Finance & Economics Review
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The Effect of Financial Deepening on Economic Growth in the East African Community
Get PDFPurpose: The study’s objective is to determine the effect of financial deepening on the economic growth of the East Africa Community bloc. Specifically, it aims to establish the effect of the rate of broad money, credit to the private sector, and the rate of value of the traded stock on economic growth.
Methodology: The study used descriptive research design and employed the fixed effect model in regression analysis. Broad money was used to proxy the rate of money supply, credit to the private sector was used to represent credit financing while the volume of the traded stock was used as a measure for financial market investment.
Results: The findings revealed that all three indicators of financial deepening namely, broad money, credit to the private sector, and volume of traded stock had a positive and significant effect on economic growth in East Africa Community. The coefficient for broad money was 0.4410, the coefficient for credit to the private sector was 0.4022, while the coefficient for the volume of the traded stock was 0.1367. The model had an F statistic of 103.50, confirming its suitability.
Implications: The study recommends that the East Africa Community governments should place more emphasis on the efficiency and of money supply, investment, and distribution by commercial banks. The study also recommends that the governments of East Africa Community countries should continue pursuing policies that promote access to credit such as ensuring that interest rates are low. Additionally, the capital market authorities of the East Africa Community countries should conduct sensitization campaigns to promote high participation in the stock market and other capital market products
Assessment and Establishment of Honey Bee Flora Calendar to Increase Honey Production in Selected Areas of SNNPR State, Ethiopia
Get PDFPurpose: This study was conducted to identify and document major honeybee flora, its flowering period, and nectar and pollen potentials in three zones representing, three agro-ecologies in SNNP.
Methodology: Three districts in each zone were used for the study and a total of 120 beekeepers were purposively selected and interviewed to collect primary data.
Results: The results of flora inventory indicated that abundant plant identified and ranked by farmers as very good (56.36%), good (27.27%) and poor (16.37%) while bee floras in terms of honey quality were categorized as very good (48.18%) good (25.45%) and poor (26.36%.) In terms of its acceptance by honeybees, the flora was categorized as very good (45.4%), good (21.81%) and poor (32.73%). The result of pollen analysis indicated that the majority of the Shebedino and Dale woreda (district) was dominated by Vernonia, Eucalyptus, Guizotia, and Coffee Arabica species. On the other hand pollen samples collected from the honey of Wonago and Kochere woreda were dominated by Lipidium, coffee Arabica, Eucalyptus and Guizotia species. The study identified an abundance of different classes of plants in different agro-ecologies as Asteraceae in highland, Acanthaceae in midland and Mimosaceae families in the lowland. Honey plants flower throughout the year except in June, July, and January in midland, highland, and lowland respectively. However, the highest proportion of honey plants flowers from August to October, with a peak in August and September and March to May with a peak in March. Based on flowering periods, the major and minor honey flow periods for selected areas of SNNP were respectively noted to be from August to October and from March to May.
Implications: Based on the result of this study, it is concluded that beekeeping productivity is strictly dependent on the availability of floral resources of a particular area. It is therefore recommended that farmers get prepared in line with the flowering calendar, to conserve the identified bee plant species to boost honey production. An in-depth analysis of bee plants throughout the year, determination of total carrying capacity, propagation, wise use and conservation of floral vegetation deserve special attention for better integration of the sector with the honey flow and potential of flowering plants in the study area. The search for dry season-resistant major honey bee flora and the provision of practical training for farmers deserve special attention
Appraising Financial Development Indicators and Capital Market Performance : Empirical Evidence from Nigeria
Get PDFThis study appraised empirically Financial Development Indicators (FDIs) and Capital Market Performance in Nigeria. While Financial Depth, Financial Access and Financial Efficiency served as proxy for FDIs and independent variable; Market Capitalization was used as proxy for Capital Market Performance and the dependent variable. Primary data were sourced employing Survey design and analyzed using Pearson Product-Moment Correlation Coefficient, (PPMCC) technique denoted by ‘r’. The robustness of findings which showed that hypotheses one (H01) and two (H02) exhibited high coefficients and passed the test of significance led us to conclude that the variables: Financial Depth and Financial Access are relevant to policies formulated to affect Market Capitalization in Nigeria. However, hypothesis three (H03) portends rather low results suggesting that though a positive relationship exists between Financial Efficiency and Market Capitalization, the strength of relationship is moderate and cannot be considered too relevant to policies formulated to affect Market Capitalization in Nigeria. We therefore recommend that financial sector authorities and stakeholders should ensure that innovative facilities and policies that enable access to finance; that give ability to financial markets to imbibe large trade volumes be put instituted to facilitate proper development of the sector and that serious attention should be given to on-the-job-training, retraining and financial courses for employees to acquire industry knowledge of the job in order to enhance their performance
Non-Oil Exports and Manufacturing Sector Growth in an Oil-Rich Country in Africa: Case of Nigeria
Get PDFPurpose: This paper presents an analysis of the effect of non-oil exports on the manufacturing sector growth in an oil-rich country in Africa – Nigeria from 1986 to 2018. In clear terms, we evaluated how manufacturing sector capacity utilization is affected by non-oil exports.
Methods: The Ordinary Least Square (OLS) estimation technique was applied in estimating the model and was lagged by two years. The long-run relationship was determined using the traditional Johansen co-integration methodology. How manufacturing sector growth is affected by non-oil exports was evaluated using the Granger Causality technique. The Augmented Dicky-Fuller (ADF) and Phillips-Perron tests were applied to check the stationarity properties of the data.
Results: The growth in the manufacturing sector in Nigeria has not been significantly affected by non-oil export despite the various non-oil export promotion strategies initiated by the government.
Implication: A major implication of the finding is that the cost and access to financial services for non-oil exporters should be reduced or relaxed by the Central Bank of Nigeria. High-interest rates charged by commercial banks and little disbursement characterized by the volume of commercial banks credit affect manufacturing firms concerning acquiring modern plants and machinery which results in a poor quality of non-oil exports
Demand Analysis for Solid Fuel and Its Substitutes as Domestic Energy in Imo State, Nigeria: Application of Quadratic Almost Ideal Demand System (QUAIDS)
Get PDFPurpose: This study aims to model the demand analysis for solid fuel and its substitute for domestic cooking energy among households in Imo State.
Methods: Data on socio-economic characteristics of the respondents, monthly expenditure on energy used for domestic cooking, unit prices, and quantity of different energy sources were collected using a multi-stage sampling technique from 262 households I Imo State. Data were analyzed using descriptive, quartile distribution and QUAIDS inferential statistics to achieve the objectives of the study.
Results: The empirical analysis of the demand for household energy usage revealed that the quadratic expenditure term is statistically significant in firewood, sawdust, and wood-shaving expenditure share equations. It implies that their null hypothesis of expenditure linearity is strongly rejected. Furthermore, the prices and demographics of the household head significantly influence the budget shares of the different energy used. Expenditure elasticity of all the energy sources are elastic. Own price (Marshallian and Hicksian) of firewood, sawdust, and kerosene are price elastic while charcoal and wood-shaving are price inelastic. The Uncompensated Marshallian\u27s cross elasticity of almost all energy sources are complementary. However, the result of the compensated- Hicksian\u27s cross elasticity values indicated that almost all the energy uses are substitutable except for firewood – charcoal, firewood-wood shaving, firewood-kerosene, and sawdust-wood shaving that are complementary.
Implications: The result indicates that the timber products and its substitutes demand domestic cooking follow both energy ladder and stacking principles as households can quickly switch to a better energy source at the same time exhibit their dynamism in the ability to combine both traditional and modern fuels to meet their domestic energy needs based on price and affordability. The study, therefore, recommends that younger females in the household should be targeted in demonstrating the demand for cleaner energy using educational facilities and reduction in unit prices of such energy in the area
Profitability Determinants of Palm Oil Marketing in Umuahia Agricultural Zone of Abia State, Nigeria
Get PDFPurpose: This study aims to ascertain the profitability determinants of palm oil marketing in Umuahia Agricultural Zone of Abia State, Nigeria.
Methods: Data on socio-economic characteristics of the respondents, cost, and returns of palm oil marketing in the area were collected using a multi-stage sampling technique from 60 palm oil marketers in Abia State. A descriptive statistical technique, marketing margin, profitability models, and the ordinary least squares multiple regression techniques were used to analyze the data obtained.
Results: The empirical analysis showed that palm oil marketers mean age to be 47 years with a household size of 5 persons. 77% of the palm oil marketers were males while only 23% were females. The mean marketing experience of the palm oil marketers was estimated to be 16 years. The gross and net marketing margins were estimated at N55, 288.91, and N54, 076.91 respectively. The marketing margin was found to be ?81,221.22 and profitability was estimated at 0.33. Age, household size, education, and marketing experience were statistically significant at 5% and influenced the profitability of palm oil marketing in the area.
Implications: Considering the net profit obtained from palm oil marketing in the area, there is a need to intensify its management and marketing strategies to further harness more profitable outcomes in the future. Also enabling environment should be created to make production and marketing of the product less stressful, especially for women entrepreneurs
Internal Control Systems Implementation and Fraud Mitigation Nexus among Deposit Taking Saccos in Kenya
Get PDFPurpose: This paper analyses the relationship between the implementation of internal control and fraud mitigation among the savings and credit cooperatives societies (Saccos) in Kenya.
Methodology: To achieve the objective, specific variables were formulated based on the five components of internal control model. Particularly, the research focuses on the effect of control environment, control activities, monitoring, information and communication, and risk assessment, on fraud mitigation. Data was collected through the use of a structured questionnaire. Ordinary Least Square Regression approach was used for analysis.
Results: The data analysis found that all the mentioned variables significantly affect fraud mitigation among Saccos in Kenya.
Implications: The analysis highlighted that there is a need for Saccos to strive and implement internal control systems to a higher extent to cure the persistent problem of fraud that they grapple with. The analysis also recommends that Saccos should institute proper mechanisms to provide adequate checks during staff recruitment, install adequate security, provide regulation of valuable information access, they should also conduct regular monitoring of third party links with personnel as measures to mitigate fraud
International Trade Costs and Trade Flows: Evidence from the West African Monetary Zone (WAMZ)
Get PDFPurpose: The study examines the effect of international trade costs on trade flows in the West African Monetary Zone (WAMZ), a sub-regional economic bloc within the Economic Community of West African States (ECOWAS).
Method: Six member countries of the WAMZ, based on data availability, are examined using panel data estimation technique and the Fully Modified Ordinary Least squares (FMOLS), which is employed to test for the robustness of results, for the sample period of 2006-2018.
Results: The study finds a negative and significant effect of international trade costs on trade flows in the WAMZ sub-region. Time to trade is also found to be negatively and significantly related to trade. Exchange rate, financial development (measured by commercial banks\u27 credit to the private sector), and real GDP growth rate (a measure of growth in annual national income/economic size) have a positive and significant impact on trade in the sub-region. The study further finds evidence that the ease of doing business is positively related to trade in the sub-region, but the impact is weak.
Implications: In the light of the empirical findings, the study recommends that policy measures and strategies to reduce international trade costs and time to trade through simplified and harmonized trade procedures be implemented in the sub-region. Policies to encourage national income growth, rapid development of the financial sector and improved ease of doing business should also be implemented in the zone. These should be supported with sound and stable macroeconomic exchange rate management policies, in order to enhance trade and integration in the sub-region
The Economic Impact Assessment of the Novel Coronavirus on Tourism and Trade in Kenya: Lessons from Preceding Epidemics
No full textPurpose: This paper aims to assess the impact of contemporary Coronavirus Pandemic on tourism and trade with its potential implications on the Kenyan economy.
Method: The study considered the cases of Severe Acute Respiratory Syndrome (SARS), Middle East Respiratory Syndrome (MERS) and Ebola epidemics to provide an understanding of the possible impacts that the novel coronavirus pandemic could have on the economy.
Results: This study established that the demand and supply shocks of the pandemic will inevitably impact Kenya’s economy specifically, the tourism and trade sectors. The Kenyan government has imposed several measures in an attempt to combat the spread of the coronavirus and cushion the country against a possible economic downturn. The study established that the policies imposed have largely focused on demand shock management.
Implications: To effectively minimize the impacts of the pandemic shocks on the economy, it will be prudent for the Kenyan government to design policy responses with a blend of short term and long term orientations. The policies should be multifaceted and their design should involve stakeholders from all the relevant sectors
Firm\u27s Value Prediction Based on Profitability Ratios and Dividend Policy
Get PDFPurpose: This study aims to empirically prove the research framework regarding the Firm’s Value based on Profitability Ratios associated with Dividend Policy. The firm\u27s Value is measured using a Price-to-Book Value (PBV) Approach.
Methods: This study included a sample of 11 firms under the automotive and components sib sector listed in the Indonesia Stock Exchange. It included data for the period of 2014-2018. This study applied path analysis using the Sobel test of the direct and indirect effects using IBM SPSS 23.0.
Results: The study finds that Profitability Ratios has no significant effect on the Dividend Policy, while the Dividend Policy has no significant effect on Firm\u27s Value too. However, the Dividend Policy does not mediate the effect of Profitability Ratios on the Firm\u27s Value.
Implications: This study could be extended further by considering all listed firms of IDX which may provide us more insights into the measurement of the financial ratios in the context of Indonesia