Theses and Dissertations (Accountancy)

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The constitutionality of SARS information gathering powers under the tax administration act
(2022) Modisane, Godfrey Tumelo
This research aims to explore the Constitutionality of the South African Revenue Service’s information gathering methods as prescribed by the Tax Administration Act. The study will focus mainly on search and seizure operations by South African Revenue Service and how these operations may affect certain fundamental rights enshrined in the Constitution i.e. the right to privacy, the right not to self-incriminate, and, privilege information. This contribution will find that there must be a balancing act between tax administration and the protection of taxpayer’s civil and Constitutional rights by South African Revenue Service. The study will also touch on the question of whether these tools to gather information afforded to the South African Revenue Service extend to the covert collection or collection of intelligence, as the South African Revenue Service has been of late accused in various publications of unlawfully establishing the so called “Rogue unit” to investigate certain taxpayers.
An analysis of Circular Economy disclosures and the impact on Integrated Reporting
(2022) Mahadew, Kashmira
The impact of global markets on the natural environment has resulted in a rapid depletion of resources. The circular economy (CE) model is a sustainable business model which aims to stay within the limits of the planet and reduce the impact on the environment by decreasing excessive resource use, minimizing waste, and converting end-of-life goods into resources for further use. This research aims to investigate disclosures by Johannesburg Stock Exchange (JSE) listed companies by analysing the type of investments in developing and achieving a CE, the quality and nature of disclosures on a CE, and the related impact on the six capitals. A content analysis method was used to analyse a sample of integrated reports of JSE listed companies. Correlation coefficients were used to evaluate the relationships between the CE disclosures and 21 identified elements, and the Kruskal-Wallis and Jonckheere-Terpstra tests were used to evaluate the significant differences among industries, company size, and year when analysing the CE disclosures. This paper finds that a significant number of CE disclosures are located in the value creation and business model location of the integrated reports, the quality and type of investments to achieve a CE model tending to differ across different industries, company sizes, and year. The research revealed that CE disclosures are becoming more prominent in South Africa. The quality of reporting is moderately low. Industries which have a higher environmental impact and have extensive physical infrastructure tend to have better disclosure on their investments in the six capitals than service-driven industries. Both the quantity and quality of disclosures are better for larger companies. The research finds that companies are increasingly investing in research and development, and partnerships with research groups, think tanks and other third parties to drive their CE adoption. This paper contributes to both corporate reporting and the CE concept by evaluating the link between a CE model and integrated reporting and the impact which CE disclosures have on the six capitals of a company
The foreign business establishment exemption and other aspects of section 9D of the Income Tax Act
(2018) Ismail, Faizel
This research report considers a number of practical issues that arise in relation to the enforcement of section 9D of the Income Tax Act No. 58 of 1962 (“ITA”) read together with complementary provisions of the Tax Administration Act No. 28 of 2011 (“TAA”). More particularly, this research report considers the following issues: the onus and burden of proof under section 9D; the scope of SARS’ power under section 46 of the Tax Administration Act No. 28 of 2011 (“TAA”) to request information in order to give effect to section 9D; the interlinking definitions in terms of section 9D; whether an outsourcing business model can constitute the primary or core operations of a CFC for the purposes of determining whether the CFC qualifies for the ‘foreign business establishment’ exemption under section 9D status; and, if the issue of whether a CFC correctly claimed an FBE status during the years of assessment be revisited by SARS, particularly in respect of years of assessment which have prescribed. It is submitted as follows. Section 46 of the TAA provides SARS with the effective procedural powers to ensure compliance with section 9D. SARS is however required to provide the taxpayer with grounds for assessment with sufficient and reasonable detail in order to enable the taxpayer to understand the basis of and reason for such assessment and respond appropriately thereto. SARS is constrained by a three-year prescription period (from the date of an original assessment) for issuing additional assessments unless SARS can demonstrate that the taxpayer committed a fraud or misrepresentation which caused SARS failure to properly assess the taxpayer. The onus is on the taxpayer to show, on a preponderance of probability, that the decision/s of SARS in terms of section 9D against which it appeals is/are wrong. There is an arguable case for contending that the active management of service providers and agents may constitute the primary operations for purposes of determining whether an FBE arises in relation to a CFC.
The implementation of Section 139(1) of the Constitution in the Ngaka Modiri Molema District Municipality
(2017) Kampi, Zoliswa
The Ngaka Modiri Molema District Municipality (NMMDM) is situated in the North West Province, South Africa. It has persistently been placed under provincial administration (s139 (1) of the Constitution) and continuously resisted the interventions including taking legal actions against the North West Provincial Executive. The objectives of the research study were to explore and provide insights into the factors that informed and impacted the planning and implementation of s139(1) interventions in the NMMDM, and to explain how these factors either promoted or undermined the success of these interventions. From the literature review undertaken, the researcher drew critical themes and concepts that underpin the research study. The leadership and governance theories provided the theoretical perspectives and the principal-agent theory underscored the conceptual framework. In line with the exploratory nature of the research study, the qualitative research method was preferred and the NMMDM was adopted as a single case study to get a deeper understanding of the intricacies involved in the planning and implementation of s139(1) interventions. The researcher obtained the primary data through semi-structured interviews with the municipal leadership and used document analysis to gather secondary data. The research findings revealed the richness and complexity of the local government discourses. Through analysing the results of these discourses, a number of critical aspects that informed and impacted these interventions in the NMMDM emerged. These aspects range from the nature of to the quality of support provided to the NMMDM prior to the interventions. These include the communication of the directives and notices to assume responsibility, details given on the rationale for the interventions, political dynamics and their influence on reactions to the interventions, capacity of the province to plan and implement the interventions, and perceptions of the impacts of the interventions. Nevertheless, it is not the intention of the research study to generalise the findings but to present them as they manifested in the NMMDM.
Income tax treatment of the transfer of contingent liabilities during the sale of a business
(2018) Boakye, Stephen
The objective of this report is to analyse the South African income tax consequences of the assumption of contingent liabilities such as leave pay provisions and bonus provisions during the transfer or sale of a business. This report will consider two methods utilised to transfer contingent liabilities as part of a sale of a business. An analysis of how these two methods have been derived will be performed as part of this report. The report will then consider the income tax implication of the transfer of contingent liabilities under each of the methods. Overall, this report will critically analyse the income tax implications of the assumption of contingent liabilities during the sale of a business. A business generally consists of assets and liabilities. Businesses are often sold as a single unit although for income tax purposes, a distinction would have to be made on the particular assets sold.1 The current South African Income Tax Act caters for the income tax implication of selling assets in a business.2 It however seems to be silent on the income tax implications in instances where liabilities including contingent liabilities are assumed as part of the sale of assets.3 As a result, the income tax implication is subjected to the general tax principles which sometimes yield uncertainties from a taxpayer’s perspective. In an effort to clarify uncertainties in relation to the income tax implication of the assumption of contingent liabilities as part of the sale of a business, the South African Revenue Service in December 2016 released Interpretation Note 94. This report will, firstly, test the legal nature of Interpretation Notes with specific reference to reliance being placed on such Interpretation Notes in relation to the interpretation of the Income Tax Act
A critical analysis of the vat apportionment method in the banking sector in South Africa
(2018) Chitando, Makgolane Kutlwano
Value-Added Tax (VAT) has the standing of being a fairly simple tax. Where vendors solely supply taxable goods and services, the VAT on expenditure acquired for the sole mandate of making taxable supplies may be recovered from the VAT imposed on their output. VAT is therefore a tax on the value added at every stage of production. Accordingly, the tax is levied on the value of the final product but is collected in small portions from each part in the supply chain. ―In the banking sector, consumers are not purchasing financial services from the bank, so there is no sale on which VAT must be imposed. This has resulted in the VAT exemption of financial transactions as it is difficult to define the value added of financial services‖. (Mirrlees et al 2011:196). The exemption of financial transactions raises a number of complicated issues for banks as there is a requirement to apportion input credits. This is common to all countries operating a VAT system, although the basis of apportionment differs. The intention of this research report is to draw a distinction between the taxing of financial services in South Africa compared to other countries. This research report will analyse the appropriateness of the apportionment method approved by SARS for the banking sector in light of the concept of direct attribution of costs. Through an analysis of the foreign treatment on the matter of VAT apportionment and the taxation of financial transactions, this study will seek to determine whether the taxation of financial transactions in the South African VAT System and the VAT apportionment method approved by SARS for the South African banking sector is consistent with international best practice
Using business models to drive classification: the case of debt instruments in the financial services sector
(2018) Holmes, Dominique
Faithfully representing financial instruments in financial statements is critical to the sustainable functioning of the global economy. This was highlighted in the aftermath of the Global Financial Crisis (GFC) where the relative financialisation of the global economy was implicated as contributing to the crisis (Barth and Landsman, 2010; Laux, 2012; Zhang and Andrew, 2014). Following the GFC, efforts to develop an improved accounting standard for reporting financial instruments were accelerated (IASB, 2014). This culminated in the release of IFRS 9 which uses the business model to determine the accounting treatment of financial assets. The standards’ predecessor, IAS 39, used the concept of management’s intention to determine accounting classification. This was perceived as being unnecessarily complex (IASB, 2008). Accounting commentators question whether the move to a business model basis is in substance different from management’s intention (Leisenring et al., 2012). Arguing that representing a contractually identical asset differently, based on its use, potentially undermines faithful representation and impairs comparability. This has led to questioning whether the use of a financial asset has the ability to alter its economic substance (Leisenring et al., 2012; Barth, 2013). This thesis explores IFRS 9’s logic of using the business model to determine the classification of financial assets in the financial services sector. Initial insights are obtained by conducting detailed interviews with some of South Africa’s leading practical and technical minds. These insights pertain to differences between management’s intention and the business model, whether a financial asset can be ‘used’ and how this may impact the economics of the financial. This research finds that financial assets can be used by financial institutions for various purposes. These are consistent with the business models of IFRS 9. Further, this thesis finds that communicating these alternate ‘uses’ is important to represent the differing economics of those assets. Participants also indicate that the business model enhances comparability through enabling comparison between similar business models, as opposed to accounting for identical financial assets in the same way. This thesis contributes to the growing calls for research into business models in financial reporting (EFRAG, 2010; Nielsen and Roslender, 2015). This thesis is also the first to provide the perceptions of South African experts on IFRS 9’s logic of using the business model as a method for classifying, measuring and presenting financial instruments.
The determinants of economic diversification from a Sub-Saharan African perspective
(2017) Masilo, Stanley
Sub-Saharan Africa (SSA) is poor even though it has vast natural resources, is a paradox which various scholars have studied from different points of view. Furthermore, this region has a tendency to be highly reliant on narrow natural resource export baskets which are susceptible to external shocks and mineral depletion. Thus, economic diversification is a development path that can propel SSA economies to develop broad export baskets that are not highly dependent on natural resources, in order to mitigate systemic risk that stems from volatile commodity prices and achieve long-term sustainability. The research objectives of this study are twofold. Firstly, it determines the extent of economic diversification of selected SSA economies. Secondly, this study investigates the main determinants of economic diversification. The hypothesis of this study is based on the premise that there is a statistically significant relationship between economic diversification and government quality. Government quality is an important determinant of economic diversification due to its influence on macroeconomic fundamentals, infrastructure development, public goods and services. Furthermore, government formulates national development plans which can create a conducive environment for economic diversification to take place. The main policy recommendations towards achieving economic diversification from a SSA perspective, are encapsulated by the following aspects: structural reform and Group Economics
Attitudes to integrated reporting in small-to medium-sized companies
(2018) Du Bourg, Caroline
The purpose of this research is to explore the attitudes of small- to medium-sized entities (SMEs) towards integrated reporting. This report analyses the motivations to produce an integrated report, the reasons for not preparing one, the isomorphic processes present in the field, and the logics of resistance evident. The thesis employs an interpretive methodology. Interviews were held with a sample of professionals involved with corporate reporting for SMEs’ to establish their attitudes towards preparing integrated reports. These attitudes were then analysed to identify the key themes. The research finds that the respondents perceive the primary benefits of preparing an integrated report to be improved relationships with stakeholders and an enhanced strategy and business model. Cost, lack of resources and no buy-in to the concept are the reasons that were identified for not SMEs to not adopt integrated reporting. The benefits are currently overshadowed by the perceived challenges which results in limited isomorphic pressures present in the field to engender the change. SMEs preparing integrated reports understand them to be best-practice. In contrast, those that do not prepare integrated reports disagree with this claim, as they are unaware of the topic or do not believe it to be applicable in the smaller environment. These attitudes have resulted in logics of resistance. The resistance has taken the form of either not preparing reports or not adhering to the essence of the concept. However, there is also evidence that some SMEs have complied with the requirements of integrated reporting. The research further revealed that the interaction between the isomorphic processes and logics of resistance determines the extent to which an SME prepares an integrated report. The results of this thesis indicate that the isomorphic pressures within the field need to grow to stimulate further preparation of reports. To achieve this, there needs to be widespread instruction on the topic, as well as an adaptation of the framework to be more relevant for smaller entities. This research shows how a social context impacts isomorphic processes and how the relatively new concept of integrated reporting is applied in an SME environment. The interpretive-style financial reporting research that has been employed addresses a void in the existing literature.
Tax deductibility of interest and finance charges: the real cost of credit
(2017) Haines, Chantelle
Borrowers will commonly incur various finance charges when acquiring loan funding, which may include, inter alia, interest expenditure, guarantee fees, introduction fees, commitment fees and service fees. The tax deductibility of these finance charges is an important consideration for borrowers. Prior to the amendment of the definition of ‘interest’ in section 24J of the Income Tax Act 58 of 1962 (as amended), related finance charges were deductible for tax purposes. The term related finance charges was interpreted very widely by the Supreme Court of Appeal in C:SARS v South African Custodial Services (Pty) Ltd1 to include guarantee fees, introduction fees, commitment fees and even selected service fees. It is submitted that following the recent amendment of the interest definition by the Taxation Laws Amendment Act 15 of 2016, to now allow the deduction of ‘similar finance charges’ rather than ‘related finance charges’ the tax treatment of finance charges are uncertain. The objective of this study is to evaluate how this amendment will affect the deductibility of finance charges incurred by borrowers for tax purposes. The study proposes to first evaluate whether finance charges will be deductible in terms of section 24J, consider the definition of ‘interest’ and provide some general tests aimed at assessing the ‘trade requirement’ and the meaning of the phrase ‘in production of income’. The impact of the anti-avoidance legislation in sections 8F and 8FA will be considered, and finally, a brief discussion of the deductibility of finance charges in terms of the general deduction formula in section 11(a) read with section 23(g).
Reconstruction and recovery process of the 2007/2008 post-election violence victims in Kenya
(2017) Kinyeki, Julius M.
This research addresses three questions: how Internally Displaced Persons (IDPs) following the post-election violence of 2007/2008 in Kenya are recreating their community resilience capacities; how the Kenyan government and non-state interventions are influencing the victims’ livelihood strategies towards their reconstruction and recovery process and how social support and social capital has accelerated their reconstruction and recovery process. It proposes a post-conflict reconstruction and recovery approach based on the research findings. The research adopted Qualitative research methodology and primary data were collected from the month of January, 2015 continuously and concurrently with data analysis. The key findings were that ownership of land is perceived and identified as a milestone in the process of post-conflict reconstruction and recovery, an avenue for community resilience. The main means of livelihood for IDPs are casual labour and other menial jobs. The Kenyan government has made an effort towards resettlement of IDPs although this is ad hoc and ineffective due to lack of experience and a specific framework for any major resettlement. NGOs abandoned the reconstruction and recovery projects as soon as the humanitarian crisis ended. But the United Nations Development Programme (UNDP) had reconstruction and recovery projects which ended in 2011. In displacement, IDPs lost their original support system, but developed new emergent norms to support each other. Integration of IDPs is a better option in the reconstruction and recovery process compared to the government farm resettlement approach. The key recommendations are that government should evaluate the economic loss of every integrated IDP and those resettled in government procured farms should be provided with legal ownership documents. There should be an urgent re-profiling of IDPs in camps and use of UN Guiding Principles on IDPs to re-integrate them into society. The findings of this research bring to light new knowledge on the theory of social capital: victims of displacement develop new emergent norms, values and culture to support each other, which eventually creates a new society/community. Key Words: Post-conflict reconstruction and recovery; integrated IDPs; government resettled IDPs; camp-based IDPs; social capital: social support; livelihood strategies.
Leadership and resilience at the Islamic University of Gaza, 1978-2012
(2016) EL-Namrouti, Said Ahmed
Leadership in Higher Education Institutions (HEIs) in turbulent times has been undertheorised. A qualitative case study based on document analysis of 70 documents, 39 interviews and 2 focus groups was the vehicle for examining the role of the leadership at the Islamic University of Gaza (IUG). IUG has operated under complex conditions of occupation and ongoing turbulence from its inception in 1978 to the present. This study examines the period 1978-2012. In this time the university grew from 25 men studying Sharia in a tent to 20,000 students (63.7% female) studying across 11 faculties and 112 different specialisations. The study documents and labels four phases of development of the university. The patterns of leadership uncovered in the study include transformational, transactional, heroic, post-heroic and on some specific occasions authoritarian styles, with transformational being the most important. The way in which the leadership resolved short term crises, as well as their long-term and big-picture focus, shaped the development of the university. Resilience theory was applied alongside leadership theory to analyse the responses of IUG leadership. Resilience was taken beyond surviving to capitalising on disruption. Twenty three markers of resilience were found which worked independently and interactively to support resilient responses to the challenges IUG faced. These factors were initially developed from the literature, and new factors were added based on this research. The relationship between leadership styles and the promotion of resilience was examined. The thesis describes a mutual shaping and supporting role between university and society in Gaza, and discusses some of the paradoxes of help and harm coming from players and belief systems external to the university. The paradox of faith which can provide a cohesive, binding set of beliefs to support staff and students, as well as being the source of conflict and harm, is also discussed. A definition of a university as an educational community functioning beyond place, buildings, external recognition, or physical destruction was developed.
Implementation of the mental health care act in psychiatric hospitals
(2017) Mulutsi, Eva Nkeng
Introduction Mental illness is prevalent in all regions of the world and contributes significantly to premature mortality, high morbidity and loss of economic productivity (Baxter, Whiteford, Vos, & Norman, 2011; Charlson, Baxter, Cheng, Shidaye, & Whiteford, 2016). In South Africa, the Mental Health Care Act (No 17 of 2002) was promulgated in 2004 in response to the high burden of mental illness and to improve mental health service delivery, within a human rights framework. Aims and Objectives: The overall aim of this PhD study was to examine the implementation of the Mental Health Care Act in psychiatric hospitals in South Africa. The specific objectives were to: explore stakeholders’ involvement in the implementation of the Act; examine the policy processes followed in the implementation of the Act; determine whether Mental Health Review Boards execute their prescribed roles and functions; examine the implementation of legal procedures for involuntary admissions of psychiatric patients; and identify factors that influenced the implementation of the Act. Methods: The study was approved by the Human Research Ethics Committee of the University of Witwatersrand, Johannesburg. Sixteen psychiatric hospitals were selected in nine provinces, through stratified random sampling. Using an adapted conceptual framework with policy implementation theory as its foundation, the overall study approach was qualitative in nature, complemented with a record review of involuntary patient admissions in the selected hospitals. The qualitative component consisted of 35 in-depth interviews with: the drafter of the Act (n=1); provincial mental health coordinators (n=9); a psychiatrist at each of the selected hospitals (n=16); and the chair of a Mental Health Review Board in each of the provinces (n=9). At each selected psychiatric hospital, five patient records were selected randomly (n=80), focusing on compliance with the legal procedures for involuntary admissions. The qualitative data were analysed using thematic content analysis and MAXQDA® 11 while STATA® 12 was used to analyse the data from the record reviews. v Results: South Africa’s political transition created a window of opportunity for the implementation of the Act. Wide-spread stakeholder support for the spirit and intention of the Act, advocacy for human rights, the broader transformation of the health system, and the need for enhanced governance and accountability in mental health, facilitated the implementation of the Act. However, implementation was hindered by: the relatively low prioritisation of mental health; stigma and discrimination; poor planning and preparation for implementation; resource constraints; and suboptimal stakeholder consultation. The study found that the majority of involuntary psychiatric patients admitted during (the year) 2010 were single (93.8%), male (62.5%), and unemployed (85%), predominantly black African (80%), with a median age of 32.5 years. The primary diagnoses were schizophrenia (33/80), substance-induced psychosis (16/80), bipolar mood disorders (15/80) and acute psychosis (9/80). There was poor compliance with the prescribed procedures for involuntary psychiatric admissions, exacerbated by suboptimal governance by, and functioning of, the Mental Health Review Boards, thus resulting in de facto illegal detention of patients. Conclusion and Recommendations: The Mental Health Care Act is an important policy lever to address the burden of mental illness and ensure quality mental health service delivery in South Africa. However, the enabling potential of the Act can only be realised if the following issues are addressed: improved, and dedicated resources for mental health; training and capacity building of health professionals and hospital managers on key aspects of the Act; improved governance, leadership and accountability through well-functioning Mental Health Review Boards; and improving mental health infrastructure and community-based services.
Application of South African VAT on e-commerce transactions
(2017) Xaba, Nduduzo Justified
The present study sought to investigate self-selection among internal and international migrants in Gauteng by making use of the Gauteng City Region Quality of Life Survey data. The present study also sought to disentangle the effects of observed and unobserved characteristics in the self-selection of migrants by conducting Oaxaca-Blinder decomposition on overall employment and self-employment outcome variables. Preliminary descriptive statistics indicated that international migrants experienced markedly higher levels of employment than both locals and internal migrants driven by higher rates of informal and self-employment. System GMM analysis of pseudo panel data confirmed these results and showed that international migrants had a higher probability of employment and self-employment. Oaxaca Blinder decomposition indicated that unobserved characteristics explained the greatest share of the differences in the rates employment and self-employment of locals, internal migrants and international migrants. These results provide evidence for the positive selection of international migrants to Gauteng on unobservable characteristics relevant to the region’s labour market. Key Words Self-Selection; Migration; Self-Employment; Employment
A critical analysis into the Organisation for Economic Co-operation and Development ‘Standard for Automatic Exchange of Financial Account Information in Tax Matters’
(2017) Mohanlal, Dhanesh
The impact of the Organisation for Economic Co-operation and Development’s Standard on Automatic Exchange of Financial Account Information in Tax Matters has a significant impact on Financial Institutions globally. This paper aims to critically evaluate the current South African legislation and the obligations it places on financial institutions. The research also highlights the challenges faced by a financial institutions in interpreting and implementing the often complex requirements of the regulations with a particular focus on the following areas namely customer on-boarding and enhanced due diligence procedures, monitoring of accounts, remediation of the existing customer base, system development, and reporting to the South African Revenue Service. The research also looks into the readiness of developing countries in implementing the Automatic Exchange of Information. The research concludes with a discussion into the appropriateness of South Africa’s decision to agree to be one of the early adopters of this legislation despite the challenges identified above. Key Words: OECD, Standard on Automatic Exchange of Financial Account Information for Tax purposes, Common Reporting Standard, Financial Institutions.
The arm’s length pricing for intra-group services – transfer pricing
(2017) Lee, Yi Ying
The purpose of this research report is to identify any improvements that can be made to the South African transfer pricing legislation for intra-group services. South Africa’s transfer pricing legislation for intra-group services will be compared to Aligning Transfer Pricing Outcomes with Value Creation, Action 8-10, 2015 Final Reports, OECD/G20 Base Erosion and Profit Shifting Project (‘BEPS Action Plan’) released by the Organisation for Economic Co-operation and Development (‘OECD’). The Action 10 of the BEPS Action Plan introduces a simplified transfer pricing approach for low value-adding intra-group services. The simplified approach aims to reduce base erosion payments through excessive management fees and head office expenses (OECD, 2015:141). According to Verlinden and Katz (2015:1): ‘… the simplified approach lowers the burden on multinational enterprise groups to demonstrate the beneficial nature of the low value-adding activities for other MNE group members; and allows for an elective approach for reducing the administration involved in the pricing of low value-adding services. The OECD is achieving an appropriate balance between theoretical sophistication and practical application that is commensurate with the tax at stake in the countries paying and receiving the charges … .’ This approach will benefit tax authorities with limited resources in performing transfer pricing audits enabling them to verify the arm’s length nature within the intra-group services charge (Watson, 2015:8). Key words: Anti-avoidance, BEPS Action Plan, Transfer Pricing, Arm’s Length Method, Arm’s Length Price, Intra-Group Services, Low Value-Adding Intra-Group Services, Comparable Uncontrolled Price Method, Resale Price Method, Cost Plus Method, Transactional Net Margin Method, OECD Guidelines, OECD.
An Experimental test of the endowment effect
(2017) Cohen, Justin Simon
In this study, I use a computer game based lab experiment to investigate the existence of the Endowment Effect. Previous empirical evidence has been criticised for failing to adequately account for the effects of transactions costs and other frictions. The structure of the game used in this study allows me to control for these effects, and the results provide evidence in support of the existence of an Endowment Effect. The effect is found to be stronger when transactions costs are present.
A Multi-dimensional framework for adopting Physical Address System in a developing country
(2017) Ditsela, Jeofrey
This thesis is about the adoption of an Information System (IS) at a country level. Information Systems literature addresses adoption of IS at an individual level, organisational level or national/country level. Each level of analysis has its own complexities. However, literature acknowledging these varied complexities has not been forth coming. That is, literature has more studies done at either individual or organisational, and hardly at national or country level. This thesis argues that the adoption of an information system (also referred to as an innovation) at country level is a multi-dimensional and multi-level phenomenon. Existing literature and previous studies have hardily addressed fully, this complexities and multi-dimensionalism, although it has been noted that countries experience and internalise the innovation adoption, as a social process, differently. The study was on a developing country adopting a Physical Address System (PAS), herein seen as an IS innovation. In this thesis, PAS is seen as a social system comprising of artefacts (digital and visual representations), physical world, residents and organisations as stakeholders. The goal of the study was to conceptualise a multi-dimensional framework for adopting a Physical Address System, in the context of a developing country. Since the thesis argument is that the adoption of IS at a country level is even more complex, varied theories were employed as lenses to tackle the various aspect of the study. These lenses are the Diffusion of Innovation, the Stakeholder Theory, Upper Echelon Theory and the Contextualist Approach. Following the interpretivist philosophy, a case study was employed as a research strategy, using Botswana as a developing country case. The research design included semi-structured interviews with stakeholders, observations, policy documents. The data was analysed, discussed, synthesised and interpreted using thematic framework analysis method. Informed by the empirical evidence and the existing literature, this thesis conceptualises that the adoption of the Physical Address System ought to be done sensitive to the developing country as a multi-dimensional social system. This multi-dimensional social system includes the roles of stakeholders, determinants of innovation and context. The contribution of the thesis is in four folds; theoretical, methodological, practical, and contextual. Theoretically, the thesis conceptualised a multi-dimensional framework for the adoption of the Physical Address System in a developing country. Methodologically, the thesis contributed by following an interpretive philosophy and a case study as appropriate for understanding the complexities of adopting an information system, employing a case. Practically, the thesis, through the framework, may inform practitioners with ways to adopt a physical address system. Contextually, the thesis gives insight into the uniqueness of a developing country adopting an information system. Keywords: Developing Country, Adoption, Physical Address System, Stakeholder Theory, Upper Echelon Theory, Diffusion of Innovation, Context
Assessing alternative monetary policy frameworks and instruments in selected African economies
(2017) Chiumia, Austin Belewa
This thesis contains three core chapters that assess the performance of alternative monetary policy frameworks and instruments in stabilizing 10 selected African economies. Literature and practice show that Advanced Economies (AEs) and Emerging Market Economies (EMEs) are mostly adopting the ination targeting (IT) framework. This framework relies on active use of the interest rate as a policy instrument for macroeconomic stabilisation. Di⁄erent from AEs and EMEs, the majority of African countries are characterized by low nancial market development, frequent supply shocks and volatile terms of trade. These features impede the e¢ ciency of the IT framework and the interest rate instrument. Supply shocks imply that ination is not only demand driven. Volatile terms of trade translate into excessive exchange rate uctuations. Due to these factors, policy practice in Africa remains largely divergent from the global trend. Authorities still rely on monetary aggregate targeting (MAT) with de facto managed exchange rates. However, the MAT framework is also failing to stabilize economies. This follows instability of the key factors, such as the money demand, upon which the framework is anchored. Furthermore, controlling exchange rate movements is a challenge due to weak balance of payments positions. It is not surprising, therefore, that the majority of African economies still remain in the grip of macroeconomic instability. Ination and GDP targets are rarely met and they also remain volatile. The perverse macroeconomic features and the perceived failure of the MAT regime have necessitated the search for alternative monetary frameworks and instruments. In this study, we join the search by specically focussing on three questions. First, given the macroeconomic landscape in Africa, what is the relative performance of the interest rate vis--vis the monetary aggregate as instru iv ments for macroeconomic stabilization? Secondly, how do these instruments perform when apart from ination and output stabilization, monetary policy also engages in smoothing exchange rate uctuations? Thirdly, what is the relative performance of ination targeting vis--vis nominal GDP targeting as alternative monetary policy regimes for macroeconomic stabilization in African economies? Although the success of monetary policy largely relies on appropriate conguration of monetary policy frameworks and instruments, answers to these questions remain controversial and scanty for African economies. In order to address these questions, we formulate a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model. In this model, money is non-separable from consumption in the utility function. We estimate the model using the Maximum Likelihood method with quarterly data mostly from 1990 to 2014. The data is obtained from the International Financial Statistics (IFS). The thesis has ve chapters. Chapter 1 is the general background to the research problem. Chapters 2, 3 and 4 are distinct but related core chapters addressing three specic research questions. Chapter 5 is the conclusion. In Chapter 2, we compare the performance of the monetary aggregate and the interest rate as alternative instruments for stabilizing ination and output in 10 selected countries. Results show that the monetary aggregate is superior in stabilizing 5 economies. In the other 5 countries, it is the interest rate instrument which performs better. In the former group of countries, the monetary aggregate plays a relatively large role in macroeconomic dynamics while in the latter the interest rate is more signicant. These results partly reect di⁄erences in nancial market development between the two groups of countries. Overall, we nd a weak role of the interest rate compared to the monetary aggregate in driving aggregate demand dynamics. The exchange rate is also found to be a key driver of macroeconomic dynamics. Our re v sults suggest three things: First, authorities in Africa need to be cautious of a blanket adoption of the interest rate as a sole monetary policy instrument. Second, authorities will nd it di¢ cult to stabilize economies using the interest rate based frameworks. Third, exchange rate stability is key to macroeconomic stability in Africa. In Chapter 3, we extend the authoritiesobjective function. In addition to minimizing ination and output volatility, authorities also use the interest rate or money supply rules to smooth exchange rate uctuations. The results show that macroeconomic performance is enhanced when authorities smooth exchange rate uctuations in 4 of the 10 countries. The gains from exchange rate smoothing mostly arise from a reduction in ination and exchange rate volatility but not fromoutput. In the other 6 countries, exchange rate smoothing worsens macroeconomic performance. These results reect the fact that the exchange rate exerts a relatively large inuence in macroeconomic dynamics in the rst group of countries compared to the latter. Exchange rate smoothing therefore minimizes the pass-through of the exchange uctuations to ination and output leading to better performance. Overall, the ndings suggest that exchange rate smoothing is harmful in Africa. Where exchange rate smoothing delivers gains, appropriate thresholdsofsmoothingneedtobeobservedtoavoidpolicyinducedmacroeconomic instability. Authorities should also smooth temporal rather that structural shifts in the exchange rate level. In Chapter 4, we compare the performance of ination targeting (IT) vis-vis nominal GDP targeting (NGDPT) as alternative monetary policy frameworks for macroeconomic stabilization. We examine the strict and exible versions of these policy regimes. We also include a hybrid regime which combines elements of IT and NGDPT. Results show that the hybrid regime performs better in 5 countries. In the other 4 countries, it is the strict ination targeting that performs better. In 1 country, exible ination tar vi geting is optimal. The results also reveal that demand shocks dominate but are closely trailed by supply and exchange rate shocks in explaining macroeconomic uctuations. The multiplicity of signicant shocks is key in explaining the dominance of the hybrid regime. The hybrid regime successfully handles shocks that can neither be optimally handled by the IT regime nor the NGDPT regime alone. These results have several implications. First, demand management alone is insu¢ cient to stabilize African economies. Second, identifying dominant shocks is critical for choosing robust monetary policy regimes. Third, the multiplicity of signicant shocks implies that choosing monetary policy frameworks and hence macroeconomic management process is more complex for African policy makers. Overall, the results have several policy implications which are outlined in Chapter 5. First, they suggest a cautious approach towards generalized adoption of the interest rate over the monetary aggregate as a monetary policy instrument in African economies. This contradicts the current wave of monetary policy changes sweeping across African countries. Secondly, the signicanceoftheexchangeraterenderscredencetoexchangeratesmoothing in Africa. The ndings, however, suggest that exchange rate smoothing can either enhance or worsen macroeconomic performance. Where it enhances macroeconomic performance, authorities must carefully consider the thresholds of smoothing to avoid creating macroeconomic instability. Authorities need not ght structural shifts in exchange rates levels through smoothing. This would help to preserve the shock absorbing role of the exchange rate. Finally, the prevalence of demand, supply as well as exchange rate shocks makes the hybrid monetary policy regime which combines elements of IT regime as well as NGDPT regime to perform relatively better in stabilizing the majority of the economies. Given the multiplicity of shocks, authorities inAfricaneedtocomplementdemandmanagementwithpoliciesthataddress supply side and exchange rate bottlenecks to ensure sustainable macroeco vii nomic stability. Overall, the ndings suggest that there is scope to improve monetary policy performance in Africa by adopting suitable frameworks and instruments. The results also highlight the problem of tackling monetary policy issues with a "one size ts all" approach.
Customer and employee-based brand equity driving United Bank for Africa's market performance
(2017) Uford, Imoh Charles
With increased competition in the banking industry, particularly in developing economies, United Bank of Africa Plc (UBA) in Nigeria has been thriving. The bank is a multinational financial services provider, which operates in 22 African countries. It also has offices in the US, UK and France. UBA has about 626 global branches and serves more than seven million retail, commercial and corporate global customers. Positioned as a pan-African bank, the UBA Group is firmly in the forefront of driving the renaissance of the African economy. It is also well positioned as a one-stop financial services institution, with growing reputation as the face of banking on the African continent. UBA Plc has grown over the years from being just a brand name to a house hold name in Nigeria. In 2011, it was reported that UBA’s total assets was worth about $12.3 billion. The bank is also gearing to be one of the dominant and leading banking brands in Africa. While the measurement of UBA’s asset worth is important as it reveals information of its financial performance, it can be more important to measure the worth of its intangible assets, which is being captured from the assessment of its brand equity. Brand equity does not only comprise of an organization’s intangible assets, but does reflect the values consumers hold of a brand and can also secure long-term commercial and competitive advantages for companies. With the notion that the value or power of a brand lies in what customers perceive in their minds concerning the brand, most studies have measured brand equity mainly from the customer-based brand equity (CBBE) perspective using Aaker’s (1996a) and Keller’s (1998) models. Aaker’s (1996a) model is however considered to be the most comprehensive CBBE model and it measures brand equity from five dimensions – brand awareness, brand association, perceived quality, brand loyalty and proprietary assets. While CBBE can secure long-term market performance, it is being recommended that the contribution of employee-based brand equity (EBBE) should also be measured. This is particularly important in the service sector, such as banking, where “what is delivered is less important than how it is delivered”. More so, with the increasing importance of internal branding, there is a need to measure EBBE, which assesses how knowledgeable, happy and committed employees are willing to deliver on the brand promises to build brand equity. v In addition to the importance of measuring both CBBE and EBBE, there is also the need to further compare the extent to which both CBBE and EBBE predict market performance, an outcome anticipated, but rarely empirically tested. This study therefore employs Aaker’s (1996) CBBE model and Kwon’s (2013) EBBE model to examine the sources of UBA’s CBBE and EBBE respectively and the extent to which each of the equities drive market performance indicators, such as consumer purchase intention, willingness to pay a price premium and brand preference. A positivist research paradigm with a quantitative survey of 182 UBA employees and 178 UBA customers were used to test the hypotheses. The relationships hypothesized in the conceptual model were empirically tested using structural equation modeling (SEM). The results indicated that the conceptual model satisfactorily fitted the data and provided reasonable explanations among variables. In terms of the relationships, it was found that UBA’s CBBE was accounted for by brand associations or image and brand loyalty. UBA’s overall CBBE positively and significantly affected all the market performance indicators of purchase intention, willingness to pay a price premium and brand preference. UBA’s EBBE which was found to be positively and significantly driven by role clarity and brand commitment could only positively and significantly predict the bank customers’ willingness to pay a price premium. Conclusively, it was found that while UBA’s EBBE make some contribution to the bank’s market performance, its CBBE is the major driver of its performance. This study theoretically contributes by not only empirically testing Aaker’s (1996b) CBBE and Kwon’s (2013) EBBE in the Nigeria’s banking sector, but by also showing how both models explain market performance. Practically, the study reveals sources of CBBE and EBBE, which not only UBA should prioritize in improving their market performance, but other service sectors in Nigeria and the continent should take special note of. Keywords: Brand equity, customer-based brand equity (CBBE), employee-based brand equity (EBBE), United Bank for Africa (UBA) Plc, market performance, structural equation modelling (SEM), consumer purchase intention, willingness to pay a price premium and brand preference

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