The Analysis Of The Rural Credit Market In Ghana

The formal banking sector does not satisfy the growing demand for credit, and many borrowers turn to informal loan sources to meet their production and consumption needs. The problem of the rural credit, which includes supplying credit for a rural community for economic growth, is reemerging on the development agenda as a pressing issue. The rural economy is financially very fragile. Lack of credit is a significant and sometimes binding constraint, limiting investment in productivity-enhancing technology and inputs. Rural credit plays a critical role in household strategies to reduce vulnerability. In spite of the contribution that credit entails to the rural development, it has been one of the crucial factors that have not been given proper attention. The purpose of this paper is to identify problems that have hindered the effectiveness of the rural credit market in Ghana. The paper is premised on the theoretical understanding of rural credit markets and applies the framework to investigate the aspect of the rural credit market in Ghana. Improving the rural credit system will help to raise household incomes and reduce poverty and will contribute to the eradication of extreme poverty. The paper identifies high cost, interest rate, lack of collateral, lack of innovation and high delinquency rates as the main factors that have hindered the effectiveness of the rural credit market in Ghana. This paper will interest policymakers to place more emphasis on savings mobilization and to revisit interest rate policy, while providing cheap and adequate credit to small and poor farmers

Interest Rate Spread on Bank Profitability: The Case of Ghanaian Banks

The banking sector in Ghana plays a dominant role in the financial sector, particularly with respect to mobilization of savings and the provision of credit. An analysis of bank interest rate spreads is therefore central to the understanding of the financial intermediation process and the macroeconomic environment in which banks operate. This paper is motivated by the fact that although Ghana’s financial sector was liberalized in the early 1990s to allow for market determination of interest rates, concerns about high interest rate spreads have persisted and attracted a lot of debate in both public and policy forums. The purpose of the study is to empirically investigate the interest rate spread on banks profitability in Ghana using average annual observation data from1992–2015 to include 28 commercial banks. Ordinary least square was used to estimate the regression coefficients. The empirical results show that bank-specific factors play a significant role in the determination of interest rate spreads in the Ghana’s banking sector. All the bank specific variables were found to be significant except Total Assets (TA). Among the macroeconomic variables, inflation was found to be significant whereas GDP growth rate was insignificant. The role of the global financial institutions is changing and so are the banks operating in Ghana. The banking sector should explore new paths that will enable them to take advantage of the government’s policy of making the “private sector the engine of growth” to market their products

Foreign Direct Investment: A Journey To Economic Growth In Ghana - Empirical Evidence

Foreign Direct Investment (FDI) has been viewed as a major stimulus to economic growth in developing countries. Its ability to deal with two major obstacles; namely, shortages of financial resources and technology and skills, has made it the center of attention for policymakers in low-income countries in particular. In spite of the significance generated by FDI flows, the flow to developing countries and the world, in general, has witnessed persistent decline over the years. The implication for the drop means that competition to attract FDI has increased as developing countries continue to create the enabling environment to attract foreign investors. Ghana, in particular, has, over the last decade, pursued various forms of economic reforms and liberalization of trade regimes in order to become more competitive in the international financial market. A handful of papers has recently dealt with FDI flows in Ghana. However, most of these studies are concerned with strategic FDI policy to attract FDI flows. The purpose of this study is to empirically determine the factors that influence FDI flows in Ghana, using time series data from 1988 to 2011. Regression analysis was carried out using relevant econometric techniques. The results of the study capture trade openness, exchange rate, natural resources, and infrastructure as the drivers of FDI in Ghana. Macroeconomic variables, such as inflation and per capita gross domestic products, were also registered to impact the determinants of FDI flows in Ghana. The contribution of this paper is that economic liberalization was found to be significant, indicating that policymakers' efforts in liberalizing the economic activities may necessarily translate into significant FDI inflows into the country

Capital Structure and Firm’s Performance in Ghana. Do Macroeconomic Factors Matter?

The paper seeks to investigate how macroeconomic factors affect the relationship between capital structure and bank performance from 2004 to 2014. In this context we try to condition the postulated relations between capital structure and firm performance on the dynamics of the macroeconomic environment of Ghana. We considered the impact of some macroeconomic variables such as inflation and GDP growth. Panel data methodology is adopted in this study. This combines simultaneous cross-section and time series data. The paper employs samples of banks in Ghana. Using fixed effect regression estimation model, a relationship was established between performance (proxied by return on asset and return on equity) and the firms capital structure over a period of ten years. Hausman chi-square test was conducted in each equation.The macroeconomic variables, GDP growth were registered to be significant in both models. This signifies that macroeconomics matter in the bank’s capital structure and performance. Inflation however were found to be insignificant. We therefore recommend that macroeconomic policies should provide a conducive environment for banks operations, in addition the government should develop the bond market

Capital Budgeting Practices In Emerging Market Economies: Evidence From Listed Ghanaian Firms

This study investigates into the application of capital budgeting practices by listed firms on the Ghana Stock Exchange. A sample of listed firms from banking, brewery, manufacturing, distribution and insurance were selected. The key findings from the study show that firms listed on the Ghana Stock Exchange adopt text book capital budgeting techniques in practice. Most of them use NPV, PBP, DPBP and IRR. Though this demonstrates a clear reduction in the theory practice gap, the modified internal rate of return (MIRR), and the Accounting rate of return (ARR) have not attracted much attention compared to the NPV. This study thus confirms the popularity and usage of DCF capital budgeting methods (NPV and IRR) due to their simplicity. The study also finds that most of the firms use weighted average cost of capital (WACC) as the cost of capital in appraising investment projects. Key words: Capital budgeting techniques, investment decision, listed firms, Ghan

Towards sustainability: Overcoming the physical barriers to urban green spaces in Kumasi, Ghana

Conserving green spaces (parks, gardens, forest) in the physical landscape of cities is an action that has been identified as contributing to the sustainability of cities. However, to be able to conserve such spaces, some barriers need to be overcome, and this has not received much attention. This paper therefore provides measures to overcome the ‘physical’ barriers to urban green spaces in order to enhance the sustainability of such spaces in Ghana, using Kumasi as a case study. A qualitative research approach, 30 in-depth interviews, ten focus group discussions, archival data, and numerous observation sessions were utilized in the study. Kumasi city authorities, allied bodies on green spaces, opinion leaders, and residents of Kumasi constituted the study’s target population. It was discovered that conflicting ownership rights, encroachment, and poor maintenance are major physical barriers hampering the development of urban green spaces. To enhance the sustainability of urban green spaces, the study recommends that there should be the creation of additional parks and gardens, conversion of brownfield sites into green spaces, incorporation of quantitative standards into the provision of green spaces, and institutionalization of an award scheme on green spaces

Empirical evidence from a few selected emerging economies on the impact of governance and health spending on health outcomes

Background: Adverse effects of weak governance on health, is a serious policy subject matter for policymakers, health experts, and researchers. Therefore, this study examines the effect of governance and health expenditure on under-five and adult mortality in emerging economies between 2000 and 2016.  Methods: Employing data from World Bank World Development Indicators, the study applied panel procedures namely cross-sectional dependence test, Westerlund cointegration, and cross-section augmented Dickey-Fuller (CADF) panel unit root test that can deal with the effects of cross-sections in the series. The study examined the long-run relationship between governance and health outcomes by using the panel fully modified least squares (FMOLS) and the fixed effects model for a robust check. Results: The Westerlund cointegration confirmed that the variables are cointegrated. The panel fully modified least squares (FMOLS) and the fixed effects estimation results show that poor governance (corruption) induces adult mortality in most of the panels. However, good governance (political stability) reduces mortality among children under five and adults in all four panels. Conclusion: The study supports the hypothesis that governance has inordinate consequences on under-five and adult mortality and therefore it has a huge impact on the health outlook of a population. The findings indicate that health expenditure and urbanization affect health outcomes in lower, upper, and high-income countries in changing economies. Different policy implications are therefore offered based on the study outcome

Facilitators and Barriers to Uptake of an Extended Seasonal Malaria Chemoprevention Programme in Ghana: A Qualitative Study of Caregivers and Community Health Workers.

BACKGROUND: Seasonal Malaria Chemoprevention (SMC) is currently recommended for children under five in areas where malaria transmission is highly seasonal. We explored children's caregivers' and community health workers' (CHWs) responses to an extended 5-month SMC programme. METHODS: Thirteen in-depth interviews and eight focus group discussions explored optimal and suboptimal 'uptake' of SMC to examine facilitators and barriers to caregivers' uptake. RESULTS: There did not appear to be major differences between caregivers of children with optimal and sub-optimal SMC uptake in terms of their knowledge of malaria, their perceptions of the effect of SMC on a child's health, nor their understanding of chemoprevention. Caregivers experienced difficulty in prioritising SMC for well children, perceiving medication being for treatment rather than prevention. Prior to the study, caregivers had become accustomed to rapid diagnostic testing (RDT) for malaria, and therefore blood testing for malaria during the baseline survey at the start of the SMC programme may have positively influenced uptake. Facilitators of uptake included caregivers' trust in and respect for administrators of SMC (including CHWs), access to medication and supportive (family) networks. Barriers to uptake related to poor communication of timings of community gatherings, travel distances, absence during SMC home deliveries, and limited demand for SMC due to lack of previous experience. Future delivery of SMC by trained CHWs would be acceptable to caregivers. CONCLUSION: A combination of caregivers' physical access to SMC medication, the drug regimen, trust in the medical profession and perceived norms around malaria prevention all likely influenced caregivers' level of uptake. SMC programmes need to consider: 1) developing supportive, accessible and flexible modes of drug administration including home delivery and village community kiosks; 2) improving demand for preventive medication including the harnessing of learnt trust; and 3) developing community-based networks for users to support optimal uptake of SMC

Novel Anti-Campylobacter Compounds Identified Using High Throughput Screening of a Pre-selected Enriched Small Molecules Library

Campylobacter is a leading cause of foodborne bacterial gastroenteritis worldwide and infections can be fatal. The emergence of antibiotic-resistant Campylobacter spp. necessitates the development of new antimicrobials. We identified novel anti-Campylobacter small molecule inhibitors using a high throughput growth inhibition assay. To expedite screening, we made use of a “bioactive” library of 4,182 compounds that we have previously shown to be active against diverse microbes. Screening for growth inhibition of Campylobacter jejuni, identified 781 compounds that were either bactericidal or bacteriostatic at a concentration of 200 µM. Seventy nine of the bactericidal compounds were prioritized for secondary screening based on their physico-chemical properties. Based on the minimum inhibitory concentration against a diverse range of C. jejuni and a lack of effect on gut microbes, we selected 12 compounds. No resistance was observed to any of these 12 lead compounds when C. jejuni was cultured with lethal or sub-lethal concentrations suggesting that C. jejuni is less likely to develop resistance to these compounds. Top 12 compounds also possessed low cytotoxicity to human intestinal epithelial cells (Caco-2 cells) and no hemolytic activity against sheep red blood cells. Next, these 12 compounds were evaluated for ability to clear C. jejuni in vitro. A total of 10 compounds had an anti-C. jejuni effect in Caco-2 cells with some effective even at 25 µM concentrations. These novel 12 compounds belong to five established antimicrobial chemical classes; piperazines, aryl amines, piperidines, sulfonamide and pyridazinone. Exploitation of analogues of these chemical classes may provide Campylobacter specific drugs that can be applied in both human and animal medicine