Browsing by Subject "Development finance"

Now showing 1 - 4 of 4
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    A critical analysis of the use of blended finance for public infrastructure development in South Africa: The IIPSA Case Study
    (2021) Kopeledi, Mosa; Alhassan, Abdul Latif
    Public-Private Partnerships (PPPs) are a commonly used procurement strategy, adopted to advance the achievement of national developmental goals. The transactions match the efficiency of the private sector, with the large market potential of the public sector, to establish mutually beneficial partnerships and address increasingly growing public infrastructure development demand. Blended finance, as a subject on alternative financing for public infrastructure finance, has gained popularity in developing counties with poor balance sheets and deteriorating sovereign credit ratings, as an option to raise capital to address infrastructure backlogs and developmental challenges by creating commercially viable public infrastructure markets for sustainable development. However, the results on blended finance transactions and initiatives have not realised the benefits purported for the adoption of blended finance in developing countries. This study sought to critically explore the perceptions of stakeholders on the outcomes of blended finance in the Infrastructure Initiative Programme for Southern Africa (IIPSA) programme. A qualitative research method approach is utilised to explore the factors that advanced or hindered the achievement of the objectives of IIPSA, and based on their experience, further identifies CSF for the adoption of blended finance in South Africa. The thematic analysis utilized in the study, reveals that participants do not believe that the objectives of IIPSA were met due to a Mis- alignment in expectations between the European Union and the SA stakeholders. Governance, State Capacity, DFI mandate restriction, Ambiguous communication of programme objectives, Misalignment in Expectations, Resistance to change, Performance measure, Regulatory restrictions, and an Unstable political environment constitute the nine main themes to emerge from the analysis of factors that hindered the achievement of IIPSA objectives. The CSF are organized around six main themes of Context, Institutional Capacity & Coordination, Alternatives to blended finance, Transparency, Motives, and Environment. The study recommendations are categorized at the Country level, where environmental factors are fundamentally at play, the Institutional Capacity level, where the competency factors of the implementing institutions are highlighted, and at the Project level, where the study relates these to motivation factors of the stakeholders.
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    Open Access
    Do property stokvels allow for greater economic inclusion than traditional mortgages?
    (2023) Matshaka, Lethu Mzikaphalo; Alhassan, Abdul Latif
    Since the dawn of democracy in 1994 South Africa has made incredible strides in diverse areas, thereby cementing its place as one of the largest and most advanced economies on the African continent. However, there are areas where progress still leaves much to be desired such as the provision of quality housing, particularly to low-income earners in the country. Since 1994, the South African Government has adopted various interventions with the aim of expediting the supply of housing to ordinary South Africans and thereby ensure a right to adequate housing as enshrined in the South African Constitution. As the housing backlog seems to be everincreasing, another increasingly popular phenomenon in South Africa is that of a property stokvel. South Africans of all class put money together for the aim of gaining access to property in some form or another. Simply put, the concept of an ordinary stokvel, where South Africans would pool money to buy groceries at the end of a given year, has been adapted to enable people to now gain access to property (as opposed to simply purchasing groceries). There were three main objectives to the study. They are: to explore the challenges faced by South Africans of a lower economic class that prevent them gaining access to traditional mortgage financing from banks in South Africa; To understand the motivations for participating in property stokvels in South Africa and; To understand which, between property stokvels and mortgage financing, is more appropriate for acquiring property in South Africa. The sample of participants was drawn from individuals who have participated in property stokvels, and qualitative, semi-structured interviews were conducted with these participants. From the thematic analysis of the interview data, the study found that that there are various challenges related to traditional housing finance applications such as a complex application process, the fear of rejection by banks, the associated anxieties, and the lack of both affordability and flexibility associated with traditional housing finance. Moreover, the study found that some of the main reasons people participate in property stokvels are property affordability and long-term investment goals, strong and effective leadership in property stokvels, their flexibility and relevance to members' needs, access to large scale opportunity, and building collectively whilst being debt free. Finally, the study highlighted various challenges associated with property stokvels such as the time it took for the property to be transferred to the participants. Notwithstanding these challenges, the study found that the benefits of property stokvels outweighed their challenges. It also found that property stokvels were more appropriate than mortgage financing, particularly for low-income earners, for purposes of gaining access to property. The study recommends that property stokvels should be used more extensively in the mainstream economy to facilitate property purchases. This is especially true for low-income groups in South Africa. It is also recommended that banks should amend their processes to ascertain how they can help property stokvels operate more effectively so as to give ordinary South Africans more widespread access to property
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    Exploring private sector challenges in financing ppps in botswana
    (2023) Masuga, Therisanyo; Alhassan, Abdul Latif
    The need to invest in infrastructure globally is well documented, and its role in economic growth is hotly debated. The current state of Africa's infrastructure is such that it needs huge capital investments, and Botswana is no exception. Botswana faces challenges in financing and delivering infrastructure assets, maintenance and upgrades, and meeting operational obligations for existing infrastructure. Historically, the government has funded infrastructure projects as part of its expenditure budget, supported by relatively high levels of government revenue. This situation is changing quickly, given the tight fiscal conditions driven by reduced revenue from the mining sector and the shocks brought about by the coronavirus pandemic - among other things. The current situation has forced the government to consider alternative ways of financing infrastructure, which include public-private partnerships (PPPs). The idea of PPPs was first mentioned in the 2002/2003 budget speech, and the PPP framework was approved in 2009 - however, only two projects (the SADC head office and Ombudsman office) have been delivered to date, which is disappointing and warrants investigation. Against this background, the study had two objectives: first, to assess whether the Public Investment Program (PIP) for projects is suitable for PPPs, and second, to identify factors, if any, that affect private sector participation in financing PPP projects. The study employed the thematic analysis technique to analyse semi-structured interviews conducted with 13 participants. The finding of the study indicates that the current PIP is not suitable for PPP projects, as there is little private sector involvement, and the information submitted for PPPs cannot be the same as for other projects which will be government funded. The study also revealed five challenges to the private sector: capacity issues and a lack of technical expertise, unclear legal/regulatory frameworks, unclear mandates and responsibilities for statutory bodies and ministries, unreasonable execution duration, and inadequate stakeholder engagements. Based on the findings, it is recommended that the government needs to build technical expertise and capacity at both the government and private sector levels. The government should also appoint a PPP advisory board to conduct a holistic review of laws, procurement policies and mandates for statutory bodies to ensure that they are fully supportive of PPPs. Finally, the current PPP frameworks should not only be reviewed but should also be expanded upon to include issues such as stakeholder engagements
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    Is Sub-Saharan Africa likely to yield demographic dividends in the 21st century?
    (2023) Ngcongo, Nokukhanya; Alhassan, Abdul Latif
    Sub-Saharan Africa (SSA) has been undergoing an increase in population, which has seen the region grow from 0.55 billion people in 1990 to 1.17 billion in 2021. By 2100 it is estimated that SSA will be accounting for 35 percent of the global population - up from 14 percent in 2019. This increase in population will result in an increase of the working age population, which in turn presents an opportunity to yield demographic dividends. Demographic dividends occurs when there is a substantial increase in economic growth due to an increase in working age population. This dissertation examines the impact of the increase in (i) working age population (ii) female working age population on economic growth. In addition, the study also examines the impact of human capital and savings on economic growth, as they are co-determinants of demographic dividends. The study uses dynamic panel data from 40 countries within the region over a period of 2000 to 2018, using GDP per capita to represent economic growth while controlling for natural resources, rule of law, technology and trade openness. The Pooled Mean Group (PMG) and the two-step difference Generalised Method of Moments (GMM) were used to predict the relationship amongst the dependent and independent variables. The main findings of the study using PMG estimation are that: (i) there is a negative statistically significant relationship amongst working age population, female working age population and GDP per capita, due to the unproductive labour impact and low income levels; (ii) there is a positive and statistically significant relationship amongst human capital (education and health) and GDP per capita; and (iii) savings has a positive and statistically significant relationship with GDP per capita, however the impact is minimal due to the high dependency ratio and the population still consuming a significant portion of their income. Further to the PMG estimation, the GMM estimation was applied on the panel data to evaluate the validity and robustness of the PMG empirical results. The GMM estimator observed a similar directional relationship as the PMG amongst the main variables. An analysis was also performed on sub-regional data, which showed similar observations to the macro results of SSA. The empirical results from this study clearly highlight the significance of improving human capital in the region, as this will advance labour supply in terms of productivity, innovation and technological enhancements, which will have a positive impact on GDP per capita and increase the earning potential of the population. This will then become a catalyst for improved savings and wealth accumulation