The study used the Autoregressive Distributed Lag-Error Correction Model (ARDL-ECM) approach to e... more The study used the Autoregressive Distributed Lag-Error Correction Model (ARDL-ECM) approach to estimate the responsiveness of South African maize and sorghum producers to price risk, price incentives and non-price incentives. The price risk variable was incorporated in the supply models to examine its impact on maize and sorghum production decisions. The study used annual historical time series data of 49 observations for the period 1970 to 2018 was used in the analysis. The empirical results reveal that maize and sorghum producers' response to own price is reasonably low. The study further shows that both maize and sorghum crops demonstrate a high speed of adjustment to the long-run equilibrium, which means that in the event of a shock to the system, grain output will quickly re-establish itself at a faster rate. The findings underscore the relevance of price risk in determining production output in South Africa.
Risk Governance and Control: Financial Markets & Institutions, 2016
The political move in South Africa occurred against a setting of high government deficits. Effort... more The political move in South Africa occurred against a setting of high government deficits. Efforts have been made over the years by the government to reduce fiscal deficit and inflation, liberalize the capital account and the financial system as well as reduce tariffs. The main objective of this study, therefore, is to empirically investigate the effect of public debt on foreign direct investment in South African for the period 1983 – 2013. The study employs a Vector Error Correction Model, which provides both the long run and short run relationships among the variables. The long run results indicate that the relationship between public debt and foreign direct investment, as well as interest rate and foreign direct investment, is positive and statistically significant, while there is an insignificant negative relationship between exchange rate and foreign direct investment. Based on the long run results, the study, thus, recommend that the level of public debt and interest rate shou...
Since 2018, the United States of America increased import tariffs especially to trading partners ... more Since 2018, the United States of America increased import tariffs especially to trading partners like China. This was in response to a huge trade deficit leading to escalating the US–China trade war. The spillover effects of the US–China trade war on some leading Sub-Saharan African countries namely Nigeria and South Africa is worthy of consideration. Using the (1) autoregressive distributive lag methodology and (2) formulated four trade models for current account balance, trade balance, tariff rates and foreign direct investment (FDI) in the US–China–Africa saga provide this perspective. They show strong spillover effects on the current account balance model, tariff rates, and FDI relationships. Consideration of trade balance as an indicator showed insignificant results. The result is an endorsement of open trade because it contributes to economic success in so many ways.
The exchange rate is an important macroeconomic variable used as a parameter for determining inte... more The exchange rate is an important macroeconomic variable used as a parameter for determining international competitiveness. It is regarded as an indicator of competitiveness of any currency of any country and an inverse relationship between this competitiveness exists. The study empirically examines the impact of the exchange rate on clothing exports in South Africa, for the period 1994Q1 to 2017Q4 by using the time series data from Quantec Easy Data and the South African Reserve Bank. The study uses a three-step estimation approach in the form of a unit root testing, cointegration analysis and the Vector Error Correction Model to determine the long-run and the short run relationships and to determine the level of impact of exchange rate on clothing exports. The results revealed the presence of a long-run and a negative relationship between the two variables under study. The findings and conclusions are valuable for the clothing sector and the government. The government should make ...
Land is viewed as the main source of livelihood for the majority of rural households in developin... more Land is viewed as the main source of livelihood for the majority of rural households in developing countries. However, the majority of the rural households do not have access to productive lands as land is finite and therefore a scarce resource and its distribution is largely attributed to historical land imbalances, hence the problem of rural poverty is more prevalent among the rural households. There has been increased demand for land for livelihoods and various land policies have been implemented in developing countries to stimulate growth in the agricultural sector and alleviate rural poverty. The question that remains is how does land redistribution policies and agriculture growth affect poverty alleviation? To answer the question, this study employed a multiplier decomposition approach using the 2010 IFPRI SOCIAL accounting matrix as the data base. The multiplier decomposition approach revealed that land redistribution and agriculture growth can alleviate poverty in South Afri...
Like in many other countries, the South African financial market facilitates the process of raisi... more Like in many other countries, the South African financial market facilitates the process of raising capital by channelling funds to more productive economic activity, thereby building the nation's economy while enhancing job opportunities and wealth creation. The aim of this paper is to assess the impact of monetary policy on financial market in South Africa. It is important to constantly look into this interaction since policy decisions have a direct influence on financial market. A negative response from the market side may jeopardise economic stability. The study uses the vector autoregressive (VAR) model to evaluate the impact of monetary policy on financial market in South Africa. The model consists of five policy instruments as variables; namely: money supply (M3), real exchange rate(ER), discount Rate (R), consumer price index (CPI), gross domestic product (GDP) and the two market related variables: Stock market turnover (S) and Bond market turnover (B). Data is obtained ...
Since 2018, the United States of America increased import tariffs especially to trading partners ... more Since 2018, the United States of America increased import tariffs especially to trading partners like China. This was in response to a huge trade deficit leading to escalating the US–China trade war. The spillover effects of the US–China trade war on some leading Sub-Saharan African countries namely Nigeria and South Africa is worthy of consideration. Using the (1) autoregressive distributive lag methodology and (2) formulated four trade models for current account balance, trade balance, tariff rates and foreign direct investment (FDI) in the US–China–Africa saga provide this perspective. They show strong spillover effects on the current account balance model, tariff rates, and FDI relationships. Consideration of trade balance as an indicator showed insignificant results. The result is an endorsement of open trade because it contributes to economic success in so many ways.
Risk Governance and Control: Financial Markets & Institutions, 2018
The neoclassical and Keynesian theories regard private investment not only as a source of economi... more The neoclassical and Keynesian theories regard private investment not only as a source of economic growth but also as a determinant of the potential extent of the national income. The aim of this research was to examine the determinants of private fixed investment in South Africa by employing the Johansen cointegration technique and the vector error correction model (VECM) analysis. Based on the literature survey it appears that the previous studies mainly focused on private investment in manufacturing and infrastructure sectors therefore this is envisaged to add knowledge to a body of economics literature in this area by focusing more on private fixed investment and its determinants in South Africa. The study concludes that for the period under investigation GDP has the positive sign as expected. This suggests that in the long run it impact positively on private fixed investment. The findings of the study also confirmed that tax rate is a complementary to private fixed investment. ...
Fiscal policy ensures macroeconomic stability as a precondition for growth at the macro level. Th... more Fiscal policy ensures macroeconomic stability as a precondition for growth at the macro level. This study investigates the impact of fiscal policy on economic growth of South Africa from 1960 to 2014 through a Cointegrated Vector Autoregression approach. It seeks to contribute to the existing literature as well as in designing effective fiscal policy programmes which can propel economic performance. Theresults of the long run estimates revealed that government tax revenue has a positive and significant long run influence on economic growth, whereas the government gross fixed capital formation and budget deficit have a negative impact on real GDP. For that reason, the study recommends that some expansionary fiscal policy measures should be strengthened since they play a very important role in the economy so as to meet the government target of the National Development Plan Vision for 2030.
Journal Article Published in: The 3rd Annual International Conference on Public Administration an... more Journal Article Published in: The 3rd Annual International Conference on Public Administration and Development Alternatives 04 - 06 July 2018, Stellenbosch University, Saldahna Bay, South Africa
The study used the Autoregressive Distributed Lag-Error Correction Model (ARDL-ECM) approach to e... more The study used the Autoregressive Distributed Lag-Error Correction Model (ARDL-ECM) approach to estimate the responsiveness of South African maize and sorghum producers to price risk, price incentives and non-price incentives. The price risk variable was incorporated in the supply models to examine its impact on maize and sorghum production decisions. The study used annual historical time series data of 49 observations for the period 1970 to 2018 was used in the analysis. The empirical results reveal that maize and sorghum producers' response to own price is reasonably low. The study further shows that both maize and sorghum crops demonstrate a high speed of adjustment to the long-run equilibrium, which means that in the event of a shock to the system, grain output will quickly re-establish itself at a faster rate. The findings underscore the relevance of price risk in determining production output in South Africa.
Risk Governance and Control: Financial Markets & Institutions, 2016
The political move in South Africa occurred against a setting of high government deficits. Effort... more The political move in South Africa occurred against a setting of high government deficits. Efforts have been made over the years by the government to reduce fiscal deficit and inflation, liberalize the capital account and the financial system as well as reduce tariffs. The main objective of this study, therefore, is to empirically investigate the effect of public debt on foreign direct investment in South African for the period 1983 – 2013. The study employs a Vector Error Correction Model, which provides both the long run and short run relationships among the variables. The long run results indicate that the relationship between public debt and foreign direct investment, as well as interest rate and foreign direct investment, is positive and statistically significant, while there is an insignificant negative relationship between exchange rate and foreign direct investment. Based on the long run results, the study, thus, recommend that the level of public debt and interest rate shou...
Since 2018, the United States of America increased import tariffs especially to trading partners ... more Since 2018, the United States of America increased import tariffs especially to trading partners like China. This was in response to a huge trade deficit leading to escalating the US–China trade war. The spillover effects of the US–China trade war on some leading Sub-Saharan African countries namely Nigeria and South Africa is worthy of consideration. Using the (1) autoregressive distributive lag methodology and (2) formulated four trade models for current account balance, trade balance, tariff rates and foreign direct investment (FDI) in the US–China–Africa saga provide this perspective. They show strong spillover effects on the current account balance model, tariff rates, and FDI relationships. Consideration of trade balance as an indicator showed insignificant results. The result is an endorsement of open trade because it contributes to economic success in so many ways.
The exchange rate is an important macroeconomic variable used as a parameter for determining inte... more The exchange rate is an important macroeconomic variable used as a parameter for determining international competitiveness. It is regarded as an indicator of competitiveness of any currency of any country and an inverse relationship between this competitiveness exists. The study empirically examines the impact of the exchange rate on clothing exports in South Africa, for the period 1994Q1 to 2017Q4 by using the time series data from Quantec Easy Data and the South African Reserve Bank. The study uses a three-step estimation approach in the form of a unit root testing, cointegration analysis and the Vector Error Correction Model to determine the long-run and the short run relationships and to determine the level of impact of exchange rate on clothing exports. The results revealed the presence of a long-run and a negative relationship between the two variables under study. The findings and conclusions are valuable for the clothing sector and the government. The government should make ...
Land is viewed as the main source of livelihood for the majority of rural households in developin... more Land is viewed as the main source of livelihood for the majority of rural households in developing countries. However, the majority of the rural households do not have access to productive lands as land is finite and therefore a scarce resource and its distribution is largely attributed to historical land imbalances, hence the problem of rural poverty is more prevalent among the rural households. There has been increased demand for land for livelihoods and various land policies have been implemented in developing countries to stimulate growth in the agricultural sector and alleviate rural poverty. The question that remains is how does land redistribution policies and agriculture growth affect poverty alleviation? To answer the question, this study employed a multiplier decomposition approach using the 2010 IFPRI SOCIAL accounting matrix as the data base. The multiplier decomposition approach revealed that land redistribution and agriculture growth can alleviate poverty in South Afri...
Like in many other countries, the South African financial market facilitates the process of raisi... more Like in many other countries, the South African financial market facilitates the process of raising capital by channelling funds to more productive economic activity, thereby building the nation's economy while enhancing job opportunities and wealth creation. The aim of this paper is to assess the impact of monetary policy on financial market in South Africa. It is important to constantly look into this interaction since policy decisions have a direct influence on financial market. A negative response from the market side may jeopardise economic stability. The study uses the vector autoregressive (VAR) model to evaluate the impact of monetary policy on financial market in South Africa. The model consists of five policy instruments as variables; namely: money supply (M3), real exchange rate(ER), discount Rate (R), consumer price index (CPI), gross domestic product (GDP) and the two market related variables: Stock market turnover (S) and Bond market turnover (B). Data is obtained ...
Since 2018, the United States of America increased import tariffs especially to trading partners ... more Since 2018, the United States of America increased import tariffs especially to trading partners like China. This was in response to a huge trade deficit leading to escalating the US–China trade war. The spillover effects of the US–China trade war on some leading Sub-Saharan African countries namely Nigeria and South Africa is worthy of consideration. Using the (1) autoregressive distributive lag methodology and (2) formulated four trade models for current account balance, trade balance, tariff rates and foreign direct investment (FDI) in the US–China–Africa saga provide this perspective. They show strong spillover effects on the current account balance model, tariff rates, and FDI relationships. Consideration of trade balance as an indicator showed insignificant results. The result is an endorsement of open trade because it contributes to economic success in so many ways.
Risk Governance and Control: Financial Markets & Institutions, 2018
The neoclassical and Keynesian theories regard private investment not only as a source of economi... more The neoclassical and Keynesian theories regard private investment not only as a source of economic growth but also as a determinant of the potential extent of the national income. The aim of this research was to examine the determinants of private fixed investment in South Africa by employing the Johansen cointegration technique and the vector error correction model (VECM) analysis. Based on the literature survey it appears that the previous studies mainly focused on private investment in manufacturing and infrastructure sectors therefore this is envisaged to add knowledge to a body of economics literature in this area by focusing more on private fixed investment and its determinants in South Africa. The study concludes that for the period under investigation GDP has the positive sign as expected. This suggests that in the long run it impact positively on private fixed investment. The findings of the study also confirmed that tax rate is a complementary to private fixed investment. ...
Fiscal policy ensures macroeconomic stability as a precondition for growth at the macro level. Th... more Fiscal policy ensures macroeconomic stability as a precondition for growth at the macro level. This study investigates the impact of fiscal policy on economic growth of South Africa from 1960 to 2014 through a Cointegrated Vector Autoregression approach. It seeks to contribute to the existing literature as well as in designing effective fiscal policy programmes which can propel economic performance. Theresults of the long run estimates revealed that government tax revenue has a positive and significant long run influence on economic growth, whereas the government gross fixed capital formation and budget deficit have a negative impact on real GDP. For that reason, the study recommends that some expansionary fiscal policy measures should be strengthened since they play a very important role in the economy so as to meet the government target of the National Development Plan Vision for 2030.
Journal Article Published in: The 3rd Annual International Conference on Public Administration an... more Journal Article Published in: The 3rd Annual International Conference on Public Administration and Development Alternatives 04 - 06 July 2018, Stellenbosch University, Saldahna Bay, South Africa
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