The Dynamic Impact of Public External Debt on Capital Formation in Sub-Saharan Africa: The Pooled Mean Group Approach

The increasing reliance on public external debt stocks in Africa and other developing countries has raised the question of debt sustainability, especially in the face of Covid-19, which has forced many counties (both developed and developing) into an unforeseen and unplanned recession. This study contributes to the literature on debt sustainability by examining the effect of public debt on capital formation in Sub-Saharan Africa (SSA) from 2000 to 2008 using the pooled mean group estimation approach. The debt variables considered are external debt stock, debt service on external debt, and interest payment on external debt. Consistent with the overhang theory, our results show that increasing external debt stock and interest payment on external debts only have a marginal impact on capital formation in the short run and exerts a serious negative effect in the long run. Our results also show that debt service burden has a positive effect on gross fixed capital formation in the long run. Therefore, we argue that despite being faced with a huge debt service burden resulting from large external debt stock, SSA countries are not neglecting investments in critical infrastructures needed to drive economic growth. However, we recommend that increasing government revenue base, minimizing economic waste associated with public expenditure, and intensifying negotiations for debt relief may be a plausible way out.

Forecasting and Measuring The Impact on Non-Tax Revenue of Its Principal Determinants in Nepal

This study aims to examine the impact on non-tax revenue of its principal determinants like charges, fines, fees, forfeiture, dividend, principal and interest payment, income received from sales, Royalty, and sales from fixed assets. It also explores the ex-post forecasting of non-tax revenue. It is based on the secondary data taken from various economic surveys of Nepal covering from 1980 to 2019. Descriptive and exploratory research designs are used to examine the impact and forecast the dependent variable. Some statistical and econometric tools like descriptive statistics, unit root testing, ordinary least square, serial correlation, heteroscedasticity test, and dynamic ex-post forecasting approaches. There is a positive impact on non-tax revenue of its principal determinants. The income received from principal and interest payment is found more consistent, whereas the non-tax revenue from sales government goods and services is found more inconsistent than other variables. The value of root means squared error is encountered very small (i.e., 0.7865). So, the gap between actual and forecasted nom-tax revenue is tiny. The results, design, and techniques of this study are not affected by the results and findings of other researchers

Antecedents of Dividend Payout Among Listed Non-Financial Companies listed in Nairobi Securities Exchanges, Kenya

: The objective of this study was to establish the antecedents of dividend payout among listed non-financial Companies listed in Nairobi Securities Exchanges, Kenya, with four specific objectives; to establish the effect of profitability, capital expenditure, leverage and liquidity on dividend pay-out of listed non-financial companies in NSE. The study was founded on Modigliani and miller hypothesis, signalling hypothesis, birds in hand fallacy, Agency and clientele policy. Using correlation research design, the study examined the antecedents of dividend pay-out of listed non-financial companies listed in Kenya for the period 2008 to 2019. The result showed a positive and significant relationship between dividend pay-out ratio and profitability, liquidity and leverage. It also shows negative association between dividend pay-out and capital expenditure. It was concluded that capital expenditure significantly influences dividend paid out negatively. Interest payment for long term debt takes priority as a charge on the profit made by the company. An improvement of a company's liquidity would lead to a better compensation to shareholder inform of dividend distributions. Listed companies therefore are expected to pay dividends when the companies are performing well because otherwise shareholders may question the proceeding of the announced profit or results to signaling effect. Listed companies should arrange the financing of capital expenditure so as ensure shareholder remains at an advantage and enable the company to recover its cost on capital and expected returns.

Increasing Financial Inclusion in the Muslim World: Evidence from an Islamic Finance Marketing Experiment

Low utilization of household credit in developing countries may be partially due to religious considerations. In a randomized marketing experiment in Jordan, this paper estimates the effect of sharia-compliant loan features on demand for credit. To comply with Islamic law, the sharia-compliant product uses a bank fee rather than an interest payment structure, while keeping the rest of the product features very similar. Sharia-compliance increased the application rate for loans from 18 percent to 22 percent, an increase in demand that is equivalent to a 10 percent decrease in interest rates. This study also randomly varied the price of the sharia-compliant loan and finds that less religious individuals are twice as elastic with respect to price as the more religious. By comparing reasons for refusal across treatment groups, this paper estimates that survey measures that try to assess the importance of religious objections to conventional credit overestimate the importance of this type of objection by a third.

Capital Structure and Firm’s Profitability: Evidence From Listed Consumer Goods Sector in Nigeria

This study investigated the impact of capital structure on profitability of consumer goods firms in Nigerian for a period of eight years (2011-2018). Data of ten (10) randomly selected listed firms of the Nigeria Stock Exchange were derived from the firms’ published financial reports for the period covered. The panel regression results revealed that Debt to Asset Ratio(DAR) is positively significant on Return On Asset(ROA) (Proxy for profitability),while other proxies of capital structure shows that Debt to Equity(DER), Liquidity Ratio(LIQ), are not statistically significant, Short Term Debt to Total Asset Ratio (SDTA) shows a negative connection, Firm Size (FS) has a weak correlation with profit and Long Term Debt to Total Asset Ratio (LDTA) do not influence firms’ profitability of the consumer goods sector of Nigeria economy. In conclusion, capital structure influences the profitability of consumer goods sector of Nigerian Stock Exchange. It was recommended that firms in that sector should leverage on debt financing to boost their earnings as interest payment on debt is tax deductible.

IMPLEMENTATION OF THE BORROWER-PAYS PRINCIPLE AND THE PRINCIPLE OF GOOD FAITH IN LENDING TO BORROWERS

The article considers the interrelation between the borrower-pays principle and the principle of good faith in lending to borrowers on the example of interest payment by borrowers and other payments under the loan agreement. The author analyzes the specificity of the principle of good faith when establishing, changing and collecting interest for the use of the loan and other payments under the loan agreement. The article concludes that the law does not contain special rules regulating the behavior of the creditor in the establishment and change of interest for the use of the loan and other payments, in this connection the provisions of the Civil Code of the Russian Federation on inadmissibility of unfair conduct of the parties should be applied. Taking into account that the provisions of the Civil Code of the Russian Federation concerning good faith of the parties are evaluative in nature, the author on the basis of court jurisprudence identified cases of bad faith behavior of the creditor when establishing or changing the interest charged for the use of the loan and other payments. The article also defines the influence of the ratio between the borrower-pays principle payment and good faith concerning the forms and methods of protection of the rights of the borrower and improvement of the legislation on payment of interest and other payments.

The Stop of the Exchequer and the Secondary Market for English Sovereign Debt, 1677–1705

Based on information related to the Stop of Exchequer, 1672, this article calculates the current yields of sovereign debt and examines the effect of the Glorious Revolution on the government’s credibility. The results show that even though the interest payment had not been paid for years, when Parliament authorized the resumption of payment, the current yields fell not only below the level when the interest payment was made by Charles II, but quickly converged to the rates of return of alternative investment. The movement of current yields supports that the constitutional change of 1689 did enhance the government’s credibility.

KAJIAN DAMPAK PERUBAHAN ASUMSI DASAR EKONOMI MAKRO TERHADAP SENSITIVITAS PEMBAYARAN BUNGA UTANG

The state budget has strategic roles due to its capability in setting fiscal policy, the amount of the government’s budget and national fiscal capacity, as well as maintaining fiscal sustainability, and enhancing accountability of the government. This study is aimed to analyze the impact of the change of basic macroeconomic assumptions towards the sensitivity of interest payment expenditure. By employing regression analysis, some conclusions can be drawn as follows: (1) the raise of 3 month SPN interest rates and the depreciation of Indonesian Rupiah to US Dollar lead to an increase of interest payment, (2) the raise of economic growth leads to a decrease of interest payment, (3) by employing a trend analysis, it can be concluded that the increase of domestic interest payment is predicted to grow more rapidly and dominate the portion of interest payment than foreign interest payment is. Abstrak Terkait dengan politik anggaran, Anggaran Pendapatan dan Belanja Negara (APBN) menduduki posisi strategis, karena memuat gambaran kebijakan fiskal dan besarnya anggaran, kemampuan keuangan negara, menjaga kesinambungan fiskal, dan meningkatkan akuntabilitas pemerintah. Kajian ini dimaksudkan untuk menganalisis dampak perubahan asumsi dasar ekonomi makro terhadap sensitivitas pembayaran bunga utang. Hasil kajian dengan menggunakan analisis regresi menyimpulkan bahwa (1) peningkatan tingkat suku bunga SPN 3 bulan dan pelemahan nilai tukar rupiah terhadap dolar AS dapat berdampak pada peningkatan pembayaran bunga utang, (2) peningkatan pertumbuhan ekonomi berdampak pada penurunan pembayaran bunga utang. Melalui analisis tren didapati kesimpulan bahwa kenaikan bunga utang dalam negeri diperkirakan tumbuh lebih cepat dan mendominasi pembayaran bunga utang jika dibandingkan dengan bunga utang luar negeri.

DAMPAK PENERBITAN DAN PENJUALAN SURAT UTANG NEGARA BAGI PEREKONOMIAN INDONESIA

The edition and the sale of the country's obligation letter/government bond give the impact to the banking sector, monetary, and fiscal, as well as the monitory authority. The objective of the study is to verify the impact of the edition and the sale of the government bondfor lndonesia economy. The methods used are descriptive analysis of the collected data from library research and other resources related to the topic.The research found that the impact to the Capital Adequacy Ratio is getting better, the impact to the monetary is the increase of the money quantity as much as the interest payment given by the government conserving the government bond property, the impact to the monetary authority is the decrease of liquidity support and the increase of lndonesian Bank outstanding to the government. The sale of government bond gives fresh fund to the government which can be invested, to the productivity asset, to support the process of economy recovery Post print