Ashesi Economics Lecture Series Journal

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    Options for affordable rural broadband connectivity: a focus on TV White Space technology
    (Ashesi University College, published by Mot Juste, 2016-07) Biney, Kwesi Assan
    There appears to be a coordinated effort the world over to achieve digital switch over (DSO) from analogue based to digital technology. Ghana signed the Geneva agreement which set 17th June 2015 as the deadline for the DSO. This switch over will create new spectrum opportunities for many wireless technologies due to the abundance of radio spectrum the switch over provides. This paper focuses on the opportunity for using White Spaces (TV frequencies allocated to a broadcasting service but not used locally) for internet connectivity in the rural and underserved areas of Ghana, using TV White Spaces in Koforidua as a case study. The paper investigates the challenges associated with lack of internet connectivity in rural Ghana and determines if the infrastructure necessary for the implementation of White Space technology in the rural areas was present and adequate. It also documents the user experience of Africa’s first commercial TV White Space network services in Koforidua, Ghana. A combination of qualitative and quantitative data collection approaches was used. Purposive and simple random sampling techniques were used in selection and administering of questionnaires. Lack of internet in the rural areas was found to be mainly due to perceived risk by the commercial network operators because of value for money considerations of existing technology options. Negative incentives for the common ISP to go rural included technical and geographic/landscape challenges. The relevant infrastructure necessary is still undeveloped in Ghana but various infrastructural projects are being undertaken by the Ghana Investment Fund for Electronic Communication (GIFEC) to bridge the infrastructure gap in these areas. Lastly, the user experience of Africa’s first commercial service network using TV White Spaces in Koforidua, Ghana were described and documented. Keywords: TV White Space, Digital switch over (DSO), Internet connectivity and Ghana Investment Fund for Electronic Communication (GIFEC) JEL classifications: O1, O32, O34, O38, O14, O15
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    Assessing road construction: potential impact of constructing the Kwabenya Kitase road on the local economy
    (Ashesi University College, published by Mot Juste, 2016-07) Boa-Amponsem, Nana Ama
    Road construction typically confers significant benefits on the population the road serves. A recent rapid growth of urban residential areas in Ghana has necessitated the construction and rehabilitation of the roads linking these urban areas to major commercial towns in the country. The Kwabenya (Abuom) to Kitase area, straddling Ghana’s Eastern and Greater Accra regions, is a typical example. Using both primary and secondary data sources, the research reveals that agricultural production is perceived by several respondents as likely to be improved by the construction of the road. Several major sectors of the economy, such as education, real estate, arts, entertainment and recreation, construction and hospitality are also identified as likely to be improved by a better road network. In spite of these positive impacts, the research identifies certain negative implications of a construction of the Kwabenya-Kitase road. These include dust, noise and the destruction of arable land and a consequent change in the livelihoods of inhabitants, especially within the Agyemanti-Kitase area. It is established that constructing the Kwabenya-Kitase road is likely to boost the local economy, as long as an effective maintenance culture is enforced. However, responses also show a concern that an influx of businesses is likely to diminish arable land for construction and commercial purposes.
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    Going regional: Internationalisation strategies of Ghanaian service companies within the ECOWAS market
    (Ashesi University College, published by Mot Juste, 2016-07) Seglah, Samuel Kingsford; Armah, Stephen Emmanuel
    This paper investigates the internationalisation strategies of Ghanaian service companies within the economic community of West African States (ECOWAS) market. The topic was necessitated by the increasing interest in the study of internationalisation processes of local firms in this era of globalisation, which hitherto was the preserve of multinational enterprises from the developed world. There is very little research on internationalisation processes of firms within the developing economy context as most of the existing literature is biased towards the developed economy context especial in the UK and USA. This paper examines the internationalisation strategies of Ghanaian service companies within the ECOWAS market in order to determine the key strategies adopted by Ghanaian service companies when expanding their operations abroad. The research was based on three case studies of service-oriented firms in Ghana using semi-structured interviews. Data was analysed using cross-case synthesis. Key strategies such as modes of entry of the three companies were analysed. The results of this study validates previous studies such as the Uppsala model which suggests that companies often expand their operations internationally on incremental and gradual fashion, and the eclectic paradigm which contends that three major sets of factors that are interdependent will influence the extent, industrial composition and geography of foreign production undertaken by a firm. Implications are also drawn for service companies, policy makers and researchers.
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    Econometric analysis of the effect of Ghana’s increasing external debt on foreign direct investment (FDI)
    (Ashesi University College, published by Mot Juste, 2016-07) Alhassan, Affum
    The study explored the relationship between foreign direct investment (FDI) and several covariates including external debt, GDP per capita income, and gross fixed capital formation, for Ghana from 1980 to 2013. It was conducted following Ghana’s bail out by the International Monetary Fund (IMF) to stabilise the Ghanaian currency (the Cedi) as debt levels soared and the Cedi depreciated precipitously against the Dollar. The primary research question that precipitated the study was: by how much will foreign direct investment inflows in Ghana change percentage-point wise per a unit increase in her external debt stock? In the econometric analysis, two OLS regressions were run: the ‘log-level’ model and the ‘log-log’ model. The coefficients on external debt, GDP per capita and gross fixed capital formation (a proxy for infrastructure) were all statistically significant, excluding the GDP deflator, which though had its expected sign, was insignificant at 10% significance level using ‘log-level’ regression. In the ‘log-log’ model, only external debts and gross fixed capital formation were statistically significant at 5% significance level. The R-squared explained 89.98% and 89.64% of the total variation in FDI using the loglevel and log-log models respectively. The semielasticities of log(FDI) with respect to external debts, GDP per capita and gross fixed capital formation were 0.3%, 0.2% and 7.5% respectively, while the elasticities of log(FDI) with respect to external debts and gross fixed capital formation were -1.56 and 1.38 respectively. The magnitude of the proportionate changes in log(FDI) was very large when the percentage increase in the explanatory became very large. To avoid violating the Gauss Markov assumptions of multiple linear regression, the Breusch-Pagan test for heteroscedasticity using ‘log-level’ was employed by regressing residuals-squared on all the independent variable. A correlation test was also run to ensure that there was no perfect correlation between the independent variables. Overall significance of the regression was tested using the F statistics and there was a strong rejection of the null hypothesis that none of the variation in log(FDI) was explained by the independent variables. The study finds that in order for government to attract more FDI, emphasis has to be placed on fiscal discipline, sound economic policies, and infrastructural development. The study will enable government and policy makers to estimate the percentage point fall in FDI per a unit increase in external debts so as to strategise borrowing.
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    Strategies to stimulate Ghana’s economic transformation and diversification
    (Ashesi University College, published by Mot Juste, 2016-07) Armah, Stephen Emmanuel
    After metamorphosing into a lower middle income country, Ghana needs to transform and diversify its economy if it is to consolidate its lower middle income status, reach upper middle income status and drag more of its people out of poverty. Pertinent questions that remain unanswered include: what are the principal self-imposed problems Ghana needs to resolve; what are the institutional changes Ghana needs to make to transform and diversify its economy and what lessons can Ghana glean out of the experiences of other countries that have transformed their economies? Using a comparative analysis of published research and economic analyses, based on the available literature, this paper provides some answers to these questions. Key self-imposed problems include: weak institutions highlighted by a ‘winner takes all’ democratic governance structure that disenfranchises Ghanaians with no connections to the ruling party; weak management of the macro-economy; extremely high cost of borrowing; an unstable exchange rate; high import taxes; a narrow tax bracket with the majority in the informal sector paying zero taxes reducing government revenue; endemic corruption; ineffective land tenure; an inadequate transportation network; unreliable access to electric power; inability to engage in manufacturing; poor sanitation; difficulties in curtailing illegal mining and widespread indiscipline that makes management of people unduly challenging. Critical institutional reform needed includes a constitutional review that limits the power of the executive and makes him accountable for his actions. The number of appointments that the executive has to make to technical and professional leadership positions in the public service and production sectors must also be reduced. The status quo forces the President to make appointments to leadership positions in which he has no experience and confounds the political and economic lives of Ghanaians. Public institutions must be rid of political influence to purge them of political sycophancy, improve the technical capabilities of their leadership and increase their effectiveness. Ghana also needs to get aggressive about limiting avenues for corruption. This can be achieved by eliminating the loopholes and conflict of interest inherent in the constitution that allows corrupt practices to go unpunished especially on the grounds of technicalities: an independent corruption prosecution agency is essential in this regard. The rule of law must be strengthened – particularly in the rural areas and inner cities – and progressive land reform must be carried out. The current situation where fertile southern agricultural land is being co-opted for real estate must be halted to reduce the twin risks of food inflation and food insecurity in the future. A real effort must also be made to break through long-held and negative socialist and traditional views about private ownership so property rights can be properly acknowledged and enforced.