Elasticity of the South African economy towards portfolio investments in BRICS countries
- Authors: Taonezvi, Lovemore
- Date: 2019
- Subjects: Economic development -- South Africa
- Language: English
- Type: Thesis , Doctoral , PhD
- Identifier: http://hdl.handle.net/10948/44537 , vital:38141
- Description: The emerging economies of Brazil, Russia, India, and China (BRIC) have been experiencing high growth rates since the turn of the millennium, whereas economic growth has been elusive in South Africa. As the newest member of BRICS, South Africa is expected to economically benefit through, amongst others, increases in capital flows, foreign investments by local firms, and increases in trade. Such benefits are anticipated to propel the country’s economic growth, thereby helping it to tackle its chronic problems of high unemployment, poverty, and economic inequality. The inclusion of South Africa in BRICS has, however, been viewed by critics as erroneous, since the country has, inter alia, poor economic growth; a small economy and population; and political instability. While foreign portfolio investment (FPI) inflows to South Africa have surged in recent years, economic growth has remained lacklustre. These flows have also faced sudden reversals, especially during the financial crisis of 2007-2009. With the potential to leverage its growth from intra-BRICS FPI inflows, it becomes of paramount significance for policymakers to have knowledge of the South African economy’s responsiveness to such inflows. With a theoretical framework based on the endogenous growth model, an augmented Cobb-Douglas production function was extended in this thesis in order to study the relationship between BRICS growth and intra-BRICS FPI in a dynamic panel data generalised method of moments (GMM) context. Similarly, the South African economy’s elasticity towards intraBRICS FPI was estimated. Vector autoregressive (VAR) analysis was used to evaluate the responsiveness of South Africa’s economy to an innovative shock to intra-BRICS FPI. Annual and quarterly data for the period 2000-2016 were used in panel data and VAR analysis, respectively. It was found that intra-BRICS FPI flows have a positive and statistically significant relationship with BRICS growth, while the elasticity of the South African economy to these flows is estimated at 0.007. Additionally, the efficiency and accessibility dimensions of financial market development do not assist FPI in promoting growth in BRICS, while financial market depth does. South Africa’s BRICS membership has a positive effect on its own growth, while for other BRICS nations, this membership is negative and insignificant. Credit rating downgrades have a negative and insignificant impact on economic growth, while the negative impact for inflation, government expenditure, and total labour employment is significant. Conversely, gross capital formation and trade openness have a positive and significant relationship with BRICS growth. The study also determined that a unit shock on intra-BRICS FPI resulted in negative fluctuations of South Africa’s economy within the first eight quarters before being positive and mostly constant thereafter. By supplementing domestic savings and facilitating the international integration of domestic financial markets, FPI promotes growth in BRICS. The short-term, ease of reversibility, and speculative nature of FPI are amongst some of the reasons for its destabilising effect on South Africa’s economy. Furthermore, inflation is a key determinant of FPI inflows to South Africa. Additional BRIC cooperation in FPI and trade; increased investments in domestic capital; reductions of inflation and corruption; investments in education and skills development; and stock market reforms are some of the recommendations for BRIC, and South Africa in particular. South Africa can consider prudential use of a mix of capital account controls, as well as fiscal and monetary policies to cushion its economy from FPI shocks in the short- to medium-term.
- Full Text:
- Date Issued: 2019
- Authors: Taonezvi, Lovemore
- Date: 2019
- Subjects: Economic development -- South Africa
- Language: English
- Type: Thesis , Doctoral , PhD
- Identifier: http://hdl.handle.net/10948/44537 , vital:38141
- Description: The emerging economies of Brazil, Russia, India, and China (BRIC) have been experiencing high growth rates since the turn of the millennium, whereas economic growth has been elusive in South Africa. As the newest member of BRICS, South Africa is expected to economically benefit through, amongst others, increases in capital flows, foreign investments by local firms, and increases in trade. Such benefits are anticipated to propel the country’s economic growth, thereby helping it to tackle its chronic problems of high unemployment, poverty, and economic inequality. The inclusion of South Africa in BRICS has, however, been viewed by critics as erroneous, since the country has, inter alia, poor economic growth; a small economy and population; and political instability. While foreign portfolio investment (FPI) inflows to South Africa have surged in recent years, economic growth has remained lacklustre. These flows have also faced sudden reversals, especially during the financial crisis of 2007-2009. With the potential to leverage its growth from intra-BRICS FPI inflows, it becomes of paramount significance for policymakers to have knowledge of the South African economy’s responsiveness to such inflows. With a theoretical framework based on the endogenous growth model, an augmented Cobb-Douglas production function was extended in this thesis in order to study the relationship between BRICS growth and intra-BRICS FPI in a dynamic panel data generalised method of moments (GMM) context. Similarly, the South African economy’s elasticity towards intraBRICS FPI was estimated. Vector autoregressive (VAR) analysis was used to evaluate the responsiveness of South Africa’s economy to an innovative shock to intra-BRICS FPI. Annual and quarterly data for the period 2000-2016 were used in panel data and VAR analysis, respectively. It was found that intra-BRICS FPI flows have a positive and statistically significant relationship with BRICS growth, while the elasticity of the South African economy to these flows is estimated at 0.007. Additionally, the efficiency and accessibility dimensions of financial market development do not assist FPI in promoting growth in BRICS, while financial market depth does. South Africa’s BRICS membership has a positive effect on its own growth, while for other BRICS nations, this membership is negative and insignificant. Credit rating downgrades have a negative and insignificant impact on economic growth, while the negative impact for inflation, government expenditure, and total labour employment is significant. Conversely, gross capital formation and trade openness have a positive and significant relationship with BRICS growth. The study also determined that a unit shock on intra-BRICS FPI resulted in negative fluctuations of South Africa’s economy within the first eight quarters before being positive and mostly constant thereafter. By supplementing domestic savings and facilitating the international integration of domestic financial markets, FPI promotes growth in BRICS. The short-term, ease of reversibility, and speculative nature of FPI are amongst some of the reasons for its destabilising effect on South Africa’s economy. Furthermore, inflation is a key determinant of FPI inflows to South Africa. Additional BRIC cooperation in FPI and trade; increased investments in domestic capital; reductions of inflation and corruption; investments in education and skills development; and stock market reforms are some of the recommendations for BRIC, and South Africa in particular. South Africa can consider prudential use of a mix of capital account controls, as well as fiscal and monetary policies to cushion its economy from FPI shocks in the short- to medium-term.
- Full Text:
- Date Issued: 2019
Financial development and economic growth in South Africa
- Authors: Mhango, Joseph
- Date: 2019
- Subjects: Finance -- South Africa , Economic development -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10948/41117 , vital:36358
- Description: Since the identification of financial development for economic growth by Schumpeter (1911), the importance of financial development has been emphasised. However, the nature of the relationship is unclear, whether financial development is demand-following, supply-leading, feedback relationship or no causal relationship with economic growth. The revolution of the relationship between finance and economic growth has left a void of the exact nature of the relationship and importance of financial development in literature and empirical evidence. In addition, the variation of the nexus between financial development and economic growth in developed and developing countries has left policy makers uncertain on the exact policy to employ. In awe of this, after the discovery of diamonds and gold in South Africa, policy makers have attempted to improve the access, depth and efficiency of the finance sector to spur economic growth. However, South Africa has been subject to apartheid, low economic growth, global financial crises, international sanctions, unemployment and other challenges to the finance sector. In light of this, this study aims to empirically investigate the relationship between financial development and economic growth in South Africa. The study used the recently developed financial institutions index and financial markets index by the International Monetary Fund to represent bank-based and market-based financial development. This study utilises annual data over the period 1980 to 2014. The study applied the Autoregressive Disturbed Lag (ARDL) bounds testing, Vector Error Correction Model (VECM) Granger – Causality, Impulse Response Function (IRF) and Variance Decomposition to uncover the relationship between financial development and economic growth in South Africa. The ARDL was selected over the Johansen Cointegration because the variables can be I (1) or I(0) before carrying out the bounds testing. It is more suitable to a small sample size. It uses a reduced form equation, and it provides unbiased estimates of the long-run model. Lastly, it can be transformed into an error correction model. The VECM Granger-Causality was chosen because it represents the short-run and long-run causalities. After selection of the optimal lag, the ARDL bounds testing shows that economic growth, bank-based financial development, market-based financial development, savings and investment have a long-run relationship in South Africa. However, after estimation of the coefficients, financial development has a positive relationship with economic growth, but insignificant and only savings and investment were significant in determining long-run economic growth. The VECM granger-causality results show that financial development (bank and market), savings and investment granger cause economic growth in the long-run. While, economic growth, market-based financial development, savings and investment granger cause bank-based financial development in the long-run. Therefore, a feedback relationship exists between bank-based financial development and economic growth in the long-run. In the short-run, it was clear that bank-based financial development positively causes economic growth. The causality results show that a feedback relationship exists between bank-based financial development and economic growth in South Africa in the short-run as well. The IRF shows that a shock in economic growth negatively and positively affects bank based and market-based financial development respectively. A shock in bank-based financial development causes a positive effect on economic growth. Lastly, a shock in market-based financial development causes a positive effect on economic growth. Whilst, the variance decomposition shows that fluctuations in economic growth are increasingly explained by financial development (bank and market). While, fluctuations in bank-based financial development are increasingly explained by market-based financial development, savings and investment. The fluctuations in market-based financial development are increasingly caused by economic growth, savings and investment. It is recommended that policy makers utilise bank-based financial development for economic growth and reduced unemployment, to increase savings for long-run economic growth. Furthermore, challenges against market-based financial development should be reduced in order to create a positive relationship between investment and economic growth in the long run.
- Full Text:
- Date Issued: 2019
- Authors: Mhango, Joseph
- Date: 2019
- Subjects: Finance -- South Africa , Economic development -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10948/41117 , vital:36358
- Description: Since the identification of financial development for economic growth by Schumpeter (1911), the importance of financial development has been emphasised. However, the nature of the relationship is unclear, whether financial development is demand-following, supply-leading, feedback relationship or no causal relationship with economic growth. The revolution of the relationship between finance and economic growth has left a void of the exact nature of the relationship and importance of financial development in literature and empirical evidence. In addition, the variation of the nexus between financial development and economic growth in developed and developing countries has left policy makers uncertain on the exact policy to employ. In awe of this, after the discovery of diamonds and gold in South Africa, policy makers have attempted to improve the access, depth and efficiency of the finance sector to spur economic growth. However, South Africa has been subject to apartheid, low economic growth, global financial crises, international sanctions, unemployment and other challenges to the finance sector. In light of this, this study aims to empirically investigate the relationship between financial development and economic growth in South Africa. The study used the recently developed financial institutions index and financial markets index by the International Monetary Fund to represent bank-based and market-based financial development. This study utilises annual data over the period 1980 to 2014. The study applied the Autoregressive Disturbed Lag (ARDL) bounds testing, Vector Error Correction Model (VECM) Granger – Causality, Impulse Response Function (IRF) and Variance Decomposition to uncover the relationship between financial development and economic growth in South Africa. The ARDL was selected over the Johansen Cointegration because the variables can be I (1) or I(0) before carrying out the bounds testing. It is more suitable to a small sample size. It uses a reduced form equation, and it provides unbiased estimates of the long-run model. Lastly, it can be transformed into an error correction model. The VECM Granger-Causality was chosen because it represents the short-run and long-run causalities. After selection of the optimal lag, the ARDL bounds testing shows that economic growth, bank-based financial development, market-based financial development, savings and investment have a long-run relationship in South Africa. However, after estimation of the coefficients, financial development has a positive relationship with economic growth, but insignificant and only savings and investment were significant in determining long-run economic growth. The VECM granger-causality results show that financial development (bank and market), savings and investment granger cause economic growth in the long-run. While, economic growth, market-based financial development, savings and investment granger cause bank-based financial development in the long-run. Therefore, a feedback relationship exists between bank-based financial development and economic growth in the long-run. In the short-run, it was clear that bank-based financial development positively causes economic growth. The causality results show that a feedback relationship exists between bank-based financial development and economic growth in South Africa in the short-run as well. The IRF shows that a shock in economic growth negatively and positively affects bank based and market-based financial development respectively. A shock in bank-based financial development causes a positive effect on economic growth. Lastly, a shock in market-based financial development causes a positive effect on economic growth. Whilst, the variance decomposition shows that fluctuations in economic growth are increasingly explained by financial development (bank and market). While, fluctuations in bank-based financial development are increasingly explained by market-based financial development, savings and investment. The fluctuations in market-based financial development are increasingly caused by economic growth, savings and investment. It is recommended that policy makers utilise bank-based financial development for economic growth and reduced unemployment, to increase savings for long-run economic growth. Furthermore, challenges against market-based financial development should be reduced in order to create a positive relationship between investment and economic growth in the long run.
- Full Text:
- Date Issued: 2019
National debt and sovereign credit ratings
- Authors: Orsmond, Daniel
- Date: 2019
- Subjects: Debts, Public -- South Africa , Credit ratings -- South Africa , Gross domestic product -- Africa , Inflation (Finance) -- Africa , Economic development -- South Africa , Economic history , Macroeconomics , Moody's Investors Service , Standard and Poor's Ratings Services , Fitch Ratings (Firm)
- Language: English
- Type: text , Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/115160 , vital:34083
- Description: In recent years South Africa’s foreign and local denominated debt has been downgraded by the three major global credit agencies, Moody’s, Standard and Poor’s (S&P) and Fitch. The foreign debt has been downgraded to speculative grade or ‘junk’ status by all three agencies. Local debt has been downgraded to ‘junk’ by S& P and Fitch, but Moody’s currently maintains local debt at the lowest level of investment grade. Many economists believe that South Africa’s rapidly rising debt levels are the major contributor to the decisions to downgrade South Africa’s debt. Yet many countries with higher levels of debt continue to be rated investment grade. Clearly, factors other than the actual level of debt are important in determining the credit rating agencies’ rating decisions. The literature suggests several variables are important in determining a country’s sovereign credit rating. These variables include not just the ratio of government debt to gross domestic product, but also a country’s real growth rate, inflation, gross domestic product per capita, external balance to gross domestic product, default history and the level of economic development. In examining the proposition that it is not a country’s debt level per se that matters, but rather the dynamics surrounding that debt, this research also includes three additional variables that are not usually mentioned in the literature. These, based on van der Merwe (1993), are the real GDP growth rate less the real interest rate, the ratio of the fiscal balance to GDP, and the ratio of government interest payments to government expenditure. The purpose of this addition is to examine whether rather than a country’s debt level (debt to GDP variable), it is the sustainability of a country’s ability to service debt, as indicated by the three additional ‘debt dynamic’ variables, that is most important when determining sovereign credit ratings. Panel data analysis for a sample of 12 countries over the period 1996Q1 to 2017Q4 indicates that of the broad macroeconomic variables mentioned in the literature, government debt to GDP, the real growth rate, inflation (cpi), and default history are all statistically significant, with the coefficients having the correct signs in all specification of the model, with the exception of the real growth rate in Models 2 and 3. With regards to the debt dynamic variables, the real growth rate less the real interest rate, as well as the interest payments to government expenditure variables are found to be significant determinants of sovereign credit ratings. Thus, the findings of the research suggest that the level of debt alone is an inadequate determinant of sovereign credit ratings. The dynamics of debt along with other macroeconomic variables are also important determinants of a country’s credit rating. Concerning policy recommendations, it is evident that debt sustainability is important for sovereign credit ratings. Evidence of the direct importance of economic growth in determining credit ratings is mixed, but growth is a key driver of debt dynamics variables and therefore of ratings. This suggests that policy should focus on stimulating growth to reduce the gap between real growth and real interest rates as well as increasing the denominator of the debt to GDP ratio and increase the size of the tax base, which would improve government’s ability to service the interest payments on its debt.
- Full Text:
- Date Issued: 2019
- Authors: Orsmond, Daniel
- Date: 2019
- Subjects: Debts, Public -- South Africa , Credit ratings -- South Africa , Gross domestic product -- Africa , Inflation (Finance) -- Africa , Economic development -- South Africa , Economic history , Macroeconomics , Moody's Investors Service , Standard and Poor's Ratings Services , Fitch Ratings (Firm)
- Language: English
- Type: text , Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/115160 , vital:34083
- Description: In recent years South Africa’s foreign and local denominated debt has been downgraded by the three major global credit agencies, Moody’s, Standard and Poor’s (S&P) and Fitch. The foreign debt has been downgraded to speculative grade or ‘junk’ status by all three agencies. Local debt has been downgraded to ‘junk’ by S& P and Fitch, but Moody’s currently maintains local debt at the lowest level of investment grade. Many economists believe that South Africa’s rapidly rising debt levels are the major contributor to the decisions to downgrade South Africa’s debt. Yet many countries with higher levels of debt continue to be rated investment grade. Clearly, factors other than the actual level of debt are important in determining the credit rating agencies’ rating decisions. The literature suggests several variables are important in determining a country’s sovereign credit rating. These variables include not just the ratio of government debt to gross domestic product, but also a country’s real growth rate, inflation, gross domestic product per capita, external balance to gross domestic product, default history and the level of economic development. In examining the proposition that it is not a country’s debt level per se that matters, but rather the dynamics surrounding that debt, this research also includes three additional variables that are not usually mentioned in the literature. These, based on van der Merwe (1993), are the real GDP growth rate less the real interest rate, the ratio of the fiscal balance to GDP, and the ratio of government interest payments to government expenditure. The purpose of this addition is to examine whether rather than a country’s debt level (debt to GDP variable), it is the sustainability of a country’s ability to service debt, as indicated by the three additional ‘debt dynamic’ variables, that is most important when determining sovereign credit ratings. Panel data analysis for a sample of 12 countries over the period 1996Q1 to 2017Q4 indicates that of the broad macroeconomic variables mentioned in the literature, government debt to GDP, the real growth rate, inflation (cpi), and default history are all statistically significant, with the coefficients having the correct signs in all specification of the model, with the exception of the real growth rate in Models 2 and 3. With regards to the debt dynamic variables, the real growth rate less the real interest rate, as well as the interest payments to government expenditure variables are found to be significant determinants of sovereign credit ratings. Thus, the findings of the research suggest that the level of debt alone is an inadequate determinant of sovereign credit ratings. The dynamics of debt along with other macroeconomic variables are also important determinants of a country’s credit rating. Concerning policy recommendations, it is evident that debt sustainability is important for sovereign credit ratings. Evidence of the direct importance of economic growth in determining credit ratings is mixed, but growth is a key driver of debt dynamics variables and therefore of ratings. This suggests that policy should focus on stimulating growth to reduce the gap between real growth and real interest rates as well as increasing the denominator of the debt to GDP ratio and increase the size of the tax base, which would improve government’s ability to service the interest payments on its debt.
- Full Text:
- Date Issued: 2019
Social movements and economic development in post apartheid South Africa: lessons from Latin America
- Authors: Makoni, Tinotenda Charity
- Date: 2019
- Subjects: South Africa -- Economic conditions -- 1991- , South Africa -- Politics and government -- 1994- , Social movements -- South Africa , Social movements -- Latin America , Economic development -- South Africa
- Language: English
- Type: text , Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/76420 , vital:30561
- Description: The aim of this research is to bring the literature on political agency and economics together in an analysis of whether social movements can play an important role in economic development in post-apartheid South Africa. The entrenched discourse of sluggish growth and high inequality in post-apartheid South Africa can largely be attributed to the political decision to implement a neoliberal economic development orthodoxy. On the one hand, there is an urgent need to shift the economic development model to an alternate developmentalist model. However, no clearly articulated alternative developmental model has emerged. As a result, economically, South Africa is seemingly stuck. On the other hand, the selection of an economic development model and change in macroeconomic policies requires a political shift. Politically, formal politics has assumed the form of neoliberal democracy, characterised by a largely centralised state and the usurpation of the state and institutions by a national bourgeoisie. Social movements have emerged in response to the failure of neoliberalism to fulfil the promises of early post independent periods. They have been largely successful at highlighting the injustices and the inequalities in the country. However their ability to influence structural economic development has come into question. Firstly, social movements and their “politically destabilising distributive demands” have faced repression from the state as the state and institutions are aligned behind the interests of capital under a neoliberal democracy. Secondly, social movements in South Africa have been largely ideologically under-developed. They have been largely fragmented and tended to contest specific single issues rather than aiming to shift the deeper underlying systemic drivers behind the symptomatic immediate discomforts. The economic dimensions of such a shift are particularly unclear. This fragmentation and apparent lack of economic pragmatism make management or suppression of disruptive movements by the state relatively easy. The research uses a contrast between the Latin American social movements against a South African background in order to see what lessons South Africa can draw from social movements in Latin America. The Latin American case is cautiously more positive and provides comparably more sanguine lessons. In this way, this research seeks to construct a more comprehensive framework for the further study of social movements in South Africa and their potential impact on economic development in South Africa.
- Full Text:
- Date Issued: 2019
Social movements and economic development in post apartheid South Africa: lessons from Latin America
- Authors: Makoni, Tinotenda Charity
- Date: 2019
- Subjects: South Africa -- Economic conditions -- 1991- , South Africa -- Politics and government -- 1994- , Social movements -- South Africa , Social movements -- Latin America , Economic development -- South Africa
- Language: English
- Type: text , Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/76420 , vital:30561
- Description: The aim of this research is to bring the literature on political agency and economics together in an analysis of whether social movements can play an important role in economic development in post-apartheid South Africa. The entrenched discourse of sluggish growth and high inequality in post-apartheid South Africa can largely be attributed to the political decision to implement a neoliberal economic development orthodoxy. On the one hand, there is an urgent need to shift the economic development model to an alternate developmentalist model. However, no clearly articulated alternative developmental model has emerged. As a result, economically, South Africa is seemingly stuck. On the other hand, the selection of an economic development model and change in macroeconomic policies requires a political shift. Politically, formal politics has assumed the form of neoliberal democracy, characterised by a largely centralised state and the usurpation of the state and institutions by a national bourgeoisie. Social movements have emerged in response to the failure of neoliberalism to fulfil the promises of early post independent periods. They have been largely successful at highlighting the injustices and the inequalities in the country. However their ability to influence structural economic development has come into question. Firstly, social movements and their “politically destabilising distributive demands” have faced repression from the state as the state and institutions are aligned behind the interests of capital under a neoliberal democracy. Secondly, social movements in South Africa have been largely ideologically under-developed. They have been largely fragmented and tended to contest specific single issues rather than aiming to shift the deeper underlying systemic drivers behind the symptomatic immediate discomforts. The economic dimensions of such a shift are particularly unclear. This fragmentation and apparent lack of economic pragmatism make management or suppression of disruptive movements by the state relatively easy. The research uses a contrast between the Latin American social movements against a South African background in order to see what lessons South Africa can draw from social movements in Latin America. The Latin American case is cautiously more positive and provides comparably more sanguine lessons. In this way, this research seeks to construct a more comprehensive framework for the further study of social movements in South Africa and their potential impact on economic development in South Africa.
- Full Text:
- Date Issued: 2019
The future of banking in South Africa towards 2055: disruptive innovation scenarios
- Authors: Koekemoer, Jonathan
- Date: 2019
- Subjects: Finance -- South Africa , Economic development -- South Africa , Banks and banking -- South Africa
- Language: English
- Type: Thesis , Doctoral , DPhil
- Identifier: http://hdl.handle.net/10948/40577 , vital:36184
- Description: The research effort developed four possible scenarios for the future of banking in South Africa towards 2055. The scenarios sought to stimulate thought on the possible, probable, plausible and preferred effects of disruptive innovation and regulation in the South African banking sector. The scenarios were developed in strict accordance with the 5 stages, and 9 steps, of the scenario-based planning process of futures studies. A conceptual futures studies model for banking in South Africa was developed to guide and clarify the way in which the research on South African banking can be integrated into the body of existing futures studies theory. The research study began with a comprehensive environmental scan, where various megatrends and driving forces are identified. A PESTEL analysis provided a deeper understanding of the driving forces. A Real-Time Delphi study was conducted in order to validate and prioritise the megatrends and driving forces that emerged. As a result, the research study was able to present four plausible scenarios that provide a better understanding of the future of banking in South Africa over the decades to come. The research presents banking as a complex, multi-faceted sector that is heavily influenced by advances in technology. The Real-Time Delphi research allowed the aggregation of expert knowledge. This is used as a guide to assist decision-makers and industry leaders in the adoption of appropriate business models and strategies towards a preferred future state. The research defined the Integrated Vision as the preferred future state for the South African banking sector towards 2055. The study closes a research gap where current strategies deviate from proposed strategies that drive the achievement of the Integrated Vision by 2055. Finally, contextually aligned practical recommendations are provided to assist decision-makers, industry leaders and change agents to work towards a preferable future state. The proposed recommendations are placed into broad categories of innovation, financial inclusion and collaborative regulatory relationships. The research makes a meaningful contribution to the South African banking sector by introducing a forward-looking, systems-thinking approach to disruptive innovation and regulation in the South African context.
- Full Text:
- Date Issued: 2019
- Authors: Koekemoer, Jonathan
- Date: 2019
- Subjects: Finance -- South Africa , Economic development -- South Africa , Banks and banking -- South Africa
- Language: English
- Type: Thesis , Doctoral , DPhil
- Identifier: http://hdl.handle.net/10948/40577 , vital:36184
- Description: The research effort developed four possible scenarios for the future of banking in South Africa towards 2055. The scenarios sought to stimulate thought on the possible, probable, plausible and preferred effects of disruptive innovation and regulation in the South African banking sector. The scenarios were developed in strict accordance with the 5 stages, and 9 steps, of the scenario-based planning process of futures studies. A conceptual futures studies model for banking in South Africa was developed to guide and clarify the way in which the research on South African banking can be integrated into the body of existing futures studies theory. The research study began with a comprehensive environmental scan, where various megatrends and driving forces are identified. A PESTEL analysis provided a deeper understanding of the driving forces. A Real-Time Delphi study was conducted in order to validate and prioritise the megatrends and driving forces that emerged. As a result, the research study was able to present four plausible scenarios that provide a better understanding of the future of banking in South Africa over the decades to come. The research presents banking as a complex, multi-faceted sector that is heavily influenced by advances in technology. The Real-Time Delphi research allowed the aggregation of expert knowledge. This is used as a guide to assist decision-makers and industry leaders in the adoption of appropriate business models and strategies towards a preferred future state. The research defined the Integrated Vision as the preferred future state for the South African banking sector towards 2055. The study closes a research gap where current strategies deviate from proposed strategies that drive the achievement of the Integrated Vision by 2055. Finally, contextually aligned practical recommendations are provided to assist decision-makers, industry leaders and change agents to work towards a preferable future state. The proposed recommendations are placed into broad categories of innovation, financial inclusion and collaborative regulatory relationships. The research makes a meaningful contribution to the South African banking sector by introducing a forward-looking, systems-thinking approach to disruptive innovation and regulation in the South African context.
- Full Text:
- Date Issued: 2019
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