The Impediments and Evolution of Derivatives in Sub Sahara Africa

The research follows on the Arusha declaration of 2005 and the global financial crisis of 2008 and explored the impediments and the evolution of derivatives in Sub Sahara Africa with special attention on Zimbabwe, Botswana and South Africa. The research has been based on a review of literature of th...

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Bibliographic Details
Published in:Journal of Business Strategy Finance and Management 2019-12, Vol.1 (1-2), p.80
Main Author: Chidaushe, Wilbert Kudakwashe
Format: Article
Language:English
Subjects:
Agricultural commodities
Commodity prices
Currency
Derivatives
Economic crisis
Energy
Futures
Metals
Partnership agreements
Regulatory reform
Securities markets
Stock exchanges
Volatility
Wage & price controls
Wall Street Reform & Consumer Protection Act 2010-US
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Summary:The research follows on the Arusha declaration of 2005 and the global financial crisis of 2008 and explored the impediments and the evolution of derivatives in Sub Sahara Africa with special attention on Zimbabwe, Botswana and South Africa. The research has been based on a review of literature of the seminal authors and through a conduct of questionnaire surveys in each of the three countries of Zimbabwe, Botswana and South Africa. The purpose of the study was to identify any disparities in the evolution of commodities and financial derivatives in the Sub-Saharan African countries. The study uncovered that registered banks in Botswana and Zimbabwe relied so much on the forward agreement to protect against financial risk. Credit default swaps (CDS), currency options and simple foreign exchange swaps also were relatively used in Botswana by most commercial banks to hedge against risk. In South Africa, a wide variety of simple and complex futures and options products are effectively applied on commodities and currencies to protect against financial losses. Rodrigues, Schwarz and Seeger (2012) noted that the initiation of formal derivative markets can accelerate growth in the economies and decrease the fluctuations of the Gross Domestic Product.
ISSN:2583-2832
2583-2832
DOI:10.12944/JBSFM.01.0102.06