Uganda energy moves pose risks for the president

2017 ◽  
Keyword(s):  
Political Economy ◽  
Oil Production ◽  
Recent Experience ◽  
Energy Infrastructure ◽  
Content Type ◽  
Investor Confidence ◽  
Energy Fund ◽  
The Impact ◽  
The Imf

Subject Political economy of energy in Uganda. Significance After 20 years of growth averaging 8% per annum, the Ugandan economy has begun to falter. In July, the IMF reported that 2016-17 growth had slowed to 3.9%. Both the IMF and Museveni agree that further investment in infrastructure -- especially energy infrastructure -- will help to alleviate the current pressures. However, recent experience suggests that such investments are not without risks. Impacts Controversies related to the Bujagali dam will raise concerns over the viability of other hydro-electric projects. The depletion of the national ‘Energy Fund’ will reduce the government’s ability to mitigate the impact of shocks in the sector. Reduced investor confidence will undermine Uganda’s attempts to kickstart oil production.

Oil price uncertainty and equity returns

2016 ◽  
Vol 8 (1) ◽  
pp. 64-79 ◽  
Author(s):  
Aktham Maghyereh ◽  
Basel Awartani
Keyword(s):  
Stock Returns ◽  
Oil Production ◽  
Equity Returns ◽  
Oil Price ◽  
Policy Implications ◽  
Price Uncertainty ◽  
Mena Region ◽  
Stock Market Returns ◽  
Content Type ◽  
The Impact

Purpose This paper aims to examine the impact of oil price uncertainty on the stock market returns of ten oil importing and exporting countries in the Middle East and North Africa (MENA) region. The sample contains both oil importing and oil exporting countries that depend heavily on oil production and exports. Design/methodology/approach This paper intuitively applies the generalized autoregressive conditional heteroskedasticity (GARCH)-in-mean vector autoregression (VAR) model using weekly data over the period January 2001-February 2014. Findings The findings indicate that oil uncertainty matters in the determination of real stock returns. There is a negative and significant relationship between oil price uncertainty and real stock returns in all countries in the sample. The influence of oil price risk is more serious in those economies that depend heavily on oil revenues to grow. Practical implications The findings have important implications. For instance, managers should be aware of the linkages between oil price uncertainty and equity returns when they use oil to hedge and diversify equities, particularly in economies where oil is important for economic growth. The policymakers in oil importing countries should encourage companies to improve efficiency in the usage of energy and to resort to alternative sources to avoid fluctuations in earnings and equity prices. In the countries that heavily depend on oil efforts should focus on diversifying the domestic economy away from oil to protect against oil price fluctuations. Originality/value To the best of our knowledge, this is the first attempt to study the influence of oil price uncertainty in the MENA region. The sample contains both oil importing and oil exporting countries that depend heavily on oil production and exports. The empirical findings of the paper have valuable policy implications for investors, market participants and policymakers.

OPEC quotas may have small impact

2016 ◽  
Keyword(s):  
Saudi Arabia ◽  
Oil Production ◽  
Change Strategy ◽  
Content Type ◽  
Small Impact ◽  
Future Action ◽  
The Us ◽  
Policy Direction ◽  
The Impact

Significance OPEC's decision to try to agree new quotas for its members, albeit with key exemptions, suggests a fragile consensus is growing around a change in policy direction towards cooperation. Impacts Perceptions will strengthen that Saudi Arabia is prepared to change strategy. A framework and platform for future action should allow OPEC to reassert its cartel position. Agreement on quotas is unlikely to reduce export volumes much, limiting the impact on prices. The prospect of a deal will see further additions to the US rig count, with implications for US oil production in 2017. If prices rise, encouraging more investment, and Libyan and Nigerian output recovers, OPEC output could rise even if quotas are imposed.

Azerbaijan looks to gas as oil's importance wanes

2017 ◽  
Keyword(s):  
Oil Production ◽  
Strong Ties ◽  
Social Unrest ◽  
Content Type ◽  
The Government ◽  
Russian Military ◽  
The Impact

Subject Impact of oil output cuts on Azerbaijan. Significance Azerbaijan has agreed to cut oil production in the first half of 2017 in support of the agreement reached by OPEC and non-OPEC states. It can ill afford a further loss of revenues, but the bigger picture is that oil production is already on a downward curve. Impacts To avoid social unrest, the government will need to allocate spending to mitigate the impact of rising prices. Fiscal pressures may rein in lavish spending on Russian military hardware. The government will maintain strong ties with Turkey as an export route and security ally.

Local truces could increase Libya's oil production

2015 ◽  
Keyword(s):  
Oil Production ◽  
Emergency Relief ◽  
Content Type ◽  
Oil Resources ◽  
The Impact ◽  
Improve Access

Subject The impact of the rising number of local truces. Significance Elders from the towns of Zintan, Zawiya and Rujban on July 14 agreed never to attack each other again. A series of local truces in western Libya in recent months has brought about a cessation of hostilities in several regions. This process has been taking place in parallel to the UN-brokered negotiations to end the divide between Libya's two governments, which resulted in a political agreement on July 11. Impacts Local truces will improve access to emergency relief for medical, fuel and food supplies in several communities. If local agreements continue to hold and inspire others, the UN-brokered national political deal will be bolstered. Reopening pipelines to El Feel and El Sharara oilfields and increasing oil production may intensify the battle for oil resources.

Tensions may surface over Kenya’s early oil production

2018 ◽  
Keyword(s):  
Investment Decision ◽  
Oil Production ◽  
Revenue Sharing ◽  
Local Communities ◽  
Transport Infrastructure ◽  
Political Leaders ◽  
Content Type ◽  
Investor Confidence ◽  
Pilot Scheme ◽  
Oil Revenue

Significance President Uhuru Kenyatta on June 3 inaugurated Kenya’s Early Oil Pilot Scheme (EOPS), waving off the trucks on their journey from Turkana County to Mombasa. The launch follows a breakthrough agreement between Kenyatta and Turkana’s political leaders on an oil revenue-sharing formula after months of discord. Impacts The petroleum bill may now be passed, potentially boosting investor confidence ahead of Tullow’s final investment decision in 2019. Turkana political leaders may struggle to sell the deal to locals disappointed by the climb-down from a 10% share for local communities. Insecurity and poor transport infrastructure will prove further obstacles to oil production.

Monetary tightening plans may backfire in Argentina

2018 ◽  
Keyword(s):  
Economic Recession ◽  
Adjustment Programme ◽  
Social Unrest ◽  
Content Type ◽  
Investor Confidence ◽  
Debt Default ◽  
Debt Repayment ◽  
The Imf

Subject Monetary tightening. Significance The Argentine government has announced a traditional fiscal and monetary adjustment programme, and an expanded stand-by agreement with the IMF, in a bid to restore investor confidence and remove fears of a new debt default. The government’s attempted gradual path to fiscal equilibrium exploded in April, as worsening global conditions closed the access to foreign finance. Impacts Any rise in investor confidence could be slow, given Argentina’s poor record of IMF compliance and debt repayment. Contractionary policies will deepen the economic recession, raising social unrest. If the recession is longer than expected, the centre-right coalition’s chances of re-election will suffer.

Determinants of variation in public investment in emerging Europe

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sasa Randjelovic
Keyword(s):  
Eastern Europe ◽  
Least Squares ◽  
Public Debt ◽  
Public Investment ◽  
Investment Policy ◽  
Content Type ◽  
Eu Membership ◽  
Public Investment Policy ◽  
The Impact ◽  
The Imf

PurposeThis paper evaluates the economic, political and institutional determinants of variation in public investment in emerging Europe.Design/methodology/approachPanel econometrics (panel-corrected standard error, generalized least squares and the two-stage least squares) methods have been applied using annual data from 2000 to 2017 for 16 countries from Central and Eastern Europe (CEE).FindingsPublic investment was procyclical in relation to output and negatively associated with the level of public debt. Austerity episodes triggered a significant drop in public investment. Positive drifts in public investment during election periods and the negative impact of the number of cabinet seats held by left-wing parties have been captured. While no firm evidence on the impact of EU membership was found, the results show that arrangements with the IMF were strongly associated with lower public investment. Political factors were of greater importance in Central Europe and the Baltics, while institutional factors had a more significant impact in South Eastern Europe.Practical implicationsTo foster public capital formation, it is necessary to: 1) strengthen the countercyclicality of public investment policy and to keep public debt at a low level; 2) adjust the fiscal criteria for EU membership in a manner that would enable countries to use the EU structural fund more effectively, while maintaining fiscal sustainability; 3) put a stronger emphasis on structural features of fiscal policy when designing country-level arrangements with the IMF.Originality/valueThe paper contributes to the literature on determinants of public investment policy by adding empirical evidence for emerging Europe countries.

Does crude oil output aid economy boom or curse in Nigeria? An inference from “Dutch disease”

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Samuel Oludimu ◽  
Adewale Andrew Alola
Keyword(s):  
Economic Growth ◽  
Crude Oil ◽  
Resource Curse ◽  
Oil Production ◽  
Income Level ◽  
Dutch Disease ◽  
Least Square ◽  
Content Type ◽  
Crude Oil Production ◽  
The Impact

PurposeA reflection on some supposed oil exporting states constantly reminds of the (in) validity of the resource curse hypothesis and environmental consequences of oil exploration. In Africa, especially the case of Nigeria, the argument has remained whether the country's voluminous deposit of crude oil has positively affected the livelihood of the people. The study aims to examine the impact of oil production on the income level in Nigeria.Design/methodology/approachIn this context, the study first examined validity of Dutch disease in Nigeria, thus providing a foundation to further establish the resource curse hypothesis. As such, the impact of crude oil production (CRUDE), square of crude oil production (CRUDESQ), crude oil reserves (RESERVES) and population (POP) on economic growth over the period of 1980–2018 is examined through the combination of autoregressive distributed lag (ARDL), fully-modified ordinary least square (FMOLS) and canonical cointegration regression (CCR) methods.FindingsWhile the study revealed the existence of Dutch disease in Nigeria, the resource curse hypothesis is also valid. However, the study found that the resource curse hypothesis in Nigeria can be over-turned when the CRUDE attains a certain maximum threshold, i.e. when crude oil output is doubled over time. In addition, either of crude RESERVES or oil rent (RENT) is seen as a limiting factor to economic growth while POP poses a positive and desirable impact on the country's economic development.Originality/valueThus, the implication of a U-shaped relationship between oil production and income level is that Nigeria's natural resources exploration could be employed to over-turn the potential of resource curse hypothesis by increasing exploration while the sources of leakages and misappropriation of the oil revenues are deliberately mitigated. Other useful socio-economic policies were proposed for the Government.

scholarly journals Investor confidence and mutual fund performance in emerging markets

2018 ◽  
Vol 45 (6) ◽  
pp. 1288-1310 ◽  
Author(s):  
Ann-Ngoc Nguyen ◽  
Muhammad Sadiq Shahid ◽  
David Kernohan
Keyword(s):  
Emerging Markets ◽  
Mutual Funds ◽  
Mutual Fund ◽  
Unobserved Heterogeneity ◽  
Generalized Method Of Moments ◽  
Fund Performance ◽  
Mutual Fund Performance ◽  
Content Type ◽  
Investor Confidence ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of investor confidence on mutual fund performance in two relatively vulnerable but leading emerging markets, India and Pakistan. Design/methodology/approach A pooled ordinary least squared (OLS) model is used to look at two alternative measures of investor confidence and test for the relationship between investor confidence and mutual fund returns. To check the robustness of the findings, the authors also implement two-stage least squares and generalized method of moments techniques to control for unobserved heterogeneity, simultaneity and dynamic endogeneity problems in the regressors. Findings The paper finds that the returns of mutual funds are positively associated with investor confidence and an interaction effect exists between investor confidence and persistence in performance. The paper also confirms that returns from mutual funds are associated with different fund characteristics such as fund size, turnover, expense, liquidity, performance persistence and the fund’s age. These findings remain robust to alternative model specifications and measures of investor confidence. Originality/value While the previous literature mainly focuses on mutual fund characteristics and the macroeconomic determinants of mutual fund returns, this paper demonstrates that investor confidence plays an important role in determining mutual fund performance. The authors attribute this finding to two relatively unique features of the emerging markets in the study. A lack of awareness of mutual funds as being a low-cost investment vehicle and the interplay of cultural and behavioral changes have prevented investor’s savings from being channeled into investment products, away from gold or property.

Doctoring the ball

2017 ◽  
Vol 44 (1) ◽  
pp. 2-23 ◽  
Author(s):  
Christian Daude ◽  
Hamlet Gutierrez ◽  
Angel Melguizo
Keyword(s):  
Political Economy ◽  
Dominican Republic ◽  
Interest Groups ◽  
Developing Economies ◽  
Tax Incentives ◽  
Institutional Framework ◽  
The Political ◽  
Policy Makers ◽  
Content Type ◽  
The Impact

Purpose Tax incentives can be a useful tool to stimulate investment in developing countries. However, interest groups often are able to exert considerable influence in its management, if not its design. The purpose of this paper is to use a power-based approach to the political economy of tax reform to analyse the case of tax incentives for investment in the Dominican Republic. Based on original interviews and a detailed analysis of regulations, the authors study how interest groups work within the institutional framework to seek outcomes that best fit their objectives. However, when unsuccessful, they become powerful advocates of change. These power dynamics have important implications for the design and management of tax incentives in the Dominican Republic and in other developing economies. Design/methodology/approach Case study based on informed interviews with policy makers, lobbyists and researchers combined with statistical and administrative information to test the main hypotheses. Findings While the role of influence groups in creating tax schemes has been widely studied, the authors show that these groups can also have an important role in the administration of the regime and making it more or less open to modifications. The paper shows that the capture of investment incentives has rendered the tax system rigid and unstable in the Dominican Republic, subjecting the public interest hostage to the gain of few. Research limitations/implications Therefore, there is a need to review and reform tax policy, not just from a technical viewpoint, but more importantly altering the political arrangements. More transparency in assessing the impact of these schemes, disclosing information of who has access to tax exemptions and budgeting the tax expenditures can also be tools to increase public control over these instruments. Also, making it more difficult to grant tax incentives, for example by asking for an ex-ante justification and quantification of the externalities supposedly being created would reduce the abuse by power groups of these instruments. Without more balanced and independent leadership, it would be extremely difficult to advance in these fields. Originality/value The literature on the political economy of tax incentives normally focuses on how key actors work around the institutional framework to solve conflict of interests. This paper addresses a complementary – and in the viewpoint equally relevant – aspect of the political economy of tax incentives: once enacted, vested interests have a particular motivation to keep the incentives in place, and therefore the authors should understand how key actors work from within the institutional framework to seek the outcomes that better suit their interests. The analysis focuses on Dominican Republic, based on official data and additional in-depth interviews with policy makers, entrepreneurs and consultants that assist firms with tax and regulation issues.

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