Abstract:
For the past decade, developing countries' governments have witnessed an astronomical
surge in their debt profile despite several attempts by international financial institutions
to help reduce their increasingly soaring debts. In this study, however, the use of
financial sector transparency as a debt management tool to lower soaring government
debts is explored for the first time in Africa. Employing a Generalized Method of
Moments (GMM)panel data of 23 African economies between 2004 and 2020, the study
reports the following findings. First, a positive effect of private and public sector-led
financial transparency is reported on government borrowings. Second, the study reports
that private and public sector-led financial transparency are substitutes given that the
interactive term of private and public sector-led financial transparency was negative.
Third, the study reports an inverted U-shape effect of private and public sector-led
financial transparencies on government borrowing implying that these transparencies
would yield desirable reducing effects on government borrowings only beyond some
threshold of transparency. Guided by the findings obtained from the study, governments
in the continent who are also the regulators of the financial sectors, are informed that
financial sector transparency can serve as a tool to help reduce their debts and
policymakers should also make a conscious effort to strengthen the use of the financial
sector transparencies (FST) to reduce governments debts in the future.
Description:
A dissertation in the Department of Applied Finance and Policy Management, School
of Business, submitted to the School
of Graduate Studies in partial fulfillment
of the requirements for the award of the degree of
Master of Philosophy
(Development Finance)
in the University of Education, Winneba
