The impact of real exchange rate on exports in South Africa
- Authors: Mbewu, Asanda
- Date: 2017
- Subjects: Foreign exchange rates -- South Africa Exports -- South Africa , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10948/19015 , vital:28765
- Description: The purpose of this study is to establish the impact of real exchange rate on exports in South Africa. In conducting the empirical test, the Vector Error Correction Model and annual time series data between 1973 and 2014 has been utilised. In the model, exports are the dependent variable and the real effective exchange rates, gross domestic product, mining, agricultural, foreign direct investments, and merchandise export prices are explanatory variables. A significant inverse relationship between real effective exchange rates and exports was confirmed in line with economic theory. Except for the Gross Domestic Product which exhibited a positive relationship, all other explanatory variables displayed an inverse relationship with exports. All other variables exhibited a significant impact except for Foreign Direct Investments. Based on the findings of this study, firm and practical policy recommendations are made including a moderated adjustment of monetary and fiscal policy to ensure competitiveness on the supply side.
- Full Text:
- Date Issued: 2017
- Authors: Mbewu, Asanda
- Date: 2017
- Subjects: Foreign exchange rates -- South Africa Exports -- South Africa , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10948/19015 , vital:28765
- Description: The purpose of this study is to establish the impact of real exchange rate on exports in South Africa. In conducting the empirical test, the Vector Error Correction Model and annual time series data between 1973 and 2014 has been utilised. In the model, exports are the dependent variable and the real effective exchange rates, gross domestic product, mining, agricultural, foreign direct investments, and merchandise export prices are explanatory variables. A significant inverse relationship between real effective exchange rates and exports was confirmed in line with economic theory. Except for the Gross Domestic Product which exhibited a positive relationship, all other explanatory variables displayed an inverse relationship with exports. All other variables exhibited a significant impact except for Foreign Direct Investments. Based on the findings of this study, firm and practical policy recommendations are made including a moderated adjustment of monetary and fiscal policy to ensure competitiveness on the supply side.
- Full Text:
- Date Issued: 2017
An analysis of the long run comovements between financial system development and mining production in South Africa
- Authors: Ajagbe, Stephen Mayowa
- Date: 2011
- Subjects: Economic development -- South Africa , Econometric models , Mineral industries -- Economic aspects -- South Africa , South Africa -- Economic conditions , South Africa -- Economic policy , Principal components analysis , Cointegration , Stock exchanges -- South Africa , Banks and banking -- South Africa , Foreign exchange rates
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:955 , http://hdl.handle.net/10962/d1002689 , Economic development -- South Africa , Econometric models , Mineral industries -- Economic aspects -- South Africa , South Africa -- Economic conditions , South Africa -- Economic policy , Principal components analysis , Cointegration , Stock exchanges -- South Africa , Banks and banking -- South Africa , Foreign exchange rates
- Description: This study examines the nature of the relationship which exists between mining sector production and development of the financial systems in South Africa. This is particularly important in that the mining sector is considered to be one of the major contributors to the country’s overall economic growth. South Africa is also considered to have a very well developed financial system, to the point where the dominance of one over the other is difficult to identify. Therefore offering insight into the nature of this relationship will assist policy makers in identifying the most effective policies in order to ensure that the developments within the financial systems impact appropriately on the mining sector, and ultimately on the economy. In addition to using the conventional proxies of financial system development, this study utilises the principal component analysis (PCA) to construct an index for the entire financial system. The multivariate cointegration approach as proposed by Johansen (1988) and Johansen and Juselius (1990) was then used to estimate the relationship between the development of the financial systems and the mining sector production for the period 1988-2008. The study reveals mixed results for different measures of financial system development. Those involving the banking system show that a negative relationship exists between total mining production and total credit extended to the private sector, while liquid liabilities has a positive relationship. Similarly, with the stock market system, mixed results are also obtained which reveal a negative relationship between total mining production and stock market capitalisation, while a positive relationship is found with secondary market turnover. Of all the financial system variables, only that of stock market capitalisation was found to be significant. The result with the financial development index reveals that a significant negative relationship exists between financial system development and total mining sector production. Results on the other variables controlled in the estimation show that positive and significant relationships exist between total mining production and both nominal exchange rate and political stability respectively. Increased mining production therefore takes place in periods of appreciating exchange rates, and similarly in the post-apartheid era. On the other hand, negative relationships were found for both trade openness and inflation control variables. The impulse response and variance decomposition analyses showed that total mining production explains the largest amount of shocks within itself. Overall, the study reveals that the mining sector might not have benefited much from the development in the South African financial system.
- Full Text:
- Date Issued: 2011
- Authors: Ajagbe, Stephen Mayowa
- Date: 2011
- Subjects: Economic development -- South Africa , Econometric models , Mineral industries -- Economic aspects -- South Africa , South Africa -- Economic conditions , South Africa -- Economic policy , Principal components analysis , Cointegration , Stock exchanges -- South Africa , Banks and banking -- South Africa , Foreign exchange rates
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:955 , http://hdl.handle.net/10962/d1002689 , Economic development -- South Africa , Econometric models , Mineral industries -- Economic aspects -- South Africa , South Africa -- Economic conditions , South Africa -- Economic policy , Principal components analysis , Cointegration , Stock exchanges -- South Africa , Banks and banking -- South Africa , Foreign exchange rates
- Description: This study examines the nature of the relationship which exists between mining sector production and development of the financial systems in South Africa. This is particularly important in that the mining sector is considered to be one of the major contributors to the country’s overall economic growth. South Africa is also considered to have a very well developed financial system, to the point where the dominance of one over the other is difficult to identify. Therefore offering insight into the nature of this relationship will assist policy makers in identifying the most effective policies in order to ensure that the developments within the financial systems impact appropriately on the mining sector, and ultimately on the economy. In addition to using the conventional proxies of financial system development, this study utilises the principal component analysis (PCA) to construct an index for the entire financial system. The multivariate cointegration approach as proposed by Johansen (1988) and Johansen and Juselius (1990) was then used to estimate the relationship between the development of the financial systems and the mining sector production for the period 1988-2008. The study reveals mixed results for different measures of financial system development. Those involving the banking system show that a negative relationship exists between total mining production and total credit extended to the private sector, while liquid liabilities has a positive relationship. Similarly, with the stock market system, mixed results are also obtained which reveal a negative relationship between total mining production and stock market capitalisation, while a positive relationship is found with secondary market turnover. Of all the financial system variables, only that of stock market capitalisation was found to be significant. The result with the financial development index reveals that a significant negative relationship exists between financial system development and total mining sector production. Results on the other variables controlled in the estimation show that positive and significant relationships exist between total mining production and both nominal exchange rate and political stability respectively. Increased mining production therefore takes place in periods of appreciating exchange rates, and similarly in the post-apartheid era. On the other hand, negative relationships were found for both trade openness and inflation control variables. The impulse response and variance decomposition analyses showed that total mining production explains the largest amount of shocks within itself. Overall, the study reveals that the mining sector might not have benefited much from the development in the South African financial system.
- Full Text:
- Date Issued: 2011
The impact of the cultural and creative industries on the economic growth and development of small cities and towns - guidelines for creating a regional cultural policy
- Authors: Ndhlovu, Raymond
- Date: 2018
- Subjects: Cultural industries -- South Africa , Cultural industries -- Economic aspects -- South Africa , Cultural policy , South Africa -- Economic conditions , Economic development -- South Africa -- Eastern Cape , South Africa. Department of Arts and Culture , Standard Bank National Arts Festival
- Language: English
- Type: text , Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/61524 , vital:28032
- Description: The arts and cultural sector has come under even more financial strain than it previously was, as it has to compete with other sectors of the economy for the very limited public funding that is available. It is in this context that the economic impact, and the role, of the arts and cultural sector towards advancing economic growth and development, needs be examined. This thesis investigates the potential for the positive impact of the cultural and creative industries (CCIs) on growth and development of small cities and towns. Furthermore, it also provides guidelines for the development of regional cultural policy in small cities and towns. The CCIs have also been touted as a catalyst for economic growth and economic development, hence the global rise in their interest. For example, the CCIs have been used to redevelop and revive urban areas that have been rundown. CCIs, however, tend to develop in clusters, and additionally, they cluster around large cities. However, the lack of reliance of some CCIs on long supply chains or high-technology inputs may make them suitable candidates for investment in small cities and towns. Additionally, the link that small cities and towns have with rural and isolated areas makes them potential engines for driving growth, development, as well as employment creation for these areas, given their decline as a result of the transition from the traditional agricultural economy, to the knowledge economy. As CCIs have the propensity to drive government’s macroeconomic objectives such as efficiency, equity, economic growth and job creation, it is necessary to develop cultural policy that regards this. The tendency of CCIs to cluster and develop around large cities inevitably means that very little research into cultural policy directed towards regions without large cities and towns has been done. By the same token, very little research has also been conducted on how to craft cultural policy for such areas. In order then, for cultural policy for regions without large cities and towns to be developed, it is necessary to investigate, and provide, guidelines on, how to develop cultural policy for such regions. As a case study, the Sarah Baartman District Municipality (SBDM) in the Eastern Cape was chosen. The SBDM has no large cities and towns, but the District Municipality has identified the CCIs as a potential growth sector, and is in the process of developing a regional cultural policy. The area also includes Grahamstown, which not only hosts the National Arts Festival, which is the largest arts event of its type in Africa, but is also piloting the “Creative City” project in South Africa. An audit and mapping study was conducted on the CCIs in the SBDM; this was based on a national mapping study commissioned by the Department of Arts and Culture. Further internet searches, as well as consultations with the provincial and regional Department of Arts of Culture, coupled with snowball sampling, also aided in the identification of CCIs, and consequently, the “creative hotspots” within the SBDM. Two random samples of stakeholders were chosen; the CCI owners and practitioners, as well as key stakeholders such as government officials, and interviews conducted with both groups, in order to get a first-hand perspective on the operations, activities, challenges, and opportunities that are faced by the CCIs. The study found that there were at least 441 CCIs in the SBDM, with two local municipalities (Dr. Beyers Naude and Makana) hosting the largest share of these (145 and 113 CCIs in each local municipality respectively), which indicates some support for the ‘clustering’ theory. It was also found that the local municipalities that had the largest number of CCIs also experienced better socio-economic welfare. Furthermore, based on the UNESCO Framework for Cultural Statistics (FCS) domains, the Visual Arts and Crafts; Information, Books and Press; and, Cultural Heritage domains were the largest domains represented in the SBDM. It was concluded that cultural policy that is developed, ought to take advantage of, and build on, these existing clusters, as well as the domains that are most prevalent in the region. To demonstrate the impact of cultural festivals on growth and development, a socio-economic impact study was undertaken at the 2016 National Arts Festival (NAF) in Grahamstown. Face to interviews, as well as self-completion questionnaires were used, with respondents at different venues, attending a variety of shows, and across a range of demographics, being interviewed, in order to get a representative sample of Festival attendees. It was found that the economic impact of the 2016 NAF on the city of Grahamstown was R94.4 million. Over and above the economic value of the NAF, it was also found that there were nonmarket benefits (social and intrinsic values) of the NAF, that included audience development, education of the arts and culture, social cohesion, and community development. The inability to directly track and measure social and intrinsic values proved to be a challenge. The study concluded that in order for successful cultural policy to be developed in regions without large cities and towns, it is first necessary to carry out a study to identify what resources are present, and where they are. Locating resources enables cluster identification - as clusters encourage comparative and competitive advantage, it is worthwhile to invest in areas where there are clusters. Therefore, in the allocation of scarce public funds, cultural policy needs to guide investment in to areas where established clusters indicate existing comparative advantage. In terms of equity and transformation, it is also necessary to evaluate labour markets and ownership patterns when developing cultural policy. Beyond the analysis of physical and human resources, the study also found that a crucial step towards developing successful cultural policy is identification of opportunities and challenges faced by the practitioners themselves; the policy ought to capitalise on the opportunities, whilst attempting to correct the challenges faced. Also of importance is aligning the proposed policy and its objectives with regional, provincial and national aims and objectives. Finally, it is important to include a monitoring and evaluation tool that will evaluate the performance of the policy against its stated aims and objectives.
- Full Text:
- Date Issued: 2018
- Authors: Ndhlovu, Raymond
- Date: 2018
- Subjects: Cultural industries -- South Africa , Cultural industries -- Economic aspects -- South Africa , Cultural policy , South Africa -- Economic conditions , Economic development -- South Africa -- Eastern Cape , South Africa. Department of Arts and Culture , Standard Bank National Arts Festival
- Language: English
- Type: text , Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/61524 , vital:28032
- Description: The arts and cultural sector has come under even more financial strain than it previously was, as it has to compete with other sectors of the economy for the very limited public funding that is available. It is in this context that the economic impact, and the role, of the arts and cultural sector towards advancing economic growth and development, needs be examined. This thesis investigates the potential for the positive impact of the cultural and creative industries (CCIs) on growth and development of small cities and towns. Furthermore, it also provides guidelines for the development of regional cultural policy in small cities and towns. The CCIs have also been touted as a catalyst for economic growth and economic development, hence the global rise in their interest. For example, the CCIs have been used to redevelop and revive urban areas that have been rundown. CCIs, however, tend to develop in clusters, and additionally, they cluster around large cities. However, the lack of reliance of some CCIs on long supply chains or high-technology inputs may make them suitable candidates for investment in small cities and towns. Additionally, the link that small cities and towns have with rural and isolated areas makes them potential engines for driving growth, development, as well as employment creation for these areas, given their decline as a result of the transition from the traditional agricultural economy, to the knowledge economy. As CCIs have the propensity to drive government’s macroeconomic objectives such as efficiency, equity, economic growth and job creation, it is necessary to develop cultural policy that regards this. The tendency of CCIs to cluster and develop around large cities inevitably means that very little research into cultural policy directed towards regions without large cities and towns has been done. By the same token, very little research has also been conducted on how to craft cultural policy for such areas. In order then, for cultural policy for regions without large cities and towns to be developed, it is necessary to investigate, and provide, guidelines on, how to develop cultural policy for such regions. As a case study, the Sarah Baartman District Municipality (SBDM) in the Eastern Cape was chosen. The SBDM has no large cities and towns, but the District Municipality has identified the CCIs as a potential growth sector, and is in the process of developing a regional cultural policy. The area also includes Grahamstown, which not only hosts the National Arts Festival, which is the largest arts event of its type in Africa, but is also piloting the “Creative City” project in South Africa. An audit and mapping study was conducted on the CCIs in the SBDM; this was based on a national mapping study commissioned by the Department of Arts and Culture. Further internet searches, as well as consultations with the provincial and regional Department of Arts of Culture, coupled with snowball sampling, also aided in the identification of CCIs, and consequently, the “creative hotspots” within the SBDM. Two random samples of stakeholders were chosen; the CCI owners and practitioners, as well as key stakeholders such as government officials, and interviews conducted with both groups, in order to get a first-hand perspective on the operations, activities, challenges, and opportunities that are faced by the CCIs. The study found that there were at least 441 CCIs in the SBDM, with two local municipalities (Dr. Beyers Naude and Makana) hosting the largest share of these (145 and 113 CCIs in each local municipality respectively), which indicates some support for the ‘clustering’ theory. It was also found that the local municipalities that had the largest number of CCIs also experienced better socio-economic welfare. Furthermore, based on the UNESCO Framework for Cultural Statistics (FCS) domains, the Visual Arts and Crafts; Information, Books and Press; and, Cultural Heritage domains were the largest domains represented in the SBDM. It was concluded that cultural policy that is developed, ought to take advantage of, and build on, these existing clusters, as well as the domains that are most prevalent in the region. To demonstrate the impact of cultural festivals on growth and development, a socio-economic impact study was undertaken at the 2016 National Arts Festival (NAF) in Grahamstown. Face to interviews, as well as self-completion questionnaires were used, with respondents at different venues, attending a variety of shows, and across a range of demographics, being interviewed, in order to get a representative sample of Festival attendees. It was found that the economic impact of the 2016 NAF on the city of Grahamstown was R94.4 million. Over and above the economic value of the NAF, it was also found that there were nonmarket benefits (social and intrinsic values) of the NAF, that included audience development, education of the arts and culture, social cohesion, and community development. The inability to directly track and measure social and intrinsic values proved to be a challenge. The study concluded that in order for successful cultural policy to be developed in regions without large cities and towns, it is first necessary to carry out a study to identify what resources are present, and where they are. Locating resources enables cluster identification - as clusters encourage comparative and competitive advantage, it is worthwhile to invest in areas where there are clusters. Therefore, in the allocation of scarce public funds, cultural policy needs to guide investment in to areas where established clusters indicate existing comparative advantage. In terms of equity and transformation, it is also necessary to evaluate labour markets and ownership patterns when developing cultural policy. Beyond the analysis of physical and human resources, the study also found that a crucial step towards developing successful cultural policy is identification of opportunities and challenges faced by the practitioners themselves; the policy ought to capitalise on the opportunities, whilst attempting to correct the challenges faced. Also of importance is aligning the proposed policy and its objectives with regional, provincial and national aims and objectives. Finally, it is important to include a monitoring and evaluation tool that will evaluate the performance of the policy against its stated aims and objectives.
- Full Text:
- Date Issued: 2018
The impact of economic downturn on black economic empowerment and banks
- Authors: Daniels, Sinclair Lonwabo
- Date: 2010
- Subjects: South Africa -- Economic conditions -- 21st century , South Africa -- Economic conditions , Business enterprises, Black -- South Africa , Blacks -- Employment -- South Africa , Employee empowerment -- South Africa , Banks and banking -- South Africa
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:8620 , http://hdl.handle.net/10948/1505 , South Africa -- Economic conditions -- 21st century , South Africa -- Economic conditions , Business enterprises, Black -- South Africa , Blacks -- Employment -- South Africa , Employee empowerment -- South Africa , Banks and banking -- South Africa
- Description: The purpose of this treatise is to ascertain the impact of economic downturn on Black Economic Empowerment (BEE) and Banks. This has been sparked by the huge speculations in the market as to what will happen to BEE and how will the banks cope in general with the impact of this scourge. It is imperative to understand the influence of the 2008+ economic downturn on socio-economic reconstruction and development in South Africa and the black economic empowerment and its funding mechanisms. The treatise has two phases the, namely the theoretical phase and a bit of narrative phase. In the theoretical phase the research study interrogates what the literature review reveals about the economic downturn, BEE as well as performances of different banks across the world. This shows the economic impact that the banks have had to endure during the economic downturn. This resulted in stock markets losing their value. The dividend earners were significantly affected including a sizeable number of BEE companies. The BEE companies are perceived to be too reliant on debt on to finance their deals and this treatise will look at various options of financing a BEE deal and what is deem to the most suited financing structure. The narrative phase involves semi-structured interviews that were conducted in order to ascertain the real impact that South African were faced with and how they have managed to steer clear of the turbulent waters. This also looked at how the BEE consultant views the current occurrences in the market.
- Full Text:
- Date Issued: 2010
- Authors: Daniels, Sinclair Lonwabo
- Date: 2010
- Subjects: South Africa -- Economic conditions -- 21st century , South Africa -- Economic conditions , Business enterprises, Black -- South Africa , Blacks -- Employment -- South Africa , Employee empowerment -- South Africa , Banks and banking -- South Africa
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:8620 , http://hdl.handle.net/10948/1505 , South Africa -- Economic conditions -- 21st century , South Africa -- Economic conditions , Business enterprises, Black -- South Africa , Blacks -- Employment -- South Africa , Employee empowerment -- South Africa , Banks and banking -- South Africa
- Description: The purpose of this treatise is to ascertain the impact of economic downturn on Black Economic Empowerment (BEE) and Banks. This has been sparked by the huge speculations in the market as to what will happen to BEE and how will the banks cope in general with the impact of this scourge. It is imperative to understand the influence of the 2008+ economic downturn on socio-economic reconstruction and development in South Africa and the black economic empowerment and its funding mechanisms. The treatise has two phases the, namely the theoretical phase and a bit of narrative phase. In the theoretical phase the research study interrogates what the literature review reveals about the economic downturn, BEE as well as performances of different banks across the world. This shows the economic impact that the banks have had to endure during the economic downturn. This resulted in stock markets losing their value. The dividend earners were significantly affected including a sizeable number of BEE companies. The BEE companies are perceived to be too reliant on debt on to finance their deals and this treatise will look at various options of financing a BEE deal and what is deem to the most suited financing structure. The narrative phase involves semi-structured interviews that were conducted in order to ascertain the real impact that South African were faced with and how they have managed to steer clear of the turbulent waters. This also looked at how the BEE consultant views the current occurrences in the market.
- Full Text:
- Date Issued: 2010
The global financial crisis and its impact on the South African economy
- Authors: Madubeko, Vongai
- Date: 2010
- Subjects: Globalization -- Economic aspects , Global Financial Crisis, 2008-2009 , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11457 , http://hdl.handle.net/10353/363 , Globalization -- Economic aspects , Global Financial Crisis, 2008-2009 , South Africa -- Economic conditions
- Description: This dissertation investigates the effects of the financial crisis on the South African economy. In order to do this, an index which describes the financial conditions of the South African economy is constructed and computed. The index indicates that domestic South African financial conditions have deteriorated substantially during the period under study and so the study investigates how this has impacted on the country’s economic growth. A VAR model with South African variables is specified and used to assess the quantitative effects of the financial crisis on South African real GDP growth. Results suggest that the South African economy was not significantly affected by the crisis, but economic growth was slowed down and may still grow substantially slower in the next few years due to the financial crisis. These results corroborate the theoretical predictions and are also supported by previous studies.
- Full Text:
- Date Issued: 2010
- Authors: Madubeko, Vongai
- Date: 2010
- Subjects: Globalization -- Economic aspects , Global Financial Crisis, 2008-2009 , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11457 , http://hdl.handle.net/10353/363 , Globalization -- Economic aspects , Global Financial Crisis, 2008-2009 , South Africa -- Economic conditions
- Description: This dissertation investigates the effects of the financial crisis on the South African economy. In order to do this, an index which describes the financial conditions of the South African economy is constructed and computed. The index indicates that domestic South African financial conditions have deteriorated substantially during the period under study and so the study investigates how this has impacted on the country’s economic growth. A VAR model with South African variables is specified and used to assess the quantitative effects of the financial crisis on South African real GDP growth. Results suggest that the South African economy was not significantly affected by the crisis, but economic growth was slowed down and may still grow substantially slower in the next few years due to the financial crisis. These results corroborate the theoretical predictions and are also supported by previous studies.
- Full Text:
- Date Issued: 2010
Exchange rates and economic growth in emerging economies: the case of South Africa
- Authors: Sibanda, Bornapart
- Date: 2012
- Subjects: Economic development , Currency convertibility -- South Africa , Foreign exchange -- South Africa , Foreign exchange rates -- South Africa , Foreign exchange administration -- South Africa , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11464 , http://hdl.handle.net/10353/d1007045 , Economic development , Currency convertibility -- South Africa , Foreign exchange -- South Africa , Foreign exchange rates -- South Africa , Foreign exchange administration -- South Africa , South Africa -- Economic conditions
- Description: This study examines the impact of exchange rate volatility and misalignment on economic growth in South Africa. It applies the Johansen co integration test and the vector error correction model on quarterly data for the period 1990:01-2010:04. Exchange rate volatility is measured as the standard deviation of both the nominal and nominal effective exchange rate. The study constructs three measures of exchange rate misalignment, with two of the measures constructed using the Producer Price Index and Consumer Price index based Purchasing Power Parity. The third measure was based on the difference between the nominal and effective exchange rate. Contrary to pre-dominant findings in the exchange rate literature, the study finds a positive and significant relationship between exchange rate volatility and economic growth and attributes it to composition of the country’s exports that are largely made up of commodities that act as essential inputs in many production processes. As a result, the variability of prices caused by exchange rate volatility is not expected to deter demand for these commodities. A negative and significant relationship between exchange rate misalignment and economic growth was found. The findings of the study show that it is important for monetary authorities to ensure that the exchange rate is always at an appropriate level in order to avoid the negative implications of exchange rate misalignment on economic growth.
- Full Text:
- Date Issued: 2012
- Authors: Sibanda, Bornapart
- Date: 2012
- Subjects: Economic development , Currency convertibility -- South Africa , Foreign exchange -- South Africa , Foreign exchange rates -- South Africa , Foreign exchange administration -- South Africa , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11464 , http://hdl.handle.net/10353/d1007045 , Economic development , Currency convertibility -- South Africa , Foreign exchange -- South Africa , Foreign exchange rates -- South Africa , Foreign exchange administration -- South Africa , South Africa -- Economic conditions
- Description: This study examines the impact of exchange rate volatility and misalignment on economic growth in South Africa. It applies the Johansen co integration test and the vector error correction model on quarterly data for the period 1990:01-2010:04. Exchange rate volatility is measured as the standard deviation of both the nominal and nominal effective exchange rate. The study constructs three measures of exchange rate misalignment, with two of the measures constructed using the Producer Price Index and Consumer Price index based Purchasing Power Parity. The third measure was based on the difference between the nominal and effective exchange rate. Contrary to pre-dominant findings in the exchange rate literature, the study finds a positive and significant relationship between exchange rate volatility and economic growth and attributes it to composition of the country’s exports that are largely made up of commodities that act as essential inputs in many production processes. As a result, the variability of prices caused by exchange rate volatility is not expected to deter demand for these commodities. A negative and significant relationship between exchange rate misalignment and economic growth was found. The findings of the study show that it is important for monetary authorities to ensure that the exchange rate is always at an appropriate level in order to avoid the negative implications of exchange rate misalignment on economic growth.
- Full Text:
- Date Issued: 2012
The developmental state, social policy and social compacts: a comparative policy analysis of the South African case
- Authors: Gwaindepi, Abel
- Date: 2014
- Subjects: Economic development -- Political aspects -- South Africa , Income distribution -- South Africa , Democracy -- South Africa , Industrial policy -- Developing countries , South Africa -- Economic conditions , South Africa -- Social conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1101 , http://hdl.handle.net/10962/d1013278
- Description: The history of economic thought is ‘flooded’ with neo-classical accounts despite the fact that neoclassical economics did not occupy history alone. This has caused the discourses on ‘lost alternatives’ to be relegated as the deterministic ‘straight line’ neo-classical historical discourses are elevated. Globally hegemonic neo-classical discourse aided this phenomenon as it served to subordinate any counterhegemonic local discursive processes towards alternatives. This study is premised on the theme of non-neoclassical ‘lost alternatives’ using the post-apartheid South Africa as a case study. Emerging from the apartheid regime, the impetus towards non-neoclassical redistributive policies was strong in South Africa but this did not gain traction as the ANC’s ‘growth through redistribution’ was replaced by globally hegemonic discourse which favoured ‘redistribution through growth’. This thesis postulates the idea of two waves of ‘internal’ discursive formations; capturing the transition to democracy up to 1996 as the first wave and the period from 2005 to about 2009 as the second wave. The developmental state paradigm (DSP) emerged as the central heterodox paradigm with ideas such as industrial policy, welfare, and social dialogue/compacts being main elements. The DSP was expressly chosen in the early 1990s, the first period of strong internal discursive formation, but faded as neo-classical policies, epitomised through GEAR, dominated the policy space. The DSP discourse gained vitality in the second wave of internal discursive formation (2005-2009) and it was associated with the subsequent Zuma’s administration. The study illustrates that the DSP has failed to be fully developed into a practical framework but remained only at rhetorical level with the phrase ‘developmental state’ inserted into government policy documents and documents of ANC as a ruling party. The thesis further illustrates that the DSP fared well ideologically because of its inclination to the ideology of ‘developmentalism’ tended to trump any socialist inclined policies such as a generous welfare regime. The thesis rebuts the notion of the DSP in South Africa which has only been amorphously developed with the phrase ‘developmental state’ becoming a mere buzzword. The thesis argues that the DSP in the 21st century is much more complex and the growing ‘tertiarisation’ of the economy makes the Social Democratic Paradigm SDP’s capability centric approach much more relevant for South Africa. The study goes further to argue that a (SDP) is much more suitable alternative for addressing South African colonial/apartheid legacies and consolidation of democracy.
- Full Text:
- Date Issued: 2014
- Authors: Gwaindepi, Abel
- Date: 2014
- Subjects: Economic development -- Political aspects -- South Africa , Income distribution -- South Africa , Democracy -- South Africa , Industrial policy -- Developing countries , South Africa -- Economic conditions , South Africa -- Social conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1101 , http://hdl.handle.net/10962/d1013278
- Description: The history of economic thought is ‘flooded’ with neo-classical accounts despite the fact that neoclassical economics did not occupy history alone. This has caused the discourses on ‘lost alternatives’ to be relegated as the deterministic ‘straight line’ neo-classical historical discourses are elevated. Globally hegemonic neo-classical discourse aided this phenomenon as it served to subordinate any counterhegemonic local discursive processes towards alternatives. This study is premised on the theme of non-neoclassical ‘lost alternatives’ using the post-apartheid South Africa as a case study. Emerging from the apartheid regime, the impetus towards non-neoclassical redistributive policies was strong in South Africa but this did not gain traction as the ANC’s ‘growth through redistribution’ was replaced by globally hegemonic discourse which favoured ‘redistribution through growth’. This thesis postulates the idea of two waves of ‘internal’ discursive formations; capturing the transition to democracy up to 1996 as the first wave and the period from 2005 to about 2009 as the second wave. The developmental state paradigm (DSP) emerged as the central heterodox paradigm with ideas such as industrial policy, welfare, and social dialogue/compacts being main elements. The DSP was expressly chosen in the early 1990s, the first period of strong internal discursive formation, but faded as neo-classical policies, epitomised through GEAR, dominated the policy space. The DSP discourse gained vitality in the second wave of internal discursive formation (2005-2009) and it was associated with the subsequent Zuma’s administration. The study illustrates that the DSP has failed to be fully developed into a practical framework but remained only at rhetorical level with the phrase ‘developmental state’ inserted into government policy documents and documents of ANC as a ruling party. The thesis further illustrates that the DSP fared well ideologically because of its inclination to the ideology of ‘developmentalism’ tended to trump any socialist inclined policies such as a generous welfare regime. The thesis rebuts the notion of the DSP in South Africa which has only been amorphously developed with the phrase ‘developmental state’ becoming a mere buzzword. The thesis argues that the DSP in the 21st century is much more complex and the growing ‘tertiarisation’ of the economy makes the Social Democratic Paradigm SDP’s capability centric approach much more relevant for South Africa. The study goes further to argue that a (SDP) is much more suitable alternative for addressing South African colonial/apartheid legacies and consolidation of democracy.
- Full Text:
- Date Issued: 2014
Tax revolts: an international perspective
- Authors: Tinotenda, Tariro Chizanga
- Date: 2020
- Subjects: Taxation -- Public opinion , Taxation -- Law and legislation -- South Africa , Income tax -- South Africa , South Africa -- Economic conditions , Fiscal policy -- South Africa
- Language: English
- Type: text , Thesis , Masters , MComm
- Identifier: http://hdl.handle.net/10962/166116 , vital:41330
- Description: The main goal of this study is to investigate whether tax revolts currently taking place and apparently threatening to take place in South Africa follow patterns shown in past international tax revolts or follow a unique pattern of their own. Tax revolts or tax rebellions are not a new phenomenon; they can be traced back to the beginning of time. Renowned tax revolts of the past include the Magna Carta and the Peasants’ Revolt in England, the Boston Tea Party, the Whiskey Rebellion, the Zimbabwean poll tax revolt, the Bambatha rebellion, the Tigre Rebellion, Proposition 13 and Margaret Thatcher’s poll tax revolt. These tax revolts were usually caused by the high burden of taxation, excessive government expenditure, corruption of government officials, declining tax morale of taxpayers and taxpayers’ perceptions of unfairness. In South Africa, elements of tax revolts have been on the rise. There has been a tax revolt against the e-tolling system in Gauteng since 2013. Non-payment of municipal rates is another form of tax revolt that has been and is happening in South Africa. Trade unions have also threatened strikes and mass action against various tax changes, including the value-added tax increase. Taxpayers, through media reporting, have been witnessing an increase in the use of taxpayers’ money for non-governmental agendas or overstated budgets. An increasing number of South Africans have been emigrating financially from South Africa to avoid a high taxation burden. The study falls within a post-positivist paradigm and an interpretive methodology is applied in the present research. The methodology is based on the fact that the social reality of tax revolts is not singular or objective, instead it is influenced by human experiences and social contexts. The study finds that tax revolts are currently occurring and threatening to occur in South Africa. The patterns of South African tax revolts are to a great extent similar to the patterns of international tax revolts, indicating the universalism of tax revolts. The study also confirms that South African tax revolts are, to a certain extent, unique.
- Full Text:
- Date Issued: 2020
- Authors: Tinotenda, Tariro Chizanga
- Date: 2020
- Subjects: Taxation -- Public opinion , Taxation -- Law and legislation -- South Africa , Income tax -- South Africa , South Africa -- Economic conditions , Fiscal policy -- South Africa
- Language: English
- Type: text , Thesis , Masters , MComm
- Identifier: http://hdl.handle.net/10962/166116 , vital:41330
- Description: The main goal of this study is to investigate whether tax revolts currently taking place and apparently threatening to take place in South Africa follow patterns shown in past international tax revolts or follow a unique pattern of their own. Tax revolts or tax rebellions are not a new phenomenon; they can be traced back to the beginning of time. Renowned tax revolts of the past include the Magna Carta and the Peasants’ Revolt in England, the Boston Tea Party, the Whiskey Rebellion, the Zimbabwean poll tax revolt, the Bambatha rebellion, the Tigre Rebellion, Proposition 13 and Margaret Thatcher’s poll tax revolt. These tax revolts were usually caused by the high burden of taxation, excessive government expenditure, corruption of government officials, declining tax morale of taxpayers and taxpayers’ perceptions of unfairness. In South Africa, elements of tax revolts have been on the rise. There has been a tax revolt against the e-tolling system in Gauteng since 2013. Non-payment of municipal rates is another form of tax revolt that has been and is happening in South Africa. Trade unions have also threatened strikes and mass action against various tax changes, including the value-added tax increase. Taxpayers, through media reporting, have been witnessing an increase in the use of taxpayers’ money for non-governmental agendas or overstated budgets. An increasing number of South Africans have been emigrating financially from South Africa to avoid a high taxation burden. The study falls within a post-positivist paradigm and an interpretive methodology is applied in the present research. The methodology is based on the fact that the social reality of tax revolts is not singular or objective, instead it is influenced by human experiences and social contexts. The study finds that tax revolts are currently occurring and threatening to occur in South Africa. The patterns of South African tax revolts are to a great extent similar to the patterns of international tax revolts, indicating the universalism of tax revolts. The study also confirms that South African tax revolts are, to a certain extent, unique.
- Full Text:
- Date Issued: 2020
Monetary policy transmission in South Africa: a comparative analysis of credit and exchange rate channels
- Authors: Sebitso, Nathaniel Maemu
- Date: 2011
- Subjects: Monetary policy -- South Africa , Foreign exchange market -- South Africa , Financial crises -- South Africa , South Africa -- Economic conditions , South Africa -- Economic policy , Banks and banking -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1129 , http://hdl.handle.net/10962/d1020851
- Description: This thesis focuses on monetary policy transmission and particularly seeks to examine the impact of credit and exchange rate channels of monetary policy transmission in the South African economy. South Africa's monetary policy has gone through several changes over the past thirty years. In this respect, there is a need for robust empirical evidence on the effects of these channels on inflation and output. The thesis employs a structural vector autoregressive (SVAR) model to identify monetary transmission in South Africa for the period 1994:q4 - 2008:q2. The form of the SVAR used in this thesis is based on the fact that South Africa is a small open economy, which means that external shocks are an important driver of domestic activity. The impulse responses and variance decomposition results show that the repo rate, credit and exchange rate play a role in terms of their impact on inflation and output. The dynamic responses to the identified monetary policy shock are consistent with standard theory and highlight the importance of the interest rate channel. A shock to the interest rate, increasing it by one standard deviation, results in a persistent fall in credit. The response of output is immediate as it falls and bottoms out within the second year. Inflation shows a lagged response, it is positive within the first year as the exchange rate depreciates but in subsequent quarters inflation responds negatively as expected. Inflation falls and reaches a minimum by approximately eight quarters then moves towards baseline. The exchange rate shows delayed appreciation. The shock to the repo interest rate leads to an immediate depreciation of the exchange rate in the first two quarters as output declines, followed by an appreciation in the third and sixth quarter. Due to larger error bounds the impact of the repo rate on the exchange rate could be less effective within the first two years. The impulse responses suggest that monetary policy plays an effective role in stabilising the economy in response to a credit shock, notwithstanding large standard error bounds. Hence, the monetary authority reacts by increasing the repo rate as a result of inflation. The impact of credit on output is positive but is offset to some extent by the rising repo rate. In response to the rand appreciation, the monetary authority reduces the repo rate significantly during the first year with the maximum impact in the second year and then returns to baseline thereafter. Therefore the monetary authority reduces the repo rate, probably to stabilise falling inflation. The result shows that inflation falls as a result of the rand appreciation. A shock to the exchange rate causes a rise in output, though small in magnitude, which is persistent but reaches baseline at the end of the period. This result could reflect the effects of the resultant fall in the repo rate and a persistent rise in credit over the whole period, which tends to increase output. The exchange rate shows an obvious and stronger immediate impact on inflation compared to credit impact on inflation. However, the credit shock has an obvious and stronger impact on output compared to an exchange rate impact on output. However, the large standard error bounds may imply that credit and exchange rate channels are not as effective in the short run. It is important to note that the results are based on the SVAR model estimated with percentage growth rate of the variables. The variance decomposition result is in line with the impulse responses and shows that the exchange rate and credit channels could be important transmission channels in South Africa over the chosen sample period. The exchange rate and credit shocks show a stronger effect on inflation than on output, looking at both the impulse responses and variance decomposition results. The reaction of the repo interest rate to the credit and exchange rate shocks comes out as expected. The repo rate increases as a result of an increase in the credit and falls as a result of the currency appreciation.
- Full Text:
- Date Issued: 2011
- Authors: Sebitso, Nathaniel Maemu
- Date: 2011
- Subjects: Monetary policy -- South Africa , Foreign exchange market -- South Africa , Financial crises -- South Africa , South Africa -- Economic conditions , South Africa -- Economic policy , Banks and banking -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1129 , http://hdl.handle.net/10962/d1020851
- Description: This thesis focuses on monetary policy transmission and particularly seeks to examine the impact of credit and exchange rate channels of monetary policy transmission in the South African economy. South Africa's monetary policy has gone through several changes over the past thirty years. In this respect, there is a need for robust empirical evidence on the effects of these channels on inflation and output. The thesis employs a structural vector autoregressive (SVAR) model to identify monetary transmission in South Africa for the period 1994:q4 - 2008:q2. The form of the SVAR used in this thesis is based on the fact that South Africa is a small open economy, which means that external shocks are an important driver of domestic activity. The impulse responses and variance decomposition results show that the repo rate, credit and exchange rate play a role in terms of their impact on inflation and output. The dynamic responses to the identified monetary policy shock are consistent with standard theory and highlight the importance of the interest rate channel. A shock to the interest rate, increasing it by one standard deviation, results in a persistent fall in credit. The response of output is immediate as it falls and bottoms out within the second year. Inflation shows a lagged response, it is positive within the first year as the exchange rate depreciates but in subsequent quarters inflation responds negatively as expected. Inflation falls and reaches a minimum by approximately eight quarters then moves towards baseline. The exchange rate shows delayed appreciation. The shock to the repo interest rate leads to an immediate depreciation of the exchange rate in the first two quarters as output declines, followed by an appreciation in the third and sixth quarter. Due to larger error bounds the impact of the repo rate on the exchange rate could be less effective within the first two years. The impulse responses suggest that monetary policy plays an effective role in stabilising the economy in response to a credit shock, notwithstanding large standard error bounds. Hence, the monetary authority reacts by increasing the repo rate as a result of inflation. The impact of credit on output is positive but is offset to some extent by the rising repo rate. In response to the rand appreciation, the monetary authority reduces the repo rate significantly during the first year with the maximum impact in the second year and then returns to baseline thereafter. Therefore the monetary authority reduces the repo rate, probably to stabilise falling inflation. The result shows that inflation falls as a result of the rand appreciation. A shock to the exchange rate causes a rise in output, though small in magnitude, which is persistent but reaches baseline at the end of the period. This result could reflect the effects of the resultant fall in the repo rate and a persistent rise in credit over the whole period, which tends to increase output. The exchange rate shows an obvious and stronger immediate impact on inflation compared to credit impact on inflation. However, the credit shock has an obvious and stronger impact on output compared to an exchange rate impact on output. However, the large standard error bounds may imply that credit and exchange rate channels are not as effective in the short run. It is important to note that the results are based on the SVAR model estimated with percentage growth rate of the variables. The variance decomposition result is in line with the impulse responses and shows that the exchange rate and credit channels could be important transmission channels in South Africa over the chosen sample period. The exchange rate and credit shocks show a stronger effect on inflation than on output, looking at both the impulse responses and variance decomposition results. The reaction of the repo interest rate to the credit and exchange rate shocks comes out as expected. The repo rate increases as a result of an increase in the credit and falls as a result of the currency appreciation.
- Full Text:
- Date Issued: 2011
Forecasting volatility on the rand foreign exchange market
- Authors: Klaas, Sinoxolo
- Date: 2015
- Subjects: Foreign exchange rates -- South Africa , Foreign exchange administration , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10948/7892 , vital:24319
- Description: Exchange rates are one of the most essential determinants of a country's economic performance in terms of level of trade. Since the exchange rate is one of the best indicators of competitiveness, this study sought to examine the behaviour of the rand against other emerging countries in the South African exchange market. The study explored the trends and estimated the forecasting accuracy of six currency markets using ARCH-family and Random walk models over the period 1994 to 2013.The six currency markets examined were the Rand/Dollar, Rand/Pound, Rand/Euro, Rand/Yen and Rand/Pula. The Rand exchange rates did exhibit the characteristics of volatility clustering and asymmetric effects suggesting volatility of the Rand. Exchange rates tend to rise when there is more bad news in the financial market than good news and positive shocks imply a higher next period conditional variance than negative shocks of the same sign.
- Full Text:
- Date Issued: 2015
- Authors: Klaas, Sinoxolo
- Date: 2015
- Subjects: Foreign exchange rates -- South Africa , Foreign exchange administration , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10948/7892 , vital:24319
- Description: Exchange rates are one of the most essential determinants of a country's economic performance in terms of level of trade. Since the exchange rate is one of the best indicators of competitiveness, this study sought to examine the behaviour of the rand against other emerging countries in the South African exchange market. The study explored the trends and estimated the forecasting accuracy of six currency markets using ARCH-family and Random walk models over the period 1994 to 2013.The six currency markets examined were the Rand/Dollar, Rand/Pound, Rand/Euro, Rand/Yen and Rand/Pula. The Rand exchange rates did exhibit the characteristics of volatility clustering and asymmetric effects suggesting volatility of the Rand. Exchange rates tend to rise when there is more bad news in the financial market than good news and positive shocks imply a higher next period conditional variance than negative shocks of the same sign.
- Full Text:
- Date Issued: 2015
The impact of stock market development on economic growth: evidence from South Africa
- Authors: Vacu, Nomfundo Portia
- Date: 2013
- Subjects: Stock exchanges -- South Africa , Economic development -- South Africa , Stocks -- Economic aspects -- South Africa , South Africa -- Economic conditions , Stock market development , Economic growth , South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11655 , http://hdl.handle.net/10353/d1006983 , Stock exchanges -- South Africa , Economic development -- South Africa , Stocks -- Economic aspects -- South Africa , South Africa -- Economic conditions , Stock market development , Economic growth , South Africa
- Description: The main objective of this study is to examine the long run relationship between stock market development and economic growth in the case of South Africa. The study used quarterly data covering the period from 1990Q1 to 2010Q4. To empirically test the link between the two variables, the study used the Johnson’s cointegration approach and Granger causality so as to test the direction of the relationship. The Vector Error Correction Model was also employed to capture both short run and long run dynamics. Generally, the results reveal that a long run relationship exists between the two variables and the causality flows from economic growth to stock market development. Also, the extent to which of stock market development impacts on growth is statistically weak.
- Full Text:
- Date Issued: 2013
- Authors: Vacu, Nomfundo Portia
- Date: 2013
- Subjects: Stock exchanges -- South Africa , Economic development -- South Africa , Stocks -- Economic aspects -- South Africa , South Africa -- Economic conditions , Stock market development , Economic growth , South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11655 , http://hdl.handle.net/10353/d1006983 , Stock exchanges -- South Africa , Economic development -- South Africa , Stocks -- Economic aspects -- South Africa , South Africa -- Economic conditions , Stock market development , Economic growth , South Africa
- Description: The main objective of this study is to examine the long run relationship between stock market development and economic growth in the case of South Africa. The study used quarterly data covering the period from 1990Q1 to 2010Q4. To empirically test the link between the two variables, the study used the Johnson’s cointegration approach and Granger causality so as to test the direction of the relationship. The Vector Error Correction Model was also employed to capture both short run and long run dynamics. Generally, the results reveal that a long run relationship exists between the two variables and the causality flows from economic growth to stock market development. Also, the extent to which of stock market development impacts on growth is statistically weak.
- Full Text:
- Date Issued: 2013
Development of the South African monetary banking sector and money market
- Authors: Patel, Aadil Suleman
- Date: 2005
- Subjects: South African Reserve Bank , Banks and banking -- South Africa , Money market -- South Africa , Economic development -- South Africa , Monetary policy -- South Africa , South Africa -- Economic conditions , Financial institutions -- South Africa , Money -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:997 , http://hdl.handle.net/10962/d1002732 , South African Reserve Bank , Banks and banking -- South Africa , Money market -- South Africa , Economic development -- South Africa , Monetary policy -- South Africa , South Africa -- Economic conditions , Financial institutions -- South Africa , Money -- South Africa
- Description: This thesis presents a theoretical analysis of developments in the South African monetary banking sector and money market. In the first section, evolution of the political, social and economic environments over the past few decades are discussed to provide the reader with an idea of some factors responsible for the underdeveloped nature of this market. It has been argued that the domestic political and economic landscape is relatively stable. Nevertheless, factors such as Zimbabwe’s political and ensuing economic turmoil, coupled with numerous financial crises in other developing nations have had negative consequences on domestic financial market development and economic growth. The current state of monetary policy is also analysed, within the economic environment, and various policy considerations have been put forth concerning the inflation targeting policy. The thesis then goes on to scrutinise the statutory and institutional environments within which the monetary banking institutions operate. Recent changes in the regulations governing the operations of these institutions are identified, together with the consequences of such laws on banking institutions and possible amendments have been suggested. In particular, a system of Asset Based Reserve Requirements (ABRR) has been recommended, in place of the current cash reserve requirement, to ensure regulators create a level playing field in the financial sector. The system can also provide authorities with the necessary control required to direct funds to the most desirable sectors of the economy. Development of the interbank market and the effect of reduced banking competition on the efficacy of the South African Reserve Bank’s refinancing operations and inflation targeting policy are also considered. Finally, the thesis analyses some effects of financial development on the South African economy, and whether it is in the best interests of the country to pursue financial reforms with such vigour. While financial development may bring South Africa closer to international standards of best practice, the timing and extent of the reforms will be critical to guarantee success.
- Full Text:
- Date Issued: 2005
- Authors: Patel, Aadil Suleman
- Date: 2005
- Subjects: South African Reserve Bank , Banks and banking -- South Africa , Money market -- South Africa , Economic development -- South Africa , Monetary policy -- South Africa , South Africa -- Economic conditions , Financial institutions -- South Africa , Money -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:997 , http://hdl.handle.net/10962/d1002732 , South African Reserve Bank , Banks and banking -- South Africa , Money market -- South Africa , Economic development -- South Africa , Monetary policy -- South Africa , South Africa -- Economic conditions , Financial institutions -- South Africa , Money -- South Africa
- Description: This thesis presents a theoretical analysis of developments in the South African monetary banking sector and money market. In the first section, evolution of the political, social and economic environments over the past few decades are discussed to provide the reader with an idea of some factors responsible for the underdeveloped nature of this market. It has been argued that the domestic political and economic landscape is relatively stable. Nevertheless, factors such as Zimbabwe’s political and ensuing economic turmoil, coupled with numerous financial crises in other developing nations have had negative consequences on domestic financial market development and economic growth. The current state of monetary policy is also analysed, within the economic environment, and various policy considerations have been put forth concerning the inflation targeting policy. The thesis then goes on to scrutinise the statutory and institutional environments within which the monetary banking institutions operate. Recent changes in the regulations governing the operations of these institutions are identified, together with the consequences of such laws on banking institutions and possible amendments have been suggested. In particular, a system of Asset Based Reserve Requirements (ABRR) has been recommended, in place of the current cash reserve requirement, to ensure regulators create a level playing field in the financial sector. The system can also provide authorities with the necessary control required to direct funds to the most desirable sectors of the economy. Development of the interbank market and the effect of reduced banking competition on the efficacy of the South African Reserve Bank’s refinancing operations and inflation targeting policy are also considered. Finally, the thesis analyses some effects of financial development on the South African economy, and whether it is in the best interests of the country to pursue financial reforms with such vigour. While financial development may bring South Africa closer to international standards of best practice, the timing and extent of the reforms will be critical to guarantee success.
- Full Text:
- Date Issued: 2005
Trends in mobilisation and unionisation in South Africa and Germany: a comparative analysis
- Authors: Whiteley, Julianne Beverley
- Date: 2001
- Subjects: Industrial mobilization -- South Africa , Labor unions -- South Africa , Industrial mobilization -- Germany , Labor unions -- Germany , South Africa -- Economic conditions , Germany -- Economic conditions
- Language: English
- Type: Thesis , Masters , MSocSc
- Identifier: vital:3332 , http://hdl.handle.net/10962/d1003125 , Industrial mobilization -- South Africa , Labor unions -- South Africa , Industrial mobilization -- Germany , Labor unions -- Germany , South Africa -- Economic conditions , Germany -- Economic conditions
- Description: The purpose of this study is to investigate long-term trends in the union membership of South Africa and Germany, and to highlight trends in unionisation in both of these countries over a period of time. The long-term aspect of this study differentiates it from more detailed specific studies concerned with the individual fortunes of confederations or unions. The changing fortunes of trade unions have been associated with changes in work organisation, the influence of institutional pressures, or long term changes in the economic cycle. All these factors may, of course, shape and be shaped by each other. From a comparative perspective this dissertation determines whether the fortunes of unions are ultimately a product of the long waves of an economic cycle, or if other factors, such as variations in union/state relations, changes in the forms of work organisation and shifts in the employment market, impact upon union membership and mobilisation. It is hoped that the comparison of a transitional and an advanced economy may shed new light on the causes of union growth and decline, and the impact of specific social, legal and cultural variables thereon. The theoretical frame of reference for this study emerged from literature pertaining to union growth and decline. This literature discusses the historical, economic and sectoral challenges that confront the identity of unions and their ability to mobilise membership within contemporary labour markets. The entire study relies heavily on primary data collected from a wide range of sources in both countries. This method facilitates the comparison and cross-checking of information, which ensures a full and balanced study. A synthesis of the facts obtained led to certain suggestions relating to the areas in which both South African and German labour organisations could adapt their agenda and interests to the changing nature of the employment market in order to avert membership decline. The methodology of this research draws from Skopol’s work which argues that social studies ought to be grounded in historical experience in order to make sense out of specific social events that occur today. The research design utilises an initial comparative historical-political analysis of the emergence of unionism in South Africa and Germany, so as to establish those factors which have, in the past, affected union growth and decline in both countries. Thereafter, the impact of contemporary economic and sectoral trends that reoccur in the South African and German labour markets are examined and compared, in order to establish their influence on the growth or decline of union membership in both countries in the future. This study consists of four sections. The first section comprises a historical dimension that uses Valenzuela’s work relating to the political nature of labour movements to establish those factors which, in the past, have affected union growth and decline. This is done to determine whether the type of insertion of labour movements into historical national political processes, and the links formed between trade unions and political parties influences membership growth or decline. The following three sections deal with the present challenges that may affect the unions in the future. Section Two deals with factors of economic recession (namely, poverty and unemployment) which confront trade unions in the 1990s. Hyman’s Theory of Disaggregation is applied to determine if recessive socio-economic factors can account for the strength of decline of unions, as opposed to union mobilisation being purely linked to transitions between long waves of the economy as Kelly suggests. The relevance of these theories to the rise and decline of unionism in South Africa and Germany is compared and contrasted. The third section determines whether changes to more flexible forms of work organisation and shifts in the employment market can account for the contrasting strength of the South African labour movement and the decline of the German labour movement today. The way in which these issues impact negatively upon union strength in South Africa and Germany in the 1990s is compared and contrasted, again using Hyman’s Theory of Disaggregation. The final section establishes whether or not the roles adopted by the South African and German labour movements during their confrontation with labour repressive regimes impacts upon their ability to attract union membership today, despite the constraints imposed upon unions by prevailing economic and structural uncertainties. Therefore the historicity of the South African and German labour movements, (based upon the findings of the first part of this study), is referred back to. At the same time, the reactions of the South African and German labour movements to prevailing economic and structural realities, (as examined in the second part of this research) are re-examined. Three conclusions are reached. Firstly, regardless of their strengths or weaknesses, all labour organisations are capable of adjusting to the adverse changes taking place in contemporary employment markets if they prove willing to advance and defend the interests of all who work, including those in the informal sector. If unions continue to neglect the informal labour market, they run the risk of being transposed by social movements that are antagonistic to trade unions or new expressions of the workforce’s latent collectivism. Secondly, in successfully playing a social movement role that led to the downfall of Apartheid in 1994, the South African labour movement has evolved as an energetic body with a dimension of recumbent militancy that attempts to adapt its identity to the changing nature of the employment market. This enables the South African labour movement to continue to attract membership despite the prevailing economic uncertainties. In contrast, forced co-operation and consensus within the German industrial relations arena since World War Two has resulted in a less dynamic union movement that lacks initiative in adapting to the changing nature of the employment market. The result is a decline in unionism. Finally, the fortunes of unions are not, as Kelly suggests, purely a product of economic cycles. Political climates can also influence mobilisation, as has occurred in both South Africa and Germany. This implies that mobilisation is not only activated by the economic dissatisfaction of a union movement.
- Full Text:
- Date Issued: 2001
- Authors: Whiteley, Julianne Beverley
- Date: 2001
- Subjects: Industrial mobilization -- South Africa , Labor unions -- South Africa , Industrial mobilization -- Germany , Labor unions -- Germany , South Africa -- Economic conditions , Germany -- Economic conditions
- Language: English
- Type: Thesis , Masters , MSocSc
- Identifier: vital:3332 , http://hdl.handle.net/10962/d1003125 , Industrial mobilization -- South Africa , Labor unions -- South Africa , Industrial mobilization -- Germany , Labor unions -- Germany , South Africa -- Economic conditions , Germany -- Economic conditions
- Description: The purpose of this study is to investigate long-term trends in the union membership of South Africa and Germany, and to highlight trends in unionisation in both of these countries over a period of time. The long-term aspect of this study differentiates it from more detailed specific studies concerned with the individual fortunes of confederations or unions. The changing fortunes of trade unions have been associated with changes in work organisation, the influence of institutional pressures, or long term changes in the economic cycle. All these factors may, of course, shape and be shaped by each other. From a comparative perspective this dissertation determines whether the fortunes of unions are ultimately a product of the long waves of an economic cycle, or if other factors, such as variations in union/state relations, changes in the forms of work organisation and shifts in the employment market, impact upon union membership and mobilisation. It is hoped that the comparison of a transitional and an advanced economy may shed new light on the causes of union growth and decline, and the impact of specific social, legal and cultural variables thereon. The theoretical frame of reference for this study emerged from literature pertaining to union growth and decline. This literature discusses the historical, economic and sectoral challenges that confront the identity of unions and their ability to mobilise membership within contemporary labour markets. The entire study relies heavily on primary data collected from a wide range of sources in both countries. This method facilitates the comparison and cross-checking of information, which ensures a full and balanced study. A synthesis of the facts obtained led to certain suggestions relating to the areas in which both South African and German labour organisations could adapt their agenda and interests to the changing nature of the employment market in order to avert membership decline. The methodology of this research draws from Skopol’s work which argues that social studies ought to be grounded in historical experience in order to make sense out of specific social events that occur today. The research design utilises an initial comparative historical-political analysis of the emergence of unionism in South Africa and Germany, so as to establish those factors which have, in the past, affected union growth and decline in both countries. Thereafter, the impact of contemporary economic and sectoral trends that reoccur in the South African and German labour markets are examined and compared, in order to establish their influence on the growth or decline of union membership in both countries in the future. This study consists of four sections. The first section comprises a historical dimension that uses Valenzuela’s work relating to the political nature of labour movements to establish those factors which, in the past, have affected union growth and decline. This is done to determine whether the type of insertion of labour movements into historical national political processes, and the links formed between trade unions and political parties influences membership growth or decline. The following three sections deal with the present challenges that may affect the unions in the future. Section Two deals with factors of economic recession (namely, poverty and unemployment) which confront trade unions in the 1990s. Hyman’s Theory of Disaggregation is applied to determine if recessive socio-economic factors can account for the strength of decline of unions, as opposed to union mobilisation being purely linked to transitions between long waves of the economy as Kelly suggests. The relevance of these theories to the rise and decline of unionism in South Africa and Germany is compared and contrasted. The third section determines whether changes to more flexible forms of work organisation and shifts in the employment market can account for the contrasting strength of the South African labour movement and the decline of the German labour movement today. The way in which these issues impact negatively upon union strength in South Africa and Germany in the 1990s is compared and contrasted, again using Hyman’s Theory of Disaggregation. The final section establishes whether or not the roles adopted by the South African and German labour movements during their confrontation with labour repressive regimes impacts upon their ability to attract union membership today, despite the constraints imposed upon unions by prevailing economic and structural uncertainties. Therefore the historicity of the South African and German labour movements, (based upon the findings of the first part of this study), is referred back to. At the same time, the reactions of the South African and German labour movements to prevailing economic and structural realities, (as examined in the second part of this research) are re-examined. Three conclusions are reached. Firstly, regardless of their strengths or weaknesses, all labour organisations are capable of adjusting to the adverse changes taking place in contemporary employment markets if they prove willing to advance and defend the interests of all who work, including those in the informal sector. If unions continue to neglect the informal labour market, they run the risk of being transposed by social movements that are antagonistic to trade unions or new expressions of the workforce’s latent collectivism. Secondly, in successfully playing a social movement role that led to the downfall of Apartheid in 1994, the South African labour movement has evolved as an energetic body with a dimension of recumbent militancy that attempts to adapt its identity to the changing nature of the employment market. This enables the South African labour movement to continue to attract membership despite the prevailing economic uncertainties. In contrast, forced co-operation and consensus within the German industrial relations arena since World War Two has resulted in a less dynamic union movement that lacks initiative in adapting to the changing nature of the employment market. The result is a decline in unionism. Finally, the fortunes of unions are not, as Kelly suggests, purely a product of economic cycles. Political climates can also influence mobilisation, as has occurred in both South Africa and Germany. This implies that mobilisation is not only activated by the economic dissatisfaction of a union movement.
- Full Text:
- Date Issued: 2001
The role of export diversification on economic growth in South Africa: 1980 - 2010
- Authors: Mudenda, Caroline
- Date: 2012
- Subjects: Economic development -- South Africa , International trade , Exports -- South Africa , Capital movements -- South Africa , Human capital -- South Africa , Free trade -- South Africa , Foreign exchange -- South Africa , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11463 , http://hdl.handle.net/10353/d1007044 , Economic development -- South Africa , International trade , Exports -- South Africa , Capital movements -- South Africa , Human capital -- South Africa , Free trade -- South Africa , Foreign exchange -- South Africa , South Africa -- Economic conditions
- Description: This study examined the role of export diversification on economic growth in South Africa. The study used annual time series data for the period covering 1980 to 2010 and employed a Vector Error Correction Model to determine the effects of export diversification and possible factors that affect it on economic growth. Possible factors that affect export diversification considered as independent variables in this study include gross capital formation, human capital, real effective exchange rate and trade openness. Results of the study reveal that export diversification and trade openness are positively related to economic growth while real effective exchange rate, capital formation and human capital have negative long run relationships with economic growth. The study recommended the continual implementation of trade liberalisation by the South African government. The South African government is also encouraged to promote the production of a diversified export basket through subsidisation, promotion of innovation and production of new products.
- Full Text:
- Date Issued: 2012
- Authors: Mudenda, Caroline
- Date: 2012
- Subjects: Economic development -- South Africa , International trade , Exports -- South Africa , Capital movements -- South Africa , Human capital -- South Africa , Free trade -- South Africa , Foreign exchange -- South Africa , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11463 , http://hdl.handle.net/10353/d1007044 , Economic development -- South Africa , International trade , Exports -- South Africa , Capital movements -- South Africa , Human capital -- South Africa , Free trade -- South Africa , Foreign exchange -- South Africa , South Africa -- Economic conditions
- Description: This study examined the role of export diversification on economic growth in South Africa. The study used annual time series data for the period covering 1980 to 2010 and employed a Vector Error Correction Model to determine the effects of export diversification and possible factors that affect it on economic growth. Possible factors that affect export diversification considered as independent variables in this study include gross capital formation, human capital, real effective exchange rate and trade openness. Results of the study reveal that export diversification and trade openness are positively related to economic growth while real effective exchange rate, capital formation and human capital have negative long run relationships with economic growth. The study recommended the continual implementation of trade liberalisation by the South African government. The South African government is also encouraged to promote the production of a diversified export basket through subsidisation, promotion of innovation and production of new products.
- Full Text:
- Date Issued: 2012
An empirical analysis of the Austrian business cycle theory with respect to South Africa
- Authors: Nyika, Farai
- Date: 2012
- Subjects: Business cycles , Business cycles -- Austria -- Econometric models , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:9031 , http://hdl.handle.net/10948/d1020867
- Description: In 2008, the global economy went into recession. Millions of jobs were lost, confidence in the financial markets fell and billions of dollars were lost by investors. Prior to the onset of the recession, the major economies of the world (USA, and Western Europe) had experienced a period of economic boom and expansion. Austrian Business Cycle Theory proposes that the roots of the current financial crisis and recessions in general, are found the actions of central banks through credit expansion and manipulation of interest rates. Central banks manipulate interest rates causing them to fall below the natural level, leading to credit expansion and malinvestments. Austrian Business Cycle Theory is based in capital theory. Capital theory incorporates the elements of time and money and allows the setting of a microeconomic foundation. The theory recognises that investment is not an aggregate (as do Keynesians and Monetarists). Opposition to empirical testing by Austrian economists has meant that few statistical analyses of Austrian Business Cycle Theory have been carried out. The apprehension toward empirical testing of Austrian Business Cycle Theory stems from some Austrian economists who argue that human behaviour cannot be captured in statistical terms. Recently, some Austrian economists have begun to do empirical research Austrian Business Cycle Theory and the thesis adds to that growing field. The thesis tests empirically for ABCT in South Africa by using Vector Error Correction Model and Granger causality techniques and the results are as follows: The Vector Error Correction Model shows that any disequilibrium adjustment in the structural equations influences correction mostly through changes in Manufacturing. The disequilibrium adjustment process for Investment is also found to have statistical significance. The results propose that Investment in South Africa is not inert. The Granger causality tests show that credit expansion causes interest rates to be artificially lowered leading to mal-investments. The main policy recommendation is that business cycles can be prevented by not manipulating interest rates and by not increasing credit availability.
- Full Text:
- Date Issued: 2012
- Authors: Nyika, Farai
- Date: 2012
- Subjects: Business cycles , Business cycles -- Austria -- Econometric models , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:9031 , http://hdl.handle.net/10948/d1020867
- Description: In 2008, the global economy went into recession. Millions of jobs were lost, confidence in the financial markets fell and billions of dollars were lost by investors. Prior to the onset of the recession, the major economies of the world (USA, and Western Europe) had experienced a period of economic boom and expansion. Austrian Business Cycle Theory proposes that the roots of the current financial crisis and recessions in general, are found the actions of central banks through credit expansion and manipulation of interest rates. Central banks manipulate interest rates causing them to fall below the natural level, leading to credit expansion and malinvestments. Austrian Business Cycle Theory is based in capital theory. Capital theory incorporates the elements of time and money and allows the setting of a microeconomic foundation. The theory recognises that investment is not an aggregate (as do Keynesians and Monetarists). Opposition to empirical testing by Austrian economists has meant that few statistical analyses of Austrian Business Cycle Theory have been carried out. The apprehension toward empirical testing of Austrian Business Cycle Theory stems from some Austrian economists who argue that human behaviour cannot be captured in statistical terms. Recently, some Austrian economists have begun to do empirical research Austrian Business Cycle Theory and the thesis adds to that growing field. The thesis tests empirically for ABCT in South Africa by using Vector Error Correction Model and Granger causality techniques and the results are as follows: The Vector Error Correction Model shows that any disequilibrium adjustment in the structural equations influences correction mostly through changes in Manufacturing. The disequilibrium adjustment process for Investment is also found to have statistical significance. The results propose that Investment in South Africa is not inert. The Granger causality tests show that credit expansion causes interest rates to be artificially lowered leading to mal-investments. The main policy recommendation is that business cycles can be prevented by not manipulating interest rates and by not increasing credit availability.
- Full Text:
- Date Issued: 2012
The relationship between interest rates and inflation in South Africa : revisiting Fisher's hypothesis
- Mitchell-Innes, Henry Alexander
- Authors: Mitchell-Innes, Henry Alexander
- Date: 2006
- Subjects: Fisher effect (Economics) , Interest rates -- South Africa , Interest rates -- Effect of inflation -- South Africa , Inflation (Finance) -- South Africa , Monetary policy -- South Africa , Banks and banking, Central -- South Africa , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:991 , http://hdl.handle.net/10962/d1002726 , Fisher effect (Economics) , Interest rates -- South Africa , Interest rates -- Effect of inflation -- South Africa , Inflation (Finance) -- South Africa , Monetary policy -- South Africa , Banks and banking, Central -- South Africa , South Africa -- Economic conditions
- Description: This thesis investigates the relationship between expected inflation and nominal interest rates in South Africa and the extent to which the Fisher effect hypothesis holds. The hypothesis, proposed by Fisher (1930), that the nominal rate of interest should reflect movements in the expected rate of inflation has been the subject of much empirical research in many industrialised countries. This wealth of literature can be attributed to various factors including the pivotal role that the nominal rate of interest and, perhaps more importantly, the real rate of interest plays in the economy. The validity of the Fisher effect also has important implications for monetary policy and needs to be considered by central banks. Few studies have been conducted in South Africa to validate this important hypothesis. The analysis uses the 3-month bankers’ acceptance rate and the 10-year government bond rate to proxy both short- and long-term interest rates. The existence of a long-run unit proportional relationship between nominal interest rates and expected inflation is tested using Johansen’s cointegration test. The data is analysed for the period April 2000 to July 2005 as the research aims to establish whether the Fisher relationship holds within an inflation targeting monetary policy framework. The short-run Fisher effect is not empirically verified. This is due to the effects of the monetary policy transmission mechanism and implies that short-term nominal interest rates are a good indication of the stance of monetary policy. A long-run cointegrating relationship is established between long-term interest rates and expected inflation. The long-run adjustment is less than unity, which can be attributed to the credibility of the inflation-targeting framework.
- Full Text:
- Date Issued: 2006
- Authors: Mitchell-Innes, Henry Alexander
- Date: 2006
- Subjects: Fisher effect (Economics) , Interest rates -- South Africa , Interest rates -- Effect of inflation -- South Africa , Inflation (Finance) -- South Africa , Monetary policy -- South Africa , Banks and banking, Central -- South Africa , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:991 , http://hdl.handle.net/10962/d1002726 , Fisher effect (Economics) , Interest rates -- South Africa , Interest rates -- Effect of inflation -- South Africa , Inflation (Finance) -- South Africa , Monetary policy -- South Africa , Banks and banking, Central -- South Africa , South Africa -- Economic conditions
- Description: This thesis investigates the relationship between expected inflation and nominal interest rates in South Africa and the extent to which the Fisher effect hypothesis holds. The hypothesis, proposed by Fisher (1930), that the nominal rate of interest should reflect movements in the expected rate of inflation has been the subject of much empirical research in many industrialised countries. This wealth of literature can be attributed to various factors including the pivotal role that the nominal rate of interest and, perhaps more importantly, the real rate of interest plays in the economy. The validity of the Fisher effect also has important implications for monetary policy and needs to be considered by central banks. Few studies have been conducted in South Africa to validate this important hypothesis. The analysis uses the 3-month bankers’ acceptance rate and the 10-year government bond rate to proxy both short- and long-term interest rates. The existence of a long-run unit proportional relationship between nominal interest rates and expected inflation is tested using Johansen’s cointegration test. The data is analysed for the period April 2000 to July 2005 as the research aims to establish whether the Fisher relationship holds within an inflation targeting monetary policy framework. The short-run Fisher effect is not empirically verified. This is due to the effects of the monetary policy transmission mechanism and implies that short-term nominal interest rates are a good indication of the stance of monetary policy. A long-run cointegrating relationship is established between long-term interest rates and expected inflation. The long-run adjustment is less than unity, which can be attributed to the credibility of the inflation-targeting framework.
- Full Text:
- Date Issued: 2006
Interest rate behaviour in a more transparent South African monetary policy environment
- Authors: Ballim, Goolam Hoosen
- Date: 2005
- Subjects: South African Reserve Bank , Monetary policy -- South Africa , Banks and banking -- South Africa , Interest rates -- South Africa , South Africa -- Economic policy , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1034 , http://hdl.handle.net/10962/d1004462 , South African Reserve Bank , Monetary policy -- South Africa , Banks and banking -- South Africa , Interest rates -- South Africa , South Africa -- Economic policy , South Africa -- Economic conditions
- Description: South Africa introduced inflation targeting as a monetary policy framework in 2000. This marked a sizable shift in monetary policy management from the previous "eclectic" approach and the explicit focus on M3 money supply before that. The study appraises the effectiveness of monetary policy under this new dispensation. However, the analysis does not centre on inflation outcomes, which can be a measure of effectiveness because they are the overriding objective of the South African Reserve Bank in effect, it is possible to have a target-friendly inflation rate for a length of time despite monetary policy that is ambiguous and encourages unpredictability in market interest rates. However, persistent policy opaqueness can, over time, damage a favourable inflation scenario. For instance, if the public is unsure about the Reserve Bank's desired inflation target, price setting in the wage and goods markets may eventually produce an inflation outcome that is higher than the Bank may have intended. Rather, this study adjudicates the effectiveness of monetary policy within the context of policy transparency, which is an intrinsic part of the inflation targeting framework. The study looks at the extent to which monetary policy transparency has enhanced both the anticipatory nature of the market's response to policy actions and the force that policy has on all interest rates in the financial system, particularly long-term rates. These concepts are important because through the transmission mechanism of monetary policy, the more deft market participants are at anticipating future Reserve Bank policy the greater the Bank's ability to steady the economy before the actual policy event. With the aid of regression models to estimate the response of market rates to policy changes, the results show that there is significant movement in market rates in anticipation of policy action, rather than on the day of the event or the day after. Indeed, the estimates for market rates movement on the day of and even the day after the policy action are generally minute. For instance, the R157 long-term government bond yield changes by a significant 41 basis points in response to a one percentage point change in the Reserve Bank's benchmark repo rate in the period between the last policy action and the day preceding the current action. In contrast, the R157 bond yield changes by an insignificant 2 basis points on the day of the current repo rate change and about 1 basis point the day after the current change. The results point to a robust relationship between policy transparency and the market's ability to foresee rate action. If this were not the case, it is likely that there would be persistent market surprise and, hence, noticeable movement in interest rates on the day of the rate action and perhaps even the day after. Another important observation is that monetary policy impacts significantly on both short- and long-term market rates. Again, certifying the robustness of monetary policy under the inflation targeting regime
- Full Text:
- Date Issued: 2005
- Authors: Ballim, Goolam Hoosen
- Date: 2005
- Subjects: South African Reserve Bank , Monetary policy -- South Africa , Banks and banking -- South Africa , Interest rates -- South Africa , South Africa -- Economic policy , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1034 , http://hdl.handle.net/10962/d1004462 , South African Reserve Bank , Monetary policy -- South Africa , Banks and banking -- South Africa , Interest rates -- South Africa , South Africa -- Economic policy , South Africa -- Economic conditions
- Description: South Africa introduced inflation targeting as a monetary policy framework in 2000. This marked a sizable shift in monetary policy management from the previous "eclectic" approach and the explicit focus on M3 money supply before that. The study appraises the effectiveness of monetary policy under this new dispensation. However, the analysis does not centre on inflation outcomes, which can be a measure of effectiveness because they are the overriding objective of the South African Reserve Bank in effect, it is possible to have a target-friendly inflation rate for a length of time despite monetary policy that is ambiguous and encourages unpredictability in market interest rates. However, persistent policy opaqueness can, over time, damage a favourable inflation scenario. For instance, if the public is unsure about the Reserve Bank's desired inflation target, price setting in the wage and goods markets may eventually produce an inflation outcome that is higher than the Bank may have intended. Rather, this study adjudicates the effectiveness of monetary policy within the context of policy transparency, which is an intrinsic part of the inflation targeting framework. The study looks at the extent to which monetary policy transparency has enhanced both the anticipatory nature of the market's response to policy actions and the force that policy has on all interest rates in the financial system, particularly long-term rates. These concepts are important because through the transmission mechanism of monetary policy, the more deft market participants are at anticipating future Reserve Bank policy the greater the Bank's ability to steady the economy before the actual policy event. With the aid of regression models to estimate the response of market rates to policy changes, the results show that there is significant movement in market rates in anticipation of policy action, rather than on the day of the event or the day after. Indeed, the estimates for market rates movement on the day of and even the day after the policy action are generally minute. For instance, the R157 long-term government bond yield changes by a significant 41 basis points in response to a one percentage point change in the Reserve Bank's benchmark repo rate in the period between the last policy action and the day preceding the current action. In contrast, the R157 bond yield changes by an insignificant 2 basis points on the day of the current repo rate change and about 1 basis point the day after the current change. The results point to a robust relationship between policy transparency and the market's ability to foresee rate action. If this were not the case, it is likely that there would be persistent market surprise and, hence, noticeable movement in interest rates on the day of the rate action and perhaps even the day after. Another important observation is that monetary policy impacts significantly on both short- and long-term market rates. Again, certifying the robustness of monetary policy under the inflation targeting regime
- Full Text:
- Date Issued: 2005
Central Bank policy and the exchange rate under an inflation targeting regime: a case dtudy of South Africa
- Authors: Gonzo, Prosper
- Date: 2013
- Subjects: Foreign exchange rates -- Government policy -- South Africa , Inflation (Finance) -- South Africa , Monetary policy -- South Africa , Banks and banking, Central -- South Africa , South Africa -- Economic conditions , Banking industry -- Finance -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11476 , http://hdl.handle.net/10353/d1015043 , Foreign exchange rates -- Government policy -- South Africa , Inflation (Finance) -- South Africa , Monetary policy -- South Africa , Banks and banking, Central -- South Africa , South Africa -- Economic conditions , Banking industry -- Finance -- South Africa
- Description: This work examined the optimality of the inclusion of the exchange rate in the reaction function of the Central Bank in an inflation targeting framework. The study attempts to answer the question whether the exchange rate should have an independent role in an open economy Taylor-type rule. To this end, a Taylor-type rule is incorporating the exchange rate is estimated by the cointegration and vector error correction modeling (VECM) using quarterly data for the period of 1995 to 2009. The empirical studies point out the importance of the exchange rates in explaining and forecasting the behaviour of the South African Reserve Bank monetary policy control variable.
- Full Text:
- Date Issued: 2013
- Authors: Gonzo, Prosper
- Date: 2013
- Subjects: Foreign exchange rates -- Government policy -- South Africa , Inflation (Finance) -- South Africa , Monetary policy -- South Africa , Banks and banking, Central -- South Africa , South Africa -- Economic conditions , Banking industry -- Finance -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11476 , http://hdl.handle.net/10353/d1015043 , Foreign exchange rates -- Government policy -- South Africa , Inflation (Finance) -- South Africa , Monetary policy -- South Africa , Banks and banking, Central -- South Africa , South Africa -- Economic conditions , Banking industry -- Finance -- South Africa
- Description: This work examined the optimality of the inclusion of the exchange rate in the reaction function of the Central Bank in an inflation targeting framework. The study attempts to answer the question whether the exchange rate should have an independent role in an open economy Taylor-type rule. To this end, a Taylor-type rule is incorporating the exchange rate is estimated by the cointegration and vector error correction modeling (VECM) using quarterly data for the period of 1995 to 2009. The empirical studies point out the importance of the exchange rates in explaining and forecasting the behaviour of the South African Reserve Bank monetary policy control variable.
- Full Text:
- Date Issued: 2013
The role of small, medium and micro-sized enterprises (smm's) in the socio-economic development of Buffalo City
- Authors: Sinxoto, Nomhle Beauty
- Date: 2007
- Subjects: Small business -- South Africa -- Buffalo City , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:8738 , http://hdl.handle.net/10948/793 , Small business -- South Africa -- Buffalo City , South Africa -- Economic conditions
- Description: Thirteen years in the new democratic South Africa, South Africa is still faced with socio-economic problems such as high rates of unemployment, shortage of housing, crime and HIV/Aids. Buffalo city falls within the Amathole District Municipality (ADM). ADM population is estimated at + 1, 67 million, being predominantly rural and living in low socio-economic conditions. The demographic trends of ADM population depict high poverty, illiteracy and unemployment rates, rendering them prone to high morbidity and mortality (www.amathole.gov.za, 2007). The aim of this research was to assess the role of the SMMEs in the socio-economic development of Buffalo City. This study is based on exploratory quantitative and qualitative research methodologies. Using a convenience sampling technique structured questionnaires were used to collect data amongst 28 SMMEs in Buffalo City. The findings of this study suggest that SMMEs play a vital role in the socio-economic development of Buffalo City. The SMMEs create employment and incomes; provide human capital investment in form of training programs and HIV/Aids programs; make donations to community structures; give sponsors to various sports clubs and food to the homeless. Finally SMMEs contribute towards tax revenues that in turn help reduce poverty and redistribute wealth. However, SMMEs in Buffalo City face a number of constraints, namely, lack of access to funding, lack of operating space, and high cost of property to lease and difficulty in finding trained competent staff. Further, the perceptions of the SMMEs about the adjudication of tenders was some biasness in the adjudication of tender in favour of those who were close to the public officials. There was no accountability and professionalism amongst the adjudicating officials. Finally the government was not doing enough to encourage SMME development in Buffalo City. In view of the socio-economic benefits of the SMMEs in Buffalo city, it is recommended that support programmes to the SMMEs should be enhanced. On the basis of the findings in this study, it is suggested that assistance to the SMMEs should go beyond institutional support such as Ntsika, Khula, DTI and/or SEDA but should be targeted to funding opportunities for the SMMEs. Commercial banks should be involved in ensuring that SMMEs obtain access to funding. Infrastructural facilities such as affordable business premises should be provided for the SMMEs. Affordable premises will reduce the overhead costs of the SMMEs and in turn increase the profits of these SMMEs. Increase the profits of the SMMEs will ensure the survival of the SMMEs and will in turn contribute towards the upliftment of the socio-economic status of the people who would have otherwise been unemployed, destitute and poor.
- Full Text:
- Date Issued: 2007
- Authors: Sinxoto, Nomhle Beauty
- Date: 2007
- Subjects: Small business -- South Africa -- Buffalo City , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:8738 , http://hdl.handle.net/10948/793 , Small business -- South Africa -- Buffalo City , South Africa -- Economic conditions
- Description: Thirteen years in the new democratic South Africa, South Africa is still faced with socio-economic problems such as high rates of unemployment, shortage of housing, crime and HIV/Aids. Buffalo city falls within the Amathole District Municipality (ADM). ADM population is estimated at + 1, 67 million, being predominantly rural and living in low socio-economic conditions. The demographic trends of ADM population depict high poverty, illiteracy and unemployment rates, rendering them prone to high morbidity and mortality (www.amathole.gov.za, 2007). The aim of this research was to assess the role of the SMMEs in the socio-economic development of Buffalo City. This study is based on exploratory quantitative and qualitative research methodologies. Using a convenience sampling technique structured questionnaires were used to collect data amongst 28 SMMEs in Buffalo City. The findings of this study suggest that SMMEs play a vital role in the socio-economic development of Buffalo City. The SMMEs create employment and incomes; provide human capital investment in form of training programs and HIV/Aids programs; make donations to community structures; give sponsors to various sports clubs and food to the homeless. Finally SMMEs contribute towards tax revenues that in turn help reduce poverty and redistribute wealth. However, SMMEs in Buffalo City face a number of constraints, namely, lack of access to funding, lack of operating space, and high cost of property to lease and difficulty in finding trained competent staff. Further, the perceptions of the SMMEs about the adjudication of tenders was some biasness in the adjudication of tender in favour of those who were close to the public officials. There was no accountability and professionalism amongst the adjudicating officials. Finally the government was not doing enough to encourage SMME development in Buffalo City. In view of the socio-economic benefits of the SMMEs in Buffalo city, it is recommended that support programmes to the SMMEs should be enhanced. On the basis of the findings in this study, it is suggested that assistance to the SMMEs should go beyond institutional support such as Ntsika, Khula, DTI and/or SEDA but should be targeted to funding opportunities for the SMMEs. Commercial banks should be involved in ensuring that SMMEs obtain access to funding. Infrastructural facilities such as affordable business premises should be provided for the SMMEs. Affordable premises will reduce the overhead costs of the SMMEs and in turn increase the profits of these SMMEs. Increase the profits of the SMMEs will ensure the survival of the SMMEs and will in turn contribute towards the upliftment of the socio-economic status of the people who would have otherwise been unemployed, destitute and poor.
- Full Text:
- Date Issued: 2007
The Grameen Bank model of microcredit and its relevance for South Africa
- Authors: Akpan, Iniobong Wilson
- Date: 2005
- Subjects: Grameen Bank , Microfinance -- South Africa , Microfinance -- Bangladesh , Credit -- Management , Risk management , Poor -- Finance, Personal , South Africa -- Economic conditions , Bangladesh -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:980 , http://hdl.handle.net/10962/d1002714 , Grameen Bank , Microfinance -- South Africa , Microfinance -- Bangladesh , Credit -- Management , Risk management , Poor -- Finance, Personal , South Africa -- Economic conditions , Bangladesh -- Economic conditions
- Description: Among the reasons for financial exclusion is the fact that the poor, being largely illiterate and unemployed, are traditionally perceived as ‘bad credit risks’. This is the dominant perception of the poor in the formal credit markets – a perception that also exists in the microcredit sector. In other words, while information asymmetry is a recognized problem in lender-borrower relationships, lenders consider the problem particularly severe when they contemplate doing business with the poor. A contrasting paradigm, such as the one adopted by Grameen Bank of Bangladesh, views the poor as possessing economic potentials that have not been tapped – that is, as ‘good credit risks’. Grameen Bank’s microcredit features appear to have successfully mitigated the problems of information asymmetry and, to a large extent, made it possible for the poor to access microenterprise credit. Using the Grameen Bank model as a benchmark, this study examined the lending features of private sector microlenders in South Africa and those of KhulaStart (credit) scheme. The aim was to identify how the lending features affect microenterprise credit access. Primary data were obtained through interviews, while relevant secondary data were also used in the study. A key finding of the study was that while the Khulastart scheme was, like Grameencredit, targeted at the poor, the method of its delivery appeared diluted or unduly influenced by the conventional (private sector) paradigm that pre-classifies people as ‘good’ or ‘bad’ credit risks. As a result, the scheme was not robust enough to support microenterprise credit access. This has consequences for job-creation and poverty reduction. Based on the findings, the study maintains that a realistic broadening of microenterprise credit access will not occur unless there is a fundamental paradigm shift in microcredit practices, and unless measures designed to mitigate information asymmetries are sensitive to the historical, economic and sociocultural realities of the South African poor.
- Full Text:
- Date Issued: 2005
- Authors: Akpan, Iniobong Wilson
- Date: 2005
- Subjects: Grameen Bank , Microfinance -- South Africa , Microfinance -- Bangladesh , Credit -- Management , Risk management , Poor -- Finance, Personal , South Africa -- Economic conditions , Bangladesh -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:980 , http://hdl.handle.net/10962/d1002714 , Grameen Bank , Microfinance -- South Africa , Microfinance -- Bangladesh , Credit -- Management , Risk management , Poor -- Finance, Personal , South Africa -- Economic conditions , Bangladesh -- Economic conditions
- Description: Among the reasons for financial exclusion is the fact that the poor, being largely illiterate and unemployed, are traditionally perceived as ‘bad credit risks’. This is the dominant perception of the poor in the formal credit markets – a perception that also exists in the microcredit sector. In other words, while information asymmetry is a recognized problem in lender-borrower relationships, lenders consider the problem particularly severe when they contemplate doing business with the poor. A contrasting paradigm, such as the one adopted by Grameen Bank of Bangladesh, views the poor as possessing economic potentials that have not been tapped – that is, as ‘good credit risks’. Grameen Bank’s microcredit features appear to have successfully mitigated the problems of information asymmetry and, to a large extent, made it possible for the poor to access microenterprise credit. Using the Grameen Bank model as a benchmark, this study examined the lending features of private sector microlenders in South Africa and those of KhulaStart (credit) scheme. The aim was to identify how the lending features affect microenterprise credit access. Primary data were obtained through interviews, while relevant secondary data were also used in the study. A key finding of the study was that while the Khulastart scheme was, like Grameencredit, targeted at the poor, the method of its delivery appeared diluted or unduly influenced by the conventional (private sector) paradigm that pre-classifies people as ‘good’ or ‘bad’ credit risks. As a result, the scheme was not robust enough to support microenterprise credit access. This has consequences for job-creation and poverty reduction. Based on the findings, the study maintains that a realistic broadening of microenterprise credit access will not occur unless there is a fundamental paradigm shift in microcredit practices, and unless measures designed to mitigate information asymmetries are sensitive to the historical, economic and sociocultural realities of the South African poor.
- Full Text:
- Date Issued: 2005