Browsing by Author "Mukoki, Paul Shepherd"

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    Infrastructure financing and bond markets development in sub-Saharan Africa
    (2022) Mukoki, Paul Shepherd
    This thesis explores how domestic public debt (bond) markets can be developed into viable mechanisms for closing the infrastructure funding gap existing in the sub-Saharan Africa (SSA) region. The infrastructure deficit in the SSA region is colossal and an impediment to its economic growth. To narrow the large deficits, Africa needs to bridge its infrastructure financing gap, estimated at US$62 billion annually until 2025. On the other hand, domestic public debt markets are seen as a potential funding source for filling this huge financing gap, but they are not considered well-developed. We first examined the relationship between bond markets development and the infrastructure gap in Sub-Saharan Africa. We employed the panel threshold regression (PTR) model on 40 countries covering 2003-2018 and documented a non-linear (single-triple) relationship between public debt market development and the infrastructure gap. We established that many of the fledgling government and corporate bond markets play a complementary role in the financing of infrastructure; and interestingly, with corporate public debt markets eliciting a greater reduction in the infrastructure financing gap than government public debt markets. We then used a cross-country survey approach on 8 SSA countries and nonparametric inferential statistics to investigate, first, the state of the public bond markets in SSA and, second, the ways by which their liquidity can be improved so that infrastructure investment can be enabled. The major conclusions from these survey results are: First, government yield curves do not provide a reliable benchmark for corporate bonds. Second, the government bond markets, which are expected to offer foundational mechanisms for establishing robust and effective yield curves, have remained underdeveloped. Commercial banks remain the predominant investorsin government bond markets, followed by nonbank financial institutions, and a few foreign investors, in that order. Third, except for South Africa, only 38% of the corporate bond markets in SSA are moderately developed; the rest are either developing (25%) or nascent (25%). Fourth, pension funds in many SSA countries have somewhat reformed to engage in infrastructure financing, though within statutory limits. Fifth, liquidity in government bond and corporate bond markets is relatively low in many countries, which in turn, limits infrastructure financing. Finally, we found that sophisticated financial instruments could facilitate infrastructure financing by deepening and fostering liquidity in domestic public debt markets. These instruments include infrastructure project bonds, diaspora bonds, green bonds, and vi securitised debt assets. An important part of this initiative involves increasing the sale of stateowned enterprise bonds and municipal bonds backed by guarantees from the government. The overall results show that the public debt markets in many of the surveyed SSA countries are underdeveloped and cannot significantly plug the infrastructure financing gap in the region unless substantial capital (especially public debt) markets growth and/or development are embarked upon.
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    The relationship between corporate social responsibility and firm performance: a study of South African listed companies
    (2016-04-06) Mukoki, Paul Shepherd
    A growing number of institutional investors that are adopting corporate social responsibility (CSR) philosophy are playing a crucial role in influencing listed companies to adopt and address CSR issues. CSR is defined as “…a concept whereby companies integrate social and environmental concerns in their business operations…” (European Commission, 2010). CSR is now widely accepted as a way of doing business in the contemporary environment. It is evident in companies that are spending large sums of money, time and effort on satisfying various stakeholders’ requirements for responsible behaviour. Despite the growing pressure on companies to become socially responsible, the direct benefits of CSR contribution to firm performance remain questionable. From existing literature the relationship between CSR and firm performance have pointed to mixed results (Gladysek & Chipeta, 2012; Aggarwal, 2013). This study examines the relationship between CSR performance and firm performance using the CSRHub sustainability indexes as proxy for CSR performance. The firm performance measures of firm value (Tobin’s Q) and financial accounting performance (return on assets) were used. Annual data of firms from the Johannesburg Stock Exchange (JSE) from year 2009 to 2012 was analysed using the Multiple Regression Analysis techniques. The study revealed that significant and positive relationship exists between CSR/environmental performance and firm value of listed South African companies. The study concluded that there is no significant relationship between firm performance and the other components of CSR such as community relations, employment relations, and governance. The relatively small sample size of the listed companies, some missing values on the sample data and the shorter time period on the study are the main limitations acknowledged in this report. In the overall, the study provides important insights for understanding the contribution of CSR and its disaggregated components to firm performance.