Performance In Sub-Saharan Africa Research Articles

Risk governance and bank performance in Sub Saharan Africa: dynamic panel evidence

Risk governance and bank performance in Sub Saharan Africa: dynamic panel evidence

Risk Governance and Bank Performance in Sub Saharan Africa: Dynamic Panel Evidence

Risk governance practice is gaining prominence as a result of its active role in addressing risk related issues within the banking sector. The study investigates the effect of risk governance on the performance of listed commercial banks in Sub Saharan African region. A sample of 50 banks from six (6) SSA countries were drawn between the periods of 2010-2018. Data were collected from the annual report of the banks while World Bank database supplements the data for the macroeconomic variables. The two-step system GMM technique was used to analyse the data collected and findings from the study revealed that, risk experience members have strong positive effect on the performance of banks. The study recommends among others to ensure adequate risk experience members in the risk committee of the banks. Moreover, recognizing the office of chief risk officer within the banking corporate governance contribute towards better banking performance.

Towards a better understanding of breeding objectives and production performance of dairy cattle in sub-Saharan Africa: a systematic review and meta-analysis

Abstract The aim of this study was to examine breeding objectives and the impact of production systems and breed types on dairy cattle performance in sub-Saharan Africa (SSA). A total of 64 research studies published between 1980 and 2018 were used for qualitative analysis (qualitative synthesis) of farmers’, scientists’ and institutional dairy trait preferences. Meta-analysis was conducted to examine the production and reproduction performance of dairy cattle in smallholder and large-scale dairy production systems. Most data used were from smallholder farmers (60%), with the remainder from large-scale farms. Linear mixed-effect models were used to estimate marginal means of production and reproduction traits for different breed types in both production systems. Overall, the results showed that there was a higher emphasis on breeding for improved fertility, increased milk yield and disease resistance. Milk content (fat and protein percentages), temperament, body conformation and total milk cell count (a mastitis indicator) were rarely mentioned in published literature, mainly because of milk pricing policies being volume based. Frequency and multivariate analyses (cluster data analysis) for desirable animal traits suggested that multiple breeding objectives are needed, based on the perceived goals of different farmers and institutions towards genetic improvement for production, reproduction, disease resistance and functional and animal welfare traits. Regardless of the breed type, commercial large-scale farms had a higher milk yield (2857.0 ± 233.3) compared with smallholder dairy farms (2419.8 ± 617.39). Estimated marginal means for lactation milk yield of the three breed types Holstein-Friesian, non-Holstein-Friesian dairy breeds (Jersey, Guernsey, Red Dane, Brown Swiss and Ayrshire) and cross-breds ( Bos taurus x Bos indicus ) were 3148.5 ± 433.00, 2995.6 ± 456.36 and 1771.1 ± 328.52, respectively. Significantly shorter age at first calving and shorter calving intervals were observed in large-scale farms in comparison to smallholder farms ( p < 0.05). No significant differences were noted for age at first calving, calving interval, days open and number of services per conception between the breed types. In conclusion, the present study suggests that (i) improvement of dairy cattle has focused on reproduction, production and disease resistance traits, reflecting the breeding objectives of farmers, scientists and institutions involved in dairy production; (ii) genetics plays a large role in increased dairy productivity in SSA and (iii) future dairy research should emphasise on the interactions between improved feeding, disease control and genetics at a production level to inform profitable combinations of dairy traits.

Washington Consensus Reforms and Economic Performance in Sub-Saharan Africa: Lessons From the Past Four Decades

Washington Consensus Reforms and Economic Performance in Sub-Saharan Africa: Lessons From the Past Four Decades

External Debt, Investment and Economic Performance in Sub-Saharan Africa

External Debt, Investment and Economic Performance in Sub-Saharan Africa

Credit Market Conditions and Agricultural Performance in Sub-Saharan Africa

Agriculture is important for Sub-Saharan African development being a major source of poverty reduction, job and wealth creation. However, limited access to credit due to weak financial systems has over the years remained a major constraint for the sector. Extant studies show mixed and inconclusive results, suggesting that the effect of credit market on agriculture is influenced by other intervening variables. Accordingly, this paper examines the extent to which credit market conditions affect agricultural productivity. The study adopts a model that draws inspiration from a standard agriculture household framework that integrates both consumption and production decisions of farm households. In terms of methodology, the paper departs from existing literature because it gives due consideration to technological heterogeneity across countries. The model is estimated using pooled ordinary least square and fixed effect panel data estimator that accounts for omitted variable bias. The study uses yearly panel data for the period 1990-2015 for West Africa (13), Southern Africa (11), Central Africa (6) and East Africa (5); resulting in 35 Sub-Saharan African countries. The findings reveal that credit market conditions in terms of low lending rates and credit to the private sector are important for agricultural development within the sub-regions considered and this result is consistent after controlling for other important agricultural inputs. The empirical analysis further shows that limited credit access particularly in the East and Central African sub-regions compared to West and Southern Africa inhibits productivity. More so, availability of critical factor inputs such as agriculture equipment, fertilizer, infrastructure and precipitation exert a positive and significant impact on agriculture output. The results unexpectedly reveal that the effect of labor on agriculture output is negative and this outcome is traced to the low productivity of agriculture workers. The results are robust using an alternative estimator (fixed effect) and measure of the dependent variable (cereal yield). The results have important policy implications. First, lowering lending rate is a viable option for improving credit to the sector in addition to enhancing agriculture sector programs. Second, intensification of efforts particularly towards rural infrastructure development and indeed the provision of agriculture support systems that promote all-year farming may be considered.

Role of Public Agriculture Spending on Performance in sub-Saharan Africa: A Channel-Based Analyses

African heads of state have made several commitments to make the functioning of the agriculture sector sustainable. The two most prominent of these commitments are the Maputo and Malabo declarations. The Maputo declaration stated that country should allocate at least 10 percent of the total fiscal expenditure so as to attain 6 percent agricultural growth. This study investigates the effects of public agriculture spending on agricultural output. This was conducted through the effective quality channels of public agriculture spending such as credit budget channel, research budget channel, fertilizer consumption channel and energy budget channel in sub-Saharan Africa. The study was essential has very limited studies have examined the effects of agriculture public spending to feeding sub-Saharan Africa. The paper adopted the system generalized method of moment to control for endogeneity, simultaneity, and reverse causality. The findings show that public spending enhances agriculture performance to feed SSA without considering the effects of identified channels, however this relationship is weak. The paper concludes that private subsidization of fertilizer should not be the major priority of the SSA governments; but the more essential agricultural sector policies should focus on: providing infrastructures such as energy railing, connecting road networks; and research and development.

Renewable energy, trade performance and the conditional role of finance and institutional capacity in sub-Sahara African countries

The paper investigates the dynamic relationship between renewable energy usage and trade performance in sub-Saharan Africa (SSA), while considering the conditioning role of corruption control, regulatory quality, and the private sector access to finance. Focusing on 42 SSA countries for the period 2004–2016, and engaging the System generalized method of moments (GMM) technique for its estimation, this study found a negative relationship between renewable energy usage and the indicators of trade performance. However, with corruption control, improved regulatory framework, and better finance for the private sector, there are potentials for a positive net impact of renewable energy usage on manufacturing export. For renewable energy and total trade nexus, we find that improved regulatory framework, and better finance for the private sector are important conditioning structures. These findings are significant because they highlight the different important structures of SSA countries that improves the effect of renewable energy use on trade outcomes. For instance, the consideration of the financial, institutional and regulatory frameworks in SSA countries in conditioning the renewable energy-trade nexus stipulates a clear policy pathway for countries in this region as the debate for transition to the use of renewable energy progresses.

Effects of biochar and nitrogen fertilizer on soil physicochemical properties, nitrogen use efficiency and upland rice (Oryza sativa) yield grown on an Alfisol in Southwestern Nigeria

PurposeBiochar and inorganic fertilizer when co-applied have been reported to increase crop yield and enhance soil fertility. However, studies on this complementary effect on soil properties and rain-fed upland rice performance in Sub-Saharan Africa are still scanty.MethodsField factorial studies conducted over 2 years was set up to investigate the interactions between rice husk biochar and inorganic nitrogen (N) fertilizer on a sandy clay loam Alfisol. A two-factor (4 × 4) in RCBD where rice husk biochar was incorporated at four doses, 0, 3, 6, and 12 t/ha−1, inorganic N fertilizer (urea) at four rates, 0, 30, 60 and 90 N kg/ha−1, and their combinations was adopted.ResultsResults showed that combination of biochar and N fertilizer exerted significant (P > 0.05) interactive effect on rice harvest index, grain and straw yield and N-use efficiency. Interaction between biochar and N fertilizer increased agronomic efficiency by 140% and grain nutrient recovery by 191% over 2 years. Combination of biochar and N fertilizer reduced soil bulk density, increased water holding capacity and soil chemical status such as pH, N, P, K, Corg, Ca, ECEC and base saturation, all within the top 10 cm depth of the soil.ConclusionsOverall, the results established that rice husk biochar can be used as a soil conditioner to enhance upland rice yield on an Alfisol. The combined dose of 3–6 t/ha−1 biochar and 30 kg/ha−1 of N fertilizer is thus recommended for upland rice farmers in the study area.

Renewable Energy, Trade Performance and the Conditional Role of Finance and Institutional Capacity of Sub-Sahara African Countries

The paper investigates the dynamic relationship between renewable energy usage and trade performance in sub-Saharan Africa (SSA), while considering the conditioning role of corruption control, regulatory quality, and the private sector access to finance. Focusing on 42 SSA countries for the period 2004-2016, and engaging the System generalized method of moments (GMM) technique for its estimation, this study found a negative relationship between renewable energy usage and the indicators of trade performance. However, with corruption control, improved regulatory framework, and better finance for the private sector, there are potentials for a positive net impact of renewable energy usage on manufacturing export. For renewable energy and total trade nexus, we find that improved regulatory framework and better finance for the private sector are important conditioning structures. These findings are significant because they highlight the different important structures of SSA countries that improve the effect of renewable energy use on trade outcomes. For instance, the consideration of the financial, institutional and regulatory frameworks in SSA countries in conditioning the renewable energy-trade nexus stipulates a clear policy pathway for countries in this region as the debate for transition to the use of renewable energy progresses.

Economic freedom and tax revenue performance in sub-Saharan Africa

PurposeThis study aims to expand the conventional tax effort model to incorporate relevant economic freedom variables to investigate whether economic freedom fosters tax revenue performance in `sub-Saharan Africa (SSA).Design/methodology/approachThis study uses data from 42 countries across the four sub-regions of SSA from the period 2005 to 2012 with 252 year-country observations in an unbalanced panel method. The data were statistically treated using feasible generalised least square (FGLS) and panel-corrected standard errors (PCSE) estimate techniques.FindingsThe findings are twofold. First, the principal finding of the study suggests that economic freedom promotes tax revenue performance. Precisely, the FGLS analysis indicates that property rights freedom, freedom from corruption and investment freedom, as well as the composite economic freedom, exerted positive significant impact on tax revenue performance. This implies that country, which attained high degree of economic freedom, is likely to have higher tax-to-GDP ratio than a country with low level of economic freedom. Secondly, the results of most conventional variables conform to the prediction in the traditional theory except per capita income. Specifically, agriculture share in GDP and per capita income indicate negative significant relationship with tax revenue performance.Originality/valueBecause little is known empirically about the connection between economic freedom and tax revenue performance, this study extended the conventional tax effort model to incorporate the economic freedom to bridge the knowledge gap due to the absence of empirical evidence on the relationship between economic freedom and tax effort.

Corporate social responsibility and financial performance nexus

PurposeThe paper aims to investigate empirically the impact of corporate social responsibility (CSR) on financial performance in South African listed firms.Design/methodology/approachThe paper uses panel corrected standard errors to estimate the effect of CSR on firm financial performance and thus addresses contemporaneous cross-correlations across the panel cross sections. The study uses a broad base measure of CSR created by the Public Investment Corporation data set and the combination of accounting and economic means of measuring firm financial performance.FindingsCSR is found to have a strong positive impact on firm financial performance in South Africa. When CSR is decomposed further into its major components, governance performance positively impacts a firm’s financial performance with no evidence of any relationship between social components and firm performance and between environmental components and firm performance. The positive impact of CSR on firm performance is greater in big firms. At the industry level, CSR is noticed to impact positively on financial performance in the extractive industry via good governance and responsible environmental behaviors. It however has no impact on firm performance in the financial sector.Research limitations/implicationsThe results should be interpreted with caution and some limitations. Due to the limiting nature of the Public Investment Corporation data set (the survey was carried out on selected firms on the Johannesburg Stock Exchange for three years spanning from 2011 to 2013). This resulted in a sample of 56 firms. It is therefore very problematic to generalize the findings to a larger population over a long period of time. This is more limiting especially on individual sector studies where the sample has further shrunk to a smaller sample. As a result of the smaller sample size, the authors were unable to explore some other sectors which could have given more revealing findings. The authors recommend that future research should explore other data sets or use primary data approach that can allow for more sample size and elongated time period for a more holistic view and for easy generalization of the findings. The authors also identify an important lacuna necessitating further research effort. It would be interesting to empirically examine the threshold point of firms’ size beyond which CSR damages firms’ performance. Knowledge of this will guide managers of firms in their strategic CSR decision.Practical implicationsThis study does not only serve as a reference work for subsequent investigations into the impact of CSR on firm performance in sub-Saharan Africa but also serves as a guide to policymakers on the financial impact of CSR adoption.Originality/valueThis study is one of the pioneering works that comprehensively examines the effect of CSR on financial performance amongst South African firms via size and sector and also controls for contemporaneous cross-correlation effects from the firms in the panel set.

Impact of corporate governance attributes and financial reporting lag on corporate financial performance

PurposeThe purpose of this paper is to investigate selected corporate governance attributes and financial reporting lag and their impact on financial performance of listed firms in Ghana.Design/methodology/approachThe study uses 90 firm-year data for the period 2012–2014 for firms listed on the GSE. Each annual report was individually examined and coded to obtain the financial reporting lag. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis, which forms the main data analysis.FindingsThe descriptive statistics indicate that over the three years, the mean value of timeliness of financial reporting (ARL) is 86 days (SD 21 days), minimum is 55 days and maximum is 173 days. The regression analysis results indicate that financial reporting lag has a negative statistically significant relationship with firm performance. This negative sign indicates that when financial performances of companies are high (good news), companies have the tendency to disclose this situation early to the public.Practical implicationsFirms that are not timely in the financial reporting practices will find it difficult to attract capital as the delay will affect their reputation.Originality/valueThis study is one of the few to measure financial reporting lag and its impact on firm financial performance in Sub-Saharan Africa.

Firm financial performance in Sub-Saharan Africa: the role of ethnic diversity

Using data from Sub-Saharan Africa, this research note examines the effect of ethnic and linguistic diversity on firms’ financial performance. We measure diversity using indices of fractionalization based on the Herfindahl-type formula and find evidence of a strong positive effect of diversity on firm performance indicators such as total revenue, dividends, earnings before interest and tax, net sales/turnover and return on assets and total factor productivity. We argue that the positive effect is driven by the influence of ethnic diversity on important channels such as innovation and entrepreneurship. Our results are robust to alternative measures of fractionalization and endogeneity.

Power outages and firm performance in Sub-Saharan Africa

In this paper we assess the extent to which power outages affect the sales of firms across different African economies. We address the potential endogeneity concerns endemic in much of the existing literature by constructing an instrument for power outages based on the varying share of electricity produced by hydro-power as a result of variation in the local climate conditions. Using firm-level data for 14 countries from the World Bank Enterprise Surveys, we find evidence of a negative relationship between an unreliable electricity supply and firms’ sales, with a stronger effect for firms that do not own a generator. We find that reducing average outage levels to those of South Africa would increase overall sales of firms in Sub-Saharan Africa by 85.1%, rising to 117.4% for firms without a generator.

The Chinese are Here: Firm Level Analysis of Import Competition and Performance in Sub-Saharan Africa

This study uses firm level data on 19 Sub-Saharan Africa countries between 2004 and 2016 to provide a rigorous analysis on the impact of Chinese import competition on productivity, skills, and performance of firms., We measure import competition and ports accessibility at the city-industry level to identify the relevance of firms’ location in determining the impact of Chinese imports competition. To address endogeneity concerns, a time-varying instrument for Chinese imports based on the interaction between an exogenous geographic characteristic and a shock in transportation technology is developed. The results show that imports competition has a positive impact on firm performance, mainly in terms of productivity catch-up and skills upgrading. Of particular interest is the finding that the effects of import competition from China are stronger for more remote firms that have lower port accessibility, an indication that Chinese imports in remote areas improves productivity of laggard firms, employment, and intensity of skilled workers. Our findings indicate that African firms are improving their performance as a consequence of the higher Chinese import intensity, mainly through direct competition and the use of higher quality inputs of production sourced from China.

Needs for In-service Professional Development of Teachers to Improve Students’ Academic Performance in Sub-Saharan Africa

This study examined the impacts of in-service professional development activities on the academic performance of students in Nigerian secondary schools, using secondary schools in Lagos, a state in Nigeria as a case study. The outcomes of this study revealed that relevant, very objective and well designed in-service professional development of teachers promote effective instructional tasks delivery of teachers, which lead to better academic performance in internal and external examinations. In-service professional development is important to quality education; it equips teachers (through seminars, workshops, conferences, mentorship and other activities) with relevant, current and effective knowledge, skills, values and attitudes that promote academic excellence in teaching and learning in school system. These activities (if well designed) improved teaching skills of participating teachers and ensure better academic performance of the learners. This paper, therefore recommends variety of well designed, purposeful, relevant, learner-centred teaching skills and regular professional development structures for all teachers to promote quality education and excellent performance in learners’ academic. A Learner-Centred In-Service Professional Development Model (LIPD) was also designed for the effective professional development of teachers in this study. A model that will make in-service professional development of teachers to be functional to teaching and learning in schools.

Socioeconomic Performance in Sub-Saharan Africa with Reference to Southeast Asia: Natural Resources or Institutions?

This paper explores the relationship between institutional quality, dependence on natural resources, and socioeconomic performance in Sub-Saharan Africa (SSA) and Southeast Asia (SEA) in the period from 1995 to 2015. It uses three measures―per capita GDP growth; foreign direct investment inflows (FDI); and infant mortality rate―to capture socioeconomic performance. The World Bank’s Regulatory Quality (RQ) indicator and the share of natural resource exports in percentage of total merchandise exports are used to capture institutional quality and resource dependence, respectively. Using Pooled OLS with robust estimators that control for temporal and spatial dependence, the paper finds that (1) higher levels of natural resource exports in SSA were significantly associated with larger FDI flows, but had no significant correlation with per capita GDP growth and infant mortality rate. Additionally, (2) in both SSA and SEA, a higher RQ score was significantly associated with increased per capita GDP growth and decreased infant mortality. The paper concludes by highlighting a few key areas that need serious consideration for further research on institutions and development in SSA.

The effect of facility-based antiretroviral therapy programs on outpatient services in Kenya and Uganda

BackgroundConsiderable debate exists concerning the effects of antiretroviral therapy (ART) service scale-up on non-HIV services and overall health system performance in sub-Saharan Africa. In this study, we examined whether ART services affected trends in non-ART outpatient department (OPD) visits in Kenya and Uganda.MethodsUsing a nationally representative sample of health facilities in Kenya and Uganda, we estimated the effect of ART programs on OPD visits from 2007 to 2012. We modeled the annual percent change in non-ART OPD visits using hierarchical mixed-effects linear regressions, controlling for a range of facility characteristics. We used four different constructs of ART services to capture the different ways in which the presence, growth, overall, and relative size of ART programs may affect non-ART OPD services.ResultsOur final sample included 321 health facilities (140 in Kenya and 181 in Uganda). On average, OPD and ART visits increased steadily in Kenya and Uganda between 2007 and 2012. For facilities where ART services were not offered, the average annual increase in OPD visits was 4·2% in Kenya and 13·5% in Uganda. Among facilities that provided ART services, we found average annual OPD volume increases of 7·2% in Kenya and 5·6% in Uganda, with simultaneous annual increases of 13·7% and 12·5% in ART volumes. We did not find a statistically significant relationship between annual changes in OPD services and the presence, growth, overall, or relative size of ART services. However, in a subgroup analysis, we found that Ugandan hospitals that offered ART services had statistically significantly less growth in OPD visits than Ugandan hospitals that did not provide ART services.ConclusionsOur findings suggest that ART services in Kenya and Uganda did not have a statistically significant deleterious effects on OPD services between 2007 and 2012, although subgroup analyses indicate variation by facility type. Our findings are encouraging, particularly given recent recommendations for universal access to ART, demonstrating that expanding ART services is not inherently linked to declines in other health services in sub-Saharan Africa.

Africa’s Skill Tragedy

We study the importance of teacher subject knowledge for student performance in Sub-Saharan Africa using unique international assessment data for sixth-grade students and their teachers. To circumvent bias due to unobserved student heterogeneity, we exploit variation within students across math and reading. Teacher subject knowledge has a modest impact on student performance. Exploiting vast cross-country differences in economic development, we find that teacher knowledge is effective only in more developed African countries. Results are robust to adding teacher fixed effects and accounting for potential sorting based on subject-specific factors.