Relative Contribution of Child Labour to Household Farm and Non-Farm Income in Ghana: Simulation with Child's Education

Child labourers play an integral role in households’ income diversification process by contributing to farm and non-farm incomes but policies, including that of the ILO have focused largely on eliminating child labour from the agricultural sector through education. This study sought to ascertain the relative contribution of child labourers to farm and non-farm income using the GLSS6 data and employed a SUR estimation that simulated, empirically, with child’s education. Findings showed that as a child labourer spends more time in school, every Gh₵1.00 contributed to farm income is accompanied by a Gh₵2.12 contribution towards non-farm income. By implication, child education policy removes child labourers from the farm but are likely to have a paradoxical effect of pushing these children into non-farm activities as they engage in them after school and during weekends. The suggestion is that governments must provide adequate remuneration for workers and pay a good price for agricultural products so that households do not use children as instruments to diversity their income portfolios, since child labour acts as a push factor in the diversification process

Relative Contribution of Child Labour to Household Farm and Non-Farm Income in Ghana: Simulation with Child's Education

Child labourers play an integral role in households’ income diversification process by contributing to farm and non-farm incomes but policies, including that of the ILO have focused largely on eliminating child labour from the agricultural sector through education. This study sought to ascertain the relative contribution of child labourers to farm and non-farm income using the GLSS6 data and employed a SUR estimation that simulated, empirically, with child’s education. Findings showed that as a child labourer spends more time in school, every Gh₵1.00 contributed to farm income is accompanied by a Gh₵2.12 contribution towards non-farm income. By implication, child education policy removes child labourers from the farm but are likely to have a paradoxical effect of pushing these children into non-farm activities as they engage in them after school and during weekends. The suggestion is that governments must provide adequate remuneration for workers and pay a good price for agricultural products so that households do not use children as instruments to diversity their income portfolios, since child labour acts as a push factor in the diversification process

Addiction to Microcredit: An Obstacle to Social and Financial Mobility

Contrary to the confidence in the ability of microfinance to uplift the poor on the social structure so that upon reaching a higher echelon, the poor (clients) will be able to save and borrow from formal financial institutions (FFIs), most of the poor and socially vulnerable have now become addicted to micro-credit due to demand and supply-side factors. What could be the possible causes of this micro-credit addiction? The objective of this paper was to unravel the causes of what we call “microcredit addiction” and provide recommendations that will enable the addicted clients to break away from this craving. The paper reviews literature on social and financial impact of microfinance and finds that failure of microfinance in the delivery of its core mandate of poverty reduction results in clients’ addiction to micro-credit and, eventually, inhibits their social and financial mobility. The upscaling intentions of MFIs, compulsory savings, high interest rates and transactions costs, multiple borrowing, client’s inability to save for the future and, surprisingly, clients’ satisfaction with MFIs’ products and services are among the factors that make clients get addicted to micro-credit

Household Deficiency in Demand for Water: Do Water Source and Travel Time Matter?

Despite the massive commitment by policy makers and stakeholders to increase the supply of water to households in Ghana, many households have a deficiency in their self-reported daily quantity of water required for drinking and for general use. This paper focuses on the effect of water source and travelling time on households’ deficiency in demand for water using the Sixth Round of the Ghana Living Standards survey. A Tobit regression analysis of data on 2,843 households reveals that a one minute increase in travelling time increases household deficiency in water demand by about 49 percent. Also, compared to pipe in dwelling/yard/plot, all other sources of water to the households come with greater levels of water deficiency, with unprotected well/spring/river-stream/dam-lake-pond generating the greatest (10.5 litres) levels of deficiency. Other significant predictors of household deficiency in water demand are per capita disposable income, number of rooms in the household, sex of the household head and regular payment of water bills. Government policies aimed at addressing household deficiency in water demand should focus on making more resources available to the Ghana Water Company Limited (GWCL) and the Community Water and Sanitation Agency so as to achieve more coverage of water accessible to both urban and rural households

Addiction to Microcredit: An Obstacle to Social and Financial Mobility

Contrary to the confidence in the ability of microfinance to uplift the poor on the social structure so that upon reaching a higher echelon, the poor (clients) will be able to save and borrow from formal financial institutions (FFIs), most of the poor and socially vulnerable have now become addicted to micro-credit due to demand and supply-side factors. What could be the possible causes of this micro-credit addiction? The objective of this paper was to unravel the causes of what we call “microcredit addiction” and provide recommendations that will enable the addicted clients to break away from this craving. The paper reviews literature on social and financial impact of microfinance and finds that failure of microfinance in the delivery of its core mandate of poverty reduction results in clients’ addiction to micro-credit and, eventually, inhibits their social and financial mobility. The upscaling intentions of MFIs, compulsory savings, high interest rates and transactions costs, multiple borrowing, client’s inability to save for the future and, surprisingly, clients’ satisfaction with MFIs’ products and services are among the factors that make clients get addicted to micro-credit

Financial globalisation uncertainty/instability is good for financial development

Purpose – This study assesses the effect of time-dynamic financial globalisation uncertainty on financial development in 53 African countries for the period 2000-2011. Design/methodology/approach – Financial globalisation uncertainty is estimated as time-dynamic to capture business cycle disturbances while all dimensions identified by the Financial Development and Structure Database of the World Bank are employed, namely: financial depth (money supply and liquid liabilities), financial system efficiency (at banking and financial system levels), financial system activity (from banking system and financial system perspectives) and financial size. The empirical evidence is based on the Generalised Method of Moments with forward orthogonal deviations. Findings- The following findings are established. First, financial globalisation uncertainty does not significantly affect money supply, financial system deposits and financial size. Second, the uncertainty increases banking system efficiency, banking system activity and financial system activity. Moreover, the positive effects are consistently driven by above-median uncertainty levels. Practical implications- It follows that uncertainty in foreign capital flows may be a disguised advantage for domestic financial development, especially in dealing with the substantially documented issue of surplus liquidity in African financial institutions. Moreover, the sceptical view in the financial globalisation literature that ‘allocation efficiency’ is only plausible in the absence of uncertainty/instability is not substantiated by the findings. Justifications for the nexuses and other policy implications are discussed. Originality/value- To the best of our knowledge this is the first study to assess the effects of financial globalisation uncertainty on financial development in Africa using time-dynamic measurements of financial globalisation uncertainty and all dimensions identified by the Financial Development and Structure Database of the World Bank

China-Africa Investments and Economic Growth in Africa

China-Africa’s economic cooperation has existed for decades. In this chapter, we observed the significance of China’s FDI on economic growth, using two decades of FDI data. In the last decades, the economic growth of Africa has been impressive despite recurrent structural and technical issues. China’s FDI stock relative to other economies has been growing, rapidly. How does it affect the performance of key macroeconomic indicators, particularly unemployment and export? Using the Pesaran Autoregressive Distributive lag (ARDL) model, there was a negative growth link between China’s FDI to Africa and growth. However, the impacts of US FDI to Africa, China Export, and Imports from Africa were insignificant. The long-run effect of World FDI inflow to Africa reported a positive effect on growth. There was no evidence of Okun’s law as unemployment increases with growth. For the Granger causality test, all macroeconomic indicators reported a uni-directional link with economic growth, except human capital and unemployment. It is recommended to shift FDI resources toward promoting labor-intensive programs because it has high employability compared to capital intensive programs. Pursuing the Pull Growth Model (PGM) technique will pull enough funds to support the growth of infrastructures and technical capacity development in the region

Financial globalisation uncertainty/instability is good for financial development

Purpose – This study assesses the effect of time-dynamic financial globalisation uncertainty on financial development in 53 African countries for the period 2000-2011. Design/methodology/approach – Financial globalisation uncertainty is estimated as time-dynamic to capture business cycle disturbances while all dimensions identified by the Financial Development and Structure Database of the World Bank are employed, namely: financial depth (money supply and liquid liabilities), financial system efficiency (at banking and financial system levels), financial system activity (from banking system and financial system perspectives) and financial size. The empirical evidence is based on the Generalised Method of Moments with forward orthogonal deviations. Findings- The following findings are established. First, financial globalisation uncertainty does not significantly affect money supply, financial system deposits and financial size. Second, the uncertainty increases banking system efficiency, banking system activity and financial system activity. Moreover, the positive effects are consistently driven by above-median uncertainty levels. Practical implications- It follows that uncertainty in foreign capital flows may be a disguised advantage for domestic financial development, especially in dealing with the substantially documented issue of surplus liquidity in African financial institutions. Moreover, the sceptical view in the financial globalisation literature that ‘allocation efficiency’ is only plausible in the absence of uncertainty/instability is not substantiated by the findings. Justifications for the nexuses and other policy implications are discussed. Originality/value- To the best of our knowledge this is the first study to assess the effects of financial globalisation uncertainty on financial development in Africa using time-dynamic measurements of financial globalisation uncertainty and all dimensions identified by the Financial Development and Structure Database of the World Bank

Household Deficiency in Demand for Water: Do Water Source and Travel Time Matter?

Despite the massive commitment by policy makers and stakeholders to increase the supply of water to households in Ghana, many households have a deficiency in their self-reported daily quantity of water required for drinking and for general use. This paper focuses on the effect of water source and travelling time on households’ deficiency in demand for water using the Sixth Round of the Ghana Living Standards survey. A Tobit regression analysis of data on 2,843 households reveals that a one minute increase in travelling time increases household deficiency in water demand by about 49 percent. Also, compared to pipe in dwelling/yard/plot, all other sources of water to the households come with greater levels of water deficiency, with unprotected well/spring/river-stream/dam-lake-pond generating the greatest (10.5 litres) levels of deficiency. Other significant predictors of household deficiency in water demand are per capita disposable income, number of rooms in the household, sex of the household head and regular payment of water bills. Government policies aimed at addressing household deficiency in water demand should focus on making more resources available to the Ghana Water Company Limited (GWCL) and the Community Water and Sanitation Agency so as to achieve more coverage of water accessible to both urban and rural households