The effect of budget deficit on interest rates in the countries of sub-Saharan Africa: A panel VAR approach

2016 ◽  
Vol 50 (6) ◽  
pp. 105-120 ◽  
Author(s):  
Ikechukwu Kelikume
Keyword(s):  
Interest Rates ◽  
Budget Deficit ◽  
Sub Saharan Africa ◽  
Panel Var ◽  
Sub Saharan

Debt, revenue woes to push African states to seek help

2016 ◽  
Keyword(s):  
Interest Rates ◽  
Financial Management ◽  
Sovereign Debt ◽  
Sub Saharan Africa ◽  
Municipal Bond ◽  
Content Type ◽  
Finance Minister ◽  
Sub Saharan ◽  
Commercial Sources ◽  
The Government

Subject Outlook for sovereign debt in sub-Saharan Africa. Significance Nigerian Finance Minister Kemi Adeosun on January 31 announced that the government is in "exploratory talks" with the World Bank to borrow 2.5 billion dollars. Squeezed by low commodity revenues, sub-Saharan African states (SSA) are struggling to manage their external debt, which has grown by 90% to 46.5 billion dollars overall during 2010-14, much of it from commercial sources. Impacts South Africa will dominate SSA municipal bond issuance since most states lack adequate subnational financial management. Donors may use the new loans to Angola and Nigeria as leverage for sharper currency depreciation. Yet this would pressure central banks, which will likely raise interest rates to support thier currency and mitigate inflation. Despite falling copper revenues, Zambia will likely delay seeking IMF assistance since reform conditions will prove politically toxic.

Financial inclusion and financial sector development in Sub-Saharan Africa: a panel VAR approach

2019 ◽  
Vol 15 (4) ◽  
pp. 444-463
Author(s):  
Ebenezer Bugri Anarfo ◽  
Joshua Yindenaba Abor ◽  
Kofi Achampong Osei ◽  
Agyapomaa Gyeke-Dako
Keyword(s):  
Financial Sector ◽  
Financial Inclusion ◽  
Sub Saharan Africa ◽  
Outcome Variable ◽  
Panel Var ◽  
Full Sample ◽  
Content Type ◽  
Financial Sector Development ◽  
Sub Saharan ◽  
Dynamic Link

Purpose The purpose of this paper is to investigate the dynamic link between financial inclusion and financial sector development (FSD) in Sub-Saharan Africa. Design/methodology/approach This paper employs a panel vector autoregressive framework to examine the dynamic link between financial inclusion and FSD in Sub-Saharan Africa. Findings The findings indicate that there is a reverse causality between FSD and financial inclusion in both the Sub-Saharan Africa countries sample and the full sample. It is evident that financial inclusion is a driver of FSD and vice versa. Practical implications The practical implication of this study is that financial inclusion should not only be pursued as a policy objective but it could also be an outcome variable of FSD and vice versa. This implies that African economies and governments in their effort to enhance financial inclusion, FSD can serve as a policy tool. This means that policies aimed at promoting financial inclusion will not impede FSD because the two are complementary. This suggests that we can achieve financial inclusion without sacrificing FSD and vice versa. Originality/value This paper provides first empirical evidence of the link between financial inclusion and FSD from the Sub-Saharan Africa perspective using data sourced from World Development Indicators spanning from 1990 to 2014 for 48 Sub-Saharan African economies and 217 economies in the world for the full sample.

scholarly journals Towards a Blockchain Special Purpose Vehicle for Financing Independent Renewable Electricity Projects in Sub-Saharan Africa

2020 ◽  
Author(s):  
Olakunle Alao ◽  
Paul Cuffe
Keyword(s):  
Interest Rates ◽  
Electricity Sector ◽  
Sub Saharan Africa ◽  
Renewable Electricity ◽  
Special Purpose Vehicle ◽  
Revenue Collection ◽  
Main Challenge ◽  
Debt Finance ◽  
Sub Saharan ◽  
Sustainable Electricity

Sub-Saharan Africa requires affordable, reliable, and sustainable electricity to boost its economic, social, and human development. The main challenge posed to the region's electricity sector is the large investment gap needed to finance new power projects. The employment of new and innovative financing options is required to bridge this investment gap. Independent power projects have become one of the fastest-growing sources of new finance in the region. However, their development is constrained by the limited availability of debt finance for project implementation. The limited capital and bureaucratic burden of traditional financial institutions coupled with the high risks in the region ensures that the debt finance required by independent power projects is raised only after an arduous voyage and at high interest rates. We address these challenges by proposing a novel decentralized finance instrument, a blockchain special purpose vehicle that streamlines the processes in the financial layer of a traditional special purpose vehicle -- finance mobilization, revenue collection, and revenue disbursal. Specifically, the proposed decentralized finance instrument facilitates the mobilization of finance for the special purpose vehicle from a location-independent crowd, revenue collection from the electricity offtaker in a risk-mitigated manner, and disbursal of eventual project revenues to investors.

scholarly journals Budget Deficit and Economic Growth in Sub-Saharan Africa: A PMG Approach

2020 ◽  
pp. 1-10
Author(s):  
Gbenga Oladapo Awolaja ◽  
Ikponmwosa Osagie Esefo
Keyword(s):  
Economic Growth ◽  
Significant Relationship ◽  
Budget Deficit ◽  
Estimation Method ◽  
Sub Saharan Africa ◽  
Policy Makers ◽  
Pooled Mean Group ◽  
Long Run ◽  
Short Run ◽  
Sub Saharan

The relationship between budget deficit and economic growth remains one of the widely debated topics among policy makers and economists in both developed and developing countries of the world. This paper empirically investigated the long run and short run relationship between budget deficit and economic growth in sub-Saharan Africa countries from 1991 to 2018 using Panel data for twenty (20) sub-Saharan Africa Countries. The estimation technique employed in the study was the Pooled Mean Group (PMG) estimation method and the regression results revealed that in the long run, budget deficit has a negative and significant relationship with economic growth whereas in the short run, it has a positive and significant relationship with economic growth. The study concluded that government should reduce the overall recurrent expenditure as it will help to mitigate the problem of budget deficit that leads to debt accumulation in sub-Saharan Africa countries and increase expenditure on developmental projects.

scholarly journals Towards a Blockchain Special Purpose Vehicle for Financing Independent Renewable Electricity Projects in Sub-Saharan Africa

2020 ◽  
Author(s):  
Olakunle Alao ◽  
Paul Cuffe
Keyword(s):  
Interest Rates ◽  
Electricity Sector ◽  
Sub Saharan Africa ◽  
Renewable Electricity ◽  
Special Purpose Vehicle ◽  
Revenue Collection ◽  
Main Challenge ◽  
Debt Finance ◽  
Sub Saharan ◽  
Sustainable Electricity

Sub-Saharan Africa requires affordable, reliable, and sustainable electricity to boost its economic, social, and human development. The main challenge posed to the region's electricity sector is the large investment gap needed to finance new power projects. The employment of new and innovative financing options is required to bridge this investment gap. Independent power projects have become one of the fastest-growing sources of new finance in the region. However, their development is constrained by the limited availability of debt finance for project implementation. The limited capital and bureaucratic burden of traditional financial institutions coupled with the high risks in the region ensures that the debt finance required by independent power projects is raised only after an arduous voyage and at high interest rates. We address these challenges by proposing a novel decentralized finance instrument, a blockchain special purpose vehicle that streamlines the processes in the financial layer of a traditional special purpose vehicle -- finance mobilization, revenue collection, and revenue disbursal. Specifically, the proposed decentralized finance instrument facilitates the mobilization of finance for the special purpose vehicle from a location-independent crowd, revenue collection from the electricity offtaker in a risk-mitigated manner, and disbursal of eventual project revenues to investors.

scholarly journals Bankability of a public private partnership in agricultural sector: A project in Sub Saharan Africa

2019 ◽  
Vol 65 (No. 5) ◽  
pp. 212-222 ◽  
Author(s):  
Donato Morea ◽  
Marino Balzarini
Keyword(s):  
Interest Rates ◽  
Cash Flow ◽  
Agricultural Sector ◽  
Financial Analysis ◽  
Development Project ◽  
Public Private Partnership ◽  
Debt Service ◽  
Sub Saharan Africa ◽  
Private Partnership ◽  
Sub Saharan

A public private partnership can be an effective approach to deal the projects with modern agricultural development in Sub Saharan Africa. A former financial analysis of a development project, carried out by the authors, showed that public and private partners can effectively join in a mutually satisfactory venture capital. The same project is now complemented with a bankability study, considering lenders options, equity allocation, collaterals and likely applicable interest rates, available cash flow and sustainable debt service repayment to provide a through financing scenario for each partner’s perspective assessing the relevant Debt Service and Loan Life Cover Ratios. Cash flow and interest rates fluctuation impacts are eventually investigated with a sensitivity analysis to prove the robustness of the proposed scenario.<br />

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