African Development Finance Journal

De-Risking Development in Sub-Saharan Africa: A Qualitative Study of Investment Dynamics in Angola

Carmen Berta C De Saituma Cagiza — 2025-07-15

This study investigates how Development Finance Institutions (DFIs) contribute to de-risking development in Sub-Saharan Africa by shaping Foreign Direct Investment (FDI) flows and supporting sustainable economic transformation. Focusing on Angola as a representative case, the research draws on qualitative interviews with international development advisors, foreign affairs professionals, and senior public sector stakeholders. The study explores how DFIs mitigate investment risk, enhance project credibility, and promote diversification beyond extractive sectors. While DFIs are widely recognized as catalysts for private sector engagement, particularly in infrastructure, agriculture, and manufacturing, their effectiveness is often constrained by institutional weaknesses and misalignment with national development priorities. The findings suggest that DFIs play a crucial enabling role in fragile and resource-dependent settings, but their long-term impact depends on complementary domestic reforms, improved governance, and strategic coordination. This research contributes to the literature on development finance by offering grounded empirical insights from an under examined Sub-Saharan context.

Keywords: Development Finance Institutions, Foreign Direct Investment, Angola, Economic Diversification, Institutional Reform, Risk Mitigation, Sub-Saharan Africa

JEL Codes: F21, O16, O55, O25, F35

Determining the Moderating Effect of Intellectual Capital on the Relationship between Corporate Governance and Financial Performance of Ventures of the Seventh-day Adventist Church in Kenya

Nicodemus O. Okoth — 2025-07-15

This study examines the moderating role of intellectual capital in the relationship between governance practices and the financial performance of Ventures within the Seventh - day Adventist (SDA) Church in Kenya. Intellectual capital, encompassing human, structural, and relational capital, has been recognized as a critical driver of institutional financial performance. Governance practices, including transparency, accountability, and strategic decision-making, significantly influence financial stability and operational efficiency. This study employs a mixed-method research design, combining qualitative and quantitative analyses. Data were collected from 120 respondents across ten SDA Ventures, including administrators, financial managers, and governance board members. Descriptive and inferential statistical analyses were performed using hierarchical regression models to assess the moderating effects of intellectual capital. Findings indicate that intellectual capital strengthens the relationship between governance practices and financial performance, enhancing institutional sustainability and efficiency β = .246, p < .05, B = .200). The study recommends investing in intellectual capital development, improving governance frameworks, and fostering knowledge-sharing practices to maximize financial performance.

Keywords: Intellectual Capital, Governance Practices, Financial Performance, SDA Ventures, Financial Sustainability, Institutional Efficiency, Strategic Decision-Making

Effect of Public Financial Management Practices on Budget Absorption among Lake Region Economic Block Counties in Kenya

Odera David Otieno — 2025-07-15

Effective budget absorption is crucial for counties as it ensures optimal utilization of allocated funds for development projects and public services. However, there is evidence that the Lake Region Economic Block (LREB) counties in Kenya face a significant challenge with budget absorption. This study therefore assessed the effects of public financial management practices on budget absorption among the Lake Region Economic Block counties in Kenya. Descriptive and inferential statistics particularly correlation and multiple linear regression were used to analyze data. The regression results showed that budgeting had the strongest influence (β = 0.270, p = 0.007), followed by debt management (β = 0.257, p = 0.034), financial reporting (β = 0.248, p = 0.000) and revenue management (β = 0.117, p = 0.001). Based on the findings, it is recommended that county governments enhance budget absorption through structured budgeting, sustainable debt management, efficient revenue collection and transparent financial reporting.

Keywords: Budgeting, Revenue management, Financial Reporting, Debt management, County Government, Budget Absorption

Moderating effect of Government Policy on the Relationship between Internal Control Systems and Financial Performance of Insurance Companies in Kenya

Abel Manas GEKE — 2025-07-15

This research examined the influence of government policy as a moderating variable in the relationship between internal control systems and the financial performance of insurance firms in Kenya. The study involved 58 insurance companies and utilized a combination of descriptive and correlational research designs. To assess the interaction between the study variables, multiple regression analysis was conducted. The findings revealed that government policy significantly moderated the relationship, strengthening the positive impact of internal control systems on the financial performance of the firms. Based on these results, the study recommends that improved compliance with government policy frameworks may enhance the effectiveness of internal control systems in boosting financial outcomes within the insurance sector in Kenya. It recommends that insurance companies should operate with transparency and adhere strictly to governmental regulations and standards. Operating in an open and transparent manner ensures compliance with relevant laws, strengthens public trust, and ensures long-term sustainability in the market. This strategy is expected to enhance compliance with regulatory standards and promote long-term financial stability within the insurance industry.

Keywords: Internal Control Systems, Government Policy, Financial Performance, Companies

The Effect of Corporate Governance Practices on the Financial Stability of Selected Credit Unions in the North West Region of Cameroon

Njekang Dieudonne Nkwati — 2025-07-15

This study addresses the persistent challenge of low compliance with COBAC prudential norms among credit unions in the North West Region of Cameroon, which undermines their financial stability and resilience; despite ongoing reforms, inadequate governance practices, credit management, and risk mitigation strategies continue to hinder the sector’s ability to withstand economic shocks and achieve sustainable growth. The objective of this study is to examine how corporate governance practices (board and supervisory committee activities, credit committee operations and risk management practices) affect financial stability. Employing a cross-sectional descriptive design, secondary data from 40 credit unions collected in 2024 were analyzed using the robust multiple regression technique to address issues of normality and multicollinearity. Findings reveal that activities of the Board and Supervisory Committee significantly improve financial stability at 5% level, supporting agency theory’s emphasis on oversight. Credit committee effectiveness equally positively affects financial stability and the findings are significant at 5% level, highlighting the importance of sound credit management aligned with resource dependency theory. Furthermore, robust risk management practices are strongly associated with increased financial resilience with findings significant at 1% level, confirming the relevance of risk management theory. Control variables such as staffing levels and branch networks further contribute to stability. Based on these findings, recommendations include; strengthening governance structures through capacity building, enhancing credit appraisal procedures and adopting comprehensive risk mitigation strategies, including staff training and expanding operational capacity. Overall, the study emphasizes the importance of integrated governance, credit and risk management practices to improve compliance, safeguard financial stability and promote sustainable growth of credit unions in Cameroon’s credit union sector.

Keywords: Board and Supervisory Committee Activities, Credit Committee Activities, Corporate Governance Practices, Credit unions, Financial stability, Risk management

Working Capital Management, Free Cash Flows, Firm Specific Factors and Financial Performance of Commercial State Corporations in Kenya

Walter Onkundi Chanua — 2025-07-15

This study examines the joint effect of working capital management (WCM), free cash flows (FCF) and firm-specific factors on financial performance of commercial state corporations in Kenya. Given that these entities play a vital role in Kenya’s economic development, understanding the nexus of the relationship among these variables is crucial for enhancing their financial sustainability and operational efficiency. The study adopted a positivism research philosophy and utilized a descriptive panel research design, collecting secondary data from annual financial reports of 28 commercial state corporations operating in Kenya from 2014 to 2023. The data was analysed using regression models to test the joint effect of WCM, FCF, and firm-specific factors on financial performance, measured by return on assets (ROA). The findings reveal that all three variables; working capital management, free cash flows and firm-specific factors have a significant joint impact on the financial performance of commercial state corporations. Efficient WCM, indicated by the cash conversion cycle (CCC), was positively correlated with financial performance, while free cash flows further enhanced this relationship. Firm-specific factors, including business risk, technological innovations, and managerial efficiency, also significantly influenced the effectiveness of WCM in improving financial performance. The study highlights the importance of integrating WCM practices with strong free cash flows and firm-specific characteristics to achieve sustainable financial outcomes.

Keywords: Working capital management, financial performance, days inventory outstanding, days sales outstanding, days payables outstanding, free cash flows, firm specific factors, business risk, managerial efficiency, and technological innovations.

Determining the Influence of Risk Management on the Financial Performance of Ventures of the Seventh-day Adventist Church in Kenya

Nicodemus O. Okoth — 2025-07-21

Risk management plays a crucial role in ensuring financial stability and sustainability within organizations. This study examines the impact of risk management practices on the financial performance of Ventures affiliated with the Seventh-day Adventist (SDA) Church in Kenya. Using a quantitative research design, data were collected from 100 respondents across various SDA Ventures, including CEOs, business managers, accountants, and internal auditors. Findings indicate that effective risk management positively correlates with improved financial performance (r = 0.579, p < .001), and regression analysis shows that it explains 33.6% of the variance in financial outcomes (B = 0.64, p < .05). The study recommends implementing comprehensive risk management strategies, strengthening internal controls, and enhancing governance frameworks to improve financial stability.

Keywords: Risk Management, Financial Performance, SDA Ventures, Corporate Governance, Internal Controls, Agency Theory, Stewardship Theory