Since 1980, South Africa recorded massive budget deficits except in 2007 and 2008 when the budget surpluses as a percentage of GDP respectively stood at 0.3 per cent and 0.7 per cent. This stirred a great debate on whether budget deficits in South Africa are a result of poor governance or are due to the magnitude of the economic problems that the government seeks to alleviate. Therefore, this study examines the economic determinants of budget deficits in South Africa for the period 1980 -2010. Specifically, the study seeks to ascertain if budget deficits in South Africa are a result of the fight against economic problems. The Vector Error Correction Model (VECM) was used to determine the impact of selected macroeconomic variables on budget deficits in South Africa. The results revealed that all the determinants have a positive impact on budget deficits except for foreign debt. However, foreign reserves explain the largest component variation of budget deficit followed by foreign debt, unemployment, economic growth and government investment, in that order.
Unemployment is one of the most topical challenges facing South
The paper examined "the role of export diversification on economic growth in South Africa
Local Economic Development entered the development lexicon in South Africa in the 1990s and from that time it has become not just an "isolated local development initiative" but an obligation for all local authorities according to a plethora of government policies and the South African Constitution of 1996. While this paper explicates the Local Economic Development episteme in South Africa, it also seeks to explore reasons for the demise of local economic development in South Africa. The paper is exploratory and descriptive in design and relied on extensive literature review. It argues that LED in South Africa suffers from both conceptual imprecision and theoretical underdevelopment. The assumption of a local economy underpinning LED is also questioned in an era of globalisation. Moreover, other challenges confronting the success of LED in the country highlighted entail lack of local government capacity for implementation, funding for LED, lack of effective planning methodologies and failure to manage participation at the local level.
One of the most pressing problems facing the South African economy is unemployment, which has been erratic over the past few years. This study examined the impact of economic growth on unemployment, using quarterly time series data for South Africa for the period 1994 to 2012.Johansen Co-integration reflected that there is stable and one significant long run relationship between unemployment and the explanatory variables that is economic growth (GDP), budget deficit (BUG), real effective exchange rate (REER) and labour productivity (LP). The study utilized Vector Error Correction Model (VECM) to determine the effects of macroeconomic variables thus REER, LP, GDP and BUG on unemployment in South Africa. The results of VECM indicated that LP has a negative long run impact on unemployment whilst GDP, BUG and REER have positive impact. The study resulted in the following policy recommendation: South African government should re-direct its spending towards activities that directly and indirectly promote creation of employment and decent jobs; a conducive environment and flexible labour market policies or legislations without impediments to employment creation should be created; and lastly government should prioritise industries that promote labour intensive. All this will help in absorbing large pools of the unemployed population thereby reducing unemployment in South Africa.
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. Similarly, the real exchange rate coefficient was negative as expected which suggests that the depreciation of the currency stimulates the growth of South Africa private fixed investment. It is obvious that even the best economic model cannot achieve the expected outcomes immediately but these results encourage the study to believe that the South African monetary policy on exchange rate complements private fixed investment. Therefore, the study proposes that both even though both growth and general tax rate are difficult to accomplish simultaneously, they should be used to promote the flow of private fixed investment in South Africa.
This study sought to investigate the relationship between exchange rate volatility and export performance in South Africa. The main objective of the study was to examine the impact of exchange rate volatility on export performance in South Africa. This relationship was examined using GARCH methods. Exports were regressed against real effective exchange rate, trade openness, and capacity utilisation. The research aimed to establish weather exchange rate volatility impacts negatively on export performance in the manner suggested by econometric model. The result obtained showed that exchange rate volatility had a significantly negative effect of South African exports in the period 2000-2011.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.