Role of Project Finance in Emerging Economies

The steady growth of funding projects with project finance to develop and provide infrastructural facilities in developed and emerging economies cannot be overemphasized. This study analysis and reviewed the immense contribution of project finance schemes in constructing numerous public projects. Central to the success of this scheme is the non-recourse financing of projects, allocation and shifting of project risk between the parties of the scheme. The study further found that in spite of the complexity associated with project finance is emerging economies, it is prudent to formulate a very solid and suitable legal framework, provide enabling environment for investors to reap their investments and a stable political atmosphere considering the number of years required to recoup the initial cost of investment. Keywords: Project finance, emerging economies, legal framework, investors, infrastructur

The Failure of Lehman Brothers: Causes, Preventive Measures and Recommendations

The 2008 global financial meltdown witnessed most of the top global financial institutions crumble into liquidation and bankruptcy. The incident culminated in most of these firms either liquidated or experienced plummetion in returns. The failure of Lehman Brothers in the midst of the global financial crisis was the largest catastrophe to hit the financial industry in the United States. Notably, the leading US investment bank suffered huge losses within the month of September. Lehman’s stock price plummeted by 73% of its value in the first half of September alone and by the mid of September 2008, lost $3.9 billion in their attempt to dispose of a majority of their shares in one of their subsidiaries.  To contribute to the body of knowledge, this paper investigated and reviewed the activities or transactions that resulted in the failure of Lehman Brothers. The findings revealed multiplicity of factors ranging from dubious accounting practices, unethical management practices, over investment in risky unsecured investments, laxity on the part of regulators. External auditors also played a major part in this failure by not detecting these financial statement malpractices by the Lehman managers. Policy makers such as the International Financial Reporting Standards (IFRS), Security and Exchange Commission (SEC), the Basel Accord etc, ought to initiate stringent policies to address Lehman failure to avert any future occurrence. Keywords: Financial meltdown, Liquidation, Bankruptcy, IFRS, SEC, Basel Accord

Working Capital Management and Profitability of Firms: A Study of Listed Manufacturing Firms in Ghana

The efficient management of working capital is crucial to the profitability of firms therefore, it is prudent that management of firms make available in the right amount, resources to manage working capital. The main objective of the study was to establish a statistical relationship between profitability measured by the return on assets and the elements of working capital such as the cash conversion cycle (CCC), average collection period (ACP), average payment period (APP) and inventory turnover days (IT). Growth, size and leverage were control variables identified. A sample size of four (4) companies listed on the Ghana Stock Exchange (GSE) out of a population of five (5) listed trading companies for the 2006 to 2010 financial years. The results showed a fairly negative significant relationship between the cash conversion cycle, average collection period and average payment period implying that a reduction in the periods for receiving cash, an increase in the period for paying cash a reduction in the cash conversion cycle will cause an increase in profit. The inventory turnover days as well as all other control variables showed a positive relationship with profitability. Hence, study recommends that trading companies should manage their working capital more efficiently so as to keep it in equilibrium. Keywords: Profitability, Capital Management, Growth, Resources, Size, Ghana Stock Exchang

Impact of E-Banking on the Profitability of Banks in Ghana

The study assessed the impact of electronic banking on the profitability of a Bank in Ghana. How the bank finds itself before a new fact imposed by technology revolution that has changed their work mechanisms from traditional means to electronic means. Furthermore, this study investigates how the electronic banking services through internet and ATM has impacted on banking services in general and the banks’ profitability in particular. The methodology was quantitative in nature. In all, 150 questionnaires were administered to the interviewee from the selected branches of the Agricultural Development Bank who are customers, to solicit information concerning the E-banking. All data from the structured self-administered questionnaires were correctly organized. The software that was used for this is, Statistical Package for Social Sciences (SPSS). The study was also more descriptive in nature. After testing the hypothesis by using inferential statistics, it was discovered that E-banking does have an impact on the profitability of the Agricultural Development bank. There was a significant increase in the net profit margin of the bank in the year (2011) E-banking was introduced and the even though it fell in the next year (2012) which wasn’t much, it increased again in the third year (2013).The study revealed that E-banking has a positive effect on ADB’s Profitability. Keywords: Profitability, Electronic Banking, Internet Banking, AD

Analysis of Basel III and Risk Management in Banking

Over the years, financial institutions have always operated as channels for lenders and borrowers. In view of their activities, the banks and other financial institutions are able to accumulate surplus funds from these investors (individuals/organizations) and lend these funds to other investors with deficit funding thereby creating a fiduciary relationship between these two parties. The study analyzed and assessed the effectiveness of Basel III to manage risk in banking. To analyze their activities, the study assessed efficacy of risk assessment procedures and regulations proposed by the Basel Committee on Banking Service (Basel III) protect the interest of these parties. Potential risks ranging from credit risk, market risk and operational risk were analyzed. In view of the reforms proposed by Basel III, the framework has failed to address numerous issues. To address this menace in the banking sector, Basel III should not be held as the only conduit to resolve financial crisis, but there is the need to seek other systems in integrating specific government financial regulations with the provisions of Basel III. Keywords: Banking, Basel III, Crises, Financial, Risk, operational

COMPLICITY OF AUDITORS IN FINANCIAL STATEMENT FRAUD IN CORPORATE GOVERNANCE

Abstract The numerous cases of financial fraud reporting in recent times have precipitated the outcry of most stakeholders in the business environment for the need to critically examine the parties responsible for the preparation of such reports in pursuance of their interest. This paper studied the complicity of Public Company Auditors in Financial Statement fraud. To achieve this objective, the responsibilities and obligation of the Auditor to detect and report financial statement fraud before their perpetration was reviewed. The study revealed that, apart from the numerous financial statement fraud cases committed by other stakeholders in corporate governance, 23 percent of Auditors were involved in financial fraud cases, implying that some auditors are complicit in financial statement fraud. As a result, this phenomenon corroborates the need for International Reporting Agencies such as International Accounting Standard Board (IASB) to develop more creative measures in identifying and reporting fraud

Competition and Market Contestability in Ghanaian banking industry: A Panzar-Rosse Approach

The present study evaluates the market structure of Ghana’s banking industry and estimates the nature and degree of competition. This study uses non-structural methodology proposed by Panzar-Rosse Model known as “H-statistic” to empirically assess competitiveness in the Ghanaian banking market. The study uses 23 banks in Ghana from 2000 to 2019, compiled and reported by Ghana Association of Bankers (GAB). The study results show that banks in Ghana derive their revenue in conditions of monopolistic competition. Thus, Contestable markets theory and Chamberlainian competition theory are validated by the study results. Furthermore, the study results revealed that from 2000 to 2019, after various structural reforms including the implementation of the FINSAP, competition in the Ghanaian banking sector increased. Finally, when the dataset was decomposed into local and foreign banks, the results indicate that monopolistic competition market conditions are found for both local and foreign banks. Managerially, the presence of a monopolistic market condition adds to the call for managers of the banks to consider factor input prices in an attempt to generate more revenues. Second, to avoid negative consequences of competition, managers of these banks should not rely on a single income source but also indulge in non-intermediation activities. In terms of policy, pro-structural shift policies that have helped with the transition from a monopoly structure to a monopolistic competition free entry or contestable market structure should be rigorously pursued by the policymakers. Besides, policy directives that enhance greater consolidation in the banking sector shouldbe pursued rigorously. Finally, the results from this study could help policy-makers to fashion an appropriate optimal intervention and stability policies geared towards enhancing banking stability at different levels of bank competition

Competition and Market Contestability in Ghanaian banking industry: A Panzar-Rosse Approach

The present study evaluates the market structure of Ghana’s banking industry and estimates the nature and degree of competition. This study uses non-structural methodology proposed by Panzar-Rosse Model known as “H-statistic” to empirically assess competitiveness in the Ghanaian banking market. The study uses 23 banks in Ghana from 2000 to 2019, compiled and reported by Ghana Association of Bankers (GAB). The study results show that banks in Ghana derive their revenue in conditions of monopolistic competition. Thus, Contestable markets theory and Chamberlainian competition theory are validated by the study results. Furthermore, the study results revealed that from 2000 to 2019, after various structural reforms including the implementation of the FINSAP, competition in the Ghanaian banking sector increased. Finally, when the dataset was decomposed into local and foreign banks, the results indicate that monopolistic competition market conditions are found for both local and foreign banks. Managerially, the presence of a monopolistic market condition adds to the call for managers of the banks to consider factor input prices in an attempt to generate more revenues. Second, to avoid negative consequences of competition, managers of these banks should not rely on a single income source but also indulge in non-intermediation activities. In terms of policy, pro-structural shift policies that have helped with the transition from a monopoly structure to a monopolistic competition free entry or contestable market structure should be rigorously pursued by the policymakers. Besides, policy directives that enhance greater consolidation in the banking sector shouldbe pursued rigorously. Finally, the results from this study could help policy-makers to fashion an appropriate optimal intervention and stability policies geared towards enhancing banking stability at different levels of bank competition

Does monetary poverty reduction through gender empowerment work?

AbstractMonetary poverty, characterized by the lack of financial resources necessary to meet basic human needs and participate fully in society, continues to be a pressing issue on a global scale. Despite various poverty reduction efforts, this problem persists, especially in many developing countries, including Ghana. Therefore, the current study examines the impact of women’s empowerment on monetary poverty reduction in Ghana. Using a Fixed-effect model (FEM) and dominance analysis (DA) as an estimation technique, this study uses the Ghana Socioeconomic Panel Survey, a coaction between the Economic Growth Center (EGC) at Yale University and the Institute of Statistical, Social, and Economic Research (ISSER) at the University of Ghana, Legon. The survey offers regionally representative data for 10 regions of Ghana available for Wave 1 (2010), Wave 2 (2014-15), and Wave 3 (2018-2019). Based on the dataset, the study concludes that women’s social empowerment reduces monetary poverty. across the study sample significantly contribute to poverty reduction in Ghana. The positive impact of women’s social empowerment on poverty reduction goes beyond individual households. Empowered women tend to invest more in their families and communities, leading to improved living standards, better health, and enhanced education opportunities. These effects help break the intergenerational cycle of poverty and promote sustainable development. To promote this, governments and policymakers should prioritize measures such as improving women’s access to education, healthcare, and financial services. Additionally, eliminating legal and societal barriers that hinder their participation in decision-making processes is crucial. Again, an inverse relationship was established between marriage age of households, households’ ability to read and monetary poverty. In terms of locality of residence, women of household heads and ecological zones, varied results are produced. This study is anticipated to be valuable in terms of originality since it provides a precise and coherent understanding of the genuine measure on women empowerment that must be placed, from the perspective of Ghanaian dataset, locality and ecological zones to reduce poverty more effectively

Foreign direct investment, remittances, real exchange rate, imports, and economic growth in Ghana: An ARDL approach

AbstractThe main objective of this quantitative study is to ascertain the effect of foreign direct investment, real exchange rate, remittances, and import on economic growth in Ghana. Secondary data on gross domestic product, foreign direct investment, real exchange rate, remittances, import, and gross capital formation from 1980 to 2018 were analyzed. The study employed Autoregressive Distributed Lag for the econometrics analysis. The study found that foreign direct investment, real exchange rate, remittances, import, and gross capital formation cointegrates with economic growth. The main findings are that foreign direct investment, real exchange rate, import, and remittances matter from growth perspective. Remittances have a positive and significant effect on economic growth in Ghana both for the short run and the long run. The study also revealed that foreign direct investment, real exchange rate, and imports have a negative and significant effect on the growth process of Ghana’s economy for both the short run and the long run. The study recommends that the Ministry of Finance, Ghana, financial analysts and other policy makers should undertake steps to reduce imports and attract more remittances inflows to attain long-run economic growth. In addition, the economy must concentrate on viable exchange rate policies such as undervaluation of currency to stimulate sustainable economic growth