This paper estimates trade misinvoicing in Zimbabwe from major trading partners using the Morgenstern (1963) methodology. It uses trade data from 1980 to 2014 from the United Nations Commodity Trade Statistics Database. The results show that unrecorded capital outflows occur through trade with different countries including Italy, United States, Germany, and China, while unrecorded capital inflows into Zimbabwe are mainly from South Africa, Belgium, and Australia. Trade misinvoicing occurs mostly in exports of diamonds, gold, and nickel. Misinvoicing through imports is not rampant and occurs mostly through Germany, South Africa, and Zambia. The results show that capital flight increased during the period of macroeconomic and political instability. This indicates the need to ensure political and macroeconomic stability to reduce capital flight.

PurposeMobile money, a service permitting monetary value to be digitally stored in a mobile phone and transacted to others through text messaging, is increasingly becoming available in several African countries including Eswatini. This study examines the factors associated with mobile money usage and the extent to which mobile money accelerates financial inclusion in Eswatini.Design/methodology/approachData were collected from the nationally representative FinScope Consumer Survey for Eswatini conducted in 2014. The authors use a quasi-experimental method in propensity score matching (PSM) with bootstrapped standard errors to alleviate the possibility of selection bias associated with mobile money use and bank account ownership. As a sensitivity check, the authors calculate the average treatment effect (ATE) using kernel-based matching methods, as well as estimate a multilevel model that accounts for the hierarchical structure of data.FindingsThe authors found that higher education, entrepreneurship, being female, improvement in work situation in the past year and living in urban area and in the Lubombo region all positively influence the probability to use mobile money. The results also show that individuals who use mobile money are 19% more likely to own a bank account at a formal financial institution with a higher probability estimate observed amongst rural residents.Originality/valueThis study examines whether mobile money accelerates financial inclusion in Eswatini. On analysing data from the 2014 FinScope Consumer Survey, the results show that mobile money does not seem to be accelerating the reach of financial services to those who are structurally excluded from the formal financial system and suggest the need for ongoing review of the financial inclusion strategies of the country to enhance access to financial services in underserved areas.Peer reviewThe peer review history for this article is available at:https://publons.com/publon/10.1108/IJSE-12-2019-0723

Purpose In a bid to enhance the stability of banks, supervisory authorities in sub-Sahara Africa (SSA) have also adopted international bank regulatory standards based on the Basel core principles. This paper aims to investigate the effectiveness of these regulations in mitigating Bank risk (instability) in SSA. The focus of empirical analysis is on examining the implications of four regulations (capital, activity restrictions, supervisory power and market discipline) on risk-taking behaviour of banks. Design/methodology/approach This paper uses two dimensions of financial stability in relation to two different sources of bank risk: solvency risk and liquidity risk. This paper uses information from the World Bank Regulatory Survey database to construct regulation indices on activity restrictions and the three regulations pertaining to the three pillars of Basel II, i.e. capital, supervisory power and market discipline. The paper then uses a two-step system generalised method of moments estimator to estimate the impact of each regulation on solvency and liquidity risk. Findings The overall results show that: regulations pertaining to capital (Pillar 1) and market discipline (Pillar 3) are effective in reducing solvency risk; and regulations pertaining to supervisory power (Pillar 2) and activity restrictions increase liquidity risk (i.e. reduce bank stability). Research limitations/implications Given some evidence from other studies which show that market power (competition) tends to condition the effect of regulations on bank stability, it would have been more informative to examine whether this is really the case in SSA, given the low levels of competition in some countries. This study is limited in this regard. Practical implications The key policy implications from the study findings are three-fold: bank supervisory agencies in SSA should prioritise the adoption of Pillars 1 and 3 of the Basel II framework as an effective policy response to enhance the stability of the banking system; a universal banking model is more stability enhancing; and there is a trade-off between stronger supervisory power and liquidity stability that needs to be properly managed every time regulatory agencies increase their supervisory mandate. Originality/value This paper provides new evidence on which Pillars of the Basel II regulatory framework are more effective in reducing bank risk in SSA. This paper also shows that the way regulations affect solvency risk is different from that of liquidity risk – an approach that allows for case specific policy interventions based on the type of bank risk under consideration. Ignoring this dual dimension of bank stability can thus lead to erroneous policy inferences.

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