The Commons in an Age of Uncertainty: Decolonizing Nature, Economy, and Society, 2021, Franklin Obeng-Odoom, University of Toronto Press, i–xv + 264 pp. ISBN: 9781487513900

Author: Juliette Alenda-Demoutiez

Article history:
Received: 28 February 2022
Accepted: 18 March 2022

Read More

 

Abstract (Click Here for Abstract)

The Commons in an Age of Uncertainty: Decolonizing Nature, Economy, and Society is a thorough demonstration of the problem of western-centered analyses in the political economic and economics disciplines. Even if used with the best intentions, the concept of commons in these western frameworks is far from reflecting the reality of other contexts and histories. Franklin Obeng-Odoom offers a fascinating and important perspective of the socio-ecological dimensions of land and thus an important reflection on the commons in the Global South.

Land; Commons; Justice; Decolonizing research; Political economy

On the nexus between sovereign ratings and financial stability: Fresh insights from Tunisia

Author: Dorsaf Azouz Ghachem, Ameni Ben Sayari and Azza Béjaoui

Article history:
Received: 3 May, 2021
Accepted: 7 March, 2022

Read More

 

Abstract (Click Here for Abstract)

In this paper, we attempt to analyze the causal relationship between the financial stability and sovereign rating for Tunisia. To do so, we adopt two-step methodology. We first construct a Financial Stability Index (FSI). Second, we use two models based on different control variables to examine the causal nexus between the FSI and Tunisian sovereign ratings. We construct the FSI using the 11 listed banks during the period 2007-2016. The empirical results show that there are two different phases: phase of financial stability (from 2007 to 2010) and phase of financial instability (from 2011 to 2016) with a significant fall due to indebtedness and inflation’s increase. Afterwards, we show that the financial stability significantly affects the sovereign ratings. Such analysis of the causal nexus could be interesting from a policy perspective.

Financial stability; Sovereign ratings; Index construction; Banking system; Emerging countries; Revolution

Farming households’ food demand in South West Nigeria: An application of Substitution Elasticity Demand System (SEDS)

Author: Olugbenga A. Egbetokun and Gavin C.G. Fraser

Article history:
Received: 15 March, 2021
Accepted: 21 October, 2021

Read More

 

Abstract (Click Here for Abstract)

Food constitutes a key component of a number of fundamental welfare dimensions, such as food security, nutrition and health. It makes up the largest share of total household expenditure in low-income countries, accounting on average for about 50% of the households’ budgets. Most demand analysis use existing models, but this study applied a new model – SEDS to analyse food demand among farming households in South West Nigeria. A multi-stage sampling technique was employed study to select 342 respondents. Primary data was collected through the use of a structured questionnaire. Data collected include information on a number of different food groups consumed by households, socioeconomic characteristics, demographic factors and income. The analytical techniques used were descriptive analysis and the Substitution Elasticity Demand System (SEDS). The result of SEDS shows that own price elasticities were less than 1 except for root and tuber, and fats and oil. It was found that cereals, legumes, fruit and vegetables and animal protein were price inelastic, i.e. necessities, and roots and tubers and fats and oils were price elastic, i.e. luxury goods.

Food; Demand systems; Household; Elasticity and Substitution

Sixty Years of Ghana-China Relations: Friendship, Friction, and the Future

Author: Lloyd G. Adu Amoah (ed)

Article history:
Received: 1 February, 2022
Accepted: 4 March, 2022

Read More

 

Abstract (Click Here for Abstract)

Sixty Years of Ghana-China Relations, one of only a handful of book-length treatments of a single African country’s ties with China, chronicles the sixtyyear history and delves into diplomacy of architecture, gastrodiplomacy, chronopolitics, racism with Chinese characteristics, and more. All in all, it provides wideranging analysis that balances both praise and critiques. An important volume that brings both depth and breadth to the ongoing study of Africa-China ties.

Ghana; China; Ghana-China relations; Emmanuel Hevi; African agency.

Women's earnings and domestic work among couples in Ghana

Author: Nkechi S. Owoo, Monica P. Lambon-Quayefio, Sylvia E. Gyan and Abena D. Oduro

Article history:
Received: 5 July, 2021
Accepted: 12 February, 2022

Read More

 

Abstract (Click Here for Abstract)

Research in feminist economics suggests that economic position can change gender relations at the household level. Much of this research, however, has been conducted in the Global North where the social structure is quite distinct from those in the Global South. Do Ghanaian women’s earnings relieve their domestic work burdens or intensify them? Addressing this question is important to extend what we know about the empowering nature of work. So, this study aims to understand how women’s earnings influence the extent to which they engage in domestic work in Ghana using two waves of the Ghana Socioeconomic Panel Survey (GSEPS) and a random effects regression model. We find that, on the one hand, higher earnings allow women to negotiate and bargain with their partners on domestic work allocations but, on the other hand, whether they are successful depends on the nature of their women. These results have implications for understanding the significance of women’s monetary resources, separate from their male partners, and the design of appropriate development policies and interventions.

earnings; domestic work; childcare; random effects; Ghana

Towards a better nowcasting and forecasting of Tunisian GDP growth: The relevance of sovereign ratings data

Author: Adel Karaa and Azza Béjaoui

Article history:
Received: 16 May, 2021
Accepted: 28 December, 2021

Read More

 

Abstract (Click Here for Abstract)

In this paper, we propose a formal and unified statistical framework in order to help performing reliable nowcasts, short- and long-term forecasts of the real GDP growth in the Tunisian context. To do so, we use a set of available monthly macrofinancial data and takes into account the sovereign ratings assigned to Tunisia by the four biggest Credit Rating Agencies since 1994. These data are used to estimate an appropriate multivariate unobserved componants times series model. The empirical results clearly show that combining of macro-financial indicators and sovereign ratings data seems to produce valid and consistent latent factors which track well GDP growth realizations throughout the estimation period. The short- and long-term factor-based forecasts of the real GDP growth based on our econometric framework are also more accurate than those produced by other classical benchmark forecasting models. This framework, which we consider as a first step in setting up a real-time monitoring system for the macro-financial situation in Tunisia, already allows us to highlight the main flash indicators capturing the dynamics of the real GDP growth. The mixture of different types of data in a formal statistical framework thus allows to provide the real-time monitoring of current economic conditions in Tunisia. Overall, such findings can be insightful for policymakers by providing reliable and early analysis of the ongoing economic situation. As well, further information about the future real activity can help business entrepreneurs to plan better their business projects.

Nowcasting; Forecasting; GDP growth; flash indicators; factors’ valtidity. JEL Classification: C54, E32, E17, C11

Do actively managed mutual funds deliver positive riskadjusted performance in emerging markets? The case of South African equity unit trusts

Author: Francois Toerien, Mohammed Badat and Nicholas Zille

Article history:
Received: 31 October, 2021
Accepted: 1 February, 2022

Read More

 

Abstract (Click Here for Abstract)

As passive investing gains traction, an important question is whether active fund manager performance justify the fees charged. South Africa’s investment industry is arguably the most developed in Africa, and this study therefore investigates whether actively managed South African equity unit trusts, both on average and individually, delivered positive excess returns, gross and net of fees, over the period 2003 to 2019. Using monthly fund returns for an unbalanced panel of the 93 actively managed SA equity funds in existence for at least three years during this period, industry average and individual fund alphas are determined, gross and net of fees, in terms of four well-established multifactor asset pricing models, namely the CAPM, the Fama-French Three-Factor Model, the Carhart Four-Factor Model, and the Fama-French Five-Factor Model. The study finds that, at an industry level, the average actively managed South African equity unit trust underperforms on a risk adjusted basis, delivering a statistically significant negative alpha in most multifactor models, both gross and net of fees. Further, depending on which model was used, between 67% and 92% of funds in the sample did not deliver positive excess returns after fees over the period. This suggests that the performance of most South African actively managed equity funds may not justify the fees charged to investors and supports the case for increased passive equity investing.

Actively managed equity mutual funds; factor models; risk adjusted return; fees; passive investing.

The banking crisis in Ghana: Causes and remedial measures

Author: Nathaniel Blankson, Godfred Amewu and Ebenezer Bugri Anarfo

Article history:
Received: 1 October, 2020
Accepted: 20 December, 2021

Read More

 

Abstract (Click Here for Abstract)

This study examines the causes and remedial measures of the ongoing banking crises in Ghana using cross-sectional survey research. The respondent agreed that the bank-specific causes include poor corporate governance practices, severe capital impairment, severe liquidity impairment, high non-performing loan ratio, low profitability levels and small bank size. They also agreed that the banking industry-specific causes include poor banking regulation and supervision, high Treasury bill rate and high Ghana reference rate. We also find that both bank size and profitability were statistically insignificant. The multiple econometric regression analysis depicts profitability, liquidity risk, Treasury bill rate and banking regulation and supervision to have no significant effect on changes in the overall level of satisfaction of the respondents. Important policy implication for the continuous implementation of the capital requirement, corporate governance, fit-and-proper, and enterprise risk management directives, inter-alia are encouraged.

Banking crisis; remedial measures; corporate governance; Ghana.

The impact of Public-Private Partnerships on Zambia's economic growth and development

Author: Zondwayo Banda and Leward Jeke

Article history:
Received: 6 January, 2021
Accepted: 25 January, 2022

Read More

 

Abstract (Click Here for Abstract)

Zambia has adopted Public Private Partnerships (PPPs) as a pro-poor strategy and as an innovative financing model to contribute to the narrowing of the development financing gap. Despite the growth of PPPs in Zambia, there have been no formal assessments of the impact of PPPs. The aim of this study is to evaluate the impact of PPPs on Zambia’s economic growth (proxied by gross domestic product {GDP}) and economic development (unemployment, household consumption and gini coefficient). The study employs quantitative method by using Autoregressive Distributed Lag (ARDL) model as the time series model for the 18 years period from 2000 to 2017. The study shows that PPPs positively impact GDP and economic development through spurring of economic activities, improved household consumption and employment creation. However, the study has also shown that PPPs negatively impact economic development as the PPPs increased gini coefficient (income inequalities). How to ensure broad-based progress would require additional political-economic analysis.

Public Private Partnership; GDP; Gearing; Unemployment; Household Consumption; ARDL.

The impact of the investment climate on foreign direct investment in Africa

Author: Parfait Bihkongnyuy Beri and Gabila Fohtung Nubong

Article history:
Received: 14 December, 2020
Accepted: 9 January, 2022

Read More

 

Abstract (Click Here for Abstract)

This paper investigates the impact of investment climate on FDI in Africa using a dataset that spans 2000 to 2018. It also hypothesised that the relationship between investment climate and FDI could vary by country classification as a landlocked, least developed (LDC), natural resource-abundant or has a developed financial market system (DFM). The system's GMM and the fixed-effect model with Driscoll-Kraay standard errors results show that investment climate is critical for FDI in Africa, resource-rich countries and those with DFM. Conversely, the role of the investment climate is less significant in landlocked countries, which underscores the need to consider the possibility of heterogeneity to avoid false-positive conclusions. We also find that the moderating role of the investment climate and GDP is nontrivial in the relationship. These results suggest that the LDCs and landlocked countries need to strengthen their investment climates by adopting policies that enhance the rule of law, fight corruption and build robust institutions to attract FDI. It also shows how researchers can navigate the considerable encumbrance of dealing with several constructs of the investment climate by employing principal components analysis, which gives the optimal granularity required for further investigation. This more specific definition is critical when the intent is to make generalities about the role of the investment climate.

Investment climate; institutions; foreign direct investment; PCA.

Dynamics of current account deficits over the economic cycle of countries with an emergence horizon

Author: Marius Achi

Article history:
Received: 26 March, 2021
Accepted: 27 December, 2021

Read More

 

Abstract (Click Here for Abstract)

This article highlights the different phases of a business cycle in the presence of persistent current account deficits. The relationship is facilitated by the quantile regression method. In this method the regression parameters are determined around the conditional mean in the quadratic form of the deficit dynamics. The empirical analyses are thus carried out on six (06) African countries with fixed and different emergence horizons covering the period 2005q1-2014q4. The results of the individual estimations lead to policy recommendations discussed according to whether the effects are procyclical for Côte d'Ivoire, countercyclical for Benin, Mali, Niger and Democratic Republic of São Tomé and Príncipe and both procyclical and countercyclical for the Democratic Republic of Congo for specific quantiles.

Current account deficit; Business cycle; countercyclical; procyclical; Quantile regression.

Africa’s Last Colonial Currency: The CFA Franc Story by Fanny Pigeaud and Ndongo Samba Sylla

Author: Franklin Obeng-Odoom

Article history:
Received: 4 December, 2021
Accepted: 20 December, 2021

Read More

 

Abstract (Click Here for Abstract)

Africa’s Last Colonial Currency: The CFA Franc Story by Fanny Pigeaud and Ndongo Samba Sylla is contextualised, analysed, and assessed. Overall, this book is a major contribution to African political economy. 

Fanny Pigeaud; Ndongo Samba Sylla; CFA franc; Africa; Colonialism

COVID-19 lockdown defiance, public ‘indiscipline’, and criminalisation of vulnerable populations in Ghana

Author: Festival Godwin Boateng, Saviour Kusi and Samuel Ametepey

Article history:
Received: 27 December, 2020
Accepted: 25 November, 2021

Read More

 

Abstract (Click Here for Abstract)

Behavioural economics has provided much source of inspiration for public policy in the COVID-19 era. Such is evidently the state of discussion in Ghana, where Ghanaians' so-called stubborn resistance to positive behavioural change is increasingly the target of public and popular criticisms. This paper argues that further to legitimising the police violence and extrajudicial sanctions meted out to ‘undisciplined’ violators of the restrictions, the indiscipline narrative leaps too quickly from an account of the personal morality/attitudes of Ghanaians to the collective action of mass-defiance of the restrictions without taking adequate account of the range of structural constraints that made it difficult for the majority of the people to comply with the restrictions. The mass defiance of the restrictions is best understood in the context of the unequal outcomes of the broader policy processes and practices, and the historical-institutional power dynamics around them that put some people in criminogenic situations in the country. It is important that media and policy analyses of public defiance of the restrictions and social problems in the country generally move beyond the simplistic notion of indiscipline to dissect how deliberate bias against the needs of the majority operates, and is institutionalised in policy and practice in ways that undermine their commitment to rules and regulations.

Political economy; Africa; critical postcolonial institutional theory

The wisdom of the Twitter crowd in the stock market: Evidence from a fragile state

Author: Kingstone Nyakurukwa and Yudhvir Seetharam

Article history:
Received: 25 January, 2021
Accepted: 25 November, 2021

Read More

 

Abstract (Click Here for Abstract)

The classical finance theory postulates that markets are informationally efficient and that the actions of arbitrageurs always bring stock prices to their correct values. Behavioural finance, on the other hand, emphasises the role of investor sentiment in the formulation of asset prices. In this study, we provide insights into the relationship between textual sentiment extracted from Twitter and stock returns in the fragile market of Zimbabwe between 24 February 2019 and 22 June 2020. Wavelet analysis is used to find the linkages between sentiment and returns in a frequency-time domain. The results from this study show that coherence is persistent and significant in highly volatile periods characterised by increasing inflation as well as during the time COVID-19 was declared a global pandemic. The findings also show that macroeconomic instability, especially hyperinflation, induces fear in investors while the onslaught of black swan events like the COVID-19 pandemic leads to greed in the financial markets as investors become uncertain about the future. The government could, therefore, prioritise macroeconomic stability as the high coherence between sentiment and returns during a crisis like the COVID-19 pandemic may lead to a crashing of the stock market. Classical finance theory, therefore, falls short in explaining the stock market returns as the evidence in the study shows that investors are susceptible to investor sentiment.

Twitter sentiment; Zimbabwe Stock Exchange; Old Mutual Implied Rate: wavelet analysis; behavioural finance.

Impact of the RDIA and the building of the Blaise Diagne International Airport on tourism demand and economic growth in Senegal

Author: Assion Lawson Sipoaka and Francois Joseph Cabra

Article history:
Received: 22 June, 2020
Accepted: 15 October, 2021

Read More

 

Abstract (Click Here for Abstract)

The place of airports in the economics of development is poorly understood. So, in this research, we assess the impact of the construction of the International Blaise Diagne Airport (BDIA) and the fee for the development of airport infrastructure (RDIA) on tourism demand and economic growth in Senegal. For this purpose, we use a dynamic computable general equilibrium model (CGEM) based on the 2005 social accounting matrix. The results show that the increase in public investment in the airport construction sector associated with increases in RDIA negatively affects foreign demand for tourism services. The variation in GDP is positive but of small amplitude. Thus, a reduction in the level of taxation of the RDIA after the airport is operational would be appropriate to boost the tourism sector, related sectors and GDP.

Excise tax; construction; tourism demand; growth; CGEM.

Weather index insurance in South Africa: An integrated approach to farmers’ willingness-to-pay intentions

Author: Mpho Steve Mathithibane and Bibi Zaheenah Chummun

Article history:
Received: 2 September, 2020
Accepted: 17 September, 2021

Read More

 

Abstract (Click Here for Abstract)

Weather index insurance is an emerging risk management tool in the African agricultural landscape specifically designed for low-income smallholder farmers that are vulnerable to weather related hazards. This insurance solution remain unexplored and commercially unavailable within the South African environment. However, there is an ever-increasing need for risk transfer mechanisms, particularly in the era of climate change and increasing drought events. The paper assesses potential demand for index-based insurance among maize farmers through a hypothetical market scenario, investigating willingness-to-pay and prevalent factors influencing the decision-making process. Quantitative research design was used. Doing so entailed employing structured surveys which were completed by 224 farmers. From this number, 86% of farmers demonstrated positive intentions towards adopting index insurance. A structural model was then constructed which identified insurance culture and risk perception as impactful behavioural constructs. Logistic regression models identified gender, education, access to credit and group membership as significant socio-economic drivers influencing willingness-to-pay intentions. The research findings advance the understanding of the smallholder producer market in South Africa which may ultimately assist in directing future product design and distribution efforts.

Weather index insurance; Smallholder farmers; South Africa; Willingness to-pay.

Does high public debt level constrain the interest rate setting behaviour of the South African Reserve Bank?

Author: Abdul-Aziz Iddrisu and Imhotep Paul Alagidede

Article history:
Received: 6 November, 2020
Accepted: 27 August, 2021

Read More

 

Abstract (Click Here for Abstract)

Constraints exerted on interest rate setting behaviour of central banks by high public debt is well acknowledged in the theoretical literature. Empirical evidence, however, remains limited. The few empirical studies either fail to provide confidence intervals for the threshold estimate (a limitation that raises concerns of precision of such an estimation for the purposes of policy) or are substantially constrained by data unavailability which hampers econometric inference. Yet, establishing the nature of such constraints is important because it highlights the nature of risk of breach of publicly announced inflation targets under inflation targeting regimes and feeds into central bank independence debate. With a complement of an expansive dataset, we account for debt constraint in the interest rate setting behaviour of the South African Reserve Bank using a Taylor rule. We find that the policy response to inflation gap in the high-debt regime is substantially constrained.

Monetary policy; public debt; inflation; sample splitting; threshold regressions.

The influence of inequality, institutional quality, and foreign aid on inclusive growth in Africa

Author: Easmond Baah Nketia, Yusheng Kong , Benjamin Korankye and Sabina Ampon-Wireko

Article history:
Received: 18 August, 2020
Accepted: 3 July, 2021

Read More

 

Abstract (Click Here for Abstract)

Growing inequality in Africa warrants continuing research. This study concentrates on the impact of institutional quality, income inequality, and foreign aid on inclusive growth in 48 countries in Africa spanning 2002 to 2018. By adopting the two-step system generalised method of moments (Sys-GMM), the study conducted the estimations of the model. Income inequality mostly has a negative influence on inclusive growth. All institutional quality indicators except government effectiveness positively influenced inclusive growth. Foreign aid does not help inclusive growth in Africa. On the contrary, foreign aid sometimes retards or stagnates inclusive growth. To attain and sustain a positive inclusive growth in Africa, much effort must be put in the creation of quality jobs. While halting the overreliance on foreign aid, African countries can more strategically emphasise self-centred development.

Inclusive growth, Inequality, Foreign aid, Institutional quality, Africa.

Access to credit and informal firm performance: Evidence from Sub-Saharan Africa

Author: Kwasi Gyabaa Tabiri, Eric Arthur*, Jacob Novignon and Prince Boakye Frimpong

Article history:

Read More

 

Abstract (Click Here for Abstract)

The informal sector forms a significant proportion of the private sector of many developing economies. Despite challenges in exact measurement of its size, the informal sector is noted for its role in employment creation as well as economic output in sub-Saharan Africa. However, access to formal credit is a major challenge for informal firms due to the nature of their operations. This leads many entrepreneurs in the informal sector to resort to informal credit. Using the World Bank’s Informal Enterprise Surveys, this study investigates the effect of type of finance on the performance informal firms. The results show that the use of informal finance is associated with lower performance, while formal finance is associated with better performance. This study recommends integrating community-based group lending schemes with credit information systems to make it easier to assess informal enterprises for access to credit.

Informal finance; Informal firms; Firm performance; Sub-Saharan Africa

Assessing and hedging the impact of longevity risk for countries with limited data

Author: Samuel E Assabil and Francis Eyiah-Bediako

Article history:

Read More

 

Abstract (Click Here for Abstract)

Almost all literature on the impact of longevity concludes that its impact is huge and can collapse any life or pension company if steps are not taken to address it. Yet, life companies in most developing countries do not account for longevity risk. This is a result of the lack of suitable mortality data needed for such valuation. In this work, we have proposed a generalized method of assessing the impact of longevity risk when mortality data is scarce and shown theoretically that our earlier proposed method is a particular case. This means that this method can be used by not just pension companies but all life companies. The method is based on our earlier proposed model which shows that there is a nearly linear relationship between annuitant’s hazard function and their mortality at higher ages (post-retirement age) which permits approximating post-retirement mortality data with the Gompertz model. The work also considers how such a risk could be managed under the assumption of limited mortality data, and shows that a range of life products whose expected return depends on the distribution of individual lifetimes could be used to hedge such a risk. Specifically, we showed how a whole life annuity product could be used to hedge such a risk.

Hedging; Longevity Risk; Interest Rate; Limited Data; Mortality.

A critical examination of the effect of size on the profitability of insurance brokerage firms in Ghana

Author: Richard Angelous Kotey, Franklin Owusu-Sekyere and Daniel Asante Amponsah

Article history:
Received: 27th June, 2020
Accepted: 31st March, 2021

Read More

 

Abstract (Click Here for Abstract)

This paper takes a critical look at the effect of firm size on the profitability of Ghanaian Insurance brokerage firms. Specifically, the paper examined the effect of firm size (measured by total assets) on firm profitability (measured by ROA and ROE) from a lagged perspective (i.e. the lagged effect of size), non-linear perspective, and across quantiles, using fixed effects, random effects, robust and PCSE estimation techniques. Analysing a unique data of 64 insurance brokers from 2007 to 2015, the findings show that firm size exhibited a significant and positive short term effect on firm profitability but the relationship turned negative in the long term showing a non-linear relationship of size on profitability, with an inflection point above the mean firm size. However, the non-linear effect was evident in the 50th and above percentile of brokers but not in the lower quantiles. The lagged values of size also significantly affected firm profitability but it was not as pronounced as the short term effects. The study recommends larger Ghanaian insurance brokerage firms take a staggered and reflective approach in its growth measures. 

Profitability; Size; Non-linear effect

Top