nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2019‒07‒29
two papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. The Agriculture Finance Year Book 2019 By Economic Policy Research Agenda
  2. Inequality thresholds,Governance and gender economic inclusion in Sub-Saharan Africa By Asongu, Simplice A; Odhiambo, Nicholas M

  1. By: Economic Policy Research Agenda
    Abstract: The 2019 Agricultural Finance Yearbook, which is the ninth edition in the series and coincides with the 10th anniversary of Agricultural Credit Facility (ACF), offers an in-depth analysis of the trends in the sector performance, with particular emphasis on interventions to promote agro-industrialisation. Chapter One of the book examines the trends in agriculture lending by both government and private financial institutions, the performance and implementation of the Bank of Uganda managed Agriculture Credit Facility over the last ten years; progress and lessons from the Agriculture Insurance Scheme; the rationale for an agriculture finance policy and the implication of the Tier-4 regulatory framework for agriculture finance. A key lesson drawn is that implementation challenges notwithstanding, the uptake of agriculture credit facilities offered by government and partners has steadily increased. This is reflected in portfolio of loans disbursed under ACF amounting to UGX 331 Billion, extended to 525 projects across the country, as at March 2019, as well as provision of complementary financial products by private institutions. Chapter Two of the book critically analyses the innovations that have impacted on the sector with a view to accelerating financial inclusion, such as the introduction and operationalisation of digital payments across the agriculture value chain, easing access to agriculture loans through agent banking, developments in collateral financing through the Warehouse Receipts System. In addition, the book chronicles unique innovations like Centenary Bank’s CenteSupa Woman club as well as interventions to encourage Agricultural Small Medium Enterprise (SME) lending. In the third chapter, evidence is provided using case studies, to examine the financing of agricultural value chains. This includes the role of Public-Private Producer Partnerships in the case of oil palm; financing the country’s integration in the global value chain referring to the case of cotton and textile industry, modalities employed by the development partners and private actors in financing the coffee value chain as well as looking at the development partners perspectives in the case of maize value chain financing in Uganda. Chapter Four assesses the opportunities for equity investments in the agriculture sector, use of credit guarantees to finance agriculture, capacities and institutional governance of Savings and Credit Cooperatives Associations Organisation—all aimed at boosting investments in agriculture sector. I appreciate EPRC’s role of fostering sustainable growth and development of the Ugandan economy by advancing the role of research in policy processes. The Ministry of Finance, Planning and Economic Development shall continue to ensure that financing of agriculture is a priority. I highly recommend this insightful book to all stakeholders working in, or with an interest in, the agricultural sector in Uganda.
    Keywords: Agribusiness, Agricultural Finance, Financial Economics, Risk and Uncertainty
    Date: 2019–06–30
  2. By: Asongu, Simplice A; Odhiambo, Nicholas M
    Abstract: Inequality and gender economic exclusion are major policy concerns facing sub-Saharan Africa in the post-2015 development agenda. The study provides critical masses of inequality that should not be exceeded if governance is to promote gender economic participation. The research focuses on 42 countries in sub-Saharan Africa using annual data spanning from 2004 to 2014. The empirical evidence is based on the Generalized Method of Moments. The following findings are established. First, inequality (i.e. the Gini coefficient) levels that completely nullify the positive effect of governance on female labour force participation are 0.708 for political stability, 0.601 for voice & accountability, 0.588 for government effectiveness, 0.631 for regulatory quality, 0.612 for the rule of law, and 0.550 for corruption-control. Second, inequality thresholds at which female unemployment can no longer be mitigated by governance channels include: 0.561 (for political stability) and 0.465 (for the rule of law). Third, inequality levels that completely dampen the positive impact of governance on female employment are 0.608 for political stability, 0.580 for voice & accountability, 0.581 for government effectiveness, and 0.557 for the rule of law. As the main policy implication, for good governance to promote gender economic inclusion, inequality levels should not exceed established thresholds.
    Keywords: Africa; Gender; Inequality; Inclusive development
    Date: 2019–06

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