Welcome to African Economic and Social Research Institute
Understanding African socio-economic prospects and challenges in a global setting
African Economic and Social Research Institute – AESRI (formerly known as AERI) is a virtual policy-oriented research institute that was established by Prof Nicholas M Odhiambo in 2019 following his extensive research at the University of South Africa as founder and head of the Macroeconomic Policy Analysis (MPA) research unit. The establishment of AESRI was motivated by the lack of adequate and customised economic policy research that could correctly inform policymakers on the appropriate economic policies relevant to their individual countries’ socio-economic needs. Although the Institute will endeavour to cover as many African countries as possible, the main focus of the Institute will be on the sub-Saharan African (SSA) region, which is currently the poorest region in the world. The Institute aims to focus on research, policy advisory services and capacity building. It intends to collaborate with a number of research institutions, international organisations, government institutions and the private sector on a wide range of research-thematic areas, which are of direct relevance to African countries. The Institute also aims to publish, on a regular basis, a number of policy briefs and opinion pieces on a wide range of topics that are of relevance to African countries. In order to address some of the socio-economic challenges facing many SSA countries, the Institute also aims to publish regularly a number of African barometer reports.
These include inter alia a poverty barometer, unemployment barometer, growth barometer, fiscal deficit barometer, inflation barometer, interest rate barometer and foreign direct investment barometer. Finally, in order to address the research skills shortage currently facing many African countries, the Institute aims to initiate a virtual mentorship programme that will focus on mentoring young researchers, especially doctoral and post-doctoral researchers.
The views expressed in the papers published by AESRI and the findings thereof are entirely those of the authors or associates and may not necessarily be the views of the Director/Founder of the Institute, its Board members, or their affiliated institutions. Queries regarding any document published by the Institute should be directly channeled to the corresponding author or the originator.
As a non-partisan think tank, all the activities of the Institute will be either supported freely by academic/research volunteers or financially by Afrocentric donors.
While sub-Saharan Africa (SSA) has vast potentials and opportunities, it has real challenges that are multifaceted in nature. Although the region houses one of the most sophisticated emerging market economies (South Africa) with one of the largest stock exchanges in the world by market capitalisation, the region has been mired by high levels of poverty, income inequality and jobless growth, which is structural in some countries and cyclical in others.
Even though SSA is currently one of the fastest growing regions in the world and is in the process of jointly exploring and harnessing its abundant resources through various economic integrations, it is still not clear whether this growth potential will salvage the region from extreme poverty, which has been ravaging many countries since post-independence era.
In 2015, for example, SSA accounted for 27 out of the world’s 28 poorest countries (see https://www.worldbank.org/en/news/feature/2018/12/21/year-in-review-2018-in-14-charts). According to this World Bank report, the average poverty rate in SSA was about 41%, compared to 13% in other regions. Based on this report’s forecast, nearly 9 out of every 10 poorest people will live in SSA by the year 2030 – if nothing is done to reduce the scourge of poverty in the region. The report also found that SSA was the only region in the world where the number of people leaving in extreme poverty has increased. The total number of people living in extreme poverty (i.e. extremely poor people) in SSA increased phenomenally from 278 million in 1990 to 413 million in 2015. According to the 2019-2020 World Bank Classification, 24 out of 31 low-income countries are located in SSA.
While some countries have over the years assumed that the benefits that accrue from increased economic growth would automatically trickle down to the poor and the vulnerable, some recent studies have shown that growth cannot mechanically trickle down to the poor unless it is balanced and pro-poor. Likewise, poverty cannot be alleviated by merely by redistributing the existing wealth, but rather by the creation of more wealth through the pursuance of increased resource mobilisation, job creation, foreign (physical) direct investment, skills development, sound macroeconomic planning, political stability/good governance, and investor-friendly regulatory policies. Indeed, this is the way by which the poor could be involved in the mainstream activities of the economy; and this is the way by which a country may succeed in reducing poverty, structural unemployment and income-inequality (ceteris paribus).
Although a number of research studies have been done on various socioeconomic issues facing SSA, the majority of these studies have either focused on SSA as a region or on only a few countries. In particular, research on some low-income countries is difficult to come by. Even where such studies have been conducted, the transmission mechanism, trade-offs and thresholds underpinning the various economic variables at country-specific level have not been fully explored. In most cases, the empirical research, which should inform policymakers on the implementation of the various economic policies, is either non-existent or has been oversimplified, often amounting to little more than surveys, case studies and situation analyses. Very little scientific research exists in many SSA countries that could offer early warning signals to policymakers. In some instances, countries resort to commissioned research – and then, only in times of crisis. Needless to say, this trend has continued unabated because, in many sub-Saharan African countries, research in general and economic research in particular has not been has been adequately funded for many years.
ASAccording to a UNESCO report, it is estimated that in 2009 South Africa alone accounted for nearly two thirds of Sub-Saharan Africa’s total research and development (R&D) expenditure. This included research in higher education, government departments, business enterprises and non-proﬁt organisations (see https://www.aplu.org/library/african-higher-education-opportunities-for-transformative-change-for-sustainable-development/file). It is also estimated that during the same period, two African countries, South Africa and Egypt, together accounted for almost half of Africa’s total scientific publications, while another 25% was generated by Kenya, Morocco, Nigeria and Tanzania. The report also found that the majority of publications in SSA focus mainly on agriculture and medicine – leaving fields like economic and social sciences with very little coverage. Although the share of GDP devoted to research and development in SSA recently increased from 0.39 in 2010 to 0.42 in 2016, this R&D expenditure is still relatively low when compared to 2.06% for East Asia and the Pacific, 0.66% for Latin America and the Caribbean, 0.59% for Arab States, and 0.55% for South and West Asia, among others (see UNESCO, 2019-http://uis.unesco.org/sites/default/files/documents/fs54-global-investments-rd-2019-en.pdf).
This lack of adequate relevant scientific economic and social research in SSA, which has been exacerbated by a lack of adequate research funding, has led some SSA countries to implement some economic policies without taking into account their socio-economic implications. Others have had to over-rely on empirical research done for other countries, which at times may have little or no bearing on the socio-economic dynamics facing their countries. This has resulted in conflicting or incoherent policies being implemented in some SSA countries – thereby causing more economic harm than good. Indeed, many SSA countries have not been able to optimally develop their economies during the post-independence era – not only because of civil wars and political instability, but because of the inappropriate and misaligned socio-economic policies that have been pursued over the years. To put it simply, a number of socio-economic policies in SSA have failed to yield the desired results because i) they are not underpinned by sound theoretical and empirical research; and ii) they are either incoherent or in conflict with each other.
It is against this backdrop that the African Economic and Social Research Institute (AESRI) aims to provide a virtual platform whereby various socio-economic challenges facing individual African countries could be discussed, debated, scientifically analysed and documented on a case-by-case basis – with the aim of providing timely scientific policy advice to the affected countries. The research papers published by AESRI are expected to not only provide tailor-made or customised policy advice to the affected SSA countries, but are also expected to offer corrective policy measures to the affected countries. In addition, the findings of these papers will enable individual countries to revisit their socio-economic policies on a continuous basis, as and when such revision is necessary. The reports published by the Institute will not only serve as early warning signals to the affected countries, but could also provide timely corrective options to other countries that are contemplating similar economic policies.
Prof Nicholas M Odhiambo
500 Lenchen Avenue