Development Finance Agenda (DEFA) - Volume 1, Issue 2, 2015
Volume 1, Issue 2, 2015
Source: Development Finance Agenda (DEFA) 1, pp 4 –5 (2015)More Less
Indices have been around for centuries to measure performance and change. Many initiatives have been launched to construct weighted benchmark indexes to reproduce the underlying performance of emerging and African domestic bond markets. Investors use indices to measure the performance (i.e. beta) in those particular markets. The debt crises in Europe for both sovereign and corporate bonds have steered some investors to query the advantages of indexes constructed based on the traditional technique of market-capitalization. This paper looks specifically at cap-weighted fixed income indices.
Author Christian-Lambert NguenaSource: Development Finance Agenda (DEFA) 1, pp 8 –9 (2015)More Less
In Africa, the concern of poverty at the forefront of economic policy, the need for inclusive growth and sustainable development, inter alia, brings forward the inevitable question of the monetary policy responsibility. Hence, using a statistical and theoretical debate method, I demonstrate that the Credible Monetary Policy paradox is traceable to Africa. Accordingly, with the promising economic environment in Africa, the promotion of a monetary policy oriented toward improving economic growth under the constraint of price stability is highly recommended. There are some noteworthy signs such the recent decision by the several central banks including the two CFA zone central banks, the European central bank, the central bank of South Africa, the Federal Reserve's to either maintain interest rates at a low level or reduce it despite tightening measures of monetary policy taken by the earlier in the year in the search of economic expansion. These are eloquent examples to reassure other African central banks in the choice of the pro-growth monetary policy option.
Author Jean SaldanhaSource: Development Finance Agenda (DEFA) 1, pp 12 –13 (2015)More Less
Financing forms an integral part of the Post-2015 framework and will impact the realisation of the Sustainable Development Goals. This article highlights a number of key features which should be addressed in the Addis Ababa agreement including the imbalances of the global tax governance system, the insubstantial regulation of financial actors, the minimal control of financial markets, the lack of responsibility in the financial sector concerning risk, the insufficient regulation of FDI, and the deficiencies in the current sovereign debt governance regime. It recommends that an agreement towards financing the sustainable development goals be built on common but differentiated responsibility and fair burden-sharing; development finance based on solidarity and grounded in the development effectiveness principles. A number of basic principles which should be set out in the agreement for effective financing arrangements and realisation of the SDGs, are presented. These include visibility and transparency of financial assets and flows, the application of human rights and environmental rules into investment and credit criteria, and incorporation of good governance into financial policy, amongst others.
Author Heleen GoussardSource: Development Finance Agenda (DEFA) 1, pp 16 –17 (2015)More Less
The World Bank estimates that the cost of bridging the infrastructure gap in Africa requires an annual expenditure of USD 93bn, or less than 5% of the total GDP of the continent. RisCura's 2015 Bright Africa report examines the sources and extent of government funding per region in order to evaluate governments' abilities to raise capital to spend on the construction of infrastructure. This article looks at the current infrastructure within Africa in terms of its road, rail and energy.
Author Nicolaas T. StrydomSource: Development Finance Agenda (DEFA) 1, pp 20 –21 (2015)More Less
Development Finance is generally a long-term endeavour, and therefore looking back into history is often a necessity to determine the success of a project or investment. By combining elements from the historical method and the case study method, this article provides a first glance at the historical case study in the context of Development Finance research.
Author Michael BennettSource: Development Finance Agenda (DEFA) 1, pp 24 –25 (2015)More Less
As the outstanding volumes of both sukuk and green bonds continue to expand, the convergence of these two markets begins to appear inevitable. "Green sukuk" (i.e., sukuk which fund environmentally beneficial projects) would be an effective tool to put Islamic capital to work financing the development of green infrastructure.
Source: Development Finance Agenda (DEFA) 1, pp 26 –29 (2015)More Less
To the best our knowledge, in the first empirical macroeconomic examination of the nexus between financial intermediation and mobile phones, Asongu employs two conflicting financial system definitions in the assessment of how mobile phones have stimulated financial development in Africa. Within the framework of the dominant International Monetary Fund's International Financial Statistics (2008) definition, mobile phones are established to be negatively associated with financial intermediary dynamics of depth, activity and size. Conversely, when the previously neglected informal financial sector is integrated into the conception, definition and measurement of the financial system, mobile phones are positively (negatively) correlated with the informal (formal) financial intermediation sector. The empirical evidence is based on 52 African countries. Causality in the established linkages has been confirmed in subsequent studies by the same author. At least three policy implications derive from the findings. First, the role of informal financial intermediation is increasing to the detriment of formal financial mechanisms. Second, in order to capture the positive effect of mobile phones on finance, it is imperative to integrate the missing informal financial sector component into the IMF definition of the financial system. Third, it is a wake-up call for more scholarly research on: (i) macroeconomic financial development implications of mobile phone penetration and (ii) monetary policy instruments in the face of burgeoning 'mobile phone'-oriented financial intermediation.