AfricaGrowth Agenda - latest Issue
Jul / Sep 2016
Source: AfricaGrowth Agenda 2016 (2016)More Less
Chummun and Ojah in the first article of this issue investigates the relationship between savings and financial inclusion in developing countries through a review of current literature. The authors argue that countries with higher propensity to save also have higher chances of successful financial inclusion policies. In addition, such countries are able to improve on access to quality education, effective healthcare and better quality of life through consumption smoothing.
Source: AfricaGrowth Agenda 2016, pp 4 –9 (2016)More Less
We examine the relationship between aggregate savings and financial inclusion in developing countries. Through a review of the literature, we advance the hypothesis that financial inclusion policies are likely more successful in countries with a higher propensity to save (higher savings pool) than in countries with lower savings pool. We argue that because higher aggregate savings enable accumulation of loanable funds, households and SMEs can tap into such a pool to participate more meaningfully in welfare enhancement and incremental production. Similarly, countries with large aggregate savings, and their attendant large pool of loanable funds, should enable more financial inclusion for households; and in turn, enable access to quality education, effective healthcare and overall better quality of life, mainly via consumption smoothing. Finally, we point to possible ways of mobilizing the savings needed to enable effective financial inclusion.
Carbon taxes in South Africa : unintended consequences for investments in greenhouse gas mitigation technologies and the resulting emissionsAuthor Heinz Eckart KlingelhoferSource: AfricaGrowth Agenda 2016, pp 10 –14 (2016)More Less
South Africa is planning to introduce a carbon tax as a Pigouvian measure to reduce greenhouse gas emissions from 2017. This paper examines how such a carbon tax regime can affect the willingness to invest in greenhouse gas mitigation technologies. It identifies the determinants of the price ceiling of such an investment under imperfect market conditions and interprets them as a sum of (corrected) net present values of the payments and the interdependencies arising from changes in the optimal solutions before and after realising the investment. This discovers that on imperfect markets over-compensation effects between different price determinants may lead to sometimes contradictory and unexpected consequences of increasing carbon taxes for investments in greenhouse gas mitigation technologies and the resulting emissions. Under certain circumstances, such investments may be discouraged and, when still undertaken, even increase the emissions. However, these results can be interpreted in an economically comprehensible manner.
Source: AfricaGrowth Agenda 2016, pp 16 –19 (2016)More Less
Financial exclusion continues to be a serious problem in Zimbabwe. This study sought to examine the causes of financial exclusion in the Zimbabwean financial sector. This research was based on quantitative research approach. Data were collected from the commercial banks, building societies and the savings bank managers. Factor analysis was used to establish the main underlying causes of financial exclusion. The results indicate that the main causes to financial exclusion were liquidity crunch, cultural and occupation barriers, individual barriers, limited accessibility, financial conditions and gender issues. It is hoped that if the financial institutions management and policy makers take the results of this study seriously, the problem of financial exclusion in the country can be minimized.
Is market automation associated with improved informational efficiency? Case study of the Nairobi Stock ExchangeSource: AfricaGrowth Agenda 2016, pp 20 –25 (2016)More Less
The 2006 automation of the Nairobi Stock Exchange (NSE) was expected to improve the informational efficiency of the market. This paper seeks to empirically establish if the previous assertion was achieved using daily NSE 20-share index data from January 2001 to December 2011. Results of the autocorrelation, variance ratio and BDS tests suggest that the market is inefficient. However, the results of the Hurst ratio indicate an improvement in efficiency with the ratio close to 0.5. The results are mixed but, in general they indicate that automation has not improved the efficiency of the market.