Industrial policy, institutions and industrial financing in South Africa: the role of the IDC and DBSA, and lessons from Brazil’s BNDES
- Authors: Fumbata, Nandipha
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1132 , http://hdl.handle.net/10962/d1021278
- Description: Institutions, particularly development finance institutions (DFIs) have been instrumental in economic development and the implementation of industrial policy throughout history. In 2007, the South African government identified the country’s DFIs as key to the implementation of its new industrial policy framework with the main objective of job creation. This thesis examines the impact that South Africa’s DFIs, particularly the IDC and the DBSA, have had on employment creation from 2010 to 2014. A comparative institutional approach is adopted in a case study analysis examining the role of the state in industrial financing. The financing activities of Brazil’s BNDES are explored by comparison to determine if there are possible lessons for South Africa. An analysis of the DFIs’ financial and annual reports and government policy documents is conducted. The political settlements framework is used as a basis for understanding the balance of power within the country and the impact this has had on the country’s industrial policy and industrial finance. The thesis finds that the financing activities of South Africa’s DFIs, particularly the IDC, have been directed at large scale capital intensive projects, with a large portion of disbursements channelled towards mining and mineral beneficiation. These sectors have also facilitated the most number of jobs. Even though the activities of the country’s DFIs are consistent with South Africa’s industrial policy and have facilitated job creation, it is evident that these efforts have not been on a scale that is large enough to reduce unemployment. Despite the DFIs’ efforts, there has been an increase in the number of unemployed South Africans between 2010 and 2014.
- Full Text:
- Date Issued: 2016
Inequality in South Africa: a possible solution within the labour market
- Authors: Ferreira, John-Edward
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4047 , vital:20594
- Description: This study sets out to identify the most effective way in which persistently and unacceptably high levels of inequality can be reduced in South Africa. Three alternative approaches were identified from the literature and their impact explored statistically. They are: the introduction of a ‘Social Solidarity Grant’; a decrease in unemployment by 5%; and a narrowing of the skill premium through an expansion of tertiary education. It is important to note that the study makes no attempt at explaining how these outcomes might be implemented or achieved. Rather, it sets out to determine only the effect that such policies may have on measured inequality. It was found that while the introduction of a new grant had a significant effect on inequality, this effect however, was once-off. The grant would be financed by individuals in the top decile through tax increases, which would be a complicated endeavour. Both job creation and a narrowing of the skills premium were significantly effective in decreasing inequality. The narrowing of the skills premium showed more promise due to its accelerating effectiveness in decreasing inequality over time and the fact that it directly addresses the problem of wage differentials. It was noted that the extreme levels of poverty and unemployment in South Africa may dampen enthusiasm for policies that narrow the skills premium to reduce inequality. These characteristics make job creation a more popular policy option because of the positive impact on poverty and unemployment as well as on inequality.
- Full Text:
- Date Issued: 2016
The effect of interest rates on investment spending: an empirical analysis of South Africa
- Authors: Dakin, Nicholas John
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1131 , http://hdl.handle.net/10962/d1021174
- Description: This thesis investigates the nature and strength of the relationship between short-, medium-, and long-term real interest rates and capital investment spending at both the aggregate and disaggregate levels in South Africa in order to determine whether changes in the real interest rate affect the level of capital investment in the economy. This thesis used quarterly data for the period 1987 to 2013. VAR modelling, variance decompositions, impulse response functions and Granger causality tests are used to explore the nature and strength of the relationship between interest rates and investment spending. It is found that interest rates explain very little of the variation in investment spending and seem to have little impact on investment (of any type). Furthermore, short-, medium- and long-term interest rates have different effects on the level of investment spending. A rise in short-term interest rates appears to decrease the level of investment spending in the long-run, whereas a rise in long-term interest rates results in an increase in investment.
- Full Text:
- Date Issued: 2016
Water service delivery in Harare: a willingness to pay (WTP) analysis
- Authors: Mugomba, Lynsey M
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4120 , vital:20614
- Description: In 2008-2009, Harare (Zimbabwe) was the centre of the worst cholera outbreak in Africa in the past fifteen years. A key reason cited was the lack of adequate water service delivery by the Harare City Council (HCC). Harare requires an optimum supply of 1 400 mega litres (ML) of water daily but the HCC has capacity to produce 650ML and after leakages and theft, only 400ML reaches consumers. This inadequacy compromised the hygiene of residents and forced them to resort to unsafe water sources. Coupled with a failing healthcare system, the outbreak resulted in over 4 000 deaths and further affected 100 000 people. The HCC attributes its poor service delivery to the lack of funds rendering them unable to adequately increase capacity and refurbish existing infrastructure (treatment plants and pipelines). This thesis serves to explore whether the residents of Harare (and surrounding satellite towns) would be willing to pay monthly contributions towards the USD$2.5 billion needed for various water capacity and infrastructure projects to ease the water crisis in Harare. The study analyses the water problem using a framework on the typical stages of water provision. The research also places an emphasis on the key social, economic and political factors that are contributing to the problem in Harare. Upon closer inspection, it was seen that the financial problems that the HCC is having are not only due to the economy, but poor management and transparency structures are also to blame. For various reasons, the government has largely lost its credibility with its citizens, leading some to conclude that the government’s actions reflect those of a predatory state. The contingent valuation method (willingness to pay-WTP) was used in conjunction with the dichotomous choice referendum. The binary probit model was used to help assess the degree to which different variables influenced the respondent’s decision to contribute to the needed funds. In spite of the seeming lack of trust, it was found that approximately 66.19% of the respondents were willing to pay. Amongst those willing, the mean willingness to pay amount was approximately USD$7 monthly per household.
- Full Text:
- Date Issued: 2016