Demographic Dividend of Ghana: The National Transfer Approach

Author: Eugenia Amporfu, Daniel Sakyi, Prince Boakye Frimpong and Olanrewaju Olaniyan

Article history:
Received: 28 June, 2019
Accepted: 26 April, 2022

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Clarifying and managing demographic changes are central to national economic planning. Yet, how to measure the demographic transition can be fiendishly difficult. This paper breaks new grounds by using the National Transfer Accounts Approach to estimate the lifecycle deficit and the first demographic dividend for Ghana in 2005. The results of the National Transfer Accounts for Ghana indicate that, lifecycle surplus runs for about 30 years and peaks around age 50. Further, there is early entry into and late exit from the labour force, probably due to significant unregulated labour market activities in Ghana, particularly in the informal economy. The results reveal that Ghana started enjoying her first demographic dividend in 1990 and is expected to peak around 2031. The paper proposes some policies geared towards strengthening the labour market which potentially would develop the human capital particularly in the productive ages to help sustain the benefits.

Ghana, National Transfer Accounts, First Demographic Dividend, Lifecycle Deficit, Economic Support Ratio

Are social protection grants alleviating poverty among vulnerable groups in Namibia? - The case of older persons and persons with disabilities

Author: Elina M. Amadhila and Tuliky Shawapala

Article history:
12 January 2021
Accepted: 16 June 2022

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The current discussions in the literature related to social protection grants are general. The lack of specificity inhibits targeted interventions. This study aimed to explore whether, and how, social protection as a financial aid in the form of grants, assists in alleviating poverty (absolute poverty) among older persons and persons with disabilities in Namibia. An interpretive paradigm was followed to obtain real issues shaped by human experiences. Qualitative methodology was employed and semi-structured interviews were used as a tool for data collection. Applying the social contract theory, it was found that, even though social protection in the form of grants assists in taking care of expenses for both groups, absolute poverty is still existent as the funds do not fully cater for basic needs including food, municipal bills, rent, and medical costs. This is because grants for the two vulnerable groups studied in the paper are not regularly adjusted so as to keep up with inflation, for instance. This challenges the concept of “adaptive social protection”. Policymakers should, therefore, re-evaluate policies meant to serve groups considered as vulnerable.

Social protection, older persons, persons with disabilities, poverty, Namibia

Foreign direct investment, human capital and economic growth in the Arab Maghreb countries

Author: Bouzayani Rajab, Abida Zouheir and Abidi Jameleddine

Article history:
Received: 19 November 2021
Accepted: 8 May, 2022

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In a global sphere characterized by the interdependence between capital flows, capital markets of the developing countries open up more foreign direct investment flows through host country development such as human capital development and financial system development. One of the sources of economic growth in the developing countries is the implementation of macroeconomic policies, such as the attractiveness of foreign direct investment, the development human capital, the development institutions and the improvement of the education system. Following the estimation of panel data from the Arab Maghreb countries from 1995 to 2019 through the generalized method of moments, this paper shows the positive and significant effect of foreign direct investment and human capital, and the importance of the interaction in strengthening economic growth.

FDI, Humain Capital, Economic Growth, GMM

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

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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

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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

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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

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

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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

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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 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

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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

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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.

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

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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 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

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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.

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

Author: Samuel E Assabil and Francis Eyiah-Bediako

Article history:

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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

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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

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