Biblio

JADS is consistently carry on publishing issues that thoroughly discusses scholarly
out puts in Africa. This volume has four articles that capture the interest of scholars,
practicing manager and policy makers.
The first article is written by Ambachew Mekonnen, which critically analyzes some
descriptive facts on the Sub-Saharan Africa Economic Stagnation. The economic
stagnation signified by a trend of de-industrialization and agrarian pre-dominance
on one side, and the unabated population growth on the other side are the two main
facets of an average Sub-Saharan Africa (SSA) economy, indicative of the deprived
living conditions of citizens of the region. He further explained that these
longstanding and unpleasant socio-economic features are happening in the era of
globalization when SSA economies are exposed for fiercer competition than any
other time. This article, finally, proposes such tangled problems indicate the need for
a research attention to be deployed to identify the root causes of the problems and a
practical/sustainable remedial action to be enacted.
Zigigu Samuel, in the second article of this volume, evaluates the role of microcredit
programs in poverty alleviation in Addis Ababa City by comparing two microcredit
institutions: Addis Credit and Saving Institution (ADCSI) and Africa Village
Financial Service (AVFS). He collected data from primary sources through
questionnaire and interview. Questionnaire was distributed and collected from 50
clients of both institutes. In addition, 4 officials of the two institutes were contacted
through interview. Supplementary to primary data, secondary data from different
sources were also collected. This study found that ADCSI and AVFS failed to
alleviate poverty in Addis Ababa, for very different reasons: ADCSI has effectively
excluded the poor, and AVFS has failed to improve the situation of the poor. The
result of this study also implies that both ADCSI and AVFS have benefited men than
women.
A.K.Vashisht, Karamjeet Singh and Letenah Ejigu have discussed the financial
decisions, the sustainability and outreach performance of Ethiopian microfinance
institutions. This study, using a relatively balanced panel data of 13 MFIs from the
period 2003-2008, tried to identify the financial decision variables that have an
impact on the sustainability and outreach performance of Ethiopian Microfinance
Institutions (MFIs). All the data are collected from the Microfinance Information
exchange (MIX), a platform dedicated to the worldwide dissemination of quality
microfinance data. Results indicated that all the included capital structure variables
(capital to asset, deposit to asset and commercial debt to gross loan portfolio) have
negative impact on Operational Self Sufficiency (OSS). Like Rhyne and Otero (1992)
study it is found that MFIs that mobilize public savings and access commercial debt
ii
can increase their number of borrowers at a significant rate. MFIs that charge high
interest rate increase sustainability significantly probably because loan demand is
interest-inelastic. MFIs that have social mission (small loan size and more proportion
of women clients) charge higher interest rate, seemingly paradoxical at the onset but
they do it possibly to cover their high cost of reaching marginalized poor people.
MFIs with high cost structure, as expected, have lower OSS and finally social
oriented MFIs have poor portfolio quality.
In the fourth article of this volume, Amabchew Mekonnen, has investigated the
dynamic links between Investment, Trade Openness and Growth in SSA. Some studies
are skeptical whether further investment is productive and trade liberalization is
promising for SSA economic growth. However, the skepticisms are mostly reliant on
single equation estimations of contemporaneous effects that may not account for
simultaneity and dynamic interactions. Tackling these econometric problems, this
study investigates the dynamic links between investment,, trade and income growth in
SSA economies targeting at addressing the question: how the impacts amongst these
economic forces flow? The study estimates a system of dynamic simultaneous
equations model with SURE using panel data from 32 SSA countries over 1961-2003.
The estimated results jointly reveal the existence of a full cycle of impact flows from
investment-GDP-trade openness-investment besides the twin feedbacks between GDP
growth and growths of investment & trade. The positive impact of trade liberalization
on SSA economic growth is found lagging for two years and persisting to the
subsequent year. Its growth effect is twofold. It enhances economic growth directly
and indirectly through investment while the latter is also found growth spurring.
Hence, deepening trade liberalization policies, encouraging investment in the
exporting sector through incentive schemes favouring the import of technology
embodying capital goods and enhancing their synergetic links have been
recommended for better economic performance of the region.
Finally, I would like to extend my gratitude to the Ethiopian Civil Service University
for the financial support & scholars, reviewers and editors for their valuable
contribution to make this issue of with the highest possible quality.