Government domestic debt arrears and private investment in Sub-Saharan Africa

PurposeThis study investigates the effect of government domestic payment arrears on private investment. The authors argue that an increase in government domestic arrears can reduce private sector investment owing to the competition for credit.Design/methodology/approachThe prediction is empirically tested using data for 33 Sub-Saharan Africa (SSA) countries for the period 2007–2018 using a panel general methods of moment estimation technique. This is also complemented with impulse responses derived from the standard vector autoregressive model.FindingsThe results show that an increase in government domestic arrears adversely affects private investment in SSA and most subregional communities within SSA. It also revealed that private investment negatively responds to shocks in government domestic arrears.Originality/valueThis is the first study that attempts to investigate the effect of government domestic borrowing arrears on private investment. It seeks to serve as a guide to governments in their domestic borrowing decisions to ensure timely servicing.

Private Sector Investment in Infrastructure in Sub-Saharan Africa Post-COVID-19: The Role of Law

Sub-Saharan Africa (SSA) is the lowest income region of the world with a considerable number of low-income countries. The region is challenged by a massive infrastructure deficit. In recent years, the governments of the countries in the region have expressed the desire to bridge the huge gap in infrastructure assets through a partnership with the private sector using the public-private partnership model. However, the advent of the Coronavirus (COVID-19) pandemic which has resulted in unplanned public sector expenditure poses a new kind of hurdle to climb for states in the region. As such, there is a need for governments in SSA to create and sustain efficient opportunities for private sector investment in infrastructure procurement and maintenance. This article adopted the doctrinal legal research method as well as review of literature in the examination of the role of law in creating a healthy and sustainable business environment for private sector participation in infrastructure financing and operation in a post-COVID-19 era in the SSA region. The article recommends among others, the enactment of legislation to create an enabling environment for raising domestic capital for the purposes of private sector–led public infrastructure procurement as well as the implementation of strategies suited for developing economies to attain successful outcomes in private sector backed infrastructure procurement.

The Macroeconomics of South African Economic Growth

Covering the period 1994 to 2019, this chapter shows that between 1994 and 2008 South Africa’s growth performance improved and that this improvement was to a large extent driven by an improvement in total factor productivity (TFP). However, since 2008 South Africa’s growth performance has deteriorated significantly. The chapter shows that the deteriorating growth performance was accompanied by the deterioration of TFP, and argues that lower private-sector investment levels, combined with low levels of human capital development and a lack of international competitiveness, constitute the causes of lower productivity and economic growth. This chapter also explores the various growth policies put forward since the mid-1990s to improve economic growth. These include labour-intensive growth, export-driven growth, and investment-driven growth. The chapter argues that the implementation of a well-designed combination of these policies will be needed to attain higher levels of economic growth.

Financing climate change mitigation in agriculture: assessment of investment cases

As with other sectors of the economy, agriculture should also contribute to meeting countries’ emission reduction targets. Transformation of agriculture to low-carbon food systems requires much larger investments in low emission development options from global climate finance, domestic budgets, and the private sector. Innovative financing mechanisms and instruments that integrate climate finance, agriculture development budgets, and private sector investment can improve and increase farmers' and other value chain actors’ access to finance while delivering environmental, economic, and social benefits. Investment cases assessed in this study provide rich information to design and implement mitigation options in agriculture through unlocking additional sources of public and private capital, strengthening the links between financial institutions, farmers, and agribusiness, and coordination of actions across multiple stakeholders. These investment cases expand support for existing agricultural best practices, integrate forestry and agricultural actions to avoid land-use change, and support the transition to market-based solutions.

Mobile Health (mHealth) in Low- and Middle-Income Countries

This article reflects on current trends and proposes new considerations for the future of mobile technologies for health (mHealth). Our focus is predominantly on the value of and concerns with regard to the application of digital health within low- and middle-income countries (LMICs). It is in LMICs and marginalized communities that mHealth (within the wider scope of digital health) could be most useful and valuable. Peer-reviewed literature on mHealth in LMICs provides reassurance of this potential, often reflecting on the ubiquity of mobile phones and ever-increasing connectivity globally, reaching remote or otherwise disengaged populations. Efforts to adapt successful programs for LMIC contexts and populations are only just starting to reap rewards. Private-sector investment in mHealth offers value through enhanced capacity and advances in technology as well as the ability to meet increasing consumer demand for real-time, accessible, convenient, and choice-driven health care options. We examine some of the potential considerations associated with a private-sector investment, questioning whether a core of transparency, local ownership, equity, and safety are likely to be upheld in the current environment of health entrepreneurship. Expected final online publication date for the Annual Review of Public Health, Volume 43 is April 2022. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

The New Final Frontier: A Case Study Analysis of Private Sector’s Increasing Role in the Space Industry

Historically, any endeavors, involving the term ‘space’, were perceived as operations undertaken by large government organizations with an emphasis on the scientific aspect, rather than a business one. However, over the last two decades, the structure of the space industry is rapidly being transformed and privatized due to the growth in commercial applications and the catalyzing entry of billionaires such as Elon Musk and Jeff Bezos. This paper offers a case study analysis of the private sector’s growing influence in the space industry through a combination of a quantitative analysis and an in-depth review of the surrounding literature. The results show that the commercial economy now accounts for almost 80% of the monetary size of the space industry and is expected to drive most of the growth in future. Further, a forecast of the future size of the space economy suggests it could touch almost US$1.5 trillion by 2040, dominated by the private sector. A regression analysis conducted to assess the quantum of private sector investment that will be required if the industry is to achieve its forecasted potential in the upcoming decades revealed that private investments must go up to US$48billion by 2025.

Quantifying economic activity in the informal recycling sector in South Africa

Informal waste reclaimers are a key part of South Africa’s recycling economy, being responsible for around 51% of all paper and packaging waste collected in South Africa in 2017. Active in the waste and recycling landscape for more than three decades, their activity predates the earliest voluntary paper and packaging Extended Producer Responsibility schemes. However, these voluntary schemes have been instrumental in scaling South Africa’s recycling economy. Investment by brand owners, retailers, converters and recyclers has helped develop local end-use markets, creating a demand for paper and packaging recyclables and a resultant increase in their collection. An analysis of tonnage and price data shows that the mean estimate of money paid by the private sector to the informal waste sector through the purchase of recyclables at intermediaries such as buy-back centres, was ZAR625 million in 2012, increasing to ZAR872 million in 2017. This private sector ‘investment’ in the local recycling economy has led to direct and indirect job creation and improved livelihoods, particularly for a large, well-established and effective informal waste sector, and has indirectly funded municipal waste diversion strategies, saving municipalities in both the collection and disposal of waste.

Part VIII Compliance, Implementation, and Effectiveness, Ch.54 Financial Assistance

This chapter studies the important role of financial assistance in furthering environmental protection. Financial assistance is composed of a complex mosaic of financial mechanisms and sources, which are linked to and affected by global conventions, multilateral institutions, bilateral aid, and private sector investment. Moreover, the principle of common but differentiated responsibilities has provided a specific rationale for the provision of financial assistance within multilateral environmental agreements (MEAs) and through various financial mechanisms. Through the provision of financial assistance, developed countries contribute to covering the incremental costs of protecting the global environment incurred by developing countries. The functions of financial assistance include, inter alia, capacity-building, disaster relief, financing of pollution control equipment, and compliance assistance. Among these various targets, capacity-building has received an important political emphasis. The chapter then outlines the different types and sources of financial assistance, as well as its aim and nature, before analysing the legal structure of financial mechanisms.

Crowd-in Effect of Highway Capital on Private Investment in the United States

This paper examines the impacts of public transportation infrastructure investment on private investment and whether public infrastructure investment tends to “crowd in” or “crowd out” private investment. “Crowding in” refers to situations where public investment encourages private sector investment, whereas “crowding out” refers to situations where public investment discourages private sector investment. This analysis applies the vector autoregression (VAR) methodology for an empirical study. Using national-level annual data from 1947 to 2017 in the United States, estimation results suggest that public investment in highways tends to crowd in private investment after an initial and temporary crowding-out effect. Most of the positive impacts on private investment accrue within 3 years after the initial public investment. The incremental impact diminishes almost completely after roughly 10 years. Alternative model specifications and sensitivity analyses further confirm the robustness of the model specification by yielding consistent and positive crowd-in effects within the first 3 to 5 years after the public investment.