Browsing by Author "Alhassan, Abdul Latif"
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- ItemOpen Access‘A beggar has no choice' A Mixed Approach Exploring Blended Finance for Africa's Infrastructure(2020) Wildschutt-Prins, Alvino; Alhassan, Abdul LatifThe United Nations estimated that to achieve the Sustainable Development Goals globally, they require approximately USD6 trillion per annum, totalling between USD90 to a USD100 trillion of investments needed over the 15 years. African countries are struggling to finance their infrastructure development needs and require innovative solutions to finance their infrastructure gaps. The African Development Bank noted that Africa's infrastructure needs can be estimated between USD130 and USD170 billion per annum with an estimated financing gap of USD68 billion to USD108 billion. Blended finance received international attention during the Third International Conference on Finance for Development in 2015 when it was mentioned in the adopted resolution report dubbed the Addis Ababa Action Agenda (here forth the Addis Agenda). The overall objective of this study is to explore the private sector participation investing in economic infrastructure in Africa and the public sector's understanding of blended finance. The research also focuses on the role of multi-and bilateral development banks in mobilising the private sector and the government support required to attract private sector participation investing in infrastructure projects For this study, the Convergent Parallel Design mixed research method is employed where both the quantitative and qualitative data are collected concurrently or in the same phase. The World Bank PPI database is used as the primary quantitative data source, while nine qualitative indepth interviews were conducted. The results from the multiple linear regression model indicate that projects with multi-lateral development bank' support are characterised by lower private sector participation in infrastructure investments in Africa. Furthermore, countries receiving concessional support from the International Development Association (IDA) are receiving lower private sector participation in their projects. In-depth interviews with public sector officials indicated that most of the officials had an overall understanding of blended finance in line with current market definitions. Officials, however, were not convinced with the use of concessional funding and loans in the blended finance structure due to the conditions precedents which came with it but felt like they had no choice but to accept these conditions due to the needs of the countries and the project involved. Informed by the findings of the study, the study recommends that blended finance should be localised for the African context and makes key policy recommendations linked to the OECD principles for blended finance.
- ItemOpen AccessA study on how franchisees finance their owner's contribution when buying a franchise(2020) Ngqola-Sebone, Lumka; Zolfaghari, Badri; Alhassan, Abdul LatifThe South African economy has been lagging its forecasted economic growth statistics in recent years, particularly following the worldwide economic recession of 2008. The year-on-year economic growth of South Africa is forecasted to continue to be lower than other developing countries. SMMEs are a significant contributor to a countries GDP and most franchises are classified as SMMEs. Entrepreneurs in the SMME space often use franchises to not only penetrate the market but to grow existing ventures. In its annual report for the year 2016, the Franchise Association of South Africa (FASA) states that the franchise industry contributed an estimated 11.6% to South Africa's GDP. When applying for finance at most institutions, prospective franchisees are required to also contribute to the total funding required; this is known as owner's contribution. This study explores what challenges franchisees experience in trying to raise owners' contribution and how the y overcame these challenges. It further explores what prospective franchisees can learn from the experiences of the participants. Through research conducted predominantly through an online survey and interviews to a limited extent, this study found that the franchise model has many advantages, but also has disadvantages. One of the main disadvantages remains the accessibility of finance, particularly that most financiers and franchisors require substantial owners' contribution. Many participants faced challenges when having to raise owner's contribution They most used personal savings and donations or borrowings from friends and family. The negative impacts that were identified were mainly personal stress and anxiety, strained personal relationships and delays in personal and/or business plans. In conclusion, in attempting to address these challenges highlighted by participants, recommendations are made to all stakeholders on how to overcome some of the challenges identified.
- ItemOpen AccessAccelerating regional trade integration in Africa through regional value chains: A SADC perspective(2020) Nare, Boitumelo; Alhassan, Abdul LatifRegional integration has been a key ambition, vision and standing agenda of the African continent for the past two decades. The recent signing of the Africa Continental Free Trade Agreement (AfCFTA) (signed by 54 of the 55 members of the African Union as of July 2019) brings to the fore the urgent need to accelerate the implementation of what has been thus far an elongated period of planning and discussion. One of the key mandates of the AfCFTA is to ensure acceleration of intra-African trade and boost Africa's trading position in the global market by strengthening Africa's common voice and policy space in global trade negotiations (African Union, 2018). Intra-regional trade can be considered as a quick avenue for the continent and its respective Regional Economic Communities (RECs) such as the Southern African Development Community (SADC), to implement this agenda by leveraging collective resources and opportunities such as increased focus on the establishment of regional value chains (RVCs). Currently, the SADC region has been at the forefront of driving regional trade integration (RTI) in the continent; however, intra-regional trade is still only but a fraction of the RECs total global trade, averaging 5-7% of total trade in 2015-2017. Because of the myriad of challenges in the region – including but not limited to the low rate of RTI, poor infrastructure, poor institutions, unstable political environments, and slow economic growth – RECs, let alone the continent as a whole, cannot take part in and capitalise on the opportunities from complex trade networks through global and regional value chains. Moreover, when African countries do participate in global value chains, they find themselves at the lower end of the value chain where it is harder to reap the benefits due to the unequal distributional effects of such trade activities. This study therefore examined the key factors that drive RTI, and sought to ascertain the relationship between regional value chains and regional trade integration. Lastly, the study aimed to uncover the contribution to economic growth of such trade activities. Thirteen SADC countries are observed over the period 2000-2017 using panel data analysis and various key estimation techniques to ensure robustness of the models used. The study finds that there are definitely key factors that drive regional trade integration in the REC that require increased focus from policy makers and trade activity participants as they have the potential to change the trajectory of the region and the continent's trade landscape. The study also indisputably finds a two-way relationship between RTI and RVCs, suggesting that if key aspects of these activities are addressed, this would lead to a mutual increase in iv these factors as they are highly complementary activities. Lastly, the study confirms the positive impact that RTI and RVCs would have on economic growth attributed to an increase in the level of productive economic trade activity thereby contributing to the gross domestic product (GDP) of countries as individuals and as a collective. The study therefore concludes that there should be more focus from policy makers and all key trade activity stakeholders on driving regional trade integration and participation in regional value chains as the benefits could prove highly rewarding to the SADC RECs and the continent as a whole. Such increased focus will ensure that the region is fully capitalising on the unique strengths of the African continent and driving collective growth and development.
- ItemOpen AccessAn alternative private sector investment approach to achieve independence and resilience in KwaZulu Natal(2020) Bainbridge, Bronwen; Alhassan, Abdul LatifLocal and foreign aid and investment has been ploughed into Africa for many years with an intended purpose of eradicating poverty. Despite significant capital inputs, certain parts of Africa continue to suffer from symptoms of poverty evidenced by inequality, hunger and social decay. This study evaluated an alternative approach to investing in poverty eradication, examine the quality of life and economic impacts of family units in Kwazulu Natal, South Africa. The study employed the exploratory sequential mixed methods research approach on a sample of seven cases across four sectors. The results of the qualitative analysis identify the Inputs, Activities, Outputs, Outcomes, Measurement and Impact. The results of the quantitative analysis show that in every family unit, their poverty status reduced over the 12- month measurement period. Further analysis on specific aspects of the family's poverty status are discussed, including consumer spending and debt ratios. The findings The findings show significantly positive over the investment period. Income increased, savings increased, monthly spending power increased, and monthly debt obligations decreased. Recommended studies fo further findings are required to determine long-term impact as the investment period for the cases studies was only 12 months. Further study is also required on the internal motivation of each human involved that propels them to escape poverty at different rates using the resources available within their ecosystem. Further research on cases that use differing investment approaches is recommended in order to compare results under each research objective.
- ItemOpen AccessAn Econometric Analysis of the Relationship Between the Namibian Government Debt and Economic Growth(2019) Shipila, Ndeshihafela Melao; Alhassan, Abdul LatifThe association between government debt and economic growth is complex. Namibia is not excluded from this spectacle as concerns are mounting about the fast-increasing state debt and its implication on economic growth in the long run. By the end of 2016, government debt constituted 40.6 percent of Gross Domestic Product (GDP). Domestic and external debt constituted 25.3 and 15.3 percent of GDP respectively. Total interest paid on state debt stood at about 1 percent of GDP. Various financial debates stress that the debt incurred to enhance economic growth via investment should also consider interest payment costs. Counterarguments emphasise that if governments borrow to stimulate growth via increased economic earnings, then state debt growth might not pose a problem to the economy. This study examined the relationship between economic growth and government debt components for Namibia over the sample period 2000-2016. The study employed a time series econometric model method to examine the nature of the relationship that exists between government debt indicators and economic growth. The augmented Dickey-Fuller (ADF) was employed in testing the unit root characteristics of the series and to determine the order of integration. The autoregressive distributed lag (ARDL) cointegration framework was also employed to determine whether there is a long run and short-run relationship between the variables. Finally, the Granger Causality Test was conducted to test causation between the variables. To investigate these issues, quarterly time series data for the period 2000-2016 was used. The results of cointegration analysis supports the existence of a positive long run cointegration relationship between government debt indicators and economic growth to indicate that debt drives economic growth in Namibia. The study found no causality effect between general debt, foreign debt, domestic debt and GDP. The main policy recommendation from this study is that, in order to avoid the country from plunging into a debt crisis, the Namibian government should consider determining an optimal debt-to-GDP ratio to serve as an indicator beyond which an increase in debt will be deemed unsustainable. The government should further ensure that the debt Fund is used for production and infrastructure development instead of consumption spending to stimulate the productive capacity of the economy.
- ItemOpen AccessAn Industry Level Analysis of Demand for Insurance in South Africa(2018) Motsepe, Molatelo; Alhassan, Abdul LatifThe shaky political landscape in South Africa, resulting from high rate of corruption and political instability, is affecting economic growth. Among businesses, the use of insurance contracts has been advanced as one of the most effective risk management strategies to deal with the business risk. Insurance is designed to hedge against unforeseen and unplanned risks that may be attributable to manmade or natural disasters. One of the major reasons for purchasing insurance is to avert risk, whilst most firms in the manufacturing industry are driven by regulations to purchase insurance. The goal of this study was to analyse industry level demand for insurance as well as determine factors contributing to the demand for insurance by corporate firms in South Africa for the period between 2013 and 2014. This study used a multivariate approach to analyse data, to derive a clear picture of what transpires in the purchase of insurance and arrive at intelligent decisions. Multiple regression analysis was used to ascertain the factors contributing to the purchase of insurance as well as to identify dominant patterns in the data revealed by other empirical studies to understand the area under investigation. The study established six variables/factors that played an important role in the purchase of insurance. These were: firm size, operational leverage, industry type, underinvestment, turnover and depreciation and amortisation. The major players that positively influenced the demand for insurance were firm size and industry type followed by turnover, depreciation and amortisation respectively. It was also established that most firms in South Africa are regulated, therefore it was mandatory for firms to buy insurance to hedge against any risk. The policy and research implications of the findings are discussed.
- ItemOpen AccessAnalysing the Relationship between Banking Development and Economic Growth: Time Series Evidence from Namibia(2020) Diergaardt, Colin; Alhassan, Abdul Latif; Mutize, MisheckThe main objective of this study is to examine the relationship between banking development and economic growth in Namibia. Namibia has eight licenced commercial banks, four of which have been operational prior to the country's independence; Bank Windhoek Limited, First National Bank Namibia Limited, Nedbank Namibia Limited and Standard Bank Namibia Limited (BON, 2018). The other four licenced commercial banks began operating post independence. The banking development indicators employed by this study were broad money to nominal GDP (M2), private sector credit to nominal GDP (PSC), and lending interest rates (INTR). The data used in this study is annual data, covering the period 1991 to 2018, engaging the VAR/VECM framework in order to determine the presence of a long-run and short-run association. In addition, this study engaged the Granger causality methodology in order to determine the casual association between banking development and economic growth. The error correction term equation suggested a long-run relationship between the variables in the VECM, while the results indicated that there are no short run associations amongst the variables. Further, the results of the Granger causality test indicated a bidirectional causality between LNRGDP and LNPSC. In addition, the causality test showed that lags of LNINTR Granger causes LNPSC, which is consistent with the neoclassical theory of interest rate, which pronounces that interest rates are determined by the demand and the supply of loanable funds. Moreover, lags of LNINTR and lags of LNM2 granger causes LNRGDP, which suggest that banking development causes economic growth. The study recommended that the Namibian banks should reform credit policies and decrease the cost of debt in an attempt to avail more credit to the private sector in order to sustain and stimulate economic growth.
- ItemOpen AccessAn analysis of the profitability and sustainability of savings and credit co-operatives in Botswana(2018) Nthaga, Laone Gosego; Alhassan, Abdul LatifSince the 2008 financial crisis, global attention has been drawn to co-operatives, owing to their resilience and ability to flourish during tough economic conditions. The potential of co-operatives as a catalyst for sustainable development is of particular interest to a country like Botswana, where the economy is heavily reliant on a single commodity trade and there is potential for greater participation of the citizens in economic and social development of the country. The growing participation of co-operatives, particularly savings and credit co-operatives (SACCOs), has proved to be a channel for increasing access to finance for the traditionally unbanked, a reduction in poverty levels, and continued socioeconomic development across the African continent. In Botswana, however, only 26% of co-operatives are profitable, while 30% operate at a loss or break even. This necessitates an empirical investigation into the performance (profitability and sustainability) of SACCOs in Botswana. Literature presents various views regarding the determinants of profitability of SACCOs; these include the selection of a skilled management committee, the clear articulation of and compliance with a credit policy, the presence of a savings culture in the area of operation, sound corporate governance, credit default rates, membership numbers and members' level of financial literacy. This study ascertains the key determinants of the profitability and sustainability of SACCOs in Botswana and the extent to which these factors influence the SACCOs' operational self-sufficiency (OSS). The population included 39 SACCOs from eight regions across the country. The independent variables chosen were return on assets, deposit mobilisation, current ratio, capital structure, and membership size. Panel data analysis for financial data collected over 10 years (2005 to 2015) for all registered SACCOs was used. The study revealed that return on assets and capital structure were significantly and positively related to OSS, which was generally consistent with literature. Size and liquidity were found to be statistically insignificant determinants of OSS. A finding unique to this study, and contrary to literature, was the negative relationship observed between deposit mobilisation and OSS. Informed by the findings of the study, the main recommendations are that members of SACCOs as well as regulators should ensure that management provides a clear investment strategy that shows consideration for revenue diversification. The Ministry of Investment, Trade and Industry should also channel resources into implementing supporting policies and legislature for SACCOs, such as the Co-operative Transformation Strategy, to enable these entities to thrive.
- ItemOpen AccessBarriers Access to Housing Finance by the Low-Income Groups: National Housing Finance Corporation (NHFC) in South Africa(2019) Limba, Edwin Mandlakayise; Alhassan, Abdul LatifSouth Africa (SA) has been experiencing a serious challenge in terms of addressing housing problems and one of the factors is access to finance, mainly by the lower income earners. Government programmes like Financial Linked Individual Subsidy Programme (FLISP) that work through the National Housing Finance Corporation (NHFC) to provide affordable subsidy finance for housing to households who earn in the range of R3 501 and R15 000 do not make a significant impact necessary to improve access to affordable housing finance. The NHFC has approved and disbursed few and low amounts for FLISP hence questions have been raised as to the challenges that low-income earners experience when accessing affordable housing finance through the NHFC and its role in creating human settlements that is sustainable. The objective is therefore to undertake a descriptive and exploratory study of the FLISP program to enhance understanding of the effectiveness of NHFC in provision of affordable housing financing accessibility by the low-income groups in Johannesburg. The sample of participants was drawn from the beneficiaries of loans and NHFC officials using observations, questionnaires and semi structured individual interviews. The mixed research method is adopted using both the primary and secondary to collect data from NHFC and is analysed by means of descriptive statistics such as percentages, tables and frequencies. Data analysis showed that accessibility for housing finance remains an obstacle faced by the low-income households. Convergent mixed method is adopted in the study to understand why the NHFC has been not effective in addressing housing finance for low-income groups. The study found that the major challenges that low-income earners encounter in accessing affordable housing finance range from the deposit amount required, interest rates and affordability in repayments of loans. It is recommended that there should be an enhancement in the housing policy to focus on the low-income groups, also, alternative mechanism such as provision of serviced land and partnerships between government and commercial banks may improve the current conditions.
- ItemOpen AccessBarriers and drivers of using transaction accounts in driving electronic payments: A consumer perspective in Southern Africa(2019) Dube, Sithembinkosi; Alhassan, Abdul LatifThis study aims to explore barriers and drivers of transactional accounts usage for electronic payments in South Africa and Zimbabwe through quantitative demand side research. This study targeted 200 respondents based on the convenience sampling technique, for a period of 2 years (2016-2017) after which a multiple regression model to examine the barriers and drivers of transaction accounts usage for electronic payments. The study found that customers’ perception towards transaction accounts usage which reflects electronic payment services is high in South Africa and Zimbabwe. The regression results indicate that three factors in costs, accessibility, and ease of use are significantly associated with consumers’ perception towards transaction accounts usage. Remarkably, security and income levels are not significantly associated with consumers’ perception towards transaction accounts usage although the correlation-coefficient results show otherwise. As a result, the researcher recommends that Southern African banks and online transaction facility providers should constantly be enhancing their transactional account services in view of the promising growth rate. It is vital that the services provided must meet customers’ expectations. The electronic payments systems must demonstrate convenience and effectiveness in real world to tape huge market share from cash. The providers of transactional account systems are required to retain an innovative and competitive environment in order to create new enhanced products and services to lower transactional costs for customers and companies. Furthermore, the results of this study serve as a guide to inform the service providers so that suitable approaches can be established to increase the usage of transaction accounts for electronic payments. As services are enhanced, the features must be communicated to improve end users’ awareness.
- ItemOpen AccessBudget deficit and economic growth in Namibia(2019) Sakaria, Hilaria Ndilokelwa; Alhassan, Abdul LatifThe study provides an assessment of the relationship between budget deficit and economic growth in Namibia, using time series quarterly secondary data covering the period, 1990 to 2015. The study employed the Auto Regressive Distributed Lag (ARDL) Bounds Test and estimated the coefficients of the variables from the Error Correction Model in examining the relationship between budget deficit and economic growth. According to the cointegration test, the result has shown that past budget deficit and past Population growth has a negative and effect and that current Trade balance has a positive effect on economic growth in the short run. The overall findings indicate that budget deficit negatively affects economic growth. This is in conformity with the Neo-Classical Theory, which holds that fiscal deficit leads to low GDP. The study therefore recommends that government expenditure be invested in developmental infrastructure that will give positive results in the future.
- ItemOpen AccessBusiness Development Services (BDS) and SMME Development in South Africa(2020) Zilwa, Portia; Alhassan, Abdul Latif; Makoni, PatriciaSmall businesses are regarded as economic growth engines with the potential to address the unemployment crisis in South Africa. The government has limited capacity to employ the majority of the unskilled and semi-skilled who are unemployed. Agencies and private organisations offering business development services (BDS) are required to assist small, medium and micro enterprises (SMMEs) help government to address unemployment. Small and medium enterprises (SMEs) are recognised for the crucial role they play in activating and supporting economic growth. While much attention and hope has been placed on SMEs to provide the much-needed jobs, they are faced with enormous challenges and continue to fail. These challenges make it impractical for SMEs to realise their full potential and deliver to the government's and society's expectations. It is documented that SMEs face unique problems, which negatively affect their prospects and as a result, weaken their capacity to contribute to sustainable economic growth. Government and other private sector stakeholders have availed various types of business support in South Africa both as financial and non-financial support to assist SMEs overcome these problems. There has also been an emergence of business development service providers (BDSPs) that seek to extend support to SMEs, to ensure their sustainability, improve production techniques, market access and increase competitiveness but this has not yielded the desired results. Business development services refer to services that improve the performance of the enterprise, its access to markets, and its ability to compete. This study sought to explore the nature of BDS offered to SMMEs with a view to help them remain sustainable. Further, the study explored the challenges faced by BDSP. The study used an inductive qualitative research approach and employed semi-structured interviews to collect data. The population of the study consisted of SME business development service providers in South Africa, with an eventual study sample size comprised of ten providers. The findings indicate that there is a range of services offered to SMEs, with training and technical assistance and market access being the focus areas. While providers offer these services to SMEs, they themselves experience various challenges such as internal challenges which include funding and resources; expertise and skills levels of providers; and design of services. In addition, there are external challenges such as payment inability of SMMEs; low market awareness; commitment to and from SMMEs; perceived value of BDS; finding the right clients; and the business operating environment, which hinder their service provision. iii The study concludes by providing recommendations on approaches that BDS providers can adopt to offer solutions to some of the identified challenges. These approaches include: developing sector-specific approaches in delivering business development service; attracting enterprise and supplier development funds as a possible strategy to solve the lack of resources in this sector; alignment of the Broad-Based Black Economic legislative framework to business development services strategies; introduction of professional standards and guidelines in the business development services sector and implementation of an impact assessment matrix.
- ItemOpen AccessCatalytic effects of IMF agreements on foreign direct investment (FDI) inflows in sub-Saharan Africa(2017) Mathebula, Percy; Alhassan, Abdul LatifIt is customary to postulate that International Monetary Fund (IMF) agreements or arrangements in Sub-Saharan Africa (SSA) will facilitate foreign capital investments or FDI inflows from multinational corporations and or foreign investors. Through empirical observations, and using a two-stage modelling technique, this research tested and examined this hypothesis. It empirically showed that SSA countries that had IMF interventions for the period 1980 to 2015 attracted FDI inflows into their economies. The study rebutted the claim that countries with previous IMF interventions were likely to appeal to multinational corporations (MNCs) or foreign investors and thereby cause the inflow of FDI into Sub-Saharan Africa.
- ItemOpen AccessThe causal relationship between road transport infrastructure development and economic growth in Namibia (1990-2014)(2018) Mungendje, Louis; Alhassan, Abdul LatifThe major aim of the study was to examine the short and long-run relationships and directional causality flow between road transport infrastructure development and economic growth in Namibia for the period 1990-2014. To achieve this objective, the study adopted the auto regression distributive lag (ARDL) Bounds testing approach to co-integration, to examine the short-run and long-run relationship between economic growth and transportation infrastructure in Namibia. The data was sourced from the World Bank Database on GDP from 1990 to 2014, the Namibia National Planning Commission MTEF (Medium-Term Expenditure Framework from 1990-2015) and the Roads Authority Annual Reports from 1999 to 2014, which were imported into the E-view tool to run quarterly regressions from 1990 - 2014. The results confirm a relationship among the variables. The Bounds test results indicated that there exists a long-run relationship among the variables under study. The estimated long-run model showed that there is a statistically insignificant positive relationship between expenditure on road transport and economic growth as well as between information communication technology and economic growth in Namibia. However, the short-run model revealed a positive and statistically significant relationship between expenditure on road transport and economic growth. Conversely, both the long-run and short-run estimates showed a statistically insignificant and negative relationship between foreign direct investment and economic growth. Lastly, the Granger causality test results showed no causality between expenditure on road transport and economic growth in Namibia. The present study offers fresh insights to policy makers on crafting appropriate policies to regulate tax consolidation revenue and infrastructure levies collection; secondly, to boost public sector borrowing on international capital markets through bond issues, infrastructure funds and revenue bonds; thirdly, to develop partner financing business models through sector budget support; fourthly, to secure private sector financing through a private debt, private equity or capital structure leveraging business model; and lastly, implementing fast-tightened fiscal and monetary policy measures on foreign direct investment which currently severely affect Namibian capital outflows.
- ItemOpen AccessChallenges facing SMEs in the Western Cape townships with a focus on gender issues(2022) Nyathi, Lomakhosi; Alhassan, Abdul LatifThe state of Small and Medium Enterprises (SMEs) is a key determinant of economic development globally. These enterprises account for almost 90% of firms in both developed and emerging markets. They are the engines of the economy that drives employment creation, poverty alleviation, tax provision, export income and better the lives of citizens. Despite the hype and investment in SME development, the world's vulnerable locations have not benefited from such development, amongst them are South African township SMEs who continue to face a multitude of challenges that hinder them from developing into sustainable business enterprises with a meaningful contribution to the economy. Amongst them, women owned SMEs face supplementary challenges, which are mostly gender based in nature. The study explored the challenges facing township SMEs in the Western Cape province and how the gender dynamics have played out in the face of SME stagnation. After identifying the challenges and gender dynamics, policy gaps were explored, and bridging strategies implored. To this end, the study employed a qualitative research approach covering a sample of 14 participants from three townships of Khayelitsha, Nyanga and Langa using a semi-structured questionnaire for in-depth interviews. The primary interviews were analysed using the six-step thematic approach. The study found lack of funding to be the most prominent challenge, resulting in inadequate operational resources such as equipment, SME owner upskilling and product marketing. The study also found crime and corruption, limited opportunities and market access, human resources as well as lack of financial and business administration skills to be the cause of stagnation of township SMEs. Apart from the umbrella challenges facing SMEs, the study found women SME owners to be facing additional challenges of gender-based discrimination, family responsibility, sexual harassment and crime. Government initiatives were found to be ineffective in addressing township SME challenges, SME owners have limited knowledge about the workings of these initiatives. They were found to be lacking fairness and transparency due to corruption.
- ItemOpen AccessCommodity Prices, Exchange Rate Fluctuation and Sustainable Development Goals in Sub-Saharan Africa: An Empirical Investigation(2021) Asuquo, Eyo; Alhassan, Abdul LatifThis dissertation examines the impact of commodity price change and exchange rate fluctuations on the capacity of Sub-Saharan African (SSA) countries to attain the UN 2030 agenda on sustainable development by using the dynamic panel data of forty-five (45) countries in Sub-Saharan Africa over a twenty-year timeframe (1999–2018). The study used the commodity terms of the trade index to measure commodity price behaviour, the real effective exchange rate index to measure bilateral exchange rate behaviour and lastly, human development index was used as a measure of human development outcomes that are consistent with the 17 SDG targets. The following control variables were included in the model specification: financial development index (a measure of resource allocation efficiency), external financial flow (a measure of foreign exchange flow) and governance indicators (a measure of institutional quality). Furthermore, the Generalized Autoregressive Conditional Heteroskedasticity (GARCH) modeling technique was used in predicting annual volatilities for commodity terms of trade and real effective exchange rate. The generated data was included in the panel data set and the Generalized Method of Moments (GMM) estimation technique was utilised in estimating the regression model. The main findings of this dissertation are that commodity prices, commodity price volatility and the real effective exchange rate all have a positive and significant correlation with sustainable human development, while the real effective exchange rate volatility has a negative and significant correlation with sustainable human development. Financial development was also observed to have a significant and positive effect on sustainable human development, whereas external financial flow and governance quality were found to have an inverse relationship with sustainable human development. However, further analysis of the regression result reveals the presence of ‘resource curse' amongst SSA countries. This can be ascribed to the consistent declining trend in the region's commodity terms of trade and a corresponding decline in the human development index. This situation is simply reminiscent of the need to transform the resource-dependence profile of SSA through the implementation of intuitive policies and strategies that will promote the efficient utilisation of primary commodities to improve the wellbeing of the populace. Hence, focusing on economic diversification, industrialisation of the commodity sector, building quality institutions and better management of the economy should be of greater concern towards the attainment of Sustainable Development Goals rather than depend on foreign aids.
- ItemOpen AccessCorporate governance and financial performance of long-term insurance companies in South Africa(2019) Zyambo, Kalwani; Alhassan, Abdul LatifThe research examines the effect between corporate governance and company-specific variables to financial performance among a sample of long-term insurance companies in South Africa from 2011 to 2016. The study employed a panel regression technique using board size, board independence, audit committee size and CEO tenure as proxies for corporate governance while controlling for firm size, reinsurance usage and leverage. The proxies used for financial performance were underwriting profits, return on assets (ROA) and returns on equity (ROE). The findings show that board size is the only corporate governance variable that is statistically significant with financial performance in the sample of South African longterm insurance providers. The remaining corporate governance variables did not have a statistically significant relationship with financial performance because each company in the sample set them in line with the recommendations outlined in the King Report IV on Corporate Governance. The implication of the adherence to the recommendations in the King Report IV on Corporate Governance reduced the variation in corporate governance structures between the companies in the sample. The findings also show leverage as the only control variable that is statistically significant with financial performance in the sample. The dissertation recommends that the corporate governance guidelines outlined in the King Report IV on Corporate Governance be made statutory in the South African longterm insurance sector, because these guidelines do not adversely affect the financial performance in a statistically significant way. Further, the dissertation recommends a board size ceiling be set in the sector to address the observed negative and statistically significant relationship between board size and financial performance. Finally, the dissertation recommends the use of regulation to limit the amount of leverage that companies in the sector can take on to address the observed negative and statistically significant relationship between leverage and financial performance.
- ItemOpen AccessCorporate Governance and Firm Efficiency in The Long-Term Insurance Market in South Africa(2018) Boakye, Mary-Ann; Alhassan, Abdul LatifThe financial crises experienced worldwide have contributed to the rising importance of corporate governance. South Africa is unique in that it has strong corporate governance structures and as a result, it would prove useful to assess the effects of these corporate governance structures on critical sectors such as the long-term insurance industry, which is the largest insurance industry in Africa. The objective of this study is to examine the effect of corporate governance mechanisms and firm efficiency in the South African long-term insurance industry using data on 73 long-term insurers from 2007 to 2014 in a two-stage analysis. In the first stage, firm efficiency is estimated using the data envelopment analysis (DEA) bootstrapping technique of Simar and Wilson (2007), which corrects for biases associated with non-parametric techniques. In the second stage analysis, the truncated bootstrapping regression technique is employed to examine the effect of corporate governance on the estimated efficiency scores. The corporate governance variables used were board size, board independence, audit committee size, CEO tenure and audit independence, while controlling for firm size, reinsurance usage and leverage. The findings indicate that long-term insurers in South Africa operated at approximately 21% of their optimal capacity which suggests high levels of inefficiency in the provision of life insurance services. The results of the second-stage analysis identify board size, non-executive directorship, CEO tenure and audit independence as the significant corporate governance indicators that impact on efficiency over the study period. In addition, firm size, reinsurance usage and leverage were also observed to be significantly related to the estimated efficiency scores. The findings suggest that non-executive directors are not as effective as expected, which may be due to a myriad of reasons, such as under-representation on sub-committees, a lack of relevant skills, experience or financial expertise. Insurers should use more stringent criteria to screen potential non-executive directors and provide training and regular updates to adequately capacitate the non-executive directors with the necessary skills and knowledge. The positive relationship between CEO tenure and efficiency suggests that frequent CEO rotation is not advisable. Most of the corporate governance indicators have a negative effect on efficiency, which is not the intended effect. This is an indication that corporate governance measures should not be viii enforced on insurers as a 'one size fits all’ measure, rather, a focus should be placed on corporate governance measures that have the intended impact, such as audit committee independence.
- ItemOpen AccessCorruption distance and FDI in Africa(2016) Tudane, Abiel; Alhassan, Abdul Latif; Nko, EdwardThe majority of empirical studies that investigate the relationship of corruption and FDI tend to find that there is a strong relationship between corruption and FDI, although the findings are mixed in this regard; some have found the opposite while others have resulted in inconclusive results. This paper uses an institutional approach to corruption and seeks to advance the concept of "corruption distance" as it relates to FDI in context of Africa, it therefore investigated the manner in which the perceived level of corruption in the African continent affects the level of FDI counties in Africa are able to attract. The paper analyses corruption and FDI where the home countries are developing economies in Africa in order to obtain a greater insight regarding relationships in African investment using a panel data set of 45 African countries from 2003 to 2013. The research findings support the view that corruption distance has a negative effect on FDI in Africa. Given the levels of corruption in Africa, even expectations that more corrupt countries would be more likely to invest in less corrupt countries where confirmed. Our evidence confirms that the flow of FDI in Africa is mostly influenced by countries who on average are less corrupt that African countries. The paper finds that that there is a negative relationship between corruption and FDI where the home country is less corrupt than the host African country and concludes that the potential for FDI towards Africa to be great if the institutional quality underpinning the investment climate in African countries where to improve.
- ItemOpen AccessCreating inclusive financial sectors to address SDGs: factors that influence access from an African context(2020) Mugwabana, Tsimbe; Alhassan, Abdul LatifIn many developing economies, access to and subsequent utilisation of mainstream financial services act as a barrier to financial inclusion. The merging of financial services and information technology, especially by means of mobile devices, result in consumers being able to make use of financial services at any time and place, thereby overcoming the distribution challenges and subsequent use (Gu, Lee, & Suh, 2009). This research examined the factors influencing the continued use of tech-based financial services post adoption by the Base of the Pyramid (BOP) in South Africa. The research uses the risk-benefit framework to understand usage behaviour focusing on cost, convenience, perceived ease of use and risk (security and operational) as predictor variables. The research makes use of analysed secondary data on 481 low-income individuals using the Structural equation modelling (SEM).The partial least squares structural modelling was utilised to test the hypotheses and relationship between the variables. The findings indicate that perceived benefit has a greater influence on usage than perceived risk. Even though consumers consider both benefit and risk in decision making, the expectation of potential benefits is a greater driver of usage. Convenience, cost and perceived ease of use were found to have significant impacts on usage, with the latter two having the greatest impacts. Perceived risk had a significant but weak impact on usage, with operating risk influencing usage more than security risk. The research recommends that when creating a value proposition for Fintech products, resources should be weighted more towards improving and highlighting those factors that drive the perception of benefit or value added to customers (cheaper, quicker etc.) vs. those that manage a potential risk. Customers are likely to respond positively and increase usage when there is an additional benefit to be derived.