Exchange Rate Risk Management and Economic Growth.

BUSOGA UNIVERSITY
IMPACT OF EXCHANGE RATE, RISK MANAGEMENT AND ECONOMIC GROWTH

IN FINANCIAL INSTITUTIONS IN SOUTH SUDAN
CASE OF BANK OF SOUTH SUDAN (BoSS).
By:-
DRUSILLA MANGOWA FORKEEY NYIRIWA
REG: BU0618BBA16J05
RESEARCH TOPIC SUBMITTED TO FACULTY OF BUSINESS ADMINISTRATION

AND MANAGEMENT IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR
BACHELOR OF ARTS BBA DEGREE IN BANKING AND FINANCE BUSOGA
UNIVERSITY
AUGUST 2017
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DECLARATION
I Drusilla Mangowa Forkeey Nyiriwa declare that I am the sole author of this dissertation, that
during the period of my study, I have not been registered for any other academic award or
qualification nor has any of the material been submitted wholly or partly for any other award.
Therefore, this dissertation is a result of my own work and where other people’s research
findings have been used they are duly acknowledged.
Drusilla MangowaForkeeyNyiriwa
Signature……………………………….. Date………………………..
2
APPROVAL
This dissertation has been submitted for examination with my approval as a University
supervisor and m y signature is appended against the respective name below:
Signature………………………….. Date……………………
Mr.Ayuen Majok Joseph
Lecturer.
DEDICATION
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This dissertation is dedicated my sincere love to you all to m y P a r e n t s , e n t i r e f a m i l y,
r e l a t i v e s a n d f r i e n d s . You are my rays of hope and without your guiding hands, financial
and moral assistance I would be Failed. You have been a catalytic force in my academic life.
Thank you for your tireless support.
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ACKNOWLEDGMENTS
First and foremost, I would like to thank my dissertation advisor, Lecturer Mr. Ayuen
Majok Joseph. For the help, guidance, encouragement and understanding that he provided in
all phases of this study. It was my pleasure and an honour to have the opportunity to work with
him.
I would like to convey special thanks to the members of my friends for their invaluable
suggestions and contributions to my thesis. I am also grateful to Mr. Nyiriwa Glove for the
motivation and encouragement he provided in my academic life.
I would like to thank also my Aunt Susan Elizara for the help that she provided in different
stages of this study. I have special thanks to my friend Margret poni Modi for her support in
every aspect. She shared my stress and worries throughout the thesis. I am also grateful to the
members of Department of Economics at METU and my colleagues for the supportive and
friendly environment they provided.
I owe my deepest gratitude to my parents, Late Mum Verina Lagya Thank you for your endless
support and sacrifice since the beginning of my life. You have made all of your opportunities
available for me and your love has been always more than a spouse for me. She always provided
all of her support and help since when I did not come in existence.
Lastly, I need to thank to my baby in my belly for the incredible happiness and motivation that
he gave me during the last months of my thesis. The feeling to own you is unbelievable. Thanks
to God for giving you to us. We are waiting you with a great missing.
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TABLE OF CONTENTS
Certification........................................................................................................... i
Declaration............................................................................................................. ii
Approval………………………………………………………………………….iii
Dedication............................................................................................................. iv
Acknowledgement................................................................................................. V
Abstract................................................................................................................ Vii
Table of Contents................................................................................................ Vii
List of Tables....................................................................................................... Viii
List of Figures....................................................................................................... Viii
List of Acronyms.................................................................................................... X
CHAPTER ONE: INTRODUCTION
1.1 Background..........................................................................................................1
1.2 Problem Statement .............................................................................................. 4
1.3 Objectives. .......................................................................................................... 6
1.3.1 General research objective................................................................................ 6
1.3.2 Specific research objectives.............................................................................. 6
1.4 Research questions ................................................................................................ 6
1.5 Significances of the study....................................................................................... 7
1.6 Scope of the Study..................................................................................................7
1.7 Layout of Dissertation ........................................................................................... 8
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction............................................................................................................ 9
2.2 Conceptual Definitions.............................................................................................9
2.3 Critical Review on the Theories Based on the FIs Growth……………….…….... 9
2.3.1 The Impeding and Interactive Issues of FIs towards Success of SMEs.............. 12
2.3.2 Characteristics of Financial Markets in Developing Countries............................. 14
2.3.3 Loan Screening, Monitoring and Contract Enforcement...................................... 16
2.3.4 Distinctive of Informal Finance in Developing Countries .................................... 17
2.3.5 Determinants of capital structure of SMEs .......................................................... 19
2.3.6 Link between capital structure and financial institutions development ................ 21
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2.4.1 Empirical Studies related to other countries ....................................................... 23
2.4.1.1 Africa ................................................................................................................ 23
2.4.1.2 Asia and Latin America .....................................................................................25
2.4.1.3 Europe............................................................................................................... 26
2.4.2 Empirical Studies in South Sudan........................................................................ 27
2.4.2.1 Development of Financial Institutions ............................................................... 27
2.4.2.2 The Role of Financial Institutions in Financing SMEs ...................................... 28
2.4.2.4 Categorization of SMEs Development in South Sudan....................................... 33
2.4.2.5 Contribution of SME sector to Economy ........................................................... 34
2.4.2.6 Challenges Faced by Small and Medium Entrepreneur. .................................... 35
2.4.2.7 Initiatives Undertaken for Promotion and Development of SMEs. .................... 39
2.4.2.8 Other Initiatives Done to Promote Small and Medium Entrepreneur Sector ...... 40
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction… ........................................................................................................... 45
3.2 Research methodology….............................................................................................45
3.3 Statement of the Problem..............................................................................................46
3.4 Objectives of Study…………………………................................................................46
3.5 Significant of Study……………….................................................................................47
3.6 Sample Design..……………………. ..............................................................................47
3.7 Sample Selection Techinques.......................................................................................... 47
3.8 Data Collection Tools………...........................................................................................48
3.8.1 Secondary Data……………………..............................................................................48
3.9 Source of Data & Form of Data....................................................................................... 48
3.10 Statistical Tools Applied................................................................................................ 49
3.11Hypotheses for the Test…………………………………………………………………49
3.12 Limitation of Study…………………………………………………………………….49
3.13 Future Scope……………………………………………………………………………49
CHAPTER FOUR: STUDY FINDINGS AND ANALYSIS
4.1 Introduction ............................................................................................................. ……51
4.2 Key Characteristics of the Respondents .......................................................................... 51
4.2.1 The Responses of SMEs’ Owners in Relation to Location........................................... 51
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4.2.2 Year of Establishment .......................................................................................... …52
4.2.3 Form of Ownership .................................................................................................. 52
4.2.4 Distribution of Gender .............................................................................................. 53
4.2.5 Marital Status of the Respondents ........................................................................... 54
4.2.6 Distribution of Age of the Respondents.............................................................. …..55
4.2.7 Education level of the Respondents.................................................................... …..56
4.2.8 Major Economic Activities carried out by SMEs...................................................... 57
4.2.9 Registration Status of Small and Medium Enterprises ............................................ 58
4.2.10 Sales performance ................................................................................................. 59
4.3 Motivational factors .................................................................................................. 59
4.3.1 Motives Influence People Participating in Doing Businesses............................. …59
4.4 Financial institutions in Relation to Accessibility of Finances.................................. 60
4.4.1 Number of Beneficiaries against the Non Beneficiaries of loan ........................... 61
4.5 Impacts of Loan on Small and Medium Enterprises Performance.......................... ..62
4.5.2 Credit Rationing ................................................................................................... 62
4.5.3 Future Credit Plans ................................................................................................ 64
4.5.4 Affects of Repayment on the financial performance of SMEs ............................. 64
4.5.5 Impacts of Loan on Sales, Assets, Profitability, and Market Coverage................ 65
4.5.6 Employment Generation ....................................................................................... 66
4.6 Factors Influences SMEs in deciding Sources of Finances ..................................... 67
4.6.1 Uses of Loan on Small and Medium Enterprises ................................................. 67
4.6.2 Sources of SMEs Finance..................................................................................... 68
4.6.4 Stages in which SMEs Request for Support........................................................ 71
4.7 Problems in Accessing Finance on Small and Medium Enterprises....................... 72
4.8 Financial Institutions .............................................................................................. 75
4.8.1 Types of Financial Products and Services .......................................................... 76
4.8.2 Conditions for Credit Accessibility .....................................................................77
4.8.3 Rate of Interests ................................................................................................ 78
4.9 Strategies on Improving Accessibility to Finance of SMEs................................. 79
4.9.1 Barriers to entry................................................................................................. 79
4.9.2 Reduction of interest rates ................................................................................ 80
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4.9.3 Commencement of grace period strategy ......................................................... 80
4.9.4 Introduction of entrepreneurship trainings to borrowers ....................................80
4.9.5 Innovative credit guarantees scheme................................................................. 80
4.9.6 Increase credit outreach strategy........................................................................ 81
4.9.7 To operate SME financing window ................................................................... 81
4.9.8 Creates of Information Database for SME .......................................................... 81
4.9.9 Improvement of the business registration environment ....................................... 82
4.9.10 Solidarity of group lending................................................................................ 82
CHAPTER FIVE: CONCLUSION AND RECOMMENDATIONS
5.1 Conclusion ............................................................................................................. 83
5.2 Recommendations ................................................................................................. 85
5.2.1 Government Interventions .................................................................................. 85
5.2.2 Small and Medium Enterprises ........................................................................... 86
5.3 Suggested Areas for Further Research .................................................................. 87
REFERENCES ............................................................................................................. 89
APPENDICES ..............................................................................................................99
LIST OF TABLES
Table 2.1 The Category of SME Development in South Sudan...................................33
Table 3.1 Number of Distribution of Business by States-Equatorial Region..... ………46
Table 3.2 Distribution of the sample............................................................................. 47
Table 4.1 The Responses of SMEs’ Owners in Relation to Location. .......................... 52
Table 4.2 Year of the Establishment. ............................................................................ 52
Table 4.3 Distribution of Age of the Respondent .......................................................... 55
Table 4.4 Distribution of Sales Performance of SMEs.................................................. 59
Table 4.5 Motives Influence People Participating in Doing Businesses....................... 60
Table 4.6 Loan Size of the Respondent....................................................................... 63
Table 4.7 Future Credit Plans ....................................................................................... 64
Table 4.8 Impacts of Loan on Sales, Assets, Profitability and Market Coverage ......... 66
Table 4.9 Employment Generation ............................................................................... 66
Table 4.10 Sources of SMEs finance. .......................................................................... 68
Table 4.11 Institutions Supporting Small and Medium Enterprises .............................. 70
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Table 4.12 Stages in which SMEs Request for Support............................................... 72
Table 4.13 Problems in Accessing to Finance on SMEs ............................................. 73
Table 4.14 Constraints Facing the SME Sector. ........................................................... 74
Table 4.15 Type of Financial Services Offered by Surveyed Financial Institutions..... 76
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LIST OF FIGURES
Figure 2.1 Conceptual Frameworks ............................................................................ 43
Figure 4.1 Forms of Business Ownership.................................................................... 53
Figure 4.2 Distributions According to Gender................................................................. 54
Figure 4.3 Distribution of Marital Status of Respondents ............................................. 55
Figure 4.4 Education levels of SMEs’ owners ................................................................ 56
Figure 4.5 Major Economic Activities carried Out by SME sector................................ 57
Figure 4.6 Registration Status of Small and Medium Enterprises................................ 58
Figure 4.7 Percentages of Beneficiaries against the Non Beneficiaries of loan............ 61
Figure 4.8 Credits Rationing ........................................................................................ 63
Figure 4.9 Affects of Repayment on the financial performance of SMEs ................... 64
Figure 4.10 Uses of Loan on Small and Medium Enterprises...................................... 68
Figure 4.11 Interest Rates Charged per Annum. .......................................................... 78
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LIST OF ACRONYMS
ACBAfrican Commercial Bank.

BDS Business Development Services
BESSS; Business Environment Strengthening for South Sudan
BET Board of External Trade
BFIA Banking Financial Institution Act
BOSS Bank of South Sudan
BRELA Business Registration and Licensing Authority
CAMARTEC Centre for Agricultural Mechanization Rural Technology
CBN Central Bank of Nigeria
CRDB Co-operative and Rural Development Bank
EOTF Equal Opportunity Trust Fund
ESRF Economic and Social Research Foundation
FEDA Finance and Enterprises Development Agency
FINCA Foundation for International Community Assistance
Definitions of key terms
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ABSTRACT
It is controversial in the literature whether depreciation of exchange rate is expansionary or
contractionary for the economy. The main aim of this thesis is to empirically examine the effect
of real exchange rate changes on economic growth. Firstly, the growth effects of real exchange
rate changes are investigated using a wide panel data set of countries. To this end, we apply not
only the conventional panel data estimation procedures but also panel co-integration and the
recent procedures taking into account the possible common correlated effects such as global
shocks. Secondly, given the importance of sectoral heterogeneity of the impact of real exchange
rates on the response of industrial production of Turkish manufacturing industry, the impact of
real exchange rate changes on imports, exports, and production of Turkish manufacturing
industry sub-sectors is examined taking into account also some sector-specific characteristics.
The results showed that depreciation of the real exchange rate is contractionary for developing
countries while real exchange rate changes have not any significant effect for developed
countries. Additionally, this contractionary effect for developing economies increases with the
degree of liability dollarization. Regarding the results of industry-level analysis, output growth of
industries is negatively affected from real depreciations whereas this negative effect is larger for
high and medium-high technology sectors. Additionally, this negative effect declines as the
export share of the sector increases and it rises as its import dependency increases.
Keywords: exchange rate, growth, common correlated effects, South Sudan manufacturing
industry, sectoral analysis.
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CHAPTER ONE: INTRODUCTION
1.0 Introduction
As a key relative price affecting the economy through many channels, the implications of real
exchange rate changes for economic growth have become a growing focus of attention in the
recent policy debate. One of the main reasons behind the increased attention on the growth
effects of real exchange rates is the growth experiences of East-Asian countries which have been
assessed as pursuing a successful export-led growth strategy maintaining a competitive and
stable exchange rate policy. The other factor is the financial effect of exchange rate movements
which mainly operates through private sector balance sheets due to the increased liability
dollarization in developing countries. Since this liability dollarization process often generates a
currency and maturity mismatch between the debt and revenues of the firms, depreciation of real
exchange rate tend to generate losses and thereby decline in economic activity.
According to the standard Mundell-Flemming model, currency depreciation is expansionary
through its expenditure switching effects between domestic and foreign goods.1 However,
contrary to the traditional view, New Structuralism School has provided several demand-side and
supply-side channels through which devaluations can have adverse effects on output.2 Severe
output losses and economic instability followed by the devaluations in East Asia and Latin
America in 1990s have led academics and policy makers to point out balance sheet effects as the
mechanism behind the output collapses.3 When a considerable amount of borrowing of firms is
risk management, a prioritization process is followed whereby the risks with the greatest loss (or
impact) and the greatest probability of occurring are handled first, and risks with lower
probability of occurrence and lower loss are handled in descending order. In practice the process
of assessing overall risk can be difficult, and balancing resources used to mitigate between risks
with a high probability of occurrence but lower loss versus a risk with high loss but lower
probability of occurrence can often be mishandled. Intangible risk management identifies a new
type of a risk that has a 100% probability of occurring but is ignored by the organization due to a
lack of identification ability. For example, when deficient knowledge is applied to a situation, a
knowledge risk materializes. Relationship risk appears when ineffective collaboration occurs.
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Process-engagement risk may be an issue when ineffective operational procedures are applied.
These risks directly reduce the productivity of knowledge workers, decrease cost-effectiveness.
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1.1 Background of the Study
Exchange-rate also is used as a means to control the behavior of a currency, such as by limiting
rates of inflation. However, in doing so, the pegged currency is then controlled by its reference
value. As such, when the reference value rises or falls, it then follows that the value(s) of any
currencies pegged to it will also rise and fall in relation to other currencies and commodities with
which the pegged currency can be traded. In other words, a pegged currency is dependent on its
reference value to dictate how its current worth is defined at any given time. In addition,
according to the Mundell–Fleming model, with perfect capital mobility, a fixed exchange rate
prevents a government from using domestic monetary policy in order to achieve macroeconomic
stability. In a fixed exchange-rate system, a country’s central bank typically uses an open market
mechanism and is committed at all times to buy and/or sell its currency at a fixed price in order
to maintain its pegged ratio and, hence, the stable value of its currency in relation to the
reference to which it is pegged. The central bank provides the assets and/or the foreign currency
or currencies which are needed in order to finance any payments imbalances.
Risk management is the identification, evaluation, and prioritization of risks (defined in as the
effect of uncertainty on objectives) followed by coordinated and economical application of
resources to minimize, monitor, and control the probability or impact of unfortunate events or to
maximize the realization of opportunities. Risk management’s objective is to assure uncertainty
does not deflect the endeavor from the business goals. Risks can come from various sources
including uncertainty in financial markets, threats from project failures (at any phase in design,
development, production, or sustainment life-cycles), legal liabilities, credit risk, accidents,
natural causes and disasters, deliberate attack from an adversary, or events of uncertain or
unpredictable root-cause.
Economic growth: is the development between developing and developed countries gone
through phases that affected growth through changes in the labor force participation rate and the
relative sizes of economic sectors. The transition from an agricultural economy to manufacturing
increased the size of the sector with high output per hour (the high-productivity manufacturing
sector), while reducing the size of the sector with lower output per hour (the lower productivity
agricultural sector).
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1.2 Statement of the Problem
Despite the large number of studies on the impact of exchange rate changes on economic growth,
they generally consider aggregate country panel data ignoring industry-specific dynamics.
However, the reaction of manufacturing industry and its sub-sectors - as the main engine of
economic growth - to the changes in real exchange rate is highly crucial for the growth effects of
real exchange. The responses of exports and production of manufacturing industry sub-sectors
will be highly heterogeneous depending on their different characteristics such as export
orientation, import dependency, technology intensity and financial structure. For instance,
depreciation of real exchange rate is likely to be contractionary for internationally non-tradable
sectors or sectors with high import dependency ratios via trade and balance sheet impacts. The
responsiveness of export sectors, on the other hand, are basically determined by their real
exchange rate elasticity of exports and degree of liability dollarization. Real exchange rate
elasticity of trade tend to decline in sectors with high degrees of intra-industry trade and
vertically integrated sectors with high imported input ratios (Jones and Kierzkowski, 2001; Arndt
and Huemer, 2004; Kharroubi, 2011). The impact of real exchange rate changes on production
and international trade dynamics will also vary with technology intensity and product complexity
of industries. These features together determine how exports, imports and production of
individual sectors react to the movements of real exchange rate and the relative weights of these
industries in total manufacturing industry will determine the response of the whole economy.
1.3 Purpose of the Study
Purpose of the Study interned to establish the relationship between exchange rate and economic
growth in financial institution, and examine the relationship between risk management and
economic growth on financial institutions to determine the relationship between economic
growth on financial institutions and exchange rate and analysis the factor structure between
exchange rate, risk management economic growth on financial institutions and exchange rate.
1.4 Objective of the study
The general objectives of this study it to Carried out the implementation of Exchange rate, risk
management and economic growth on institutions in Bank of South Sudan-Juba
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1.5 Specific objectives of the Study
Being subparts of general objectives the specific objectives of the study:
i. To establish the relationship between exchange rate and economic growth in financial
institutions
ii. To examine the relationship between risk management and economic growth in financial
institutions
iii. To determine the factor relationship between exchange rate and risk management on
economic growth in financial institutions.
1.6Research Questions:-
i. What is establishing the relationship between exchange rate and economic growth?
ii. What is the relationship between risk management and economic growth on financial
institutions?
iii. What is factor relationship between exchange rate and risk management on economic growth
in financial institutions?
1.6.1Scope and limitation of the study

1.7.Scope of the study
1.7 content scope
This study focused on the exchange rate and implementation of South Sudan Juba city
municipality even though the exchange rate is different in every type of organization.
In conducting this study the main problem which faced the study is in case of time and cost to
conduct the research (considering all case or conditions cost is needed for the purpose of
preparing interview transportation and questionnaires and for other expenses. The capacity of the
researcher is not sufficient enough.
1.7.2 geographical scope
1.7.3 time scope
1.8 Significance of the study
It is likely certain that some benefit would be derived from this study. Even if the South Sudan
Juba city ministry is the oldest organization, No sufficient study has been done regarding on this
18
research. So that the budgeting system assessment this research will be made to serve different
purpose. Contains or provide information most useful to management It helps the organization
officials by giving a recommendation to some existing problems which need some improvement
regarding budget preparation and budget implementation.
1.9 Conceptual Framework

INDEPENDENT VARIABLE DV
EXHANGE RATE ECONOMIC GROWTH
 Reduction of Taxes income  Sustainable Growth

 Tax channel confused  Development Growth
 Decrease in investment  Growth in production
 Imported input cost  Real Exchange Rates
 Wage indexation  Improve the degree of
development
RISK MANAGEMENT
 Risk Avoidance
 Risk Detection
 Conducting economic
 Improve determinant of imports
 Distinguishes unanticipated
Description of Model
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The researcher is to distinguish the variable in whichexchange Rateis the Independent Variable
and risk management is the Dependent Variable, whereby economic growth of financial institutions is an
intervening variable to both. This conceptual framework is to explain and evaluate the relationship
between exchange Rates and risk management whereby it can identify factors that influences the
relationship between economic growth of financial institutions, to assess the relationship between
economic growth of financial institutionsand exchange Ratein South Sudan.
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CHAPTER TWO: REVIEW OF LITERATURE
2.0 Introduction
According to the conventional Keynesian open economy model, internal balance (full
employment and price stability) and external balance (current account compatible with long run
capital flows) can be maintained by two types of policies: expenditure-switching and
expenditure-reducing policies. Expenditure-switching policies affect the composition of
countries’ expenditure on tradable and non-tradable goods. Expenditure-reducing policies aim to
control aggregate expenditures. The exchange rate is the main instrument of the first type of
policies whereas monetary and fiscal policies are used as classical instruments of the second type
of policies.
2.1 Definition of Concepts
The traditional Mundell (1963)-Fleming (1962) model proposes that an increase in the exchange
rate (currency depreciation or devaluation) is expansionary assuming that the Marshall-Lerner
conditions are satisfied.3 Due to this standard textbook model, the depreciation of the exchange
rate boosts aggregate demand by encouraging exports and creating a substitution from imports to
domestic goods. This “orthodox” view is originated by the money-less Keynesian model of
Meade (1951) and it is extended by the monetary approach of Dornbusch (1973, 1986). Based on
this orthodox view, it is believed that by stimulating the export sector, real devaluations of the
currency help countries to avoid financial crisis and provide sustained growth. Introducing an
There was no serious controversy over the positive effects of devaluation on economic growth
until the late 1970s. However, the recessions that took place in some Latin American countries
which implement orthodox adjustment programs have raised the possibility that devaluations can
be in fact contractionary especially for developing countries. Some “structuralism” economists
proposed several theoretical reasons why, contrary to the traditional view, devaluations can be
contractionary and generate a decline in economic growth. These authors stressed mainly the
negative real balance effects, income distribution effects and supply-side effects of devaluation
which are ignored by orthodox view of devaluation.
2.2 The relationship between Exchange Rate and economic growth
2.2.1 Exchange rate:
Diaz-Alejandro (1963) and Cooper (1971) are among the first who suggest that devaluations can
be contractionary for developing countries. The advocators of this contractionary devaluation
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hypothesis provided some theoretical channels through which real devaluations can negatively
affect economic activity. These channels can be divided into three categories: demand side
channels, supply side channels and balance sheet channel. The first two channels are the ones
which are emphasized by the earliest supporters of contractionary devaluation mechanism. The
last one, balance sheet channel, emerged subsequent to the previous two channels stressing
mainly the financial effect of real exchange rate depreciation. We can summarize these channels
 Reduction of Taxes income
The increases in price of traded goods relative to non-traded goods after devaluation will
increase the general price level which will cause the real money balances to fall. The eventual
impact on real income depends on whether traded goods have a higher share in consumption or
in income. The larger the share of traded goods in consumption, the larger the fall in real income
so the fall in expenditures (Bruno, 1979; Hanson, 1983). Besides, if there is a trade deficit in the
economy, the increase in traded goods prices immediately reduce real income at home and
increase it abroad which reduces aggregate demand (Krugman and Taylor, 1978).
 Tax channel confused
If there are ad volarem taxes on exports and imports, since the value of exportable and
importable goods increase after a devaluation, tax revenue of the government will increase. This
means an income transfer from private sector to the public sector. This will induce a reduction in
aggregate demand since the marginal propensity to consume of public sector is lower than the
marginal propensity to consume of private sector (Krugman and Taylor, 1978).
 Decrease in investment
New investment in developing countries requires imported capital goods. Since a real
depreciation will raise the price of capital in terms of domestic goods, new investments will fall
leading to a decline in aggregate demand (Branson, 1986; Buffie, 1986). 11
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 Imported input cost
When inputs for manufacturing are largely imported and cannot be substituted easily by
domestic production, real depreciations will increase the costs of inputs. This negative effect on
production due to higher input prices can outweigh the positive effect that result from higher
relative prices of traded goods (Bruno, 1979; van Winjbergen, 1986).
 Wage indexation
If nominal wages are indexed to current prices in the economy, such an increase in wages can
induce adverse supply effects (van Winjbergen, 1986; Hanson, 1983; Edwards, 1986)
iii. Cost of working capital: In case of devaluation, since the real balances will decline, real
volume of credit in the market decreases and interest rates tend to rise. This will negatively affect
the cost of production and the quantity supplied (van Winjbergen, 1986; Bruno, 1979).
2.3 The relationship between risk management and economic Growth
2.3.1 Risk management:
Contractionary devaluation hypothesis have intensively been discussed through its demand side
and supply-side channels beginning from 1960s and the balance sheet channel since 1990s. With
the successful experiences of East Asian countries like China, India and South Korea in recent
years, some additional channels have emerged through which real exchange rate depreciations
affect growth positively. The “Productivity” channel and the “Capital Accumulation” channel are
the two mechanisms as referred in Montiel and Serven (2008). These channels are also
 Risk Avoidance
Emphasized by some recent studies on the growth effects of real exchange rate. The productivity
channel is not new in the literature but it has drawn interest in recent years. Since learning by
doing externalities and technology and skill spillovers are higher and faster in traded goods
sector than in non-traded goods sector. It is also discussed in Dutch Disease literature in 1980s.
See van Winjbergen, 1984; Krugman, 1987; Troika, 2001 among others. 14
23
the expansion of traded goods sector will increase productivity and growth (Balassa, 1964; Hahn
and Matthews, 1964). Depreciation of the real exchange rate shifts production from non-traded
to traded goods therefore contributes to the productivity growth by expanding the tradable sector.
Rodrik (2008) proposes that developing countries can achieve higher growth by increasing the
profitability of their tradable sector. According to Rodrik (2008), tradable sector is special
because it suffers disproportionately from institutional weaknesses and market failures. An
undervalued real exchange rate can therefore be used as a second-best policy to reduce these
distortions, increase profits in the sector and accelerate growth.
 Risk Detection
Upadhyaya and Upadhyay (1999) examine the effects of risk detection on output for six four
East Africans countries, South Sudan,Uganda, Ethiopia and Kenya. They employed a reduced
model for output consisting of government consumption, money supply and terms of trade as the
explanatory variables. Their results show that for almost all countries devaluation does not have
any significant positive effect on output growth either in the short run, medium run or long run.
One exception is Philippines for which real devaluation has expansionary effects in short and
medium term. Similarly, Bahmani-Oskooee, Chomsisengphet and Kandil (2002) investigate
short run and long run response of real output to real devaluations in South Sudan, Uganda,
Ethiopia and Kenya. Conducting integration and error correction approach, they examine the
short run and long run dynamics of output in these five Asian economies. Their models provide
mixed results as real depreciations are found to be contractionary for Indonesia and Malaysia in
the long run, while they are expansionary for Philippines and Thailand. Korea’s real output does
not significantly respond to real exchange rate. Kim and Ying (2007) compare the effects of
currency
24
Devaluations in seven East African countries, along with two Latin American countries, Mexico
and Chile. They conduct both bivariate Granger Causality analysis and a multivariate Vector
Autoregressive Regression (VAR) Model. In order to account for the structural break in the
series due to 1997 financial crises, they distinguished pre-1997 period in their analysis. Their
results show differences according to the period used. In pre-1997 period, devaluation is not
contractionary for East Asian countries while it is strongly contractionary for Mexico and Chile.
However, for the whole period, devaluation is contractionary for Latin American countries but
also for some East Africans countries. Real devaluations are observed to be associated with
economic contractions whereas real appreciations are followed by expansions in Mexico over the
past decades. Kamin and Rogers (2000) examine whether this negative correlation between real
depreciations and real output is robust empirically when some possible factors such as reverse
causation, spurious correlation with third factors and temporary contractionary effects of
devaluation are controlled for. Using a Granger Causality analysis and a VAR model, they
conclude that even after accounting for spurious correlation and reverse causation; devaluation of
the real exchange rate is inflationary and leads to the contraction of output in Mexico.
Bahmani-Oskooee and Kandil (2008) evaluate the effects of exchange rate depreciation on
output growth for a sample of fourteen MENA countries. By applying co integration and error
correction modeling, they differentiated the growth effects of deprecation in the short run and
long run. They also distinguish the anticipated and unanticipated components of real exchange
rate. Their results indicate that anticipated depreciation is expansionary for Bahrain, Oman,
Saudi Arabia, Syria and Tunisia but contractionary for Lebanon and Libya in the long run.
Unanticipated depreciation has no expansionary effect in the long run while it is only evident in
the short run. In contrast, it has a contractionary effect in Jordan, Kuwait and Qatar in the long
run. There are only a few studies which examine the effect of real exchange rates on output in
Turkey. Berument and (2003), conducting a VAR analysis.
 Conducting faster economic improvement
Some earlier studies estimated the real exchange rate elasticity of exports and imports in Turkey.
These studies generally provided mixed results. Some authors support the traditional view that
real exchange rate depreciations expand exports and decline imports therefore provides an
improvement in the trade balance. Akbostance (2004) estimates the effect of real exchange rate
changes on Turkey’s trade balance by utilizing from a vector error correction model (VECM).
25
According to her results, real exchange rate is the main factor influencing the trade balance. The
author also suggests that trade balance improves in response to real exchange rate depreciations
in the long run while the results do not support J-curve hypothesis in the short run. Neyaptıet al.
(2007) estimates export and import functions in order to investigate the effect of Customs Union
(CU) on Turkey’s trade. They show that real depreciations are positively correlated with exports
and negatively correlated with imports as traditional theory predicts. Their results also indicate
that the effect of real exchange rate on export to European Union countries is stronger after the
CU whereas real exchange rate changes are no longer a significant determinant of imports after
CU agreement.
 Improve determinant of imports
According to Togan and Berument (2007) exports and imports give traditional responses to real
exchange rate changes and the Marshall-Lerner conditions hold as the absolute values of the
elasticity of exports and imports sum up to more than unity.
The earliest empirical studies which investigate the effects of real devaluations on economic
growth generally focused on a number of devaluation episodes. Since these studies examine the
position of some macroeconomic variables of countries before and after these devaluation
episodes, this empirical approach is referred to as “Before-After Approach”. Cooper (1971) is
possibly the earliest study that examines .Agenor (1991) analyzes the effect of real exchange rate
changes on output for a group of 23 countries over the period 1978-87. His empirical analysis is
based on an output equation explicitly derived from a rational expectations macro-model with
imported intermediate goods.
 Distinguishes unanticipated
He distinguishes the effects of anticipated and unanticipated effects of real depreciations. By
applying fixed effects estimation technique to his panel data sample, he provides evidence that
an anticipated depreciation of RER has a negative impact on output, while an unanticipated
depreciation has a positive effect. Contrary to the results of Edwards (1986), the contractionary
effect of unanticipated depreciation remains significant even after a year. That is, he proposes
that depreciation is not neutral but continue to be contractionary in the medium to long run.
Regarding the differences in the estimation results with Edwards (1986), Agenor (1991)
emphasizes the importance of appropriate specification of the output equation and the adequate.
26
Morley (1992) conducts a cross-section study on the effect of real devaluations on capacity
utilization during stabilization programs in least developed countries. He shows that devaluations
reduce output, but it takes at least 2 years to have the full effect. Moreover, by checking the
change in the share of private and total consumption and fixed investment in GDP, he shows that
the recessions due to devaluations are not caused by a rise in saving, but instead by a sharp fall in
investment.
Ahmed, Gust, Kamin and Huntley (2003) investigate whether the devaluations under fixed
exchange rate regimes and depreciations under floating exchange rate regimes are similarly
destructive for the economy.
2.4 The factor relationship between exchange rate and risk management on economic
growth in financial institutions
2.4.1 Economic growth:
Developing countries generally have to abandon their pegged exchange rate regime in case of
devaluation since governments run out of their reserves. This abandonment of exchange rate
policy leads to a decline in the confidence of investors, a sharp capital outflow and economic
contraction.
 Sustainable Growth
Therefore, it is not clear whether devaluation itself have led to adverse outcomes, or rather the
abandonment of pegged exchange rate regimes after devaluations. The negative consequences of
devaluation under pegged exchange rate regimes may not be observed in case of normal
depreciations under floating exchange rate regimes. For this purpose, Ahmed et al. (2003)
estimate VAR models to compare the responses to devaluation of developing economies which
consist of Latin American and East Asian countries that are altered between fixed and floating
exchange rate regimes and two types of industrial economies those that have consistently floated,
and those that have sustained fixed exchange rate regimes as well. They define fundamental
depreciation as the percent deviation of the equilibrium REER from the observed pre-crisis real
effective exchange rate.
 Development Growth
Overshooting is the additional depreciation above and beyond fundamental depreciation.
Cespedes (2005) analyzes 82 large devaluation episodes for a set of middle income and
developed countries during the period of 1980-2001. He interactsEconomic Growth with external
27
debt to capture balance sheet effects. His findings support that balance sheet effect has a
significant negative effect on output, while there is also A few studies examine the balance sheet
effect of real depreciations using cross-country panel data methods. By incorporating interaction
terms to their panel data growth model, Bebczuk, Galindo and Panizza (2006) evaluate whether
foreign currency denominated debt is important for the effect of real depreciation on growth.
Based on a sample of 57 countries (35 developing, 22 industrial) for the period of 1976-2003,
they find that in countries with no dollarization, a 20 percent real devaluation increases per capita
GDP growth by approximately half of a percentage point.
 Growth in production
As dollarization increases, the expansionary effect of devaluations diminishes. When the dollar
denominated external debt exceeds 84 percent of GDP, devaluations become contractionary.
Similarly, Bleaney and Vargas (2009) analyze the relationship between net capital inflows, real
exchange rate movements and growth for twenty emerging markets and twelve developed
countries over the period 1985–2004. In order to examine valuation effects that arise from
foreign indebtedness, they constructed a debt-weighted real exchange rate. Their results show
that real exchange rate depreciations tend to be contractionary in emerging markets, whereas
they are expansionary in developed countries and this finding is not only valid for crisis periods.
They also point out that the debt-weighted real effective exchange rate rather than the trade-
weighted one is associated with the contractionary devaluation hypothesis which indicates that it
is the result of valuation effects on foreign debt. Blecker and Razmi (2008) test the twin
hypotheses-Fallacy of Composition (FOC) and Contractionary Devaluation empirically, utilizing
from a data of 18 developing.
 Real Exchange Rates
Over the past several decades, some developing countries such as South Korea, Taiwan, Hong
Kong, Singapore and China have been performing high growth rates by promoting their
manufactured exports. Their export-led growth strategy based on stable and cheap currency
policy has drawn the attention of policy-makers and it has begun to be discussed again that
maintaining a competitive or undervalued real exchange rate can foster economic growth.
Beginning with Rodrik (2008), some other authors argued that developing countries can achieve
high and sustainable growth rates such as these East-African countries by pursuing an
28
undervalued currency policy. Rodrik (2008) provides empirical evidence for the positive growth
effects of real exchange rate undervaluation for a panel data sample of countries.
 Improve the degree of development
 2.5 conclusion literature review
29
Using this Balassa-Samuelson adjusted index of undervaluation, Rodrik (2008) estimates panel
data growth models for developing and developed countries by adopting Fixed Effects (FE) and
Generalized Method of Moments (GMM) estimators. His results show that undervaluation of
currency stimulates economic growth especially for developing countries. He argues that the
main mechanism behind this result is the tradable sector that, by increasing the profitability of
the tradable sector which suffers disproportionately from the institutional weaknesses and market
failures, undervaluation of the real exchange rate facilitates economic growth in developing
countries. Woodford (2009) heavily criticizes Rodrik (2008) mainly due to his undervaluation
index, as the use of this index exaggerates the strength and the robustness of the effect of real
exchange rate on growth. According to Woodford (2009), there is no need to adjust for the B-S
effect because the panel growth regression of Rodrik (2008) already includes country fixed
effects which accounts for the differences in the real exchange rate levels of countries due to the
per capita income differences.
30
CHAPTER THREE: RESEARCH METHODOLOGY
3.1Introduction
An exchange rate (also known as a foreign-exchange rate, forex rate, FX rate or Agio) between
two currencies is the rate at which one currency will be exchanged for another. The spot
exchange rate refers to the current exchange rate. The forward exchange rate refers to an
exchange rate that is quoted and traded today but for delivery and payment on a specific future
date. There are several methods and techniques available through which exchange rate is a
measure like, Purchasing power parity, interest rate parity, fisher effect, international fisher
effects. Foreign exchange risk also exists when the foreign subsidiary of a firm maintains
financial statements in a currency other than the reporting currency of the consolidated entity.
The risk is that there may be an adverse movement in the exchange rate of the denomination
currency in relation to the base currency before the date when the transaction is completed.
Investors and businesses exporting or importing goods and services or making foreign
investments have an exchange rate risk which can have severe financial consequences; but steps
can be taken to manage (i.e., reduce) the risk. Firms may adopt alternative strategies to financial
hedging for managing their economic or operating exposure, by carefully selecting production
sites with a mind for lowering costs, using a policy of flexible sourcing in its supply chain
management, diversifying its export market across a greater number of countries, or by
implementing strong research and development activities and differentiating its products in
pursuit of greater inelasticity and less foreign exchange risk exposure.
THE RESEARCH DESIGN:
3.2Research Methodology
Exchange Rates are very important for any country as they determine the level of imports and
exports. If a domestic currency appreciates with respect to a foreign currency, imported goods
will be cheaper in the domestic market and local companies would find that their foreign
competitor's goods become more attractive to customers. If the country has a strong currency
then its goods become more expensive in the international market, which results in lost
competitiveness. This is the reason that China, despite much pressure from the United States, is
31
not letting its Yuan appreciated. Exchange rates are extremely important for a trading economy
such as the BRICS. There are several reasons for this, including:
 Exchange rates represent a cost to firms, which arises when commission is paid on the
exchange of one currency for another.
 Exchange rate changes create a risk to those firms that hold assets in currencies other
than Nation Currency.
 Exchange rates affect the price of export to form a significant part of aggregate demand,
and the price of imports with that the balance of payments.
Generally nation economy strength is determined on the basis of exchange rate valuation. If
nation exchange rate likely appreciates, this nation has sound economy. That’s why developed
nation exchange rate is always appreciating compare to developing nation.
There are lots of factors influence exchange rate like, demand and supply of exchange rate,
inflation, interest rate, balance of payment, stock market, speculator, GDP, GNP etc.
3.3Statement of the Problem
An international exchange rate, also known as a foreign exchange (FX) rate, is the price of one
country's currency in terms of another country's currency. Foreign exchange rates are relative
and are expressed as the value of one currency compared to another. When selling products
internationally, the exchange rate for the two trading countries' currencies is an important factor.
Foreign exchange rates, in fact, are one of the most important determinants of a countries relative
level of economic health, ranking just after interest rates and inflation.
A number of factors influence exchange rates. These include all of the following:
 Relative rates of inflation.

 Comparative interest rates.
 Growth of domestic money supply.
 Size and trend of a country's balance of payments.
 Economic growth (as measured by the gross national product).
 Dependency on outside energy sources.
 Central bank intervention.
32
Exchange rate is most important factors for the trading countries and developing countries
because their economies mostly depend on the foreign trade and transaction. That’s why in
research select BRICS countries because these countries are developing countries and their
economy depend on the foreign trade, FDI (Foreign Direct Investment) and FII (Foreign
Institutional Investments) and BOP (Balance of Payment). The BRIC [Brazil, Russia, India and
China] idea was first conceived in 2001 by Goldman Sachs as part of an economic modeling
exercise to forecast global economic trends over the next half century; On the bases of Common
characteristics are large, fast-growing economies all developing or newly industrialized
countries. BRIC Foreign Ministers at their meeting in New York on 21st September 2010 agreed
that South Africa may be invited to join BRIC. Accordingly, South Africa was invited to attend
the 3rd BRICS Summit in Sanya on 14 April 2011. These BRICS countries main focus on export
import trade and promote industrialization. That’s why exchange rate is a keep factors for
BRICS country.
3.4 Objectives of Study
Main objectives: To find out which factor influence exchange rate in BRICS country and How to
manage exchange rate fluctuation in BRICS country?
Sub objectives:
 To study which types of flexible exchange rate method apply in south Sudan country?
On this objectives find out which flexible exchange rate method manage exchange rate in their
own nation. Which types of the government intervention are generated in flexible exchange rate?
 To check validity of exchange rate parity theories in South Sudan country.
In advance 5 parity theories are find out and which said inflation and interest rate are major
factor to decide the exchange rate movement. Through theses check validity of exchange rate
parity theories in South Sudan country.
 PPP (purchasing Power Parity)
 FE (Fisher Effect)
33
 IFE (International Fisher Effect)
 IRP (Interest rate Parity)
 In real life these theories are really worked or not. 
 To measures exchange rate fluctuation and risk for Company and Country.
 Exchange rate risk measures in company on the bases of relationship between market
value of share and exchange rate movements.
For country, to find out relationship between exchange rate movement and change in FII
and Balance of Payments.
 To manage exchange rate exposure for company and country.
 For management of MNC exchange rate exposure use hedging techniques. And
exchange rate hedge through the Commodity market and currency derivatives
market.
 In South Sudan country, Government policy is not using hedging.
3.5Significance of Study.s
To assists the business in making the international decision, which involve transactions in multi-
currency.
It focuses on the condition of the market, and evaluates whether the economy is truly governed
by market forces, or else there are some interventions hindering the free flow of transactions in
the economy.
To know about triangular arbitrage.
To helpful in future predicted exchange rate.
To helpful for offsetting their assets.
It is useful to MNC firm which make multilateral trade on credit base, because in which several
exchange rate risk is associated.
Investor also gets idea how to hedge and protects his investments in another country.
34
3.6 Sample Design
Research design is the plan and structure of investigation so as to obtain the answer to research
questions. The plan is the overall program of the research. It includes an outline of what the
investigation will do from writing the problems and their implication to final analysis of data.
Earlier part of my project is exploratory research design as the topic demands exploration the
various terminologies in the exchange rate. While exploration I will come to know about the
various concepts associated with exchange rate determination. Even collection of data also
demands exploration through various books and websites.
Then descriptive research method is adopted to find out the degree of causal relationship
between the dependent variable and independent variable in respective parity condition model.
Lastly again the reason to the functioning and none functioning were explored. Try to create one
model through which easily predict exchange rate and minimize exchange rate risk with the help
of contractual hedge.
3.7Sample Selection Techniques Non probability judgmental sampling technique is used,

because BRICS countries selections also depend on as per convenience and data collection
period after January 2005 to August 2015.
3.8Data Collection Tools
3.8.1 Secondary data: It is a second user data and reused data from various source of data.
(Newspaper, Magazine, Journals, Research Report and Books) and electronic media (Websites,
e-journals and data bases). The details are given as references at the end of the thesis.
3.9 Sources of Data and Form of Data
Secondary data collection method is used.
Time duration: Monthly January 2005 to August 2015
Type of Data Characteristics of Data Source of Data
Treasurer Bill Country’s Central Bank
35
Nominal Interest
European Currency Quotation International Monetary Fund
Exchange Rate
CPI World Bank & International
Nominal Inflation Rate Monetary Fund
Trading Economy & Country
GDP Economy
European Currency Quotation NSE Currency future
Future Rate MCX Currency Future
Monthly exchange rates between the US Dollar against Brazil Real, Russia Rable, Indian Rapee,
China Yuan (Renminbi) And South Africa rand between the years January 2005 to august 2015.
The data collected material has been revised by calculating the percentage nominal interest
differential and the percentage exchange rate change for different quarters and country pair,
where the US is the home country. The nominal interest differential has been computed by taking
the US nominal interest rate minus foreign nominal interest rate divided by one plus the foreign
nominal interest rate. Exchange rate has been computed by taking the exchange rate at time t+1
minus the exchange rate at time t, divided by the exchange rate at time.
3.10 Statistical Tools Applied
For effective data analysis and to derive the needed results the following financial and statistical
tools were applied in this study: Trend analysis, Summary Statistics (Mean & Standard
Deviation), Co - efficient of Variance, Multiple Regression analysis, Pearson‘s Correlation
analysis, Adjusted R2 , intercept, beta valuation and Pairedt- test.
Trend analysis is an important tool of horizontal financial analysis.
This method determines the direction upwards or downwards and involves the computation of
the percentage relationship.
Measures of Summary statistics had been applied to measure mean and Standard Deviation
between the time series data used for analyzing the exchange rate in BRICS countries.
36
Karl Person‘s Correlation has been applied to analyze the correlation between the exchange rate
and interest rate and inflation variable, also find out the exchange rate movement and stock price
movement in BRICS countries and India‘s FII’s and BOP are variated due to exchange rate
change.
With the support of Multiple Regression Analysis, a research model has been framed to measure
the prime determinants of exchange rate movement in Brazil, Russia, India, China and South
Africa.  A line in a two dimensional or two-variable space is defined by the equation
Y=a+b*X; in full text: the Y variable can be expressed in terms of a constant (a) and a slope (b)
times the X variable. The constant is also referred to as the intercept, and the slope as the
regression coefficient or B coefficient. Determinants of exchange rate parity theory: Where, α is
constant and β is coefficients to estimate, and e is the error term.
3 .11 Hypothesis for the Test
The null hypotheses- thus hypotheses states that there is no association between the variable
being tested.
The alternative hypotheses – this hypothesis states that there is significant association between
the variable that are being tested and that the results obtained did not occur by chance.
Following hypotheses and sub hypotheses were tested for the study purpose:
H0: α = 0, β = 1 will be rejected at 5% confidence interval if p-value is less than 0.05. P Value
are shows acceptance level. Hypothesis will be rejected at 5% confidence interval if the p-value
is less than 0.05. The null hypothesis is rejected
H1: Inflation is significant and negatively related with exchange rate.
H2: Inflation is significant and positively related with interest rate.
H3: Interest rate is significant and positively related with future exchange rate.
H4: Cost of transaction is not increase due to exchange rate fluctuation.
3.12 Limitation of Study
37
 Monthly data are used, may be the parity condition would work for more time period.
 Bid- Ask spread is ignored.
 Brokerage charge and other transaction costs are ignored.
 Sometime particular strategies are not works under certain circumstances.
 Hedging strategies are also expensive.
3.13 Future Scope
 With the help of this research, researcher can find out other variable factors (political,
economic, internal war and any specific events) through which exchange rate fluctuated.
 To introduce one common currency for BRICS country, with the help of this currency
promote international trade between members and other member’s countries.
 Company also calculates operating and translation exposure due to exchange rate change,
and maintain their assets and liabilities ratio.
38
CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION
4.0 Introduction
This chapter presents analyses, discusses and interpretation of the findings for the study on the
Financial accountability, public sector performance and Services delivery in South Sudan
4.1. Demographics of Respondents

4.1.1 Findings on Gender composition of respondents
Table 4.1 Gender composition of respondents
Age Frequency Percent
Male 95 60
Female 85 45
Total 180 100
From the findings in table 4.1 above shows the majority of respondents are male (55%) and (45
%) represent female of 180 respondents, this implies that the highest percentage is represented
by male in the ministry of humanitarian affairs in South Sudan.
4.1.2 Findings on Age bracket of respondents

Table 4.2 Age bracket of respondents
Frequency Percentage
Less than 24 years 20 11.1
Between 25-30 years 40 22.2
Between 31-35 years 70 38.9
Between 36-40years 22 12.2
Above 40years 28 15.6
Total 180 100
Source: primary data
39
Findings in table 4.2 indicated that majority of the respondents were 38.9% which were between
the age bracket of 31 to .35 years, followed by 22.2% with the age of 25-30 years, 15.6% above
40 years, and 11.1% less than 24 years. This implies that there were adequate representation of
the study population and data provided represented the views of age groups.
4.1.3 Findings on education Level

Table 4.3 Level of education
Frequency percentage
Postgraduate 15 8.3
Degree 80 44.4
Diploma 65 36.1
Certificate 12 6.7
Others 8 4.4
Total 180 100
From table 4.3, majority of the respondents 44.4% were degree holders and 36.1 %) were
diploma holder. This implies that the staffs have at least a minimum level of education which
makes the work easier for the management of ministry of finance.
4.1.4Findings on period worked for organization
Table 4.4 period worked for the organization

Frequency percent
Less than 1 year 35 19.5
Between 1-5years 90 50
More than 5 years 55 30.5
Total 180 100
Table 4.4, clearly shows that the biggest percentage of 50% have worked for a period of 1 to 5
years in the South Sudan financial Dept, 30.5% for more than 5 years, 19.5% for less than one
year. This may imply that they are aware of current changes in the exchange rate.
40
4.1.5 Findings on Regression Analysis
Table 4.5 the Spearman Zero order correlation matrix
1 2 3
Financial accountability (1) 1.000 70.5

Public Sector performance (2) 750** 1.80 56.5
Services Delivery (3) 500** 650** 50.5

Spearman correlation was used to determine the relationship between the Study variablesas
shows in the table 4.5 above:
Table 4.5 the Regression Analysis relationship between Exchange Rate, Risk Management
and Economic growth of financial institutions
The result in table 4.5 indicated a significant strongly positive relationship between Exchange
Rate, Risk Management and Economic growth of financial institutions (r=0.750,p-Value <
00.01).this implies that exchange rate has a significant relationship exist between Economic
growth financial institutionsin Bank of South Sudan particular improvement of money grams.
Thus, the question of how Exchange Rate has a relationship with Economic growth of financial
institutions in Bank of South Sudan was answered as true. The implication of these finding is
that without financial accountability in place the performance of Bank of South Sudan will be
affected in South Sudan.
4.6 regression analysis for Exchange Rate, Risk Management and Economic growth
financial institutions
Table 4.6 below shows the regression model for Exchange Rate, Risk Management and
Economic growth financial institutions Council in South Sudan
Exchange Rate Unstandardized Standardized

Coefficients Coefficients
41
B Std.Error Beta Std.Error T
Sig
Risk Management 2.719 .131 20.705 .000

.184 .058 .347 .115 3.023 .003
Economic growth Financial .289 .089 .456 .132 3.462 001
institutions
R=0.869- Square=0.755,adjustedR-Square=0.751,F=0.595,Sig0.593
Source: Primary data (2017)
The result in the table 4.6 above indicated a linear relationship between exchange rate, risk
management and economic growth of financial institutions(F=0.595Sig =0.593). Exchange rate,
risk management and economic growth of financial institutions in Bank of South Sudan risk
management(Beta=0.456).Explained more to economic growth of financial institutions and
exchange rate(Beta 0.349).This implies that risk management and Exchange rate entirely
influenced the economic growth of financial institutions in Bank of South Sudan
4.7 The factor Structures of Exchange rate
This research used factor loadings in order to check how much a variable loads into its
corresponding factor. The figure below showed factor loading of each items.Straurb, (2009)
suggested that the value of each item in factor loading should be at least 0.50 into its relative
principal component.
Variable Attributes Reductio Tax Decrease in Imported

n of channel investment input cost
Taxes confused
income
42
It is for the purpose of organizing revenue and .952
expense. And limited use of fund for no benefits
Such that to handle financial process of transaction .956

for only one account
is to evaluate the issues concerning financial .919

department
Is to Allocate the proper budget for the year and for .865
the benefits of public in development.
; is for the purpose of organizing revenue and .873

expense transaction for only one account
The purpose of organizing and take full .872

responsibility in any institution and firms
Setting of financial monitoring also is another

element of maintaining finance.
Variable Attributes .857
Is preferable to measure performance in terms of .775

outputs
In public management, it implies the citizen .963
sovereignty.
The obligation by government agencies to be .935

sensitive to citizen expectations and to attempt to
satisfy their needs.
43
It is the obligation to ensure performance of .939
certain duties or actions. It is the obligation that
mandated organs of government.
It connotes to openness in government actions .535
and decision-making.
It calls for openness about decisions and greater .937

access to information about an authority’s
activities as a strategy to counteract corruption.
It is the extent to which an activity’s stated .875

objectives are achieved.
It describes the relationship between intended .885

impact and the actual impact on an activity.
Eigen value 1.605 1.589 1.503 .513
Variance % 41.333 38.749 23.458 12.385
44
Cumulative% 41.333 81.092 94.65 .98.47
The factor loading in table 4.7 above shows how the factor loadings do confirm that financial
accountability is measured by Reduction of Taxes income, Tax channel confused, Decrease in
investment and imported input cost. as hypothesized in conceptual framework (Figure 1.1).The
table shows the factor analysis results of exchange rate three factor were extracted and the
attributes (Reduction of Taxes income) explained financial accountability better with 95.1% the
second attributes (Tax channel confused)Explained more of financial accountability system with
92.5% the third attributes(Decrease in investment) explained public sector performance with
88.9%
The factor analysis Reduction of Taxes income under exchange rate explained that the exchange
rate has improved in terms of operations and distributions
4.7.1 Factor analysis results of Risk Management
Table 4.7.1 factor loading of Risk Management
Variable Attributes Risk Risk Conductin prove Disting

Avoidance Detection g determina uished
economic nt of unantici
improvem imports pated
ent
is the analysis in the matter of real .862

importance formational
governments and public policy
The volume of public debt as a . 879
result of crossing the period of
financial crisis. This public Sector
45
performance
The issue is not only present, but .894

also covers a longer time horizon
given the debt burden caused by the
public duty
That accumulated on the future .952
public budgets and on future
generations. Public sector
The analysis framework of the .965
public sector performances.
The analysis framework of the 972

public sector performances.
It is the measurement of the .896

economy of resources.
It means being receptive to community .947

problems, needs, and views.
46
Take the appropriate action to deal with .899
them in a cost-effective way.
In public management, it implies the .799

citizen sovereignty and the obligation by
government.
Agencies to be sensitive to citizen .896
expectations and to attempt to satisfy their
needs. According to Fox and Meyer
(1995: 113),
it is a criterion according to which an .789
alternative is recommended if it results in
the satisfaction of the express needs.
The preferences or values of citizen are .793

thus responsive administration.
It is a moral concept in public .831

administration inasmuch as Public sector
performance Address it.
Eigen value 1.161 1.005 .651 .989
Variance % 32.871 28.454 18.431 16.534
47
Cumulative% 32.871 61.325 79.756 81.597
The results in table 4.7.1 above shows how the factor calculating do confirm that public sector
performance is measured by Risk Avoidance,Risk Detection, Conducting economic
improvement, prove determinant of imports and Distinguished unanticipated as hypothesized in
conceptual framework (figure 1.1).
In the results of factor analysis of Risk management, three factors were extracted the first
attributes (Risk Avoidance) explained public sector performance better with 93.5% the second
variable attribute (Risk Detection,) also explained more of Risk management with 89.4% lastly
(Conducting economic improvement) explained more of Risk management with 97.2%
The factor analysis of Risk Avoidanceunder Risk management attribute explained that is the
protection of department by 91.7% which enable to perform better by 89.9%
2.8 Economic growth
Variable Attributes Sustainab Develo Growth in Real Improve

le Growth pment production Exchange the degree
Growt Rates of
h developme
nt
is a special process describing a complete .987
and integrated approach for performing a
specific project type.
They provide a complete end-to-end .867
lifecycle for its scope and can be used as
a reference for running projects with
48
similar characteristics.
Service definition is key to service .895

management. Service definition enables
both the customer and the service
provider
o expect and not expect from a service. .875
Clearly defined services enable
customers to understand service
offerings, including what each service
does and does not include,
The eligibility, service limitations, cost, .891
how to request services, and how to get
help.
A well-defined service also identifies .981

internal processes necessary to provide
and support the service Francis and
James, 2003; Crook, 2003.
It relates to achieving maximum output .892

from a given amount of resources used.
49
It is the relationship between the output in .871

terms of goods and services and the
resources used to produce them.
The ratio of output – input) (Pauw et al., .875
2002: 139). In this case, the higher the
ratio, the higher the efficiency is.
It is the extent to which an activity’s stated .891

objectives are achieved.
It describes the relationship between .875

intended impact and the actual impact on
an activity.
Internal controls in this thesis particularly .831
relate to mechanisms undertaken within
the confines.
The district local governments to ensure .797

accountability, efficient and effective
performance.
The National Revenue Authority is the .868

institution responsible for managing
revenue in the country.
50
It composition and functions shall be .799
regulated by the law” (p. 67).
Eigen value 1.576 1.498 .599 .573
Variance % 38.973 31.343 19.353 17.175
Cumulative% 38.973 60.313 80.789 83.695
The results in table 4.7.1 above shows how the factor calculating do confirm that Services
delivery is measured by Sustainable Growth, Development Growth, Growth in production, Real
Exchange Rates and Improve the degree of development as hypothesized in conceptual
framework (figure 1.1).
In the results of factor analysis of Economic growth of financial institutions four factors were
extracted the first attributes (Sustainable Growth) explained Economic growth of financial
institutions better with 75.5% the second variable attribute (Development Growth) also explained
more of Economic growth of financial institutions with 88.4% lastly (Growth in production)
explained more of Economic growth of financial institutions with 77.2% The factor analysis of
Sustainable Growthunder Economic growth of financial institutions attribute explained that is the
protection of department by 87.7% which enable to perform better by 89.9%
51
CHAPTER FIVE
DISCUSSION OF THE FINDINGS
5.0 Introduction
This chapter summarizes the findings of the study. Section 5.2 is a summary of the findings.
Section 5.3 discusses the conclusion. Section 5.4 explains the limitations of the study and
Section 5.5 gives the recommendations for further research.
5.1 Summary of the Study
The budget preparation and financial policy sector has continued to play an important role in
South Sudan Economy. The sector’s contribution to the Gross Domestic Product increased from
13.8% in 1993 to over 18% in 2009. The Economic survey 2012 estimated that the contribution
to the by this sector currently stands at over 25%. It is the objective of every entrepreneur to
grow their businesses into large enterprises. To achieve this, most of the entrepreneurs make use
of microfinance services. Various studies have been done in Kenya on SMEs and how they are
influenced by microfinance services but none had focused on the effects of microfinance services
on the growth of the SMEs. The purpose of this study was to find out the effects of microfinance
services on the growth of Small and Medium Enterprises in South Sudan. A quantitative
descriptive design was used to study 8 types of business categories in South Sudan. Structured
questionnaire was used to collect data from 100 businesses. The sample of 100 businesses from a
list of 5311 was taken as a representative population in the county.
The study was on dependence and independent relationship. A moderate multiple regression
analysis was used. A multivariate regression model was applied to determine the relative
importance of each of the three variables; microcredit, micro insurance and training, with respect
52
to the effects of services delivery on the financial policy. The regression analysis conducted
established that two of the independent variables have appositive correlation with the dependent
variable. Micro credit and training contribute positively to the sales growth while micro
insurance affects growth negatively. The analysis was intended to investigate whether the
variation in the independent variables explains the observed variance in the outcome – in this
study the annual growth in turnover. Findings in this study showed that there was correlation
between the predictor variables (Budget preparation and Training provided and response variable
Annual growth in turnover since P- value of 0.011 is less than 0.05. This indicated that there was
a strong positive relationship between the study variables.
The probability value (p-value) of a statistical hypothesis test is the probability of getting
a value of the test statistic as extreme as or more extreme than that observed by chance alone, if
the null hypothesis H0 is true. The p-value is compared with the actual significance level of the
test and, if it is smaller, the result is significant. The smaller it is the more convincing is the
rejection of the null hypothesis. Showed that there was correlation between the predictor
variables (Microcredit, Micro insurance and Training provided by and response variable (Annual
growth in turnover) since Play value of 0.011 is less than 0.05. The results indicate that the
independent variables significantly (F=2.094, p=0.011) explain the variance in Annual growth in
turnover.
5.2.1 Conclusion
Based on the findings, the study concludes that the growth in sales is due to changes in
Microcredit, Micro insurance and Training provided by MFIs. The results show the relationship
between the micro finance services and the growth of SMEs. There is strong positive relationship
between the micro finance services and the Budget preparation. The study further concludes that
Microcredit and Training provided to SMEs leads to their high growth. It can also be concluded
that there is a major effect of the microfinance services. This concurs with Koech (2011) that the
factors affecting growth were capital market, cost, capital access, collateral requirements,
information access, capital management and cost of registration. Capital market, cost and capital
access had the highest contribution to constraining into large businesses. It also agrees with the
findings of Cooper (2012) that microfinance services had a strong positive impact on the growth
of SMEs. The study further concluded that effect of microcredit, micro insurance and training.
5.2.2 Limitations of the Study
53
The study focused on SMEs in South Sudan and the time limit was not adequate to collect data
from the whole county. Cost constraint was also a limiting factor and hence the sample of 100
SMEs from the whole county was on the lower side. Most business owners were reluctant to fill
the questionnaires after reading and establishing that financial information about their businesses
was required in the questionnaire. They said that information was very sensitive and confidential
and that giving it to anybody amounted to uncovering themselves. Many of the entrepreneurs
argued that they do not keep records. They admitted that they lack basic bookkeeping/recording
skills.
Sales figures could not form a reliable basis to analyze the growth since the figures were not
provided from audited published financial statements. Most respondents could not be
interviewed and as a result the validity of their responses could not be confirmed. Majority of the
sole proprietors said they get their family financing from the businesses and were satisfied as
long as the businesses continued to operate and were not threatened to close down. The micro
enterprises owners said they do not get any formal financial services from formal financial
institution because of the strict requirement conditions put in place i.e collaterals, guarantors, and
repayment terms. They said they only depend on round table banking for their financial needs.
5.2.3 Recommendations for further research
Since the study focused on micro finance services on the growth of SMEs in South Sudan
County, it is suggested that further studies be done on other Counties. This is because different
counties have unique characteristics and diverse contextual realities that might affect micro
finance services offered to. It is also recommended that a study be done to find out why many
SMEs do not make use of the micro insurance. The study further recommends that for studies
require information about business growth and business records the data collection tools be
designed to seek both facts and opinions.
5.3.1. Findings on Gender composition of respondents
The findings shows the majority of respondents are male (55%) and (45 %) represent female of
180 respondents, this implies that the highest percentage is represented by male in the Financial
Dept in South Sudan.
54
5.3.2. Findings on Age bracket of respondents
Findings indicated that majority of the respondents were 38.9% which were between the age
bracket of 31 to .35 years, followed by 22.2% with the age of 25-30 years, 15.6% above 40
years, and 11.1% less than 24 years. This implies that there were adequate representation of the
study population and data provided represented the views of age groups.
5.3.3 Findings on education Level

Researcher found that majority of the respondents 44.4% were degree holders and 36.1 %) were
diploma holder. This implies that the staffs have at least a minimum level of education which
makes the work easier for the management of ministry of finance
5.3.4 Findings on period worked for organization

The finding shows that the biggest percentage of 50% have worked for a period of 1 to 5 years
in the South Sudan financial Dept, 30.5% for more than 5 years, 19.5% for less than one year.
This may imply that they are aware of current changes in the financial policies.
5.3.5 Findings on the relationship between exchange rate, risk management and economic
growth of financial institutions
The study conducted researcher found out that majority of respondents (46.5%) strongly agree
that exchange rate affect financial policy 12.5% agreed also agreed that there is relationship exist
between services delivery and financial policy report 5% disagree, and 10.5% were not sure.
This implies that financial policy has high effects on exchange rate these can be positive effects
or negative effects. 25.5%. This is in line with the study carried out by
5.4. Findings on Reduction of Taxes income
Results in table 4.6 above indicate that 41.7% of the respondents strongly agreed that good
taxation system improve performance of the company 25% agreed, 16.7% were not sure, 11%
disagreed and 5.6% strongly disagreed. Majority of the respondents agreed. This implies that
good taxation system can improve Reduction of Taxes income of any organization like in case of
financial dept in South Sudan.
5.4.1 Findings on Tax channel confused
Results in table 4.7 above indicate that 27.7% of the respondents strongly agreed that revenue as
a attribute of financial policy it helps Dept to improve their performance and effective achieving
55
of business objectives 47.8% agreed, 11.1% were not sure, 7.8% disagreed and 5.6% strongly
disagreed. This implies that Revenue as tool attributes of Tax channel confused affects the level
and the standard of Tax channel confused of any organization in both private and Tax channel
confused
5.4.2 Finding onDecrease in investment
Results in table 4.8 above indicate that 36.1% of the respondents strongly agreed that
expenditure as measure of financial policy affect Decrease in investment of the financial dept.
30.5% agreed, 11.1% were not sure, 13.9% disagreed and 8.3% strongly disagreed. Majority of
the respondents strongly disagreed. This implies that fiscal policy is very importance in budget
preparation of South Sudan financial dept.
5.4.3 Finding on Imported input cost
Results in table 4.9 above indicate that 36.1% of the respondents strongly agreed that there is
high business performance in South Sudan 25% agreed, 3.3% were not sure, 23.3% disagreed
and 23.3% strongly disagreed. Majority of the respondents strongly agreed. This implies that
budget preparation provide base for making good Imported input cost
5.4.4 Finding on Wage indexation
Table 4.11 shows that 41.7 % of the respondents strongly agreed that profitability is the measure
of budget preparation which is affected by financial policy, 13.9% agreed 11.1% not sure, 25%
disagreed and 8.3% strongly disagreed. Majority of the respondents strongly agreed. This implies
Wage indexationsattribute is affected by Wage indexation
5.4.5 Findings on Risk Avoidance
Results in table 4.9 above indicate that 23.3% of the respondents strongly agreed that control
activities is one of internal audit functions, 16.7% agreed, 3.3% were not sure, 23.3% disagreed
and 23.3% strongly disagreed. Majority of the respondents strongly agreed and agreed. This
implies that budget preparation as an attribute of Risk Avoidance it is also affected by economic
growth of financial institutions
5.5 Findings on Risk Detection

Results in table 4.10 above indicate that 26.7% of the respondents strongly agreed that risk
management is one of an element of sustainable working capital, 31.7% agreed, 20% were not
sure and 13.3% strongly disagreed. Majority of the respondents strongly agreed. This implies
that it affects sustainable working capital of an organization gets affected by Risk Detection
56
5.5.1 Findings on conducting economic improvement
Table 4.11 shows that 22.2 % of the respondents strongly agreed that financial reporting is
affected by budget policy and internal control system, 33.3% agreed 17.8% not sure, 12.2
disagreed and 14.4% strongly disagreed. Majority of the respondents strongly agreed. This
implies if fiscal policy is good there will be improvement in budget preparation.
5.5.2 Findings on Improve determinant of imports
Table 4.12 shows that 42% respondents agreed that other factors like inflation and monitory
policy has effects on budget preparation, 34% strongly agreed 20% not sure and 4% strongly
disagreed. Since the majority strongly agreed this implies that other factors affect financial
policy.
5.5.3 Findings on financial institutions
Table 4.13shows that 48.9 % of the respondents strongly agreed that Financial policy is other
factor which affect small budget preparation 17.8% agreed 6.7% not sure and 26.6% strongly
disagreed. Majority of the respondents strongly agreed. This implies budget preparation is
affected by monetary policy that is if there is a change in monetary policy and financial dept gets
affected.
5.5.4 Finding on risk management
Table 4.14 shows that 43.9 % of the respondents strongly agreed that inflation highly affects
small business performance 18.9% agreed, 19.4% not sure, 10 disagreed and 7.8% strongly
disagreed. Majority of the respondents agreed. This implies that budget preparation can be
affected by inflation that is when there is high inflation rate in the country services delivery get
affected negatively but when there is low inflation financial policy is always good
5.5.5 Finding on exchange Rate

Table 4.14 shows that 43.9 % of the respondents strongly agreed that working capital must
always be well sustain in order to improve budget preparation 18.9% agreed 19.4% not sure, 10
disagreed and 7.8% strongly disagreed. Majority of the respondents agreed. This implies that this
implies when working capital is well sustained budget preparation will automatically improve.
57
CHAPTER SIX:
CONCLUSION AND RECOMMENDATIONS
6.0 Introductions
The study set out to examine and analyze the socio-economic implications of forced migration
for migrant-host communities using key variables such as internal peace and security,
environmental resources, public health, food security and the economic outcomes. The study,
alongside also tried to identify the refugee policy response of the government in refugee
management. The analysis of the empirical findings and relevant conceptual models has
illustrated interesting outcomes on the subject under scrutiny.
6.1 Summary
The general findings of the research have given a portrayal of what it indeed set out to do with
specific regards to the objectives/research questions and hypothesis of the study. In line with the
research questions, the premise of the study is that forced migration in South Sudan has had
more negative than positive impact on the socio-economic structures of the migrant-host
communities. Various theoretical and conceptual models as indicated in chapter 3 were adopted
as the foundation for the discussion and analysis of findings based on the variables mentioned
above. On the basis of these theoretical and conceptual models contributions, I presented my
own working model as depicted at the end of chapter.
6.2Conclusion
The findings of the research have generally established that forced migration have had more
negative impact on host communities, in Ghana with varying degree in the south and north.
58
Nevertheless, the findings also revealed some considerable positive implications of the refugee
presence for the host communities. Through this summary it is found that from the very start of
the massive migrant influx to Ghana, challenges of peace and security in the local host
communities have evolved in various ways.
Organized and petty crimes have flourished an issue that some informants may attribute to
deprivation, frustration as well as unemployment. This was more evident in the northern refugee-
host communities. A considerable number of literatures argue that most host governments have
difficulty in confining refugees within camps or designated areas due mainly to international
humanitarian conventions and partly to the large numbers involved in African refugee situations.
Furthermore, there was increased pressure on environmental resources of the community fuel
(firewood), water and land. These resources stood as a pivot for competition between refugees
and host populations thereby creating environmental degradation especially in the north where
desertification has already set in. This issue gradually became pronounced with time as refugees
saw the communities as a safe haven and therefore became reluctant towards voluntary
repatriation. The competition for these local resources is also a potential of provoked tensions
and violence and as well contributed significantly to environmental degradation with specific
reference to deforestation and pollution from burning charcoal. In relation to the above as the
findings depict, the refugee presence increased the population of the host communities fuelling
corresponding increase in demand for all products including food items. However, the provision
to refugees of small plots of land in the northern refugee-host communities for maize, yam,
vegetable, potato farming and poultry rearing increased production level of these products and
enhanced food security.
The analysis under public health and sanitation show that existing health facilities have been
over stretched. The refugee situation equally produced serious sanitation problems due to the
poor sanitation practices without enforcement of by-laws to sanction culprits.
Positively, these challenges are mitigated through the assistance of both local and international
agencies. These agencies help in the provision of medical care, portable water, and structures to
uplift environmental sanitation and control of endemic and contagious diseases. The need for
refugee education and skills training also exerted some burden on educational resources available
for communities. The refugee situation led to establishment of schools of various levels of
59
education as well as vocational and technical institutions. This equally placed strain on scarce
teaching manpower which
Ghana is facing. Notwithstanding this, local hosts also benefited from the educational facilities
provided by the humanitarian agencies.
On general social dynamics, the relations between refugees and hosts also produced some
negative impacts. The camps in the south especially became points for drunkenness, prostitution
and sexual promiscuity. Members of the host communities, especially the elderly saw such
behaviours to be against public decency and traditional order. These attitudes and behaviours
were accompanied by criminal activities, theft and other social vices.
Economically, the refugee situations produced both negative and positive impacts. Due to the
population, prices of basic items shot up sharply. Whilst this situation became challenging for the
local hosts, especially the poorer to bear, the rich business people and the advantaged group
benefited by using the opportunities to engage in ventures to make more profits. This further
widens the gap between the poor and the rich in the community. Remittances from refugee
relatives enable refugees to supplement their income, acquire properties in the communities as
well as engage in income generating activities which improves the economy of the communities.
Despite enormous volumes of scholarly works on there is deficiency of literature on international
migration with regards to refugees in Ghana as well as policy framework. More attention has
been paid to domestic migration within the country. On the refugee policy framework the huge
wave of refugees into South Sudan in the 2000s and afterwards resulted in the establishment of
the GRB under the 2013 South Sudanese constitution. This institution, a first of its kind in Ghana
was mandated by the government to deal with refugee related issues. The board in undertaking
its responsibilities does this in collaboration and cooperation with both international and local
humanitarian agencies.
The international refugee agency, UNHCR in line with these findings acknowledges the
concerns of African governments with specific reference to the burdens forced migrants put on
them as hosts. UNHCR, (1997) therefore, indicates that now more than ever before, African host
governments have realized the impact of hosting refugees and categorically argue that refugees
present.
6.3 Recommendations
60
In their effort to address refugee problems, policies of governments, national and international
organizations should be holistic enough to also take the potential burden refugees can place on
host communities and their populations into serious consideration.
The humanitarian organizations should be able to, as Chambers (1986) puts it, distinguish
different categories among host communities, especially those who are poorer, morevulnerable
and more likely to be hurt by refugee competition just as the case in northern
Ghana. In this way durable solutions would be sought to mitigate if not eradicate the negative
implications for the Services delivery. Another major strategy to mitigating the impact of refugee
situations on host communities is the concept of burden sharing. This is when the international
and donor agencies acknowledge the burden refugees place on host countries and their
communities and offer a helping hand to include hosts as well. This as stated by Gallagher, D.
(1994:432) implies that the international community is obliged to support host countries, which
assist and protect refugees while durable solutions are sought. In designing and implementing
development programmed in refugee-host communities the lessons of past experiences such as
the case in question should help improve performance. It is the opinion of many refugee authors
that unless national and international refugee institutions deliberately include many hosts in their
relief programmed, services and development, they will be hurt at the expense of being hosts
while refugees are supported in various ways. It is also very sad that most refugees even with the
necessary skills and expertise are unemployed due to the high rate of unemployment in Ghana.
This situation has resulted in various exchange ratefor the local hosts. It is therefore vital that the
government financial accountability and its operational partners help to promote employment
opportunities for them so that they can contribute meaningfully to the socio-economic
development of the country as a whole and the host communities in particular.
It is worthy stating that this study does not claim as being exhaustive of studies on Public sector
performance and its Services delivery. More related studies are needed in future to undertake an
in-depth look into how refugees can serve as potential assets for their hosts especially if their
skills and expertise are well managed can represent an all round potential for the benefit of host
communities. Refugees are often perceived as an economic and social burden on their host
countries. That can be true initially or in the short-run but in the long run however, people who
work, produce and consume become assets not liabilities (Blavo, 2009). I submit that forced
migration is not necessarily associated with burdens on hosts but equally present some benefits.
61
6.4 Data Process and Analysis
Collected data shall be ,coded, and entered into the computer using the statistical packages for
social scientists (SPSS) and shall be then coded .the analysis involved person correlation analysis
and multiple regression analysis person correlation analysis shall be used to determine the
relationship between Study variable financial accountability ,public sector performance and
services delivery .alternatively ,multiple regression analysis will used to establish the extent to
which the independent variable (exchange rate)and dependent variable (Risk Management)
predicted the intervening variable(economic growth of financial institutions)
7.0 APPENDIX II: BIO DATA AND DESCRIPTION OF VARIABLE

Dear Sir/ Madam
I am Student in Busoga University Uganda pursuing Bachelor degree of Accounting and finance
study on the Topic: exchange rate, risk management and economic growth of financial
institutions in the ministry of finance. The study is for academic purposes and is carried out as
partial requirement of the award of Bachelor Degree of Accounting and financeat Busoga
University Uganda. Your responses will be treated with utmost confidentiality. Your input is
highly appreciated.
7.1 SECTION A: BIO DATA

Please tick your selected option
1. Gender
Male Female
1 2
A2. Age Group
21 – 30 yrs 31 – 40 yrs 41 – 50 yrs Over 50 yrs
1 2 3 4
A3. Highest level of education
Diploma Degree Post Graduate Master’s Degree PhD
1 2 3 4 3
4. What department are you working with?
5. Human Resource Dept Finance Dept Marketing Dept Internal Audit Dept Other
1 2 3 4
62
A6. What is your position?
Top Management Middle Management Lower Management
1 2 3
A7. How long have you worked with ministry of Local Government Juba City council Block?
Less than 3 yrs 4 – 6 yrs 7 – 8 yrs More than 8 yrs
1 2 3 4
7.2 DESCRIPTION OF VARIABLE

Section B (III): Exchange Rate
To what extent do you agree with the following statements?
Tick appropriately following scales 1=strongly agree 2= agree, 3= strongly 4=disagree 5=
uncertain in the table below:-
Exchange Rate 1 2 3 4 5
Exchange Rate; is a ministry planning tools to address or improve financial
plans
Budget is comprehensive plan of the government
It coordinate all the government activates
It determine how effectiveness government perform it works
Reduction of Taxes income
Reduction of Taxes income; Is the integral part of the Planning helps to
improve performance
It ensures better resource allocation and utilization
It ensure efficiency in carrying out business activities
It reduces wastage of the resources
Tax channel confused
Tax channel confused: is the coordinating activities in organization
aTax channel confused is thealigns organization activities with objectives of
an organization.
63
It shows the line of flow of jobs of an organization
It interlinks departments of an organization to achieve one goal
Decrease in investment
Decrease in investment ;is the ability to operate efficiently
Is measured by how efficient the enterprise is in use of resources in
achieving its objectives
Financial performance indicators are return on assets
Measuring the performance of the Budget policyyields benefits to
organizations
Imported input cost
Imported input cost; Is the Measuring the performance of the Budget

policyyields benefits
Is where the business has more market shares
High r sales revenues over every period
High asset mix, business with high pool of asset is said to be high profitable
Section C (I): Risk Management

uncertain in the table below;-
Risk Management 1 2 3 4 5
Risk Management is the mostStrongest internal system improve financial
reports
It protects organization assets from theft
It ensures accuracy in financial reporting
It provides assurance to the public
Risk Avoidance
Risk Avoidance; It is still spirit of honesty and integrity since it checks daily
activities
64
It helps in identifying errors and frauds at an earlier stage
It can be used to check the existent of internal control and whether they are
working
It is one of the tool auditor use to collect audit evidence
Risk Detection
Risk Detection; is the Effective commitment improve financial reporting
Is the process of identifying competencies
It involves the process of accepting risk and measurement of degree of its
occurrence
Risk management involve the process of accepting, reducing risk
Conducting economic improvement
Conducting economic improvement ;It is an element of disciplinary
procedures the can improve better performance
Financial reporting is based on the activities of an organization
Control activities helps in financial reporting
It helps in providing audit evidence for better financial reporting
Section D (I): Economic Growth of financial institutions

uncertain in the table below:-
Economic Growth of financial institutions 1 2 3 4 5
Economic Growth of financial institutions is the requirement of the company
Act
It provides financial reports that are to be used by the stakeholders
It shows how best the financial resources are been put to it uses
It can be used for planning to improve the performance of the ministry
Sustainable Growth
Is the well allocated of resources that must contain information which is
relevant
Relevant financial report is used by owners and investors for decision making
65
Financial information is relevant to serves the interest of decision makers
Financial report is relevant when it has been accurately recorded
Development Growth
Development Growth; is the Reliable financial information conveys
transactions
Reliable financial information serve particular needs, of financial reports
Reliable financial information also needs to be free from undue error
Reliable financial report can be offset by disclosure of the uncertainties
Growth in production
Growth in production; Is the integral part of Financial performance need to be
able to compare aspects of an entity over time
Financial statements should be compared for both current period and previous
period
Financial statement helps to compare ministry performance
Financial report should be easy to be compared
Real Exchange Rates
Real Exchange Rates; Is the sets of rate That could be easy to understand by all
users
Information which easy helps in making good decision
Under stability of the information reduces risk of making wrong decision
In your organization management
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9. Bartram, Söhnke M. (2002). "The Interest Rate Exposure of Nonfinancial Corporations".
European Finance Review. 6 (1): 101–125. SSRN 327660 .
Doi:10.1023/a:1015024825914.
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7.3 APPENDIX II: QUESTIONNAIRES GUIDE
In this Sections please tick in the box that corresponds to your opinion/view according to scale
1=strongly disagree 2=disagree 3= not sure 4=agree 5= strongly agree.
1-Position in the institution ……………………………………………………………………
2-Department/Section………………………………………………………………………….
a) Does the Exchange Rate effective in South Sudan?
Yes No
3-what is the relationship between exchange rate and risk management?

………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
……………………………………………………………………
b) In your view, do you think exchange rate performance influence the economic growth in
South Sudan Ministry of finance or Bank of South Sudan?
Yes No
69
4-What are the relationship between risk management and economic growth of financial
institutions?
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
…………………………………………………………….
c) Does the commercial Banks engage the Bank of South Sudan in the activities of
development?
Yes No
5-How to establishthe relationship between economic growth of financial institutions and

Exchange Rate?
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
……………………………………………………………………………………
APPENDIX: IPROPOSED TIME PLAN FOR THE STUDY

ACTIVITIES PERIOD
JAN-16 FEB-16 MAR-16 APRIL-16 MAY-17
Research topic formulation
Writing snappy
Writing of research topic
Research tool of data collection
70
Submitting Report
APPENDIX: II PROPOSED BUDGET FOR THE STUDY
S/No Items Price Total amount items Total

Name purchase budgets
fuel used 6*2500 15,000 SSP
Buying of Stationeries for 50*100note 5000 SSP
Noting Down
Facilitate support 1 5000 SSP
Research group discussion 1000 0SSP
contribution
Friendship consumption 500 0 SSP
Contingency Amount 1500 0SSP
The Amount Spends 65,500 SSP 65,500
SSP
71

Exchange Rate Risk Management and Economic Growth.

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BUSOGA UNIVERSITY

IMPACT OF EXCHANGE RATE, RISK MANAGEMENT AND ECONOMIC GROWTH

RESEARCH TOPIC SUBMITTED TO FACULTY OF BUSINESS ADMINISTRATION

Mr.Ayuen Majok Joseph

ACBAfrican Commercial Bank.

Definitions of key terms

1.6.1Scope and limitation of the study

1.9 Conceptual Framework

EXHANGE RATE ECONOMIC GROWTH

 Reduction of Taxes income  Sustainable Growth

THE RESEARCH DESIGN:

3.3Statement of the Problem

 Relative rates of inflation.

3.4 Objectives of Study

 To check validity of exchange rate parity theories in South Sudan country.

 PPP (purchasing Power Parity)

 IRP (Interest rate Parity)

 In real life these theories are really worked or not. 

To know about triangular arbitrage.

To helpful in future predicted exchange rate.

To helpful for offsetting their assets.

3.7Sample Selection Techniques Non probability judgmental sampling technique is used,

3.8Data Collection Tools

3.9 Sources of Data and Form of Data

Secondary data collection method is used.

Time duration: Monthly January 2005 to August 2015

Type of Data Characteristics of Data Source of Data

Treasurer Bill Country’s Central Bank

3.10 Statistical Tools Applied

Trend analysis is an important tool of horizontal financial analysis.

3 .11 Hypothesis for the Test

H1: Inflation is significant and negatively related with exchange rate.

H2: Inflation is significant and positively related with interest rate.

H4: Cost of transaction is not increase due to exchange rate fluctuation.

3.12 Limitation of Study

3.13 Future Scope

4.1. Demographics of Respondents

4.1.2 Findings on Age bracket of respondents

4.1.3 Findings on education Level

4.1.4Findings on period worked for organization

Table 4.4 period worked for the organization

Financial accountability (1) 1.000 70.5

Services Delivery (3) 500** 650** 50.5

Source: primary data

Exchange Rate Unstandardized Standardized

Risk Management 2.719 .131 20.705 .000

Source: Primary data (2017)

4.7 The factor Structures of Exchange rate

Variable Attributes Reductio Tax Decrease in Imported

Such that to handle financial process of transaction .956

is to evaluate the issues concerning financial .919

; is for the purpose of organizing revenue and .873

The purpose of organizing and take full .872

Setting of financial monitoring also is another

Variable Attributes .857

Is preferable to measure performance in terms of .775

The obligation by government agencies to be .935

It calls for openness about decisions and greater .937

It is the extent to which an activity’s stated .875

It describes the relationship between intended .885

Eigen value 1.605 1.589 1.503 .513

Variance % 41.333 38.749 23.458 12.385

Source: Primary data (2017)

Table 4.7.1 factor loading of Risk Management

Services Delivery (3) 500 650 50.5