Browsing by Author "Alagidede, Paul"

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    An assessment of capital budget planning and municipal borrowing as funding source in Overstrand Municipality in the Western Cape
    (2015) Alexander, Donovan Patrick; Biekpe, Nicholas; Alagidede, Paul
    The major challenges confronting municipalities in South Africa are poor governance, lack of effective performance, backlogs in service delivery, over- and in most cases under-spending on capital infrastructure, and poor audit outcomes. It is therefore very important for municipalities to deliver on the constitutional mandate as enshrined in the South African Constitution in terms of Section 153. Municipalities need to structure and manage the organisation's budgeting, administration and planning processes effectively in terms of their strategic five-year Integrated Development Plan (IDP). The research problem of this study encompasses the assessment of the capital budget planning processes and expenditure patterns in relation to capital infrastructure to determine whether the planning processes followed are in alignment with the IDP and the relevant legislation. The core objective of the research was to investigate the extent to which the Overstrand Municipality funded their capital budget with external borrowing in terms of the budget planning process in relation to capital infrastructure spending over a three year period in compliance with the relevant legislation.
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    Costs and benefits of electricity subsidies in Uganda
    (2013) Byaruhanga, Charles Victor; Alagidede, Paul
    Electricity subsidies in Uganda have been pervasive in support of industrial output and government revenues since 2005, until their reduction in January 2012. While economic theory suggests that market mechanisms maximise social welfare, the necessity for subsidies arises when a markets fail. However, market failure alone is not a sufficient condition to provide subsidies, as they are costly, and therefore have to be properly targeted and justified. This research seeks to establish the relationship between electricity subsidies, on the one hand and industrial output and government revenues in Uganda. It also attempts to ascertain the equitability of the electricity subsidy policy. Information and data was gathered from secondary sources in Uganda on electricity subsidies, industrial output and revenues during the period 2005 to 2012. For an empirical investigation of the costs and benefits of electricity subsidies in Uganda, certain logical relationships are identified in the study to guide the empirical investigation and the analyses. It is assumed that government revenues were dependent on electricity subsidies and industrial output during the period under investigation, in order to maintain social welfare. It was also argued that the maintenance of industrial output through electricity subsidies support was justified given that about one third of Uganda total revenues are contributed by the manufacturing sub-sector. To ascertain the extent of vertical equity, the research also investigated the benefit incident of electricity subsides, from a macro-level standpoint. This is pertinent given that only 11 per cent of Ugandans have access to grid-power and electricity use favours higher income, urban end-users. Secondary data on excise and corporate tax collections and electricity subsidies provided to end-users in Uganda during period are statistically analysed for relational effects using Ordinary Least Square regression models. The respective estimators in the relationship reveal very strong relationships between excise and corporate tax revenues, on the one hand, and electricity subsidies. Electricity subsidies were found to be positively related to both excise and corporate tax revenues and industrial output during the period under study. From the evidence, the overall objective of the electricity subsidy policy seems to have been attained, in as far as revenues base was protected and industrial output was maintained. The evidence also reveals that at a macro-level, end-user beneficiaries of subsidies in the manufacturing sub-sector continued to make profits, enabling them meet their corporate tax obligations.
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    Donor funding and crowding out of public spending: Evidence from low and middle-income countries
    (2015) Shine, Ritta Sabbas; Alagidede, Paul
    In many low-resource settings agricultural output and public spending on agriculture are in decline, raising questions about the effectiveness of agricultural aid. To understand why these trends are occurring, we examined factors that affect the share of government spending on agriculture. Using a sample of 66 low- and middle-income countries from 1996-2010 we use dynamic panel regression models to explore: (1) the impact of agricultural aid on public expenditure to agriculture, and (2) the impact of aid on domestic resource mobilisation, which indirectly affects public expenditures. Our results provide evidence of a strong substitution effect, especially in low-income countries, suggesting aid to agriculture is treated as fungible. We also found evidence that aid loans resulted in higher tax revenues, while aid grants decreased tax effort, which may account for decreasing public investment in agriculture. To improve aid effectiveness, donors need to work with recipients to understand country needs and the fiscal environment of the receiving government.
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    The management of public expenditure by the Eastern Cape Department of Education and Health (2007/8 to 2011/12) and compliance with the PFMA
    (2013) Shabalala, Gloria Nokuthula; Alagidede, Paul
    Good financial and expenditure management remains a central issue of every governmental agenda as it relates to how available government resources are utilised. Financial management has undergone many reforms as the public administration discipline changed its approach. The classical approach to public administration gave rise to bureaucracies who in turn were bloated and largely inefficient. The new approach to public administration, NPM sought to promote good financial management through adoption of private sector practices by the public sector. The NPM approach gained momentum in the 1980s and 1990s. Both developed and developing countries adopted the approach as a solution to existing inefficiencies and to reduce the size of government. SA also adopted the approach in 1995 resulting in the promulgation of the PFMA in 1999. The NPM approach devolved decision making by making management accountable for financial mismanagement and expenditure of resources under their control. As a developing country, SA faces limited resources which have to be allocated to escalating and increasing needs. The Medium Term Expenditure Framework highlights the twelve key priorities of government. Health and Education are top of the lists. These two priorities are allocated the lion's share of the budget each and every year. Therefore, it is crucial to analyse how this allocated budget is utilised by the two Departments. The research analysed expenditure management for the Department of Health and Education of Eastern Cape between 2007/8 to 2011/12 and compliance with the PFMA that regulates financial and expenditure management by national and provincial departments. This was done through analysis of unauthorised expenditure; irregular expenditure and fruitless and wasteful expenditure and its implications for service delivery. Challenges that prohibit the two departments from improving financial management and expenditure management are also analysed.
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    Measures of financial development
    (2014) Hoffman, Dieter; Alagidede, Paul
    The subject of financial development has received a great deal of attention, both theoretically and through empirical research. Earlier work focussed on the relationship between financial development and economic growth, with both policy makers and academics seeing financial liberalisation and the development of financial systems as a way to quickly improve the welfare of a country's citizens. Practically the steps taken to liberalise and develop financial systems have had mixed results, indicating the pitfalls of any 'one size fits all' approach to development. Still, there is almost unanimous acceptance of a strong linkage between the financial system and the wider economy. Financial development in Africa is also of particular interest given the economic challenges that many African countries face (and related issues such as poverty). Financial development can act as a lever to spur economic growth and ultimately the welfare of much of the continent. However, it is widely recognised that African financial systems are under-developed. Allen et al. (2013) show that even compared to other developing economies, African financial systems score significantly lower across most measures of development. More recent studies have therefore shifted focus towards answering questions related to the determinants and drivers of financial development itself. Given the accepted benefits of an effective financial system, what policies and interventions can be put in place to assist with financial development? Ultimately, any inquiry into the realm of financial development is constrained by the study's ability to select the appropriate indicators for, and accurately measure the financial system. Even under ideal circumstances this can be challenging, as there is certainly no consistent view as to how best measure financial development. Approaches have changed over time, from traditionally focussing on simply the size and depth of a financial market to more modern indicators related to stability and financial inclusion – more aligned to the long term welfare outcomes in the economy rather than merely measuring the properties of a system. In reality, studies have to account for inconsistent and often missing data sets, especially for developing economies (which tend to be the focus of research into development). The assertion of La Porta et al. (1998) that measuring the size of financial markets "is a bit tricky" somewhat understates the challenges related to the measurement of financial systems. This study aims to explore the theory and empirical studies related to financial development, its impact on economic growth in Africa and the various ways to measure financial markets and institutions. The rest of this report is structured as follows; Section 2 contains the context and case for the study and lays out the objectives for the research. It also provides a summary overview of the key functions of financial systems as a reference for the rest of the paper. Section 3 provides a comprehensive review on the literature around three core areas (1) The relationship between financial development and economic growth, (2) the determinants of financial development and (3) the approaches to measuring financial development. Section 4 contains the discussion on this study's methodology and hypotheses. Section 5 discusses the key results and findings from the analysis. Section 6 provides a conclusion and recommendations for future research, followed by the Appendices.
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    Supplier Development framework analysis in South Africa's upstream oil & gas sector
    (2014) Peinke, Laura; Alagidede, Paul
    Although considerable attention has been given to the prospects for developing small, medium and micro-enterprises, and more specifically local content, very little relevant research has been undertaken in South Africa's upstream oil and gas industry with specific reference to an offshore supply base. In this research report, findings have been presented from 15 detailed interviews conducted with Transnational Corporations, local SMEs, government departments, industry associations, small business support organisations, and international respondents involved in supplier development programmes within the Oil & Gas sector. The aim of the research was to investigate the difficulties that confront local small businesses, and examine opportunities for outsourcing services to SMEs and encouraging development of business linkages in South Africa's upstream oil and gas industry. The South African research has been conducted within the context of existing international research on upstream oil and gas supplier development, and small enterprise development in developing countries.