- Title
- The impact of underperforming state-owned enterprises on the South African economy
- Creator
- Erasmus, Christopher
- Subject
- Government business enterprises
- Subject
- Government corporations
- Subject
- Budget deficits -- South Africa
- Subject
- Deficit financing -- South Africa
- Date Issued
- 2024-04
- Date
- 2024-04
- Type
- Master's theses
- Type
- text
- Identifier
- http://hdl.handle.net/10948/64951
- Identifier
- vital:73991
- Description
- Problems have existed in South African SOEs for more than 80 years and in the more recent past, billions of rands in bailouts have begun to accumulate in an effort to revive struggling SOEs and consequently has placed the South African economy under immense fiscal strain. With the use of case study analysis, this study set out to determine the impact bailouts of underperforming SOEs are having on the budget deficit as well as government debt, with particular focus aimed at the contributions of Eskom and SAA. Thereafter, the study adopted a VAR framework and investigated if either the budget deficit or government debt share a relationship with economic growth based on data from 2000-2020. It was discovered that an alarming R331,206 billion has been given out in bailouts to underperforming SOEs over the past decade. As a result, SOEs have been identified by credit rating agencies, financial institutions such as the IMF and the National Treasury as posing one of the greatest threats to the fiscal outlook and a widening budget deficit. Results from the granger casualty tests only found evidence of unidirectional causality running from GDP to both the budget deficit and government debt, meaning there was no evidence to suggest that changes in the budget deficit and government debt influence GDP. The estimated VAR model also failed to find evidence of a statistically significant relationship existing between the budget deficit and GDP as well as government debt and GDP. These findings suggest that there is inconclusive evidence to suggest that underperforming SOEs do impact economic growth via the budget deficit and government debt. However, government expenditure was found to have a statistically significant and negative relationship with GDP which indicates that expenditure has been wasteful and is a reflection of the impact bailouts have on economic growth when considering the significant amount of expenditure directed towards SOEs over the past two decades.
- Description
- Thesis (MCom) -- Faculty of Business and Economic Sciences, School of Economics, Development and Tourism, 2024
- Format
- computer
- Format
- online resource
- Format
- application/pdf
- Format
- 1 online resource (iv, 72 pages)
- Format
- Publisher
- Nelson Mandela University
- Publisher
- Faculty of Business and Economic Sciences
- Language
- English
- Rights
- Nelson Mandela University
- Rights
- All Rights Reserved
- Rights
- Open Access
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| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | SOURCE1 | Erasmus, C April 2024.pdf | 1 MB | Adobe Acrobat PDF | View Details Download |