African Development Community Member States Research Articles

FinTech—A pathway to financial inclusion? Evidence from Southern African Development Community member states

AbstractThe study investigates the effect of FinTech on financial inclusion in Southern African Development Community (SADC) member states over the period 2011–2021, while also looking at the transmission channels. The study adopts a battery of econometric techniques such as ordinary least squares (OLS), the two‐step system generalized method of moments (GMM) and the Driscoll and Kraay covariance estimator. The study finds that FinTech (proxied by digitization) deepens financial inclusion (access to loan) and a decline in the number of bank branches in SADC member states. This is logical since the operations of FinTech are digital. This implies that an attempt to promote financial inclusion by traditional means such as building physical bank structures may be limited, especially in Africa where large swathes of the populace remain unbanked. As expected, FinTech (measured by automated teller machines [ATMs]) increases the number of bank branches in SADC. We also find that mobile cellular subscription, the share of population with access to electricity and Internet access and mean years of schooling are important transmission channels of FinTech to financial inclusion in SADC. In general, the result shows that FinTech enhances and deepens financial inclusion in SADC member states. The research and policy implications are discussed.

A Foreign Investment Destination Risk Framework: Evaluating the Southern African Development Community Member States

Potential investment risks need to be understood by an investor organisation, which implies that a host country’s environment plays a significant role in attracting foreign investment. This paper’s purpose was to propose a foreign investment risk conceptual framework to serve as a basis for evaluating the Southern African Development Community (SADC) Member States’ investment risk/attractiveness. Firstly, the most appropriate foreign investment risk indicators from the literature were identified to develop a foreign investment risk framework. Ten recent peer‑reviewed studies were used to identify the factors which drive investment risk in emerging markets. We developed a conceptual framework including 16 investment risk indicators grouped into four sections: (i) the business environment, (ii) related taxes on business operations, (iii) the economic environment, and (iv) the human and social environments. Secondly, a comparative analysis of the 16 SADC countries was performed, enabling the ranking of the countries in quadrants of investment risk/attractiveness. Data were downloaded from theGlobalEconomy.com (2022) website for six years, from 2015 to 2020. The literature suggests many investment risk indicators which are grouped differently by researchers to form a conceptual framework to evaluate investment risk. This study’s contribution is that the most popular/prevalent risk indicators were identified to develop the new proposed framework. Furthermore, evaluating the SADC region may also serve as an example of investment risk/attractiveness assessment of emerging markets or least‑developed countries. The practical implication of this paper is that the proposed framework enables transferability since potential investors may connect the fundamentals of this study with their own investigation.

Planning Sustainable Energy Systems in the Southern African Development Community: A Review of Power Systems Planning Approaches

Southern Africa has a huge potential for renewable energy sources such as hydro, solar, wind, biomass, and geothermal. However, electricity access remains a key policy issue for most member states, with a global average access to electricity of only 54% in 2019. This low electrification rate is a strong motivation for member states to increase renewable energy use and improve access to electricity for all. The goal of this paper was to present a literature review of methodologies, energy plans, and government programs that have been implemented by the Southern African Development Community member states to address the region’s low average electrification rate and greenhouse gas emission reduction targets. The study presents the most commonly used methodologies for the integration of renewable energies into electrical systems, considering the main grid and distributed generation systems. LCOE minimization methodologies and software options, such as GIS, HOMER, LEAP, and EnergyPLAN, are the most common among the identified studies. The traditional method of electrifying by expanding the grid has not contributed to the eradication of energy poverty in rural areas. Therefore, to improve electricity access in Southern Africa, it is essential to consider off-grid solutions based on renewable energy sources.

Effects of external financial flows on income inequality in selected Southern African Development Community member states

Background: The developmental goals of various emerging markets are quantitative targets set to reduce income inequality, alleviate poverty, reduce unemployment and achieve continuous inclusive economic growth amongst other key economic performance indicators. The interest is mainly on what can be done on economic performance to fight escalating inequality, increase economic growth and maintain low inflation amongst other economic indicators.Aim: The study investigates the effects of external financial flows on income inequality in the Southern African Development Community (SADC) region.Setting: The study shows the long-run stable relationship between the set of variables.Methods: The study have used the panel cointegration, autoregressive distributed lag and causality techniques.Results: The findings are that in the long run, remittances can strongly reduce income inequality, foreign direct investment (FDI) and cross border bank lending have an increasing effect and foreign aid can weakly reduce inequality. In the short run, FDI and cross border bank lending can strongly explain income inequality, and negative remittances and foreign aid are insignificantly explaining income inequality. Furthermore, the evidence from panel causality confirms the bidirectional causality amongst remittances, cross border bank lending and income inequality, and unidirectional causality in other sets of variables.Conclusion: It can be concluded that external financial flows can play a vital role to reduce persistent income inequality in the SADC region. It is recommended that the SADC governments need to formulate policies on remittances as they have positive returns on human capital, strengthen foreign aid institutions and create conducive environment to attract FDI.

Perceived Adverse Effects of Separating Government Institutions for Disaster Risk Reduction and Climate Change Adaptation Within the Southern African Development Community Member States

Integration of disaster risk reduction (DRR) and climate change adaptation (CCA) is widely recognized as a solution for reducing the risk and impacts of disasters. However, successful integration seems elusive, and the two goals continue to function in isolation and in parallel. This article provides empirical insights into the perceived effects of separating government institutions for DRR and CCA within the Southern African Development Community member states. A mixed method research design was applied to the study. A total of 40 respondents from Botswana, Eswatini (until April 2018 Swaziland), Madagascar, Malawi, Namibia, South Africa, Tanzania, Zambia, and Zimbabwe participated in face-to-face interviews or an online survey. Five major effects of separating the organizations for DRR and CCA that impede efforts to reduce disaster risk coherently were identified: duplication of services, polarization of interventions, incoherent policies, competition for the same resources, and territorial contests. Given the continued fragmentation of institutions for DRR and CCA, highlighting these effects is important to emphasize the need for integrated approaches towards the reduction of disaster risk.

The African Medicines Regulatory Harmonization Initiative: Progress to Date

The African Medicines Regulatory Harmonization Initiative (AMRH) has contributed to reduce marketing authorization timelines in East African Community and the Southern African Development Community member states. Challenges still exist in using the outcome of the regional joint dossier review processes for national decision making processes by the national medicines regulatory agencies. Progress in domestication of the African Union Model Law on Medical Products Regulation by twelve countries provides basis for improving regulatory systems. This is coupled by the designation of eleven regional centers of regulatory excellence which will ensure sustainable training programmes and subsequent increase in Africa’s regulatory workforce. The Biennial Scientific Conferences on Medical Products Regulation in Africa is a strategic platform for knowledge and ideas exchange among key stakeholders in the pharmaceutical sector. The ongoing alignment of the African Vaccines Regulators Forum, the Network of Medicines Control Laboratories in Sub-Saharan Africa, Pan African Harmonization Working Party on the regulation of medical devices and diagnostics, the planned establishment of a forum for blood and blood with AMRH serves as a solid foundation for establishment of the African Medicines Agency (AMA). AMA will be a key driver to remove technical barriers for trading among the region countries by contributing to the continental socio-economic development agenda.

Qualifications frameworks in Africa: A critical reflection

Today there is an accelerating trend towards qualifications frameworks as an instrument to develop, classify and recognise formal learning across the African continent, as is also the case across most of Europe, Australasia and the Asia-Pacific region. As more and more countries and regions across the world develop qualifications frameworks to improve harmonisation of education and training systems and comparability of qualifications, it is becoming increasingly evident that Africa has not remained unaffected. At present more than twenty African countries are actively engaged in qualifications frameworkdevelopment, including all Southern African Development Community member states and the SADC region as a whole, not to mention exploratory discussions in other regions and talk of a continent-wide ‘African Qualifications Framework’. Starting from an exploration of the apparent Western and Eurocentric origins of qualifications frameworks, and a realisation that education in Africa was influenced by Western and European ideas long before the advent of qualifications frameworks,we consider the extent to which qualifications frameworks influence the way education and training is organised in the African context. As we critically reflect on the seemingly unquestioned, largely uncritical, and nearly always unopposed move towards qualifications frameworks in Africa, we consider whether qualifications frameworks are able to embrace the distinctive tenets of the African context that can, as described by Catherine Odora Hoppers (2008, 24), make it possible to ‘place and name’ the collective experiences and abilities that African people bring to the field.

The cellular phone economy in the SADC region: implications for libraries

A review of relevant literature reveals a great deal of information on the possible use of cell phones for Internet access via the emerging wireless application protocol (WAP) technology, but little information if any exists about the link between cell phones and libraries. Going by the wide use of wireless networks in libraries especially in Western countries, it is possible that as cell phone technology continues to evolve and mature it could have a significant impact on libraries in the same way the Internet did. Ironically, today, a review of cell phone use in libraries only reveals efforts that are being made to dissuade users from making or receiving calls on their handsets within libraries. Few efforts are geared towards exploring ways that cell phone technology could be used to enhance library operations. Attempts to demonstrate that cell phones may in future provide solutions to libraries’ problems of connectivity especially in the remote areas of the Southern African Development Community member states.