Effects of household debt on economic growth in South Africa
- Authors: Bwalya, Rachael Mulenga
- Date: 2024-04-03
- Subjects: Household debt , Mortgage loans South Africa , Credit card debt , Gross domestic product South Africa , Economic growth
- Language: English
- Type: Academic theses , Master's theses , text
- Identifier: http://hdl.handle.net/10962/434766 , vital:73103
- Description: South Africa’s household debt relative to GDP has risen rapidly over the past decade. There is concern that high levels of household debt may decrease spending in the future and hence in the long run slow down economic growth. Thus, this study investigates the impact of household debt on growth in South Africa from 1987Q3 to 2022Q1. The research draws upon first-generation theories which include the absolute income hypothesis, life cycle hypothesis, and permanent income hypothesis, and second-generation theories which include the neo-Kaleckian model, the Super multiplier model, and the Steindl model. The impact of this relationship is assessed using a Vector Autoregressive (VAR) model, with a Toda-Yamamoto modification for some regressions. It is discovered that household debt has a positive short-term influence on economic growth, however, the influence is weak, and it decreases in the long run. Types of household debt such as credit card debt have shown to have a positive and strong influence on economic growth in South Africa from the short run to the long run, however, mortgage debt has shown weak positive influence on economic growth from the short 105 run to the long run. The study found that the growth maximizing ratios for household debt to 106 GDP ratio is 70 percent. The growth maximising credit card debt level is ZAR 72 403, in nominal terms and for mortgage debt is ZAR 5 980 000. The findings are expected to assist policymakers such as central banks and government authorities in formulating relevant policies to ensure economic sustainability through macro-prudential policy and strategies for household debt management. , Thesis (MEcon) -- Faculty of Commerce, Economics and Economic History, 2024
- Full Text:
- Date Issued: 2024-04-03
- Authors: Bwalya, Rachael Mulenga
- Date: 2024-04-03
- Subjects: Household debt , Mortgage loans South Africa , Credit card debt , Gross domestic product South Africa , Economic growth
- Language: English
- Type: Academic theses , Master's theses , text
- Identifier: http://hdl.handle.net/10962/434766 , vital:73103
- Description: South Africa’s household debt relative to GDP has risen rapidly over the past decade. There is concern that high levels of household debt may decrease spending in the future and hence in the long run slow down economic growth. Thus, this study investigates the impact of household debt on growth in South Africa from 1987Q3 to 2022Q1. The research draws upon first-generation theories which include the absolute income hypothesis, life cycle hypothesis, and permanent income hypothesis, and second-generation theories which include the neo-Kaleckian model, the Super multiplier model, and the Steindl model. The impact of this relationship is assessed using a Vector Autoregressive (VAR) model, with a Toda-Yamamoto modification for some regressions. It is discovered that household debt has a positive short-term influence on economic growth, however, the influence is weak, and it decreases in the long run. Types of household debt such as credit card debt have shown to have a positive and strong influence on economic growth in South Africa from the short run to the long run, however, mortgage debt has shown weak positive influence on economic growth from the short 105 run to the long run. The study found that the growth maximizing ratios for household debt to 106 GDP ratio is 70 percent. The growth maximising credit card debt level is ZAR 72 403, in nominal terms and for mortgage debt is ZAR 5 980 000. The findings are expected to assist policymakers such as central banks and government authorities in formulating relevant policies to ensure economic sustainability through macro-prudential policy and strategies for household debt management. , Thesis (MEcon) -- Faculty of Commerce, Economics and Economic History, 2024
- Full Text:
- Date Issued: 2024-04-03
Re-industrialisation of the Nelson Mandela Metropole regional economy
- Authors: Sipuka, Msingathi
- Date: 2022-04
- Subjects: Economic growth , Economic development -- Nelson Mandela
- Language: English
- Type: Doctoral's theses , text
- Identifier: http://hdl.handle.net/10948/58190 , vital:58675
- Description: The main assumption underlying this study is that structural change brings about growth and in turn translates to poverty reduction through the expansion of labour absorbing economic sectors and employment in higher productivity non-primary sectors. Since labour productivity in non-primary sectors is higher, the large-scale migration of labour out of primary activity should raise labour incomes and result in poverty reducing growth. Economic growth driven by structural change in income and employment should therefore aid and promote poverty reduction. Notwithstanding the important role of the national sphere of government in setting the industrial policy framework in the country, this research places emphasis on the role and contribution of regional economies in translating active industrial policy into implementation and development results. In South Africa the rise in poverty can be partially attributed to an economy that is not growing at the required rates needed to, among others, create the necessary employment opportunities at scale. The ability to adequately respond to these national development challenges depends on key economic regions in the country unlocking growth in several economic sectors, in particular the manufacturing sector which is described as labour-intensive and with a high multiplier effect on the economy. To this end, the capacity of regional governments working with regional stakeholders to plan, coordinate, implement and provide oversight over integrated regional industrialisation strategies and implementation plans becomes pivotal. Equally, the Nelson Mandela Metropole, which is the geographic area of focus for this study, has identified and prioritised the growth of the manufacturing sector as one of its economic priorities, reflecting its ambition of driving a programme of re-industrialisation and positioning the region as one of the country’s industrial centres. The main proposition of this study is that the Nelson Mandela Metropole, like other regional economies in the country, is not able to drive the programme of re-industrialisation. The reason for this inability is that it does not have a coherent framework of levers that are at the disposal of regional governments and regional stakeholders to design and implement a programme of re-industrialisation within the ii context of a globalised economy but that takes into consideration national peculiarities of the manufacturing sector. The fact that the regions do not have an integrated regional implementation plan for reviving the manufacturing sector creates an eco-system where there is limited coordination of the actions of different role players, in turn limiting collaboration within the region. The research has identified a gap in the literature between the two areas that impact on this study, namely, industrial development and regional economic development. The study navigates the literature across these two areas to emerge with a synthesised framework of strategic enablers for industrialisation at a regional level. These strategic enablers can be used by regional governments to develop an integrated regional framework to drive the industrialisation programme at this level. With specific reference to the Nelson Mandela Metropole, the study used a mixed methods research approach to assess regional actors’ views on the strategic enablers identified through the literature. A survey was employed to extract data from manufacturing enterprises in the region on the perceived constraints to the growth of the manufacturing sector. The quantitative data were complemented by qualitative data collected through semi-structured interviews with key regional informants. The results of the study reveal some of the general weaknesses that confront the region as it pursues regional industrialisation. Importantly, the study uses the identified regional strategic enablers to develop a framework that can be used by regional actors to design an implementation plan. , Thesis (PhD) -- Faculty of Business and Economic science, 2022
- Full Text:
- Date Issued: 2022-04
- Authors: Sipuka, Msingathi
- Date: 2022-04
- Subjects: Economic growth , Economic development -- Nelson Mandela
- Language: English
- Type: Doctoral's theses , text
- Identifier: http://hdl.handle.net/10948/58190 , vital:58675
- Description: The main assumption underlying this study is that structural change brings about growth and in turn translates to poverty reduction through the expansion of labour absorbing economic sectors and employment in higher productivity non-primary sectors. Since labour productivity in non-primary sectors is higher, the large-scale migration of labour out of primary activity should raise labour incomes and result in poverty reducing growth. Economic growth driven by structural change in income and employment should therefore aid and promote poverty reduction. Notwithstanding the important role of the national sphere of government in setting the industrial policy framework in the country, this research places emphasis on the role and contribution of regional economies in translating active industrial policy into implementation and development results. In South Africa the rise in poverty can be partially attributed to an economy that is not growing at the required rates needed to, among others, create the necessary employment opportunities at scale. The ability to adequately respond to these national development challenges depends on key economic regions in the country unlocking growth in several economic sectors, in particular the manufacturing sector which is described as labour-intensive and with a high multiplier effect on the economy. To this end, the capacity of regional governments working with regional stakeholders to plan, coordinate, implement and provide oversight over integrated regional industrialisation strategies and implementation plans becomes pivotal. Equally, the Nelson Mandela Metropole, which is the geographic area of focus for this study, has identified and prioritised the growth of the manufacturing sector as one of its economic priorities, reflecting its ambition of driving a programme of re-industrialisation and positioning the region as one of the country’s industrial centres. The main proposition of this study is that the Nelson Mandela Metropole, like other regional economies in the country, is not able to drive the programme of re-industrialisation. The reason for this inability is that it does not have a coherent framework of levers that are at the disposal of regional governments and regional stakeholders to design and implement a programme of re-industrialisation within the ii context of a globalised economy but that takes into consideration national peculiarities of the manufacturing sector. The fact that the regions do not have an integrated regional implementation plan for reviving the manufacturing sector creates an eco-system where there is limited coordination of the actions of different role players, in turn limiting collaboration within the region. The research has identified a gap in the literature between the two areas that impact on this study, namely, industrial development and regional economic development. The study navigates the literature across these two areas to emerge with a synthesised framework of strategic enablers for industrialisation at a regional level. These strategic enablers can be used by regional governments to develop an integrated regional framework to drive the industrialisation programme at this level. With specific reference to the Nelson Mandela Metropole, the study used a mixed methods research approach to assess regional actors’ views on the strategic enablers identified through the literature. A survey was employed to extract data from manufacturing enterprises in the region on the perceived constraints to the growth of the manufacturing sector. The quantitative data were complemented by qualitative data collected through semi-structured interviews with key regional informants. The results of the study reveal some of the general weaknesses that confront the region as it pursues regional industrialisation. Importantly, the study uses the identified regional strategic enablers to develop a framework that can be used by regional actors to design an implementation plan. , Thesis (PhD) -- Faculty of Business and Economic science, 2022
- Full Text:
- Date Issued: 2022-04
Institutionalised business incubation: a frontier for accelerating entrepreneurship in African countries
- Authors: Lose, Thobekani
- Date: 2021
- Subjects: Economic indicators , Economic growth , Business incubators
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/11260/7405 , vital:53977 , https://www.abacademies.org/articles/institutionalised-business-incubation-a-frontier-for-accelerating-entrepreneurship-in-african-countries-9989.html
- Description: Africa is a growing hub for small, medium and large enterprise. This paper attempts to cement the need to create business incubation institutions in South Africa (as well as in other African countries) so as to promote a superior entrepreneurial ecosystem for economic growth. The Africa of tomorrow needs solutions that last and one key component is the progress of entrepreneurship as an employment strategy, an innovation and creativity platform, and a key economic factor. This study employs a narrative overview of literature to explore an institutionalised business incubation concept as a frontier for accelerating entrepreneurship in African countries. The study found that the need for institutionalised business incubation has become pervasive for superior entrepreneurial ecosystems across economies. The study recommends that central governments need to promote the development of local, regional and national institutions for the strong development of incubation as well as entrepreneurship.
- Full Text:
- Date Issued: 2021
- Authors: Lose, Thobekani
- Date: 2021
- Subjects: Economic indicators , Economic growth , Business incubators
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/11260/7405 , vital:53977 , https://www.abacademies.org/articles/institutionalised-business-incubation-a-frontier-for-accelerating-entrepreneurship-in-african-countries-9989.html
- Description: Africa is a growing hub for small, medium and large enterprise. This paper attempts to cement the need to create business incubation institutions in South Africa (as well as in other African countries) so as to promote a superior entrepreneurial ecosystem for economic growth. The Africa of tomorrow needs solutions that last and one key component is the progress of entrepreneurship as an employment strategy, an innovation and creativity platform, and a key economic factor. This study employs a narrative overview of literature to explore an institutionalised business incubation concept as a frontier for accelerating entrepreneurship in African countries. The study found that the need for institutionalised business incubation has become pervasive for superior entrepreneurial ecosystems across economies. The study recommends that central governments need to promote the development of local, regional and national institutions for the strong development of incubation as well as entrepreneurship.
- Full Text:
- Date Issued: 2021
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
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