activities for the year and of the scope of our audit, the summarized financial statements should be read in conjunction with the financial statements from which they were derived, and our audit report thereon.

Certified Public Accounts

Nairobi XXXXX

34 ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM FINANCIAL REPORT

Statement of Financial Position for the Year Ended 31 March 2006 (US$)

2006 2005 US$ US$ ASSETS Current Assets Bank and cash balances 1,503,159 5,191,565 Investments 11,796,027 6,951,344 Grants receivable 2,868,111 3,237,944 Other receivables 420,980 230,661

Total Current Assets 16,588,277 15,611,514

Non-Current Assets Property and equipment, net of accumulated depreciation 219,599 214,536

TOTAL ASSETS 16,807,876 15,826,050

LIABILITIES AND NET ASSETS Current Liabilities - Accruals 518,531 334,399 Grants payable 3,289,528 4,363,332

Total Liabilities 3,808,059 4,697,731

NET ASSETS Unrestricted Net Assets 2,673,034 2,289,493 Board Restricted Reserve 3,981,071 3,873,128 Temporarily Restricted Net Assets 3,935,246 2,926,302 Research Innovations Endowment Fund 2,466,128 1,924,536 Unrealized Currency translation account (55,662) 114,860

Total Net Assets 12,999,817 11,128,319

TOTAL LIABILITIES AND NET ASSETS 16,807,876 15,826,050

The financial statements were approved by the Board of directors on ...... 2006 and signed on its behalf by:

35 CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 FINANCIAL REPORT

Statement of Activities for the Year Ended 31 March 2006 (US$)

Board Operating restricted Temporarily Permanently Total Total reserve restricted restricted 2006 2005 US$ US$ US$ US$ US$ US$ Support and Revenues Grants from governments 2,407,612 - 5,659,658 529,996 8,597,266 7,026,253 Grants from foundations 390,000 - 2,332,491 - 2,722,491 2,223,279 Grants from other organizations 225,000 - 618,532 11,596 855,128 320,000 Investment income 283,509 107,943 99,250 - 490,702 123,943 Other income 215,381 - 56,645 - 272,026 529,796

3,521,502 107,943 8,766,576 541,592 12,937,613 10,223,21 Net Assets Released from Restriction Satisfaction of programme restrictions 7,757,635 - (7,757,635) - - - Grants forfeited 580,475 - - - 580,475 64,726 Appropriation to reserve ------8,338,110 - (7,757,635) - 580,475 64,726

Total support and revenues 11,859,612 107,943 1,008,941 541,592 13,518,088 10,287,97

Expenditure General administration 720,344 - - - 720,344 988,328 Programme management 79,392 - - - 79,392 298,080 Research Programme 3,625,933 - - - 3,625,933 3,499,723 Communications 781,157 - - - 781,157 679,893 Master’s Programme 3,077,400 - - - 3,077,400 2,135,905 CMAAE Programme 512,448 - - - 512,448 - Training Programme - - - - - 222,556 Doctoral Programme 2,679,397 - - - 2,679,397 2,419,385

Total expenditure 11,476,071 - - - 11,476,071 10,243,80

Change in net assets 383,541 107,943 1,008,941 541,592 2,042,017 44,127

Net assets at the beginning of the year 2,289,493 3,873,128 2,926,302 1,924,536 11,013,459 10,969,32

Net assets at the end of the year 2,673,034 3,981,071 3,935,243 2,466,128 13,055,476 11,013,49

36 ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM FINANCIAL REPORT

Grants Income for the Year Ended 31 March 2006 (in US$)

Income Income for year for year 2005/06 2004/05

Government Entities Danish International Development Agency (DANIDA) U 484,738 483,870 European Union (EU) R 2,244,362 347,538 International Development Research Centre ( IDRC) U 269,914 190,694 International Development Research Centre ( IDRC) (RIEF) R 429,996 - Ministry of Foreign Affairs - Netherlands U - 480,000 Ministry of Foreign Affairs - Netherlands R 474,000 457,104 Norwegian Agency for Development Cooperation ( NORAD) U 125,523 128,572 Norwegian Agency for Development Cooperation ( NORAD) R 739,191 757,143 Dept for International Devt (DFID) U 400,000 340,001 Dept for International Devt (DFID) R 382,053 95,000 Swedish International Development Cooperation Agency (Sida/SAREC) U 976,107 769,231 Swedish International Development Cooperation Agency (Sida/SAREC) R 847,303 576,924 United States Agency for International Development (USAID) R 972,749 1,917,253 Swiss Agency for Development and Cooperation ( SDC) U 151,330 176,923 Central Bank of Nigeria (RIEF) R 100,000 - Ministry of Foreign Affairs - France U - 306,000 Subtotal 8,597,266 7,026,253

Foundations - African Capacity Building Foundation (ACBF) R 919,491 1,313,279 Rockefeller Foundation U 240,000 195,000 Rockefeller Foundation R 713,000 490,000 The MacArthur Foundation U 150,000 75,000 The MacArthur Foundation R 200,000 150,000 Analytical Trust Fund (ATF) R - - Hewlett Foundation R 500,000 - Subtotal 2,722,491 2,223,279

Other Organizations & Individuals International Bank for Reconstruction & Development (IBRD) R 300,000 - Global Development Network (GDN) U 225,000 320,000 Global Development Network (GDN) R 127,500 - United Nations Development Programme (UNDP) R 80,300 - London School of Economics R 57,341 - IFPRI R 21,481 - Others (DAAD & RIEF) R 43,506 - Subtotal 855,128 320,000

GRAND TOTAL 12,174,885 9,569,532

Key: U – Unrestricted funding; R – Restricted funding

37 CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 ANNEXES

Table A1: Thematic research grants, 2005/06

Grant No. Research project title Issued to Group RT05501 FDI and Economic Growth: Evidence from Nigeria Adeolu B. Ayanwale B RT05502 Private Investment Behaviour and Trade Policy Practice in Dipo T. Busari C Nigeria: Sectoral Analysis Philip C. Omoke RT05503 Efficacy of Exchange Rate Intervention in Malawi Kisu Simwaka B Leslie Mkandawire RT05504 Seigniorage and Civil War in Africa Victor A.B. Davies B RT05505 The Capital Structure of Small and Medium Enterprises in Joshua Abor C Ghana: Empirical Evidence RT05506 International Financial Integration and Growth in African Bizeme Martin Ezo’o B and Sub-Saharan Countries RT05507 Politique monétaire et demande de monnaie au Rwanda: Musoni Rutayasire B Application des techniques du cointégration et du modèle a correction d’erreur (1980–2000) RT05508 La Pauvreté Micro Multidimensionnel au Cameroun: Sa Paula Ningaye A Répartition Spatiale, ses Déterminants Laurent Adjangou RT05509 Malaria Household Burden Sharing and Labour Market Mrs. Alaba Olufunke A Outcome in Nigeria Olusemi A. Salio RT05510 Corruption and Microenterprise Growth: Evidence from a Daniel Gbentkom C Cross Section of Firms in Cameroon Nicholas Ngepah RT05511 Financial Sector Reforms and Monetary Policy in Ghana T.O Antwi-Asare B RT05512 Asymmetric Shocks in the West African Monetary Union: Romain Houssa B A Dynamic Structured Factor Model Approach RT05513 Market Structure and Performance in Uganda’s Banking Adam Mugume C Industry in the Post-Financial Sector Liberalization Period RT05514 Impact de I’intégration sous-régionale sur les changes Akoete Ega Agbodji AT commerciaux bilatéraux: Cas de I’UEMOA RT05515 Intra-Household Allocations and Gender Relations: Miriam Omollo A Evidence from Kenya Household Data RT05516 Croissance, distribution du revenue: L’expériences des Eric Koffi Kouadio A Côte d’Ivoire dans 1985–2002 Ouattara Yaya RT05517 Les déterminants du redoublement scolaire: La cas de Dr. Issidor Noumba A l’enseignement secondaire général dans la province du centre au Cameroun RT05518 Effects of Trade Liberalization on Trade Tax Revenue in Ghana William G. Brafu-Insaidoo AT Camara Obeng RT05519 Determinants of Expected Poverty among Rural Farming Omobowale Ayoula Oni A Households in Nigeria Suleiman A. Yusuf RT05520 Pauvreté et statut anthropométrique des enfants: Abalo Kodjo A Une analyse comparative dans les ménages ruraux et urbains au Togo RT05521 Analyses de l’utilisation des soins medernes de santéen Côte d’Ivoire Alimatou Cisse A RT05522 The Impact of Board Changes on Shareholders’ Wealth: Evidence Janet O. Adelegan E from Nigeria RT05523 Libéralisation des echanges et croissance economique dans les pays Akilou Amadou B en développement: Le cas des pays de l’UEMOA RT05524 Reforme financières, efficacité et progrès technologique dans la Charlemagne B. Igue E productivité des banques de l’UEMOA RT05525 Financial Sector Liberalization and Productivity Changes in Kenneth Alpha Egesa C Uganda’s Commercial Banking System RT05526 Analyse des possibilités d’amélioration de la qualité des produits Koffi Pokou E de transformation du manioc en Côte d’Ivoire cas de l’attire RT05527 Empirical Analysis of Sector-Level Trade and Welfare Effects Evious K. Zgovu D of Reciprocity under an Economic Partnership Agreement Josaphat P. Kweka with EU: Evidence of Malawi, Tanzania and Zambia RT05528 Les Determinants de l’investissement privé au Benin: Une Sosthene E analyse sur donnes de Panel Ulrich Gnansounou

38 ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM ANNEXES

Grant No. Research project title Issued to Group RT05529 Technical Efficiency of Farmers growing rice in Ghana: An Al-Hassan Seidu D analysis based on Farm Size and Ecological Zones RT05530 Analysis and Estimation of the cost function of Urban Transport ValerieOngolo D Service Delivery in Cameroon Afor J. Fosah RT05531 Corruption au Cameroun: Une cause jajeur de la pauvret :une Joseph –Perre Timnou E esquisse de la perception du probl me Dorine Kanmou Fenou RT05532 Gender, Poverty, User Changes and Health Care Decisions: Folasade Lilian Ayonrinde A Evidence from Western Nigeria RT05533 Determinants of a Firm’s Export Level: Evidence from Aggrey Niringiye D Manufacturing Firms in Uganda Richard Tuyiragaze RT05534 Policy Reversal and Bank Capital Structure in Nigeria: The Sobodu Olatunji C Case of Government Deposits

Key: A = Poverty, income distribution and labour market issues B = Macroeconomic policies, investment and growth C = Finance and micro/sectoral issues D = Trade, regional integration and political economy issues

Table A2: Distribution of researchers in the 2005/06 biannual research workshops

Country of Gender No. of researchers Concurrent sessions applicant per country MF ABC D E

1. Benin 2 2 2 2. Burkina Faso 1 1 1 3. Cameroon 22 3 25 10 1 2 7 5 4. Congo 4 4 2 2 5. Côte d’ Ivoire 10 2 12 10 2 6. Ethiopia 2 2 2 7. Ghana 17 17 2 6 4 5 8. Kenya 5 4 9 6 1 2 9. Lesotho 2 2 2 10. Malawi 5 5 3 2 11. Mauritius 2 2 2 12. Namibia 2 2 2 13. Nigeria 34 7 41 7 13 12 7 2 14. Rwanda 2 2 1 1 15. Senegal 12 12 1 1 9 1 16. Sierra Leone 2 2 2 17. Tanzania 1 1 1 18. Togo 5 5 1 1 1 2 19. Uganda 14 14 3 8 3 20. Total 144 16 160 39 35 37 39 10

Key: A = Poverty, income distribution and labour market issues B = Macroeconomic policies, investment and growth C = Finance and resource mobilization D = Trade and regional integration E = Political economy and sectoral policy issues (This new concurrent session was introduced for the first time during the December 2005 workshop.)

39 CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 ANNEXES

Table A3: CMAP scholarship recipients, 2005/06

University Year I Nationality Year II Nationality Ghana Kamara Boima Liberian Gbondo Roland Robin Sierra Leone Samuel Momoh Sierra Leone Kargo S. Mohammed Sierra Leone Botswana Ncamiso Ntshalintshali Swaziland Jackson Worlobah Liberia Zachary Munene Kenya Boaz Meso Kenya Thomas Nimely Toby Liberia Maluke Latete Lesotho Delphin D. Magere
Tanzania Daniel Komen Kenya Nokhupila Elaine Thabede
Swaziland Gladys Gamariel
Zimbabwe Malawi Stein Masunda Zimbabwe Dennis Muhofa Uganda Jaison Chireshe Zimbabwe Benedict Musili Musenge Kenya Scholastic Achieng
Kenya Monica Marren Assuna
Kenya Dorothy Nakyambadde
Uganda Sylvia Mwamba
Zambia Dar es Salaam Nyorekwa Enock Twinoburyo Uganda Josephine N. Nduku
Kenya Naomi Tlotlego
Botswana Ezekiel Phiri Zambia Justice Nonvignon Ghana Nairobi Muhuza Tony Uganda Chileshe M. Patrick Zambia Dukuly Musa Liberia Josephine Namukwaya
Uganda Zimbabwe Ingombe Lutangu Zambia James Basuta Uganda Abson Chompola Zambia Pasiletso Makhema Lesotho Addis Ababa Anthony Beah Chea-Doe Liberia

Indicates women students

Table A4: AERC sponsored CPP 2005 students by university, gender and nationality

Degree-awarding university Student names Gender Country of nationality Cape Town Kumchulesi, Grace Female Malawi Musonda, Anthony Male Zambia Mussa, Richard Male Malawi Cocody Beke, Tite Ehuitche Male Cote d’Ivoire Houeninvo, Gbodja Male Benin Togba, Edith Prisca Leadaut Female Cote d’Ivoire Dar es Salaam Nahu, Asteraye Male Ethiopia Mtui, Michael John Male Tanzania Ngasamiaku, Michael Wilheim Male Tanzania Ibadan Jalloh, Mohamed Male Sierra Leone Ogunleye, Eric K. Male Nigeria Oyinlola, Mutiu A. Male Nigeria Tarawalie, Abu Bakarr Male Sierra Leone Nairobi Kamau, Anne W. Female Kenya Obere, John Almadi Male Kenya Witwatersrand Dlamini, Faith Dumsile Female Swaziland Moyo, Busani Male Zimbabwe Nakamba-Kabaso, Pamela Female Zambia Yaound II Afor, Josephine Fosah Female Cameroon Atangana, Henri Ondoa Male Cameroon

40 ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM ANNEXES

Secretariat Staff*

William Lyakurwa Executive Director Jacqueline O. Macakiage Executive Assistant Rachelle Siele Administrative Secretary

Resources Grace Amurle Chief, Resources Leonard Ndinyo Chiunda Finance Manager Evar Kiambuthi Accountant Lamiku Kidamba Accounts Assistant Edith Musella Administrative Secretary

Jane Muema Human Resources and Administration Manager Edmund W. Njoroge Information Technology Administrator Damaris Michoma Human Resources and Administration Assistant Florence Maina Conference and Travel Coordinator Herbert Asava Administrative Assistant Dorine Mutanda Receptionist / Secretary Jackson Ng’ang’a Driver / Office Assistant

Research Olusanya Ajakaiye Director of Research Joseph Karugia Manager, Research Programme Joyce Kiplimo Programme Administrator Lydiah Kiraka Auma Programme Assistant Pamellah Lidaywa Administrative Secretary

Training Njuguna Ndung’u Director of Training Grace Omodho Manager, Collaborative MA Programme Mukwanason Hyuha Manager, Collaborative PhD Programme Paul M. Mburu JFE Administrator Vacant Programme Administrator Lynette Onyango Programme Assistant Catherine Cheng’oli Administrative Secretary

Communications Marjory Gichohi Manager, Communications Charles Owino Publications Administrator Winston Wachanga Information Resources Administrator Miriam Rahedi Publications and Communications Assistant Charles Bett Librarian

*As of 31 March 2006

41 CONSORTIUM POUR LA RECHERCHE ECONOMIQUE EN AFRIQUE ANNUAL REPORT 2005/2006 42 ANNUAL REPORT 2005/2006 A FRICAN ECONOMIC RESEARCH CONSORTIUM