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Mozambique

Shedding light on the informal economy: A different methodology and new data

Filip Jolevski's picture

In Mozambique’s three largest cities (Maputo, Beira, and Nampula), informal businesses—those operating outside formal licensing and registration procedures—outnumber formal firms by a factor of 9 to 1. The World Bank’s Enterprise Analysis Unit recently published surveys of informal businesses in Mozambique, conducted in collaboration with the country management unit and colleagues from the Finance, Competition, and Innovation Global Practice. These surveys were designed to mirror the standard World Bank Enterprise Surveys, which cover the formal sector, but were tailored to better understand the unique conditions in which informal firms operate. Thanks to recent methodological innovation in sampling techniques, these surveys now also provide an estimate of the total number of informal businesses.
 
The surveys use stratified adaptive cluster sampling methods—a method commonly used in the field of biology—that allow researchers to efficiently study subjects that cluster near each other. In practice, the method is implemented as follows: first, we take a city such as the capital city Maputo, and divide it into 150 by 150 meter squares—each stratified based on the likely concentration of informal business activities (see the illustration below). Second, we randomly select a pre-defined number of squares for a full enumeration of all informal businesses in each. The process is adaptive in the sense that enumeration is expanded to all adjacent squares if the number of informal firms found in any square is above a pre-defined threshold. This method allows for the same unbiased precision as stratified random sampling (Thompson 1990) but it can be implemented at a lower cost and with reduced fieldwork. Informal businesses tend to operate in close proximity to one another, forming clusters of economic activity.

Figure 1: Primary Sampling Units (Squares) for Maputo

Unraveling the dynamics of agricultural input subsidies

Guigonan Serge Adjognon's picture

Inorganic fertilizer use by smallholder farmers is one way to boost soil fertility and associated crop-yields and farm incomes. Yet fertilizer use remains the lowest where yield increase is needed the most. Per the World Development Indicator database , inorganic fertilizer use averages 154 kgs/hectare in middle-income countries, while in low-income countries it is less than one-tenth this level at 13 kgs/hectare.  What is driving this situation? And are at times fiscally expensive programs, such as government subsidies, commonly used in low income countries, the right solution?

Flying Geese, leading dragons and Africa’s potential

Justin Yifu Lin's picture

The “flying geese” pattern describes the sequential order of the catching-up process of industrialization of latecomer economies.The potential for expanding the industrial sectors of African countries is substantial – this was a message I delivered on a recent trip to Italy, Tanzania, Mozambique and Malawi. This can happen through an improved understanding of the mechanics of economic transformation as well as by focusing on how such countries can follow their comparative advantage in natural resources and labor supply. 

During my site visits and meetings with the private sector for the African segments of my trip, I became more convinced than ever of the strong untapped potential for private sector-led industrialization. Yet that can only happen when the government plays a facilitating role, such as by overcoming information asymmetries, coordination failures and externalities associated with first-mover actions. In Tanzania, initial experiments with industrial parks look promising, as do agricultural development projects and rural transport initiatives currently under way. In the case of industrial parks, it’s important to have a one-stop shop for registration and other administrative obligations, adequate electricity and water supply, and good transport/logistics links.

Could easier access to AIDS treatment increase risky sexual behaviors?

Damien de Walque's picture
 Photo: istockphoto.com

By the end of 2009, an estimated 5.2 million people in low- and middle-income countries received antiretroviral therapy (ART). In sub-Saharan Africa, nearly 37% [34%–40%] of people eligible for treatment had access to those life-saving medicines (UNAIDS 2010). This is an extraordinary achievement, considering that as recently as 2003, relatively few people living with HIV/AIDS had access to ART in Africa. The scaling-up of ART in Africa and other regions has saved the lives of countless people and we hope will continue to do so.

 At the same time, access to HIV/AIDS treatment might have transformed the perception of AIDS from a death sentence to a manageable, chronic condition, not necessarily different from any other chronic disease. Such a change in perception could lead to change in sexual behaviors. If AIDS is not perceived as a killer disease anymore, it might induce complacency and increase risky behaviors and the mixing between higher- and lower-risk groups in the population. That’s what has been described as the “disinhibition” hypothesis.