Research Korner: Economic Development in Africa

The relationship of economic development and banking sector of a government

ECONOMIC DEVELOPMENT AND BANKING SYSTEM       Banking system in every country plays a vital role in economic development for substantial reasons of funds and savings which is given by the banking system and government regulation and policy. Generally speaking the banking system in other country contributes to a large framework of success among various government projects through the use of lending, micro-financing, capital investment and government funding. The banking system generates not just employment but economic stability and International trade through the use of foreign exchange. The banking system approach may vary from country to country accordingly or as directed by their government.       In Malaysia the banking system plays an important role being an intermediary as well as performing short term and long term economic growth.  Their gross domestic product (GDP) is measured by domestic credit which benefits the small and medium industry through the help of public and private banking institutions. The economic growth through lending and borrowing shows that the banking system in this country has been a determinant contributor in nation building and development.  Therefore in most developing countries likes Malaysia these banking system ensure resource allocation for their economic growth.       In African countries like Nigeria, Kenya, Botswana and  Senegal the banks played a major role in sustainability and social rejuvenation providing finances and better access to financial services through achievement of  short term and long term goal as their common objectives. Most funds and resources are attributed directly to Small and Medium Enterprise and individuals practicing agricultural reform which is their common sources of income.          In Morocco the banking system is strong over the past 20 years; however the government restriction implication is to limit the relation of some chosen or favored industries. Until recently some other banks started to channel their credit distribution to tourism, agriculture and housing projects. The financial system will grow even stronger if specialized banks do not limit themselves from government regulatory body. Not much indication of economic progress has been shown in this country with the help of banking sector. The government limits the capability of the banks in lending industry, while the high implication deficit of tax indebted them heavily by the government sectors. Such tax rates can reduce returns of investment by the bank. Because of this limited fund utilization these banks have a very limited return over the country’s economic development.       Most of the time banking industry helps promote the economic stability of a country however governments control should not hamper its extreme privilege to dominate institution; the worst thing could happen is the misleading funds that cannot penetrate the market resource distribution that could results in heavily indebtedness to international banking industry like World Bank or International Monetary Fund (IMF). Since the role of Banking Industry is to uplift the economic standard of a country, Government should takes advantage of the following Banking System Objectives and its importance: 1.    Promoting Capital through the use of funds and loans -  Public, private and individual organization deposit their money in the bank so this bank in return can provide funding by distributing financial resources necessary to economic development. 2.    Agricultural Development- Banks can provide credits for individuals especially in agricultural production in rural areas of developing countries 3.    Influence economic activity through average interest rate 4.    Bank helps provide pricing stability and promote economic growth. 5.    Invest in new enterprise – People can borrow loan to invest in new enterprise to create their own new business and become independent if they have succeed. Most banks including Micro-financing organization do this. This provision helps many industries in many economic developing countries in Asia and in Africa. 6.    Promotion of International trade and Industry – With the help of foreign exchange, bonds, bank drafts, credit cards Virtual banking like ATM online payments Mobile payments and credit cards and other financial instrument this can help largely in developing worldwide economic growth. 7.    Helping small and medium industries through export integration among various institution and help them find partners in participating countries worldwide through information and development research.       Bank is the lifeblood of a business, as long as the blood is in circulation the life of the nation is sound and healthy.  If the blood is not supplied within the body the person may become useless. A country should take advantage of its function in order to establish a well rounded banking system to achieve economic stability.

The relationship of economic development and banking sector of a government

ECONOMIC DEVELOPMENT AND BANKING SYSTEM Banking system in every country plays a vital role in economic development for substantial ...

Assessing Entrepreneurs In Socio-Economic Development In Ghana

ASSESSING ENTREPRENEURS IN SOCIO-ECONOMIC DEVELOPMENT IN GHANA         There are many enterprising individual and organizations in Ghana and they contributed to the growth and sustainability of the country although we all know that they still suffer poverty and economic deficit in their country the continuous improvement and development in the countryside will give them access to entrepreneurship and they are on their way to recovery. Most of the people in Ghana have realized their position and the needs to grow but they do not have access, knowledge and opportunities to establish their own business. One of the latest entrepreneurship developments was arranged by Danish Ministry of Foreign Affairs conducted by the Center for Business and Development Studies (CBS) last 2010. They have a very good objective for the people of Ghana in conducting this seminar, they are sharing their resources, knowledge and experiences of successful entrepreneurship to discuss business matters to foster, harness and promote business activities and influence the people to be a part of a productive society through entrepreneurship.       It should provide the latest input and current trends to audience because they have reliable participants who can encourage and deal with the people of Ghana through further development, recommendations of business growth and employment. During the first day the workshop they pin pointed the challenges and opportunities in entrepreneurship and why this is one of the best solution to poverty alleviation, in the second day they have discuss a thorough learning methodology about the characteristic of successful entrepreneurs and most importantly the identification of business with high potential for growth and opportunities that they can adopt, what are the barriers and what support they need to contribute to innovation, growth and employment. On the third day the public debate was held with Mr. Soren Pind the Danish Minister for Development Cooperation about the growth and employment implementation.  On the fourth day the final conclusion and presentation of reports and success of the seminar was held.       Another important factor that they should know is that entrepreneurship is not a need that arise or forcible activities out of necessity but they should understand that it is a choice to take advantage of the opportunities that surround them. After the training those people who have small business enterprise should also understand how they can take their business into a bigger leap and further realize to take the step to make their business into a more legal and formal business entity to be able to gain growth. They should also seek appropriate training and education as the key to entrepreneurship, access to finance is also important but this is not a barrier to entrepreneurship they can start in modesty until their business will grow and they can also use their own labor as a capital. People should not also be afraid to start and fail it is a part of a business they should remain strong physically and spiritually if this happen.       There are also more micro-financing organizations in Ghana that they can seek if they need additional capital for their business they just have to prevent delinquency in payment and make use of the money that they have acquired in micro-financing industries. If they have to join a group to access micro-financing they have to make their participation so that they can create cooperation and camaraderie and later on acquire a bigger amount of loan in the next stage of their credits. In Ghana the help of Non government and private organizations like Standard Charter Bank, Unilever and others have already extended their help in poverty eradication through social responsibility development and promotion of entrepreneurship. They also help to provide capital in small and medium enterprise development financial organization like United Nations Children’s Fund (UNICEF), World Bank (WB) , International Monetary Fund (IMF), International Finance Corporation (IFC) has also extended their help in providing funds for general purpose including poverty eradication and livelihood.       The Ghanaian Livelihood Empowerment Against Poverty (LEAP) Program has good programs for different projects including cash transfer program and health insurances that started in 2008 and as of 2010 they reaches more or less 35,000 household. Another assessment for entrepreneurship was shown in the participation and contribution of women to economic growth. More and more women have been engaging to livelihood and small business development using their little resources and human capita. The adult rate of literacy increases up to 66% compared to last few decades, half of the labor forces also constitute women, they also involved in economic activities, small trading practices, crop production, farming and fishing that they are more engaged in livelihood than men who usually seek employment. All this organizations and activities means that the government and the environment opens up opportunities to entrepreneurship, the people of Ghana must decide if they are willing to deal with it. References: http://pdf.wri.org/ref/morduch_02_analysis_effects.pdf      http://www.publicprivatedialogue.org/workshop%202008/Ghana_Voices_Final_06082007.pdf   http://www.unileverghana.com/sustainability/approach/UGF/  http://openarchive.cbs.dk/bitstream/handle/10398/8208/UM_-_CBDS-UM_Entrepreneurship_Workshop_final_report.pdf?sequence=1   http://www.cpc.unc.edu/projects/transfer/countries/ghana

Assessing Entrepreneurs In Socio-Economic Development In Ghana

ASSESSING ENTREPRENEURS IN SOCIO-ECONOMIC DEVELOPMENT IN GHANA There are many enterprising individual and organizations in Gha...