African Review of Economics and Finance <p>The <em>African Review of Economics and Finance</em> (AREF) is the official journal of the African Review of Economics and Finance Consult (AREF Consult). The journal welcomes high quality articles in theoretical and empirical economics, with special emphasis on African economies. Theoretical contributions can be either innovation in economic theory or rigorous new applications of existing theory. Pure theory papers include, but are by no means limited to, those in behavioural economics and decision theory, game theory, general equilibrium theory, contract theory, public finance, financial economics, industrial organisation, labour economics, development theory and the theory of economic mechanisms.</p> <p>At the same time AREF publishes papers of high quality dealing with the confrontation of relevant economic theory with observed data through the use of adequate econometric methods. Empirical papers cover topics such as estimation of established relationships between economic variables, testing of hypotheses derived from economic theory, policy evaluation, simulation, forecasting, methodology, econometric methods and measurement.</p> <p>As a general interest journal, AREF emphasizes the replicability of empirical results. Replication studies of important results in the literature - both with positive or negative results - may be published as short papers in AREF. Authors are expected to make available their data set in case readers, editors or referees should want to replicate results reported in submitted contributions. AREF also welcomes book reviews, and special issues of international conferences and workshops.</p> <p>Other websites related to this journal:&nbsp;<a title="" href="" target="_blank" rel="noopener"></a> and&nbsp;<a title="" href="" target="_blank" rel="noopener"></a></p> Rhodes University en-US African Review of Economics and Finance 2042-1478 <p>To assure the integrity, dissemination, and protection against copyright infringement of published articles, you will be asked to assign us, via a Publishing Agreement, the copyright in your article. Your Article is defined as the final, definitive, and citable Version of Record, and includes: (a) the accepted manuscript in its final form, including the abstract, text, bibliography, and all accompanying tables, illustrations, data; and (b) any supplemental material. Our Publishing Agreement with you will constitute the entire agreement and the sole understanding between you and us; no amendment, addendum, or other communication will be taken into account when interpreting your and our rights and obligations under this Agreement.</p> Dr. George Adu: A valedictory remembrance No Abstract Imhotep Paul Alagidede Copyright (c) 2019-06-21 2019-06-21 11 1 3 8 George Adu, PhD. (1977-2019): The social planner goes home No Abstract Franklin Obeng Odoom Copyright (c) 2019-06-21 2019-06-21 11 1 9 11 Tribute to a true and loyal friend No Abstract Hannah Vivian Osei Copyright (c) 2019-06-21 2019-06-21 11 1 12 14 On the scholarly contributions of the legendary George Adu <p>Beginning on a personal note, this paper succinctly presents the salient scholarly works of my teacher and mentor Dr. George Adu to the body of theoretical and empirical literature in economics. His contributions to the field of environmental and natural resources economics and macroeconomics in general cannot be overemphasized. While death might have cut his life short, George’s considerable contributions to knowledge and society will continue to live on. He is a legend.</p><p><strong>Keywords:</strong> George Adu; Environmental economics; Macroeconomics</p> Muazu Ibrahim Copyright (c) 2019-06-21 2019-06-21 11 1 15 28 Natural resources, institutions and economic development in Africa <p>This article, first, examines the association between resource rents, institutions and economic growth in Africa, as well as the performance of resource-rich and non-resource-rich countries on institutional quality and political governance. The findings suggest that resource rents failed to contribute to long-term growth on the continent. Additionally, higher resource rents are associated with relatively weak institutions. Second, using historical data, the study tests the validity of the resource-curse hypothesis in two resource-rich countries, namely, Nigeria and Botswana. Although both countries have derived substantial revenues from their natural resource sectors, the distributed-lag results show that Nigeria may have experienced a natural resource curse, while Botswana has not. These findings are presumed, based on the extant literature, to be explained by differences in the level of institutional quality.</p><p><strong>Keywords:</strong> Natural resources; Institutions; Africa</p> Augustin Fosu Dede Gafa Copyright (c) 2019-06-21 2019-06-21 11 1 29 52 Comparative analysis of the socio-economic characteristics of Delta and Non-Delta spaces of Ghana: An input-output approach <p>This paper provides insights into the current socioeconomic and biophysical state of the Volta Delta, Ghana. We employed non-survey methods, notably the Flegg Location Quotient (FLQ) method of regionalization and construction of tables to develop environmentally extended input-output (IO) model for comparing the economic characteristics of the Volta Delta and the rest of the country. The main sources of data for doing the regionalization were District Analytical Reports. Results from the study indicate that the agricultural sector, trade and transport activities are much predominant in the delta than in the non-delta region. However, employment in services of public administration, financial and insurance, construction and crop production is higher in the non-delta than in the delta region. From a gendered perspective, the embodied work of women in the delta is high in services and manufacturing sectors, but less predominant in agriculture and fishing (compared to the males’ participation). Overall, the delta is found to be a net importer (embodied in goods and services from other regions, higher than in exports) of all the economic metrics used in the study, including agricultural land use, employment, energy and CO<sub>2</sub> emissions.</p><p><strong>Keywords:</strong> Economic activities; Volta delta; Non-delta; Land use; Employment; Sector productions; Ghana</p> Prince Osei-Wusu Adjei Ignacio Cazcarro Iñaki Arto Patrick K. Ofori-Danson Joseph K. Asenso Emmanuel Ekow Asmah Samuel Nii Codjoe Kwasi Appeaning Addo Samuel K. Amponsah Copyright (c) 2019-06-21 2019-06-21 11 1 53 75 Complementarity of inorganic fertilizers and improved maize varieties and farmer efficiency in maize production in Kenya <p>This study contributes to the literature and policy on the impact of partial and package adoption of inorganic fertilizers and improved maize varieties on yields among smallholder households in Kenya. We use a blend of the quasi-experimental difference-in-differences approach and propensity score matching to control for both time-variant and time-invariant unobservable household heterogeneity. Our findings show that inorganic fertilizers and improved maize varieties significantly improve yields when adopted as a package rather than as individual elements. The impact is greater at the lower end of the yield distribution than at the upper end, and when technical efficiency of the farmers improves. A positive effect of partial adoption is experienced only in the lower quantile of the yield distribution. The policy implication is that complementary agricultural technologies should be promoted as a package, and should target households and areas which are already experiencing low yields for greater impact.</p><p><strong>Keywords:</strong> Technology Adoption; Yield; Difference-in-Differences; Kenya</p> Maurice J. Ogada Wilfred Nyangena Copyright (c) 2019-06-21 2019-06-21 11 1 76 100 A psychological study of the effect of microfinance on the self-esteem and self-efficacy of the poor in South Africa <p>The impact of microfinance on the lives of the poor is controversial and there is limited empirical understanding of its psychological effects. Our study endeavoured to explore the effect of microfinance on the self-esteem and self-efficacy of the poor in South Africa. The study was conducted using a non-experimental research strategy (within-subjects design) and quasiexperimental strategy (pre-post-test non-equivalent control group). Systematic and convenience sampling methods were used to select participants. Data were collected on 264 pre-test and 159 post-test participants using the Rosenberg self-esteem scale and General self-efficacy scale. The Pearson productmoment correlation coefficient, the ANOVA and the MANCOVA were used to investigate the effect of microfinance provision on self-esteem and self-efficacy. Our findings not only showed that the provision of microfinance is positively related to self-esteem, but they also showed that microfinance provision leads to an increase in the self-esteem of recipients. The results further revealed a decline in self-esteem for those who were denied microfinance. We argue that providers need to critically assess the psychological effect of their programmes especially on declined microfinance applicants.</p><p><strong>Keywords:</strong> Microfinance; Poverty; Self-esteem; Self-efficacy; South Africa</p> Barnard B. Motileng Claire Wagner Copyright (c) 2019-06-21 2019-06-21 11 1 101 141 An integrated approach to SME risk assessment: A focus on endogenous and exogenous risk factors <p>Despite the many government programmes that have been put in place to assist with small business development, South African small and medium-sized enterprises (SMEs) still face high rates of failure. This study is an empirical investigation into the role and influence that endogenous and exogenous risk factors play in reducing SME failure. Building on existing theoretical perspectives, such as complexity and systems theory, hypotheses are formulated to predict the impact of different forms of capital and risk factors on SME success. Moreover, an integrated risk assessment model that can be used to assess SMEs more holistically regarding risk and success was devised.</p><p>The study collected primary data through survey and employed correlational analysis and hierarchical multiple regression. The results indicate that financial capital and entrepreneurial self-efficacy are significant predictors of SME success. Regarding modeling, the integrated model shows that the effect of the combined risk factors is stronger when compared to individual effects only. These findings highlight that funding models need to incorporate both endogenous and exogenous risk factors which significantly affect the success of SMEs in South Africa.</p><p><strong>Keywords:</strong> SMEs; Risk assessment; Success; Growth; Performance; Integrated Framework</p> Jabulile Msimango-Galawe Boris Urban Copyright (c) 2019-06-21 2019-06-21 11 1 142 177 Credit risk management and performance of deposit money banks in Nigeria <p>This study investigates the relationship between credit risk management and the performance of Deposit Money Banks (DMBs) in Nigeria over the period 2006-2016 using the dynamic Generalized Method of Moments (GMM) and Granger causality techniques. The empirical results revealed a direct and statistically significant relationship between DMBs credit risk management variables measured by capital adequacy ratio, liquidity ratio, non-performing loan ratio and loan loss provision ratio and performance measured by return on asset. However, there is a significant inverse relationship between liquidity ratio and DMBs performance which is an indication that excess liquidity not properly managed as credit facility will eventually leads to a reduction in the financial performance of DMBs. The study recommends that rigorous credit risk management practice is of utmost importance to ensure long term survival of banks in their turbulent operating environment. Besides, Nigeria DMBs need to devise strategies that will limit the banks’ exposition to credit risk and improve their performance and competitiveness.</p><p><strong>Keywords:</strong> Credit Risks; Performance; Deposit Money Banks; ROA; GMM</p> Mayowa G. Ajao Ehi P. Oseyomon Copyright (c) 2019-06-21 2019-06-21 11 1 178 198 The financialisation of primary sector MNEs <p>Since the 1990s, three major developments occurred within the primary sector. First, in a rather short time period, resource prices have displayed major changes. During the 1990s, price indices for food, metals and energy resources were more or less stable. Things changed at the dawn of the new millennium and prices peaked around 2008. After the outbreak the financial and economic crisis, prices dropped and have shown a rather volatile path since then. Second, in the same period, state-owned-enterprises and parastatals emerged to become global players. Mainly, companies from the so-called BRICS (e.g. PetroChina, Gazprom, Petrobas) assumed leading roles. Third, a concentration of capital and market power occurred due to multiple mergers and acquisitions (M&amp;A). These multinational enterprises (MNEs) are listed as some of the biggest companies worldwide. Within their respective commodity chains, they hold dominant and defining positions.</p><p>To understand and analyse these developments, a framework that draws on Marxist political economy is elaborated. By combining the debate on rent theory with the discussion on financialisation, that is, capital accumulation based on fictitious capital, the following arguments can be made. On the one hand, M&amp;As are partially a response to the increasing influence of financial actors on natural resource markets. Simultaneously, the financial sector induced a change in the corporate governance of MNEs towards the principle of shareholder value. Moreover, the conflict between extractive companies and natural resource owners (that is, nation states) over the distribution of rents gained weight due to increasing prices. Strategic M&amp;A allowed MNEs to enhance their bargaining position and secure access to resource reserves. On the other hand, it is characteristic of the companies embedded in the primary sector to follow a mixed accumulation strategy based on both the accumulation of fictitious capital (rent appropriation) and productive capital. Precisely, the access to, and control over, pseudo-commodities define the long-term success of these enterprises. By means of M&amp;A, this access and control are secured, an outcome which supports the ability of MNEs to generate revenue based on rents. Therefore, recent developments in natural resource industries are only partially induced by a general, macroeconomic financialisation.</p><p><strong>Keywords:</strong> Natural resources; Mining; Oil; Food; Primary sector; MNE; Financialisation; Rent theory; Critical political economy</p> Koen Smet Copyright (c) 2019-06-21 2019-06-21 11 1 199 219 Bank competitive landscape and competition in the banking sector in Kenya <p>This study investigates the evolution of competition among commercial banks in Kenya with changes in the bank competitive landscape. Employing system GMM and the performance dynamics approach, the study establishes that bank consolidation has an inverted U effect on competition in the banking sector in Kenya, growth in technology spurs competition among commercial banks in the short run but is impotent in the long run and the progressive increase in the core capital requirement for commercial banks from KES250 million in 2008 to KES1 billion in 2012 slowed competition in Kenya’s banking sector by 3.3 percentage points. Arising from the findings the study concludes that consolidation of commercial banks is a short to medium term instrument for promoting competition in the banking sector in Kenya, growth in technology is effective in promoting competition in Kenya’s banking sector in the short run rather than in the long run and blind increases in the core capital requirements can lead to undesired outcome of reduced competition in the banking sector in Kenya.</p><p><strong>Keywords:</strong> Bank competitive landscape; Intermediation efficiency; Exceptional profits</p> Mdoe Idi Jackson Omolo O. Jacob Nelson H. Wawire Copyright (c) 2019-06-21 2019-06-21 11 1 220 251 Book Review: <i>Women and the informal economy in urban Africa: from the margins to the centre</i> <p><strong>Book Title:</strong> <em>Women and the informal economy in urban Africa: from the margins to the centre</em></p><p><strong>Book Author:</strong> Mary N. Kinyanjui</p><p>(2014). London: Zed Books, pp. 140. ISBN 978-1-78032-630-6 (paperback)</p> Nana Akua Anyidoho Copyright (c) 2019-06-21 2019-06-21 11 1 252 256 Book Review: <i>Knowledge sovereignty among African cattle herders</i> <p><strong>Book Title: </strong><em>Knowledge sovereignty among African cattle herders</em></p><p><strong>Book Author:</strong> Zeremariam Fre</p><p>(2018). University College London (UCL) Press, London, 210 pp. ISBN 978-1-78735-313-8</p> Steve Tonah Copyright (c) 2019-06-21 2019-06-21 11 1 257 260 Book Review: <i>The Twilight of Cutting: African activism and life after NGOs</i> <p><strong>Book Title: </strong><em>The Twilight of Cutting: African activism and life after NGOs</em></p><p><strong>Book Author:</strong> Saida Hodzic</p><p>(2017), University of California Press, Berkeley, 400 pp. ISBN: 978 0 520 29199 7</p> Akosua K. Darkwah Copyright (c) 2019-06-21 2019-06-21 11 1 261 270