The determinants of credit default swap spreads in emerging market economies
- Authors: Matakane, Lwazi
- Date: 2017
- Subjects: Bank loans -- BRIC countries , Risk management -- BRIC countries , Swaps (Finance) -- BRIC countries , BRIC countries -- Economic conditions , Rating agencies (Finance)
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/7142 , vital:21221
- Description: Emerging markets have become a destination for international portfolio flows as a result of global financial integration. This has allowed exogenous factors like sentiment and developed country monetary policy to affect developing countries capital markets and macroeconomic fundamentals. This study analyses the impact of investor sentiment alongside US monetary policy, country specific risks, inflation and domestic stock returns on the BRICS credit default spreads. To investigate this relationship, the study uses panel data and a fixed effects model. The results of the panel regressions suggest that all variables had an impact on the variation of BRICS credit default spreads however the crisis may have distorted the relationship among the variables. Sovereign ratings had an inverse relationship depicting a rise in ratings decreasing the credit default premium. This was in line with a priori expectations. Domestic company earnings also had an inverse relationship with BRCIS credit default premia, the magnitude of which is dependent on the value of the index. This is to say the higher the index, the more significant the effect on the BRICS default premium. US monetary policy was significant and in line with expectations of a linear relationship between emerging market credit default spreads when controlling for the crisis. In the crisis period however, results depicted an inverse relationship going against a priori expectations. The inflation variable was found to have a greater impact on CDS spreads during the crisis period, while the VIX index had a linear relationship with the default premia albeit the impact was not highly significant. The study concludes that the financial crisis was an important event that affected the relationship of these variables with BRICS country default spreads and had read through to market participant’s behaviour at the time.
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The effects of changing western worldviews on morals and ethics in economics: a protestant perspective
- Authors: Appalraju, Nerusha
- Date: 2017
- Subjects: Economics -- Moral and ethical aspects , Neoclassical school of economics , Capitalism -- Religious aspects -- Protestant churches , Feminist economics , Economics -- Religious aspects , Environmental economics -- Moral and ethical aspects , Smith, Adam, 1723-1790 , Weber, Max, 1864-1920
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/32480 , vital:24050
- Description: The World Economics Association held an online conference in 2012 where they published many papers on ethics in economics. The topic of ethics in economics became more serious and popular following the 2008 financial crisis. However the case for a professional code of ethics in economics is difficult to introduce and implement due to the multidisciplinary approach of the discipline. Therefore authors such as Dow (2012), De Martino (2012), Freeman (2012) and Earl (2012) urged economists to start thinking about ethics in economics from a pluralistic view. This thesis studied the effects of changing Western worldviews on morals and ethics in economics from a Protestant perspective. Numerous authoritative sources were considered and used to create a discussion and analysis of how diverse Western worldviews impact on the type of economics which is prescribed and practiced. It was found that different Western worldviews create various standards of understanding and evaluation, which result in varying opinions on what constitutes as morally or ethically acceptable within the discipline of economics.
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The illegal diamond trade in South Africa and its tax consequences
- Authors: Kumm-Schmidt, Megan
- Date: 2017
- Subjects: Diamond industry and trade -- South Africa , Diamond industry and trade -- Corrupt practices -- South Africa , Diamond industry and trade -- South Africa -- Taxation , Conflict diamonds -- South Africa , Income tax -- Law and legislation -- South Africa , Tax evasion -- South Africa , South Africa. Income Tax Act, 1962 , South Africa. Prevention and Combating of Corrupt Activities Act, 2004 , South Africa. Tax Administration Act, 2011 , South Africa. ǂt Value-Added Tax Act, 1991 , Kimberley Process Certification Scheme
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4389 , vital:20656
- Description: The object of the research was to discuss the taxability of the illegal diamond trade in South Africa and to identify the consequences of not declaring income obtained from the illegal diamond trade to the South African Revenue Services. The research was conducted by means of a critical analysis of documentary data with specific reference to the Income Tax Act, the Value-Added Tax (VAT) Act, the Tax Administration Act and relevant case law. The Income Tax Act and the Value-Added Tax Act were referred to in relation to the tax consequences of the illegal diamond trade and the Tax Administration Act was used to determine the consequences of not declaring income to the South African Revenue Services. It was established that amounts received from the sale of illegal diamonds are to be included in the taxpayer's gross income, whilst in relation to income received from diamond theft it was not as clear. The MP Finance Group case held that the nature of the receipt and the way in which the transaction occurred in each individual situation will be the deciding factor as to whether or not the stolen diamonds will be taxable in the hands of the thief. The buying and selling of "blood" or stolen diamonds can amount to a trade. As there have been no definitive case decisions in South Africa, it remains unclear whether expenses relating to an illegal trade are deductible. Assuming that expenses relating to an illegal trade are deductible, the provisions of section 11(a) will apply to expenses incurred as a result of dealing in illegal diamonds and it was concluded that qualifying expenses will be deductible. A taxpayer buying and selling "blood" or stolen diamonds is required to register for VAT if sales exceed the threshold and would be required to account for VAT on these transactions. If the taxpayer does not declare the income for income tax purposes or register for and pay VAT to the South African Revenue Services from either the sale of illegal diamonds or the theft of diamonds, this will amount to tax evasion and the dealer will be subject to penalties and even imprisonment
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The impact of good news and bad news on South Africa’s sectoral stock return volatility: an asymmetric GARCH analysis
- Authors: Muzinda, Edmond Toreva
- Date: 2017
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/6425 , vital:21108
- Description: This study explores the impact of good news and bad news on South Africa’s sectoral stock return volatility using an asymmetric GARCH analysis. Understanding the different impact of news on stock return volatility in different economic sectors has important implications for investors’ risk management practices, portfolio allocation strategies and asset pricing. The study employs data of daily closing prices for nine sectors and three benchmark indices for the period 2nd January 1997 - 17th August 2016. The data was split into sub-samples of pre-, during and post-global financial crisis, as well as the overall sample period. The incorporation of sub-samples was to help explain the outcomes of the overall sample period. To capture the different impact of good news and bad news on stock return volatility for each sector, asymmetric GARCH models namely, TGARCH and EGARCH were employed. The findings from this study revealed that volatility asymmetry was present in all sectors and benchmark indices of South African equity market. Bad news had more impact on stock return volatility for all sectors except the Oil and Gas sector, than good news of the same magnitude. In the Oil and Gas sector, good news was found to have an amplified effect on return volatility compared with bad news of the same magnitude. High volatility persistence was also found to be present in the Consumer goods, Financials, Industrials, All-share index and Mid-cap index. High differential impact of good and bad news were found in the Industrials, Financials, Basic materials, Consumer goods and the All-share index. Since the main objective of this study was to provide explanations of volatility asymmetry found in the South African sectors, the following were proposed as possible explanations of the findings. Within sectors, volatility asymmetry was explained by financial leverage, the role of the media, loss-averse investors and the behaviour of traders (overconfidence and extrapolation bias). Volatility asymmetry across sectors was explained by information flow, the uneven distribution of information by the media, investor sentiments, investor expectations and trading volumes. Overall, the results indicate that the stock return volatility of individual sectors of the South African equity market is driven mainly by bad news (except for Oil and Gas) and that leverage effects exist in all the sectors and in the benchmark indices.
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The South African tax implications of ceasing to be resident
- Authors: Walker, Anthony Howard
- Date: 2017
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/5555 , vital:20941
- Description: In the context of rapid globalisation, skilled South African employees and professionals are often attracted overseas to take up new work opportunities in foreign countries. This may cause these individuals no longer to be “ordinarily resident” in South Africa. At the same time, changes in modes of travel, information and communication channels could result in companies and trusts no longer being considered to be tax resident in South Africa, if the place of effective management for these entities is moved to a foreign country and a double taxation agreement between South Africa and that foreign country deems these entities to be exclusively resident in the foreign country. The objective of this thesis was to analyse the tax implications that could arise when a resident natural person, trust or company ceases to be a resident or when a Controlled Foreign Company (CFC) ceases to be a CFC. A detailed analysis of the “exit charge” in section 9H of the Income Tax Act was undertaken to understand its normal tax implications when a natural person, trust or company ceases to be a resident or a CFC ceases to be a CFC. This included an analysis of how a natural person, trust or company ceases to be resident or how a CFC ceases to be a CFC. It was found that certain normal tax principles consistently apply to when a natural person, trust or company ceases to be resident or a CFC ceases to be a CFC. At the same time, certain unique normal tax implications arise for trusts and CFCs since they are impacted by the special tax rules that apply to these entities. Furthermore in the case of a trust, a judicial precedent has established that the “exit charge” remains and is taxable in the trust. For CFCs, there is uncertainty as to whether the “exit charge” could arise when a shareholder ceases to be resident, which results in residents no longer holding more than 50% of the total participation or voting rights in that foreign company.
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The taxation of illegal income in South Africa: the basis on which proceeds from a unilateral taking should be taxed
- Authors: Nyakanyanga, Kudzai Talent
- Date: 2017
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/5960 , vital:21002
- Description: In South Africa, income tax is levied in terms of the Income Tax Act, 58 of 1962, and the calculation of a taxpayer’s taxable income and ultimately the tax liability commences with considering what constitutes the taxpayer’s gross income. In terms of the definition of “gross income” a person can be taxed either on receipts or accruals. The definition makes no reference, however, to the legality of receipts or accruals. The main issue addressed in this thesis is the interpretation of the term “receipt” in relation to the proceeds from a unilateral taking (theft) and whether the concept of a receipt in relation to theft should be interpreted using the subjective approach used in MP Finance Group CC (In Liquidation) v C:SARS, or the objective approach. An interpretative research approach was used to provide clarity on the matter. The documentary data used for the research consists of South African tax legislation, case law, textbooks and journal articles. The thesis also analysed SARS’ view in Interpretation Note 80 that MP Finance Group CC (In Liquidation) v C:SARS is authority for a unilateral taking being a receipt, and the correctness of this viewpoint. A brief comparative analysis was done of the basis on which illegal income flowing from a unilateral taking is taxed in Australia, New Zealand and America. These countries have legislative provisions that specifically deal with how the proceeds from theft in the hands of a thief should be treated for tax purposes. The thesis concludes that, although the court in MP Finance Group CC (In Liquidation) v C:SARS shed some light on the issue of the taxability of income from illegal activities, the basis on which proceeds from theft may be taxed, as opposed to the basis on which proceeds from other illegal activities like fraud are taxed, remains a grey area in our law. The thesis recommends the introduction of a legislative provision in order to provide a more unified, consistent and effective approach when taxing all illegal income.
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A critical analysis of the concept and extent of base erosion and profit shifting, and its impact on South Africa versus Australia
- Authors: Basnett, Robyn
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4037 , vital:20592
- Description: Tax avoidance by multinational enterprises is the focus of much media and political scrutiny. It is also the subject of a major Organisation for Economic Co-operation and Development (OECD) project called Base Erosion and Profit Shifting (BEPS). The objective of this thesis was to gain a greater understanding of BEPS, particularly in a South African and Australian context, and to determine whether BEPS is as great a problem as the OECD portrays. A detailed analysis of the OECD BEPS Report and Action Plan was undertaken to understand what the term BEPS means. A review of current BEPS literature was then performed toassess the extent of BEPS. This was followed by a comparative analysis of South Africa and Australia, including a comparison of their tax systems and various economic indicators. It was found that there is no simple definition of BEPS. It encompasses the spectrum of international tax planning strategies used by multinational enterprises. Furthermore, these tax strategies are usually legal, which makes measuring the extent of BEPS conceptually difficult. Despite being legal, many observers believe that BEPS behaviour by multinational enterprises is ethically unacceptable. This thesis also discussed the ethics of tax avoidance, and argued that countries should assess BEPS with reference to the many benefits which multinationals bring to a country. The benefits of multinational enterprise activity are especially important to developing countries like South Africa. Despite similar tax systems, South Africa and Australia vary greatly in terms of their economic and social position. This thesis concluded that South Africa, as a developing country, is more likely than Australia to tolerate BEPS behaviour in order to maintain or even attract foreign investment. The OECD Action Plan calls for urgent internationally coordinated actions against BEPS. It appears, however, that much more research is needed on the nature and extent of BEPS before countries formulate their response. This thesis acknowledges that aggressive tax planning by multinational enterprises does exist, but suggests that countries approach BEPS, and any estimates of its extent, with a degree of caution.
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A critical analysis of the deductibility for income tax purposes of dual-purpose expenditure
- Authors: Pickup, Richard Kenneth
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4155 , vital:20628
- Description: This thesis critically analysed the apportionment of dual-purpose expenditure. In doing so, two categories of dual-expenditure were examined: expenditure that has been incurred for both trade and non-trade purposes, and expenditure that has been incurred to produce both taxable and exempt income. In conducting this analysis, this thesis set out to answer three questions: has the apportionment of dual-purpose expenditure been officially sanctioned in South Africa, when does the need for apportionment arise, and on what basis should a taxpayer apportion expenditure that has been incurred for a dual purpose? A doctrinal methodology was applied to the documentary data which consisted of relevant tax legislation; South African, Australian and English case law; and commentary of experts in the field of tax law. From the analysis performed, it was revealed that the apportionment of dual-purpose expenditure has been officially sanctioned in South Africa. In addition, it was concluded that the applicable legal principles for determining the need for apportionment and for performing the apportionment calculation are clear and well-established. The difficulty which taxpayers, the courts and the South African Revenue Service face, however, is applying these principles in practice. This research therefore concluded that there is a need for further guidance in this complex area of tax law. In addition, this research proposed some recommendations which could provide more certainty and clarity.
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A critical analysis of the tax concessions relating to medical expenses, with particular emphasis on persons with a physical impairment or disability
- Authors: Rogers, Richard
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4144 , vital:20623
- Description: This thesis provides a critical analysis of the tax concessions granted in respect of medical costs, with particular reference to persons with a physical impairment or “disability” in the South African context. The primary method of collecting information for this research was through an extensive analysis of the South African legislation that is specifically applicable to a person who has a physical impairment or a “disability”. The analysis placed particular emphasis on the qualifying diagnosis criteria for a “disability” as defined for tax purposes as well as on the qualifying expenditure incurred in consequence of a person’s physical impairment or “disability”. A further goal of the research was to analyse the specific provisions of the Income Tax Act that are applicable to a special trust created for the benefit of a person with a physical impairment or “disability”. This research also includes a brief evaluation of the extent to which medical schemes provide coverage for non-discretionary expenditure items incurred in consequence of a person’s “disability” and whether this differs from the qualifying expenditure in terms of the Income Tax Act. It is important to conduct research of this nature in order to identify areas where the legislation could be improved. Accordingly, the thesis also recommends possible amendments to the current provisions of the legislation that are specifically applicable to persons with a physical impairment or “disability”.
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A critical analysis of the taxation of financial assets and financial liabilities in terms of section 24JB of the South African Income Tax Act
- Authors: Snyman, S L
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4178 , vital:20630
- Description: Section 24JB of the Income Tax Act No. 58 of 1962 was introduced with effect from 1 January 2014 in order to govern the taxation of financial instruments of a covered person as defined. Section 24JB represents a significant departure from the standard tax principles for financial instruments and will therefore directly affect the timing of the imposition of tax on gains and losses on these financial instruments, resulting in a significant adverse cash flow effect for the taxpayer. The main purpose of the research is to investigate the meaning of the wording in section 24JB through a critical analysis of the domestic tax legislation in the context of practical examples of specific financial assets and liabilities. The research includes an analysis of the scope of section 24JB by examining the definition of a “covered person” as well as the specific financial instruments to which the section applies, with reference to the International Financial Reporting Standards classifications and terms. The interaction of section 24JB with the rest of the Act is examined and whether this section overrides all the other provisions, specifically with reference to the taxation of dividends and the general and specific anti-avoidance provisions contained elsewhere in the Act. The study aims to highlight anomalies and possible unintended tax consequences arising from the current drafting of section 24JB using practical examples, highlighting the major areas of concern and issues of interpretation of section 24JB. Recommendations are made for amendments to the Act or the provision of guidance in the form of an Explanatory Memorandum or Interpretation Note to be issued by SARS.
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A discussion of the concept, “place of effective management” and the proposed changes, in the context of South African tax law
- Authors: Singh, Nishika
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4166 , vital:20629
- Description: The concept, “place of effective management”, is used in South African tax legislation to determine the residency of companies and it is also used by the Organisation for Economic Co-operation and Development (OECD) and in many tax treaties as a tie-breaker clause to determine the residency of companies that may appear to be dual resident or to determine which country has the taxing rights to income that may be subject to double tax due to the income being from a source outside of the company’s country of residence. The concept is not defined in any tax legislation and there is no uniform interpretation of the concept globally. The former guidance provided by the South African Revenue Services (SARS) adopted a hierarchal approach and the focus was the implementation of the Board of Directors’ decisions. This interpretation was not aligned to the guidance of the OECD whose focus is the place where the key management and commercial decisions of the entity are made. The current SARS guidance has been aligned to the OECD guidance and, essentially, the core principle is to determine who makes the key commercial and management decisions of the company and the place where these individuals are making these decisions. The current SARS and OECD guidance have now been aligned. The current SARS and OECD interpretations have been found to be a more effective tie-breaker clause than the former interpretations.
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A review of generalized linear models for count data with emphasis on current geospatial procedures
- Authors: Michell, Justin Walter
- Date: 2016
- Subjects: Spatial analysis (Statistics) , Bayesian statistical decision theory , Geospatial data , Malaria -- Botswana -- Statistics , Malaria -- Botswana -- Research -- Statistical methods
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:5582 , http://hdl.handle.net/10962/d1019989
- Description: Analytical problems caused by over-fitting, confounding and non-independence in the data is a major challenge for variable selection. As more variables are tested against a certain data set, there is a greater risk that some will explain the data merely by chance, but will fail to explain new data. The main aim of this study is to employ a systematic and practicable variable selection process for the spatial analysis and mapping of historical malaria risk in Botswana using data collected from the MARA (Mapping Malaria Risk in Africa) project and environmental and climatic datasets from various sources. Details of how a spatial database is compiled for a statistical analysis to proceed is provided. The automation of the entire process is also explored. The final bayesian spatial model derived from the non-spatial variable selection procedure using Markov Chain Monte Carlo simulation was fitted to the data. Winter temperature had the greatest effect of malaria prevalence in Botswana. Summer rainfall, maximum temperature of the warmest month, annual range of temperature, altitude and distance to closest water source were also significantly associated with malaria prevalence in the final spatial model after accounting for spatial correlation. Using this spatial model malaria prevalence at unobserved locations was predicted, producing a smooth risk map covering Botswana. The automation of both compiling the spatial database and the variable selection procedure proved challenging and could only be achieved in parts of the process. The non-spatial selection procedure proved practical and was able to identify stable explanatory variables and provide an objective means for selecting one variable over another, however ultimately it was not entirely successful due to the fact that a unique set of spatial variables could not be selected.
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Assessing the value of public investment into biological control research for invasive alien plants : the ARC PPRI Weeds Research Division
- Authors: Scarr, Lowell Martin
- Date: 2016
- Subjects: Alien plants -- Biological control , Invasive plants -- Biological control , Alien plants -- Economic aspects , Invasive plants -- Economic aspects , Weeds -- Biological control
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1126 , http://hdl.handle.net/10962/d1020604
- Description: This study investigates the economic impact of the ARC PPRI Weeds Research Division. The Division researches appropriate methods of biological control for invasive alien plants (IAPs). These plants pose an increasing threat to environmental integrity and ecosystem service provision impacting on economic potential. Since the work of the Division is considered a public good, a predominantly descriptive approach has been adopted for the valuation process. A combination of quantitative cost analysis and a qualitative study of the impacts of research and invasive alien plants is used to deal with the challenges associated with non-market valuation. The study found that investment into the Weeds Division is a valuable activity that supports the long-term growth potential of the South African economy. The role of a well-functioning environment is highlighted as an essential base for the creation of sustained growth opportunities in any society. It was determined that investment into the Division should be increased into the future to support efficient spending of scarce state funds. Biological control research was found to provide strategic future growth potential, creating opportunities for the development of a competitive advantage in the biotechnology and environmental management sectors. The study adds to the increasing move towards a more holistic view of economic valuation, taking factors other than pure finance and econometrics into consideration. This is an important shift in prevailing economic thought, as a realisation is reached that a single, or even triple, bottom line is an outdated and insufficient decision making basis.
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Exploring the relationship between leadership styles and quality of work life: a case study of a Chinese- South African joint venture
- Authors: Handley, Rayne Cyla
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4058 , vital:20597
- Description: This thesis employs a phenomenological qualitative research methodology to explore its research aims and objectives. It focuses on describing the various leadership styles and quality of work life (QWL) levels with reference to the Chinese-South African intercultural context. By doing so, it answers a primary exploratory research question; how does a particular leadership style influence QWL. By answering this question, this study will contribute to the understanding of the dynamics of Chinese organisations in South Africa. Furthermore, it will assist in creating greater intercultural synergy within the respective organisation. In order to explore the research question related to leadership and QWL, the thesis will begin by defining and describing the two concepts indigenously. In light of the research gap pertaining to African intercultural managerial contexts, as well as the rising Chinese and South Africa intercultural business environments, this case study demonstrates how leadership style is an important determining factor in QWL levels, both of the leaders as well as leader-raters within an intercultural context. China is South Africa’s largest trading partner and the signing of new agreements in 2015 will lead to enhanced China-Africa engagement at the macro and organisational level. China’s increasing engagement in both Africa and South Africa has been widely covered, but non-pejorative empirical research is needed to shed light on the organisational manifestations of China’s engagement. The study was conducted within the mining sector which is a key component of Chinese investment in, and trade with, South Africa. Through an in-depth content analysis which draws on coding and thematic concerns, quantification and description, this study finds that leaders directly influence QWL through relationships with their followers. Moreover, leaders indirectly have a bearing on QWL through the influence they have on organisational and work environment factors. Another finding is that leaders are inclined to describing higher levels of QWL and more transformational leadership styles. In addition, it is shown that executives (irrespective of leader or leader-rater status) were more likely to describe a high level of QWL and transformational leadership behaviours when compared to skilled level participants while the semi-skilled participants where least likely of all. Finally, it was found that the nature of the relationship between a leader and a follower is influenced by whether the said leader is a direct supervisor or if there is a large organisational level ‘gap’ between a leader and a leader- rater. It can also be said that leaders at higher organisational levels are expected to exhibit different leadership behaviours and meet different needs. Overall this study suggests that leaders need to be aware of the way in which the intercultural context can influence perceptions of subjective phenomena such as leadership effectiveness and QWL. The study concludes that leaders directly and indirectly play a key role in determining need satisfaction and QWL levels. To that extent, they ought to strategically adopt leadership practices that enhance need satisfaction and wellbeing in the workplace. Wellbeing and employee satisfaction are increasingly gaining importance within theory and literature related to QWL and has, importantly, also been shown to influence workplace attitudes and behaviours.
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Industrial policy, institutions and industrial financing in South Africa: the role of the IDC and DBSA, and lessons from Brazil’s BNDES
- Authors: Fumbata, Nandipha
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1132 , http://hdl.handle.net/10962/d1021278
- Description: Institutions, particularly development finance institutions (DFIs) have been instrumental in economic development and the implementation of industrial policy throughout history. In 2007, the South African government identified the country’s DFIs as key to the implementation of its new industrial policy framework with the main objective of job creation. This thesis examines the impact that South Africa’s DFIs, particularly the IDC and the DBSA, have had on employment creation from 2010 to 2014. A comparative institutional approach is adopted in a case study analysis examining the role of the state in industrial financing. The financing activities of Brazil’s BNDES are explored by comparison to determine if there are possible lessons for South Africa. An analysis of the DFIs’ financial and annual reports and government policy documents is conducted. The political settlements framework is used as a basis for understanding the balance of power within the country and the impact this has had on the country’s industrial policy and industrial finance. The thesis finds that the financing activities of South Africa’s DFIs, particularly the IDC, have been directed at large scale capital intensive projects, with a large portion of disbursements channelled towards mining and mineral beneficiation. These sectors have also facilitated the most number of jobs. Even though the activities of the country’s DFIs are consistent with South Africa’s industrial policy and have facilitated job creation, it is evident that these efforts have not been on a scale that is large enough to reduce unemployment. Despite the DFIs’ efforts, there has been an increase in the number of unemployed South Africans between 2010 and 2014.
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Inequality in South Africa: a possible solution within the labour market
- Authors: Ferreira, John-Edward
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4047 , vital:20594
- Description: This study sets out to identify the most effective way in which persistently and unacceptably high levels of inequality can be reduced in South Africa. Three alternative approaches were identified from the literature and their impact explored statistically. They are: the introduction of a ‘Social Solidarity Grant’; a decrease in unemployment by 5%; and a narrowing of the skill premium through an expansion of tertiary education. It is important to note that the study makes no attempt at explaining how these outcomes might be implemented or achieved. Rather, it sets out to determine only the effect that such policies may have on measured inequality. It was found that while the introduction of a new grant had a significant effect on inequality, this effect however, was once-off. The grant would be financed by individuals in the top decile through tax increases, which would be a complicated endeavour. Both job creation and a narrowing of the skills premium were significantly effective in decreasing inequality. The narrowing of the skills premium showed more promise due to its accelerating effectiveness in decreasing inequality over time and the fact that it directly addresses the problem of wage differentials. It was noted that the extreme levels of poverty and unemployment in South Africa may dampen enthusiasm for policies that narrow the skills premium to reduce inequality. These characteristics make job creation a more popular policy option because of the positive impact on poverty and unemployment as well as on inequality.
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Social assistance strategies as means of addressing poverty: lessons for South Africa
- Authors: Mampuru, Tsebo
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4098 , vital:20607
- Description: Poverty is a daily reality which a majority of South Africans live with. Social security in the form of cash grants has been the main poverty reduction instrument, albeit with limited success. The thesis aims to propose improvements which can be made in the government’s current social protection system and formulate alternative directions towards reducing poverty. An overview of the three most researched social security strategies around the world (i.e. Nordic, Latin American, and U.S. models) revealed two dominant instruments: conditionality and universalism. If applied in South Africa, universalism may be costly and unsustainable unless the right funding method is used. Attaching education and health attainment conditions to an adult grant would be inefficient and even burdensome to recipients. In terms of child grants, there is little evidence to suggest that the demand for and private levels of investment in education and health are insufficient. Therefore attaching health and education conditions to social grants may only serve to highlight the severe supply side inefficiencies in South Africa. Attaching marriage as an alternative condition may disadvantage poor and needy beneficiaries as marriage is an expensive institution in South Africa. Furthermore, enforcing the marriage condition would violate the constitutional rights of recipients who do not necessarily place a high value on the institution. To strengthen the poverty reduction efficiency of social grants and reduce dependency, the thesis suggests that social cash grants, regardless of whether universal and/or conditional or neither, should be temporary and used in conjunction with other strategies which encourage inclusive economic growth. Social assistance alone will not reduce poverty and ultimately, inclusive economic growth remains a more viable approach to reducing poverty. How to achieve the required inclusive economic growth in South Africa therefore provides further research opportunities.
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The application of the “reasonable suspicion of bias” test in relation to the appointment of a tax Ombud in South Africa
- Authors: Tendayi, Tatenda Lovemore
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4190 , vital:20631
- Description: The South African Parliament established a tax Ombud to act as an oversight body which reviews administrative complaints against SARS. Concerns have, however, been raised by academics and experts that the tax Ombud is not adequately independent of SARS so as to be able to investigate the complaints effectively and without bias. The manner in which the appointment, funding and staffing of the tax Ombud have been provided for, have been cited as the major sources of the perception of impartiality. According to decisions of the highest courts in South Africa, the “reasonable suspicion of bias” test must be applied in cases where institutional bias is alleged. The test investigates whether or not the reasonable person would suspect that the particular decision maker will be biased, due to institutional factors. After applying the “reasonable suspicion of bias” test to the model of the South African tax Ombud, the conclusion reached is that the model of the tax Ombud gives rise to a reasonable suspicion of bias. Notwithstanding the fact that the model gives rise to a suspicion of bias, it is concluded that the model, in its current form, remains fair as safeguards have been put in place by the legislature to ensure that fairness prevails. There is, however, international precedent which suggests that the sources of institutional bias can be eliminated completely from the model of the tax Ombud. Specifically, if the funding and staffing of the tax Ombud’s office is removed from SARS, the model of the tax Ombud would move closer to the ideal standards of fairness.
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The current role of farmers’ associations in the Albany Area
- Authors: Moss, Nicola Joy
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4108 , vital:20609
- Description: The primary aim of this study was to analyse the current roles that farmers’ associations in the Albany Area fulfil, by determining their current practices, describing the internal measures of effectiveness, and to explain why there are some farmers’ who do not belong to farmers’ associations. In doing this, the researcher was able to determine whether maintaining the status quo would effectively satisfy the members of farmers’ associations. In turn, recommendations were made to farmers’ associations on the roles which could be improved, in order to obtain a higher level of satisfaction among members. In order to achieve the primary aim of the study, interviews were conducted and questionnaires were administered to members of, non-members of, and chairpersons of farmers’ associations in the Albany Area, thus implying that a pragmatic research paradigm was employed to conduct the study. The key findings of this study revealed that farmers’ associations in the Albany Area do perform the five roles of organised associations. However, the manner in which the roles are performed appears to be of a subpar standard. There are 29 services which are aligned with the five roles which are to be performed by organised associations. With regards to farmers’ associations, 18 of the 29 services are able to obtained by non-members through alternative mediums, at a cost lower than that of the membership fee. This does not entice members to join farmers’ associations because the benefits of membership are not seen. Using the competing values framework, we were able to determine the values incorporated into the daily management of farmers’ associations in the Albany Area. Based on the data analysis farmers’ associations were found to have an internal outlook. This could be the overarching reason as to why non-members of farmers’ associations are able to access 18 of the 29 services offered without actually being a member of the respective associations. It was concluded that while farmers’ associations do perform the five roles of organised associations, it does not imply that they do so effectively. This is due to the services offered falling under both public and private good categories. The results showed that 18 of the services offered were classified as public goods, which could be the overarching reason for low levels of membership in farmers’ associations in the Albany Area. Interestingly, members of farmers’ associations are satisfied with the services offered by farmers’ associations, although the majority of the services which are valued were classified to be public goods. However, the internal outlook portrayed by farmers’ associations could provide an explanation as to why more public than private goods are offered. Not having an external outlook affects the services which are offered, and will not provide associations with an understanding of the services which could attract members to the association. If farmers’ associations were to provide more valued services, and understand what services could be sourced elsewhere, they might increase the probability of satisfying all their members, while potentially attracting new members.
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The effect of interest rates on investment spending: an empirical analysis of South Africa
- Authors: Dakin, Nicholas John
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1131 , http://hdl.handle.net/10962/d1021174
- Description: This thesis investigates the nature and strength of the relationship between short-, medium-, and long-term real interest rates and capital investment spending at both the aggregate and disaggregate levels in South Africa in order to determine whether changes in the real interest rate affect the level of capital investment in the economy. This thesis used quarterly data for the period 1987 to 2013. VAR modelling, variance decompositions, impulse response functions and Granger causality tests are used to explore the nature and strength of the relationship between interest rates and investment spending. It is found that interest rates explain very little of the variation in investment spending and seem to have little impact on investment (of any type). Furthermore, short-, medium- and long-term interest rates have different effects on the level of investment spending. A rise in short-term interest rates appears to decrease the level of investment spending in the long-run, whereas a rise in long-term interest rates results in an increase in investment.
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