Browsing by Subject "economic growth"

Now showing 1 - 13 of 13
  • Thumbnail Image
    Item
    Open Access
    An Analysis of the Finance Growth Nexus in Nigeria
    (2021) Chetty, Roheen; Nikolaidou, Eftychia
    This study empirically examines the relationship between financial development and economic growth in Nigeria. It employs statistical techniques such as the Autoregressive Distributed Lag approach as well as a short and long run Granger Causality test on time series data spanning from 1960-2016. Empirical results reveal that the financial development indicators have a long run relationship with economic growth in Nigeria and the existence of unidirectional and bidirectional Granger causality was also discovered. This study recommends that policy should be geared towards promoting financial development in the country as well as encouraging more financial depth and openness – in order to foster economic growth in Nigeria.
  • Thumbnail Image
    Item
    Open Access
    Analysing the Relationship between Banking Development and Economic Growth: Time Series Evidence from Namibia
    (2020) Diergaardt, Colin; Alhassan, Abdul Latif; Mutize, Misheck
    The main objective of this study is to examine the relationship between banking development and economic growth in Namibia. Namibia has eight licenced commercial banks, four of which have been operational prior to the country's independence; Bank Windhoek Limited, First National Bank Namibia Limited, Nedbank Namibia Limited and Standard Bank Namibia Limited (BON, 2018). The other four licenced commercial banks began operating post independence. The banking development indicators employed by this study were broad money to nominal GDP (M2), private sector credit to nominal GDP (PSC), and lending interest rates (INTR). The data used in this study is annual data, covering the period 1991 to 2018, engaging the VAR/VECM framework in order to determine the presence of a long-run and short-run association. In addition, this study engaged the Granger causality methodology in order to determine the casual association between banking development and economic growth. The error correction term equation suggested a long-run relationship between the variables in the VECM, while the results indicated that there are no short run associations amongst the variables. Further, the results of the Granger causality test indicated a bidirectional causality between LNRGDP and LNPSC. In addition, the causality test showed that lags of LNINTR Granger causes LNPSC, which is consistent with the neoclassical theory of interest rate, which pronounces that interest rates are determined by the demand and the supply of loanable funds. Moreover, lags of LNINTR and lags of LNM2 granger causes LNRGDP, which suggest that banking development causes economic growth. The study recommended that the Namibian banks should reform credit policies and decrease the cost of debt in an attempt to avail more credit to the private sector in order to sustain and stimulate economic growth.
  • No Thumbnail Available
    Item
    Open Access
    Analysing the role of external debt and corruption on economic growth in the Sub-Saharan African Region
    (2025) Chicha, Chilala; Mpofu, Trust
    This paper examines the relationship between corruption, external debt and economic growth in the Sub-Saharan African region as the roles of external debt and corruption as growth drivers or deterrents remains inconclusive. The paper employs a two-step system generalized method of moments (sysGMM) model to estimate the relationship between external debt, corruption and economic growth. An interaction term between external debt and corruption is included to determine whether the impact of external debt on growth is influenced by the level of perceived corruption in an economy. Corruption is found to have a negative and often significant relationship with economic growth whilst external debt has significant, varying associations with economic growth. The interaction between debt and corruption is also found to significantly influence economic growth.
  • Thumbnail Image
    Item
    Restricted
    Energy Sector Reform and the Poor: Energy Use and Supply: a Four Country Study: Botswana, Ghana, Honduras & Senegal (ESMAP)
    (2006-03) Prasad, Gisela
    The Energy Sector Management Assistance Program (ESMAP) is a global technical assistance partnership administered by the World Bank and sponsored by bi-lateral official donors, since 1983. ESMAP's mission is to promote the role of energy in poverty reduction and economic growth in an environmentally responsible manner. Its work applies to low-income, emerging, and transition economies and contributes to the achievement of internationally agreed development goals. ESMAP interventions are knowledge products including free technical assistance, specific studies, advisory services, pilot projects, knowledge generation and dissemination, trainings, workshops and seminars, conferences and roundtables, and publications. ESMAP work is focused on four key thematic programs: energy security, renewable energy, energy-poverty and market efficiency and governance.
  • Thumbnail Image
    Item
    Restricted
    Meeting the Challenge of Unemployment?
    (SAGE Publications, 2014) Nattrass, N
    South Africa has one of the highest rates of unemployment in the world. Job creation is a national priority, yet labor-intensive options are derided by the trade union movement as an unacceptable throwback to the “cheap labor” policies of apartheid, and effectively ruled out by the government in its recent National Development Plan (NDP). Instead, minimum-wage setting in South Africa continues to contribute to job destruction (as evidenced most recently in the clothing industry). Policy-makers hope that support for high-productivity firms and rapid economic growth will make up for job losses and solve the unemployment problem. Unfortunately, South Africa’s economic performance has been comparatively disappointing and constrained by negative investor sentiment, especially with regard to the labor market. The NDP has called for a social accord between labor and capital. But the prospects are not promising, and unemployment is likely to remain a significant feature of the South African economic landscape.
  • Thumbnail Image
    Item
    Open Access
    Pension fund Investment and infrastructure development in Namibia
    (2020) Mingeli, Benedictus; Alhassan, Abdul Latif
    Developing countries, such as Namibia, need to bridge the existing infrastructure gap to improve the country's comparative advantage, economic growth and competitiveness, quality of life and the welfare of its citizens. As traditional sources of finance dwindle, Pension Fund savings need to be pooled to complement traditional sources of funding, such as government budgetary allocations, borrowing and user fees. Although infrastructure's economic and financial characteristics are a match to Pension Fund liabilities, Namibia's Pension Fund investment in infrastructure lags behind world-class benchmarks. This study investigated the factors that hinder Pension Fund investment in infrastructure in Namibia. The study employed a mixed-method research method and convergent parallel data collection processes. The study obtained a representative sample to participate in the survey from a population of NAMFISA registered Pension Fund and investment managers using a combination of the stratified random and simple random sampling techniques as part of primary data collection. The financial characteristics that make infrastructure assets attractive such as; long term, low sensitivity to economic swings, a low correlation with other assets and long term and inflation hedged returns makes them suitable for Pension Fund investments. The study confirms findings of previous studies by Beeferman, (2008); Ehlers, (2014); Inderst & Della Croce, (2013); Sy, (2017) and Thierie & Moor (2016), amongst others, revealed factors such as; a lack of a project pipeline, a lack of expertise by Pension Funds in infrastructure investments, Pension Fund regulation and a lack of financial instruments and assets that match Pension Funds are barriers to Pension Fund investment in infrastructure. The lack of a project pipeline is further attributable to issues such as infrastructure projects that are not sufficiently developed or viable on their own without some form of government support, inefficiencies in public procurement and public-private partnership policies and a lack of project preparation funding. The study recommends the following initiatives by policymakers and key stakeholders towards increasing Pension Fund investment in infrastructure: firstly, government and state-owned institutions responsible for public services should implement policies that will increase the pipeline of bankable and implementable projects. The National Development Plans (NDP5), the Harambee Prosperity plans and the Vision 2030 already identify projects; however, institutionstasked with infrastructure development need to develop implementation modelsthat are viable and bankable. The development plans need to be coordinated across the various levels iii of government and state-owned enterprises for effective implementation. Secondly, it is recommended that policymakers create the necessary conditions for Public Procurement and Public Private Partnership Policies to gain confidence amongst investors. Rooting out corruption and ensuring processes are transparent and fair to all stakeholders can have the effect of creating investor confidence in the two policies. The financial institutions, especially with a developmental angle, should support the public institutions with project preparation funding and technical assistance during project planning/development. Thirdly, the government, through the regulators, NAMFISA, are advised to continue with the implementation of policies aimed at increasing the limit on assets held with unlisted investment managers to allow increased Pension Fund investment in infrastructure without compromising the performance (return) and risk exposure. The financial regulators, NAMFISA and the Bank of Namibia should encourage the growth of the local financial sector to increase the quality and quantity of financial instruments available to investors and increase the depth of the financial sector to absorb local funding capacity. Lastly, the government is recommended to explore the options of partial listing infrastructure SOEs,such as NamPower, NamWater, Road Fund Administrator (RFA), NamPort, TransNamib, among others, to facilitate Pension Fund investment into infrastructure and reduce transaction cost and risks. The study identifies the need for future research opportunities with the aim of understanding issues that affect the project pipeline in the Namibian context in greater detail.
  • Thumbnail Image
    Item
    Open Access
    Renewable energy technologies for poverty alleviation: South Africa - biodiesel and solar water heaters
    (University of Cape Town, 2006) Prasad, Gisela; Visagie, Eugene
    South Africa, like other transitional countries, faces the dual challenge of pursuing economic growth and environmental protection. Sustainable energy systems, based on renewable energy (RE) resources, offer the possibility of doing both. The implementation of RE technologies faces a major challenge because South Africa has large coal deposits and its electricity generated from coal is among the cheapest in the world. Currently less than 1% of the 200 000 GWh of electricity generated in the country originates from renewable sources (DME, 2003a). The Government’s White Paper on Renewable Energy Policy (2003) supports the establishment of RE technologies, targeting the provision of 10 000 GWh of electricity from renewable resources by 2013. This has the potential to create 35 000 jobs, adding R5 billion to the GDP and R687 million to the incomes of low-income households (DME, 2004). Solar water heating and biodiesel have the greatest potential to contribute to meeting the target. RE is to be utilised for both power generation and non-electric technologies such as solar water heating and biofuels. By late 2005 the DME completed a Renewable Energy Target Monitoring Framework to ensure that progress towards the 2013 target is effectively monitored (DME, 2005a). In this report, two RE technologies – solar water heaters (SWHs) and biodiesel – have been identified where renewable energy could make a significant contribution towards poverty alleviation in terms of improving the general welfare of households as well as developing productive activities to generate employment. The country has high levels of solar radiation and an established manufacturing infrastructure for SWHs. They can contribute to a reduction in greenhouse gas (GHG) emissions, and their manufacture and installation can contribute to job creation and skills development. However, the high upfront capital cost of SWHs is one of the key barriers to the development of a market in South Africa. Biodiesel has the potential to contribute to job creation, economic development in disadvantaged rural communities, energy security in the light of rising oil prices, and reducing greenhouse gas emissions. Some of the key challenges to the development of a biodiesel market are food security and limited water resources.
  • Thumbnail Image
    Item
    Open Access
    Savings, investment and economic growth in Namibia
    (2018) Namoloh, Julius Nyerere; Charteris, Ailie
    This study examined the interaction between saving, investment and economic growth in Namibia. The relationship between these variables is central to Namibia’s guiding macroeconomic framework. However, empirical evidence has shown that the relationship between saving, investment and economic growth depends on the country context. This makes it important to understand the policy implications of the interaction between these variables in Namibia. The specific objectives of the study were to investigate the causal relationship between saving and investment and the impact of the saving-investment relationship on economic growth in Namibia. The diagnostic testing using the Johansen cointegration test revealed a long-run relationship between the study variables with one cointegrating equation. The long run analysis was followed by Granger causality tests to understand short-run causal relationships between the variables. Impulse response functions and variance decompositions were also estimated to examine the interaction between the variables. The results from the Vector Error Correction Model showed that there was a positive long-run relationship between economic growth and investment, & savings and investment in Namibia. The Granger causality test revealed a causal relationship between saving and investment, consistent with the long-run analysis. The study implications are that a pro-saving policy can achieve increased investment. However, the long run relationship between investment and economic growth implies that investment should be made on a longer term for it to impact on economic growth. It is therefore recommended that Namibia implements policies to encourage long term investments. This can be achieved through waiving duty on capital goods and offering tax incentives to investors in strategic sectors of the economy.
  • No Thumbnail Available
    Item
    Open Access
    The effects of fiscal and monetary policy on economic growth in Zambia
    (2025) Luneta, Dean; Mateane, Lebogang
    This study assesses the impact of fiscal and monetary policy on economic growth in Zambia for the period 2010Q1 to 2022Q4 using money supply and the monetary policy rate as monetary policy instruments and fiscal policy instruments such as government expenditure and fiscal policy outcomes in the form of government revenue. Government expenditures excluded interest payments from total expenditure as the data did not explicitly provide lines for government expenditure in the domestic economy. Government revenues were modelled as policy outcomes of fiscal policy to rule out the possibility of having to pinpoint the accurate form of tax tools or instruments such as the income tax rate, value-added tax rates, or rates associated with customs duty. This study uses vector autoregression (VAR) model to conduct the empirical analysis of the impact of monetary and fiscal policy on economic growth. Within the VAR framework, the Structural VAR (SVAR) was used to model the dynamic relationship among the different variables and trace out the impact of shocks from monetary and fiscal instruments using impulse response functions. The SVAR uses a recursive identification strategy and ordered the exogenous copper prices first, followed by GDP, inflation, a monetary policy instrument and a fiscal policy instrument. Consistent with theory, the results of the impulse response functions show that money supply positively affects GDP but also drives inflation up. On the other hand, the bank policy rate did not have a significant effect on GDP on its own but it seemed to slow down inflation. In the same vein, both government revenue and expenditure serving as fiscal instruments did positively affect GDP but also edged inflation upwards across the 20-period horizon.
  • No Thumbnail Available
    Item
    Open Access
    The impact of foreign direct investment on economic growth in Lesotho
    (2025) Nkhasi, Rethabile; Nikolaidou, Eftychia
    This study evaluates the impact of the inflow of foreign direct investment (FDI) on Lesotho's economic growth in both the short- and long-run from 1977 to 2020. Three versions of the exogenous model guided by Solow (1956), Mankiw Gregory et al. (1992), and World Bank (1990) and augmented by FDI are used and then estimated by the Auto-Regressive Distributed Lag (ARDL) approach to cointegration. The findings show that FDI's influence on economic growth is negligible, while capital investment (i.e. gross fixed capital formation) and human capital induce economic growth in both the long-run and the short-run. It is also noted that population growth is detrimental to economic growth in both periods whereas trade openness only exerts a positive influence on economic growth in the long-run. The policy implications that are derived from this study suggest amendments in land allocation policies and increased governmental support for the investment promotion agency, LNDC, which currently relies on limited income sources. Moreover, the paper recommends that policymakers boost technological progress by regularly updating school curricula and promoting trade, particularly in tech-intensive sectors.
  • Thumbnail Image
    Item
    Open Access
    The impact of mobile communications infrastructure investment on economic growth in South Africa
    (2018) Sookha, Keshal; Alhassan, Abdul Latif
    Mobile telecommunications networks provide the ability to access the internet and use telephony services, where the infrastructure exists. Because of its mobile nature a customer can always connect to the internet, even when not in the comfort of their home, unlike the case with fixed-line services. This paper studies the impact of mobile telecommunications investment on economic growth in South Africa. To test the impact of mobile telecommunications investment on economic growth, the dissertation examines the development of mobile telecommunications infrastructure in South Africa and the relationship between mobile communications infrastructure investment (MCII) on economic growth. It is hypothesised that MCII has a relationship with economic growth. The methodology employed by this study is the autoregressive distributed lags (ARDL) approach with secondary data sourced from the World Bank Group and Global System Mobile Association (GSMA) databases over the period 1994 to 2016. To model the relationship, the study used a neoclassical growth model with proxies for economic growth as gross domestic product (GDP); capital as mobile operator capital expenditure and gross capital formation; and labour as the labour force and the unemployment rate. Results of the study showed that there was a unidirectional Granger causality between GDP and MCII and therefore no bidirectional causal relationship between MCII and GDP. Furthermore, using the ARDL approach found no cointegration between the variables and consequently no long run relationship. Producing the short run model as a VAR (2) model using the Akaike information criteria (AIC) lag selection also resulted in no significant relationship between MCII and GDP. This result has very important implications for policy recommendations to government and for development. Firstly, government should investigate why there is no significant impact of MCII on GDP because this relationship does exist in other markets. From these findings, government can develop and adopt policies which could produce a positive effect of MCII on GDP.
  • Thumbnail Image
    Item
    Open Access
    The impact of transport infrastruture in the econolic growth of South Africa
    (2018) Selamolela, Nokuthula; Alhassan, Abdul Latif
    This study examines the impact of transport infrastructure on the economic growth of South Africa from the period 1970 to 2015. The researcher adopted a conceptual and theoretical framework related to infrastructure development and economic growth. The Johansen multivariate Co-integration and Granger causality test were adopted, consisting of stationary and directional causality of variables. The findings disclosed a strong unidirectional causality relationship in the long run between economic growth and gross domestic fixed capital formation, which runs from the former to the latter. The results also indicated a causal relationship between economic growth and transport infrastructure in both railway and ports transport. Moreover, there exist links between economic growth and railway transport, which run from the former to the latter. The findings further showed that the correlation between economic growth and ports transport runs from the former to the latter. On the contrary, the findings revealed a non-existence of causal relationship between economic growth and transport infrastructure (roadways and airways), though the theoretical framework demonstrates a link between them. The findings also revealed a non-existence of a causality association between economic growth and transport infrastructure performance. The overall findings demonstrated the existence of a unidirectional causality relationship between economic growth and gross domestic fixed capital formation, and between economic growth and transport infrastructure (both railways and ports transport). Economic growth expands commercial and industrial sectors and as such, there is a need to suggest that transport infrastructure development policies align with it to maintain sustainable economic growth in South Africa.
  • Thumbnail Image
    Item
    Open Access
    The role of private capital flows and financial deepening in the economic growth of South Africa
    (2018) Karimatsenga, Sharon; Alhassan, Abdul Latif
    This research examines the role of Private Capital Flows (PCF) and Financial Deepening in the economic growth of South Africa. Using secondary data obtained from the South African Reserve Bank and the World Bank online databases for the period 1990 to 2015, we examine the relationship between these three variables using the Autoregressive Distributed Lag (ARDL) bounds testing procedure. The causal relationship between the variables is further investigated using the Granger Causality test. Where previous studies mainly focus on investigating the relationship between capital flows and economic growth; and that of financial deepening and economic growth in South Africa independently; this study looks at the interrelationship between these three variables. Contrary to our expectations, the findings from the research suggest that there is no significant long run relationship between these variables in South Africa; however we found significant unidirectional short run causal relationships between the variables. The study established that in the short run, economic growth granger causes private capital flows; financial deepening granger causes private capital flows and that economic growth granger causes financial deepening. These findings imply that putting in place policies that encourage economic growth will lead to improvements in both PCF and financial deepening in the short run. In turn, improvements in financial deepening will also foster improvements in PCF in the short run. The results, policy implications, and future research are discussed.