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The relationship between exchange rate volatility and stock returns on the Ghana stock exchange.
(KNUST, 2018-05) Afful, Seth
The study employs Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model to examine the relationship between exchange rate volatility and stock prices from January, 2000 to August, 2016. The purpose of the study was to ascertain whether investors and fund managers can take advantage of diversification to minimize risk and maximize return. A sample of 200 monthly observations of stock and exchange rate returns was used for the purposes of the analysis. It was revealed that there is a negative relationship between stock price movements and exchange rates volatility and the relationship is strong and significant. This implies that an increase in exchange rate volatility will lead to a decrease in stock market volatility. This study recommends the need for policy maker’s intervention in times of abnormal exchange rate volatility so as to boost investor confidence and the need for increased use of efficient hedging instruments by firms on the stock markets thus, eliminating negative effects
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Impact of internal migration on household welfare.
(KNUST, 2018-06) Senyo, Kwame Denutsui
The welfare of individuals is very important to every government and household. The measurement of welfare takes different dimensions and several studies show that one of the best ways to measure welfare is through the consumption pattern of such individuals. Migration from rural to urban centres in Ghana has led to the formation of slums in most migrant destinations. These slums serve as a haven for criminals, contributed to increase in teenage pregnancy and child labour in the cities. There is an increase agitation by citizens for government to relocate the slum dwellers back to the rural areas. United Nations reports that over 200 million individuals are likely to live in slums by the year 2020 and Molini and others have attributed the growth in slums to increase in migration. Other argue that migration improves welfare. Using Ghana Living Standards Survey data collected between 2012-2013 and employing ordinary least square regression (OLS) technique, the study estimates the impact of internal migration on household welfare in Ghana. It was observed that, internal migrants have a positive level of welfare compared to that of non migrants. The study further reveals that, basic education, migrant being divorced or separated, household headed by male, living in rural Ghana and having a household size have a significant impact on the welfare of the internal migrant. It is recommended that, establishment of more basic and technical schools, business advisory services, increase provision of vocational training programs, increase support for government policy of free universal Basic and Senior high school by all stakeholders in rural areas, increase education of rural dwellers of the need to practice birth control and it associated benefit tohousehold welfare, and provision of better transportation networks in the rural areas will increase internal migration and welfare of migrant household in Ghana
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The effects of non-performing loans on bank profitability.
(KNUST, 2018-03) Agbo, Rita Kafui
This study investigates the effects of Non-performing loans (NPL) on bank profitability. The study uses the balanced panel data from three banks (HFC Bank, Ecobank and CAL Bank) toanalyse the effects of non-performing loans on the profitability of the selected banks from January 2010 to December 2015. The findings showed that the non-performing loan of the selected banks is neither strong nor weak. Again, the results reveal that non-performing is negatively related to bank profitability whereas capital adequacy ratio is positively related to bank profitability. The study concludes that once the non-performing loan is managed it improves the level of profitability of the banking sector. This reveals some significant policy implications for increasing profitability and protecting banks from crisis. It is recommended that banks should have dedicated credit risk policy and must raise the level of awareness of the need to identify, measure, monitor and control credit risk.
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An empirical investigation of crude oil price volatility and inflation in Ghana.
(KNUST, 2018-09) Asiedu, Obed Otu
Oil prices have both direct and indirect effect on the general price levels of the domestic economy. According to Arinze (2011) rising oil prices can have direct effect on the consumer price index (CPI) by directly influencing the prices of energy related products like motor fuels, electricity, gas and household fuels captured under the energy component of the CPI. Also because energy prices form a considerable portion of the production cost of most goods produced; usually in the form of fuelling machineries and transportations, rising oil prices can indirectly affect the core portion of CPI. The study had the main objective of investigating the effect of crude oil price volatility on inflation in Ghana. Specifically, the study sought to examine the effect of oil price volatility on consumer and producer prices in Ghana, and also assess the response of consumer and producer prices to oil price shocks. The study estimates separate VECM models for consumer prices and producer prices using time series data from 1980 to 2016. The study found that oil price volatility had a positive effect on both consumer prices and producer prices. The impulse response functions also showed the positive response of consumer prices and producer prices are likely to be permanent and exist in the economy for a long time. Also the study found that exchange rate reduces consumer prices whereas government expenditure and money supply leads to higher consumer prices. On the other hand, exchange rate and money supply reduces producer prices, imports increases producer prices. The study recommends that policy makers and the various authourities consider policies that can enable the country diversify its energy mix to help reduce the positive effect that oil price has on inflation. Also, government should implement policies that will help reduce the risk from the country’s vulnerability of the oil price volatility.
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Assessing the role of Sub-district structures in decentralised local governance: a case study of Sagnarigu Municipal Assembly.
(KNUST, 2018-10) Kamal-Deen, Baba
The research investigated into the role of the sub-district structures of local government in the Sagnarigu Municipality using a participatory study design. Data was collected from both primary and secondary sources. In addition to literature review, a sample size of 100 participants was used and responses from the Municipal Assembly officials, stakeholders of the sub-district structures and the members of the community represented the primary data. Data was analysed using qualitative techniques. Results from the analysis indicated that sub-district structures are confronted with a number of constraints that militate against the realization of their potential for inducing grassroots development. The Unit Committees in the rural communities of the Municipality are more effective and efficient in keeping touch with the grassroots than their counterparts in the urban communities. Recommendations are made to the Ministry of Local Government and Rural Development to ensure that the Municipal Assembly adequately provides for the financial and logistical needs of the sub-structures as timely as possible and massive public education should also be done by stakeholders in democratic decentralisation to educate the public about the need for depoliticisation of local governance in Ghana.
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Effect of loan interest rate on small and medium enterprises development in Ghana.
(KNUST, 2018-09) Loli, Ernest Quashie
There is an increase in recognition of the important role small and medium enterprises (SMEs) play in every economic development. In the past, developing economies including Ghana have undergone periods of significant changes such as the economic recovery and structural adjustment programmes which have gradually necessitated the development of a market economy. This study is a contribution to the debate on the effect of loan interest rate on small and medium enterprises growth in Ghana. The main purpose of the study is to examine the effect of loans interest rates on SMEs performance and growth at Tudu in the Accra central business district. Some major issues included the difficulty for SMEs to access bank loans due to high interest rates, low profitability and lack of collateral required by the banks. The general argument was that, high loan interest rates were not compatible with the performance and growth of SMEs, and that most financial institutions such as the Banks charged high interest rates, and hence the SMEs tend not to be profitable. Causing an increased rate of SMEs failure in developing countries. In addition, little work establishes the link between the loan interest rates and the growth of SMEs. Therefore, it is in the best interest of this study to investigate and find out the extent to which the charged interest rates affect the performance and growth of SMEs. The study design was a cross-sectional survey. The information that led to the achievement of the objectives was gathered through the use of questionnaire involving a sample size of 100 respondents sampled based on purposive sampling. From the results, the study concluded that the effects of loans on growth and development of businesses are physical, social infrastructure and capital. Clearly, there is a close to consensus expression that acquiring a loan from bank or any financial institution brings about improvement of businesses. Hence, the study recommended that more attention be focused on the growth of small and medium enterprise by making loans available at reduced interest rates and accessible to all people in the country in order to create job opportunities for employment, reduce cost of doing business and ensure effective business operations and management. The findings of the study indicated that, majority of the entrepreneurs were females who were engaged in various small and medium enterprises with the Tudu business centre. Larger proportion of the entrepreneurs mainly contract loan facilities from the bank with GH₵ 1000 and GH₵ 2000 to speed up the operations of the business. Business growth and sales of SMEs are the main variables that influence loan accessibility. Employment, reduce cost of doing business and business operation and management are the variables that have a significant influence on growth and development of small and medium entrepreneurs. The study suggested that government should reduce interest rate to the optimum growth and development of SMEs in Ghana.
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Foreign aid, human capital development and economic growth in Ghana.
(KNUST, 2018-03) Amegavi, Cephas Tetteh
The main purpose of this study was to examine foreign aid, human capitaldevelopment and economic growth in Ghana using a time series data for the period of 1975 to 2014. The study looked at the real impact of aid on human capital development and its consequence effect on economic growth in Ghana. Growth should comprise a sustained increase in both physical and human capital development. Even the growth of physical capital should impact positively on the human capital and hence economic growth. The ARDL technique was employed to examine the possibility of long run and short run effects among the variables. The Granger causality test was also used to investigate if there is any causal relationship between foreign aid on human capital development and economic growth. The statistical results obtained revealed that foreign aid had a positive and significant effect on human capital development both in the long run and short run respectively. The Granger causality test result showed that there is causality between human capital development and economic growth and also there is no causality between human capital development and foreign aid. The study recommends that the efforts of Ghana and its donor partners will coordinate better and properly plan their efforts to undertake projects that will have positive impacts in the long run on growth in Ghana. Those projects should include public capital which will help educate and increase productivity of large group of people and their private capital. The government should create a strong absorptive capacity in terms of complete recognized framework and stable macroeconomic environment that will help the country maximize the benefits of foreign aid, and then the objectives of their multi-donor budgetary support could be very well achieved.