African Development Finance Journal

Capital Inflows, Climate Change and Economic Growth

Mon, 18 Aug 2025 06:25:30 +0000

Economic growth is a key objective for nations seeking to improve living standards and promote sustainable development. In many developing economies, particularly in West Africa, the role of capital inflows has been a subject of considerable debate. Foreign capital inflow is often seen as a catalyst for economic transformation, providing financial resources that supplement domestic savings and investment. However, ongoing climate-related challenges may undermine its benefits by creating an unstable economic environment. This instability can discourage investment and impede development efforts. The study examined the impact of capital inflows and climate change on the economic growth of Ghana, Gambia, Liberia, Nigeria, and Sierra Leone, utilising data from 1980 to 2022. The Feasible Generalized Least Squares (FGLS) estimation technique was employed to analyse the data. The capital inflow was proxied by official development assistance (ODA) and foreign direct investment (FDI), while climate change was measured by temperature (TEM) and precipitation (RAN). The results showed that FDI, ODA, and TEM significantly contribute to positive economic growth, as measured by GDP per capita (in current U.S. dollars). However, precipitation does not affect economic growth. These findings underscore the vital importance of capital inflows in promoting regional economic growth. The governments of the five countries should implement measures to streamline business regulations and simplify investment procedures. By doing so, they can create a more attractive environment for foreign investors, ultimately boosting the flow of ODA and FDI into their economies.

Keywords: Foreign Direct Investments, Feasible Generalized Least Squares, Official Development Assistance, Temperature

Corporate Governance, Firm Performance, and CEO Compensation

Mon, 18 Aug 2025 06:32:35 +0000

Corporate governance is crucial for shaping policies and decisions in emerging economies like Nigeria. A key focus is executive compensation, which should align executives' interests with those of shareholders to boost firm performance. However, in many developing markets, weak governance, high executive pay, and limited accountability raise doubts about the effectiveness of these compensation systems. The effect of corporate governance and firm performance on CEO compensation in Nigeria remains underexplored mainly, especially within the non-financial sector, which constitutes a significant part of the Nigerian economy. Non-financial firms operate across diverse sectors with unique regulatory and competitive landscapes, making it essential to investigate how board structures impact CEO compensation within this context. This study examined the influence of corporate governance and firm performance on CEO pay among listed Nigerian non-financial firms, utilising a panel dataset of 28 firms spanning 2011 to 2023. Guided by agency theory, the study explores how board attributes—precisely board and board independence—and corporate performance metrics, measured by return on enterprise value and assets (ROA), influence CEO compensation. Employing the System Generalised Method of Moments for analysis, the results reveal that firm performance significantly positively affects CEO compensation. In contrast, board size shows no significant impact, while board independence negatively affects CEO compensation. These results highlight the nuanced interplay between governance mechanisms and executive remuneration in the Nigerian corporate context. Based on the findings, the study recommends empowering shareholders with voting rights on CEO compensation packages during annual general meetings to ensure alignment between executive pay and shareholder interests, fostering improved corporate accountability.

Keywords: Agency theory, CEO, Enterprise value, Return on Assets

Does Institutional Quality Influence Tax Structure in Developing Countries? A Panel Data Analysis

James Daniel Chindengwike — Mon, 18 Aug 2025 06:42:23 +0000

Institutional quality is very imperative to support tax system and hence to increase economic growth of any nations. This study examined on how institutional quality affected tax structures in developing countries. Using macroeconomic data spanning 26 years (1996–2021), the study employed the Panel Autoregressive Distributed Lag (ARDL) model to investigate the effects of political stability, government performance, accountability, and corruption control on the region's tax structure. The data came from the Worldwide Development Indicators (WDI 2021), government Revenue Datasets, and Worldwide Governance Indicators (WGI 2022). The findings demonstrated that the direct-to-indirect tax ratio is significantly and favourably impacted over the long run by government effectiveness at a 10% significance level. This study implies that good governance promotes the development and implementation of tax systems that give direct taxes precedence over indirect ones, thereby promoting equity. Controlling corruption also has a positive and significant effect at the 10% significance level, indicating that reduced corruption enhances justice and might even promote a higher reliance on direct taxes. Political stability has a significant positive effect at the 1% significance level. This demonstrates how early initiatives to combat corruption and improve governance may disturb established tax systems, leading to a temporary reliance on indirect taxes or challenges increasing the share of direct taxes. Over time, it is expected that these improvements would improve and stabilize tax performance. To properly balance direct and indirect taxes, the study advises East African governments to increase government effectiveness and combat corruption.

Keywords: Institutional Quality, Tax Structure, Developing Countries, Panel Data, ARDL

Enhancing Transport Logistics Efficiency through Public-Private Partnerships: The case of Isaka Dry Port along Tanzania’s Central Corridor

Flory Okandju Okonge, George Nyaronga — Mon, 18 Aug 2025 06:48:40 +0000

This study investigates the impact of Public–Private Partnerships (PPPs) on transport logistics efficiency, with a specific focus on Isaka Dry Port along Tanzania’s Central Corridor. The study used mixed-methods design, the research integrates quantitative analysis with qualitative insights multiple regression analysis revealed that PPP implementation significantly reduced cargo clearance time by over 52%, transport costs by 30.6%, and container dwell time by 56.9%. Thematic analysis of interviews highlighted operational discipline, ICT-driven innovation, and improved multimodal integration particularly rail as critical success factors. These findings affirm the value of PPPs in addressing infrastructural and institutional limitations, supporting both the Technological Innovation Theory and Institutional Theory. The study concludes that PPPs can be instrumental in transforming dry port performance when embedded in sound policy, cross-border coordination, and regulatory oversight frameworks. It recommends expanding the PPP model to other inland logistics hubs and strengthening regional digital trade infrastructure to improve corridor-wide logistics performance.

Keywords: Public–Private Partnerships (PPPs), Transport Logistics Efficiency, Cargo Clearance Multimodal Integration

Enterprise Resource Planning Systems and Organizational Sustainability of Major Retail Supermarkets in Nairobi City County, Kenya

Richu Salome W, Gichohi, Solomon G — Mon, 18 Aug 2025 06:52:43 +0000

Operationally driven ERP modules can directly influence organizational sustainability goals, such as reducing waste, improving efficiency, and engaging stakeholders, and these are especially crucial in retail and supply-chain-heavy organizations. The study’s objectives were: to identify the level of ERP systems utilization, and to establish the influence of the ERP systems on organizational sustainability of major supermarkets in Nairobi City County, Kenya. Descriptive research design was employed and primary data was collected. A census was conducted. Descriptive and inferential statistics were used to analyze data. The ERP systems was operationalized by four ERP modules, procurement management, quality management, sales and distribution management, inventory and material management, and customer relationship management. Organizational sustainability was measured by economic, social, and environmental sustainability. From the findings, all the ERP modules were utilized from moderate to a great extent. The results indicated a statistically significant positive effect of the ERP systems on organizational sustainability. The study recommends implementation of ERP systems for greater organizational sustainability.

Keywords: Enterprise Resource Planning Systems, Organizational Sustainability, Major Retail Supermarkets, Kenya

The Impact of Performance Evaluation on the Effectiveness of the Public Sector in Zanzibar

Farashuu Juma Moh’d, George Nyaronga — Mon, 18 Aug 2025 06:58:03 +0000

The study investigates the impact of performance evaluation on the effectiveness of public sector institutions in Zanzibar, with a particular focus on improving accountability, service delivery, and organizational performance. Using a quantitative research design, data were collected from 162 public sector officials directly involved in planning and evaluation activities under the Zanzibar Development Plan (ZADEP). Descriptive and inferential statistical analyses, including linear regression, revealed a moderately strong relationship of 40% (R² = 0.398) between institutional participation in performance evaluation processes and enhanced public sector outcomes. The findings indicate that while performance evaluation is acknowledged as a valuable tool for improving public service delivery, its practical effectiveness remains uneven across institutions, as evidenced by varying mean scores: involvement of M&E agencies scored 3.64, reflecting positive engagement; training by the lead agency had a moderate mean of 3.21, indicating limited but existing capacity-building; communication of evaluation results scored 3.52, suggesting fair dissemination across departments; inclusion of local consultants received a lower score of 2.89, pointing to weak integration of national expertise; and ZAMEA’s role in capacity building and collaboration with academia both scored 2.69, highlighting minimal impact and limited visibility in institutional processes. Overall, the study observes moderate internal participation but significant deficiencies in training, knowledge sharing, and local engagement, and therefore recommends strengthening interdepartmental collaboration, investing in institutional training, and formally integrating local consultants and academic institutions into performance evaluation systems to ensure a more effective, accountable, and data-driven public sector under ZADEP.

Keywords: Performance Evaluation, Public Sector Effectiveness, Service Delivery, Institutional Participation, Evaluation Systems, Organizational Efficiency, Accountability, Monitoring and Evaluation (M&E), Zanzibar Development Plan (ZADEP), Public Administration, Institutional Capacity, Evidence-Based Decision Making, Evaluation Utilization