Economic Growth In South Africa Research Articles

The unfinished promise of infrastructure in post‐apartheid South Africa

AbstractThis article explores aspects of the “unfinished” using notions of human‐centered design in African public infrastructure and the importance of involving the “users” and “beneficiaries” in infrastructure development and delivery. Infrastructure, both conceptually as an idea and in its constructed material reality, has a huge impact on society, socially and economically, and has been promised as one of the most effective drivers of economic growth in South Africa. Increasingly in South Africa, facilities are falling into disrepair. Infrastructure is being adapted and used in unintended ways that often do not provide the socio‐economic benefits intended. In considering medical infrastructure across three sites in post‐apartheid South Africa, my argument asks how factors such as statecraft, governance and funding models, design considerations, project implementation methodologies, operational and maintenance policies affect the promise of infrastructural change in contemporary South Africa?

Remittances and economic growth: Evidence from South Africa using ARDL in the presence of structural breaks

The aim of this study is to investigate the relationship between remittances and economic growth in South Africa, using data running from 1970 to 2019. We utilize the ARDL bounds testing approach to explore the relationship between remittances and economic growth, incorporating control variables and addressing structural breaks. Our findings suggest that the structural change in economic growth occurred in 2008 during the global financial crisis, while the break point for remittances emerged in 1997. After taking into consideration the presence of structural breaks, our study found the estimated coefficient for remittances to be statistically significant at the 1% level of significance. The coefficient is negative, indicating that remittances have a negative impact on economic growth. This result is robust to alternative estimators, including the fully modified least squares technique and the impulse response function. Despite employing different estimation methods, the consistent finding of a negative relationship between remittance inflows and economic growth underscores the reliability of our conclusion. Being a recipient of remittances, it is appropriate for a study of this nature to guide policy makers in formulating appropriate policies to benefit from the full impact of remittances, diversify the economy, and reduce reliance on remittance inflows.

Entrepreneurship Education in South Africa’s Higher Education Institutions:Iin Pursuit of Promoting Self-Reliance in Students

Purpose: Entrepreneurship Education (EE) has garnered increased attention in SouthAfrican higher education institutions due to its potential to foster self-reliance and jobcreation in a country grappling with high unemployment rates. This study examinesentrepreneurship education's role in promoting economic development and povertyalleviation in South Africa.Study design/methodology/approach: The study adopts a systematic reviewapproach to explore the effectiveness of entrepreneurship education in addressingunemployment, creating employment opportunities, and fostering economic growthin South Africa. The study seeks to identify key findings and insights regardingintegrating entrepreneurship education into teaching and learning practices in highereducation institutions by synthesising existing literature.Findings: The findings indicate that entrepreneurship education has the potential toaccelerate economic growth, reduce unemployment rates, and alleviate poverty trapsin South Africa. By equipping students with entrepreneurial skills and mindset,entrepreneurship education can empower individuals to establish and sustain smallbusinesses, thus contributing to economic development and poverty reduction.Originality/value: This study contributes to the existing literature by providinginsights into the role of entrepreneurship education in addressing socio-economicchallenges in South Africa. The findings underscore the importance of integratingentrepreneurship education into teaching and learning practices across all highereducation institutions to tackle unemployment and poverty in the country effectively.The study emphasises the need for concerted efforts from stakeholders in highereducation to prioritise entrepreneurship education to foster economic resilience andsocial upliftment in South Africa.

The Impact of Current Account Balance on Economic Growth in South Africa

This study investigates the impact of South Africa’s current account balance on its economic growth from Q1 2015 to Q4 2022 using Auto Regressive Distributed Lags (ARDL) technique. This study incorporates qualitative variables like COVID-19 to understand its effect on the South African current account and economic growth rate. Generally, the results show that the South African current account deficit impacted economic growth in both the long and short run. COVID-19 also affected the current account significantly in both the long and short run, thus causing more deterioration on the South African current account and subsequently affecting the economic growth rate negatively. This study recommends more competitive export promotion and import substitution by investing in and developing domestic productivity. This study also recommends an acceleration of the tabled COVID-19 recovery initiatives through an alliance between the government and private sector.

Foreign Direct Investment, Non-Renewable Energy and Economic Growth: An Empirical Analysis from South Africa

Purpose This study aims to examine the connection between foreign direct investment, non-renewable energy, and economic growth in South Africa. Methodology The data was collected from the World Bank’s website from 1990 to 2020. The VECM and Granger causality approaches were employed to evaluate the connection between Economic growth, FDI, and Non-renewable energy. Findings The findings show that a long-term equilibrium relationship exists among the variables. Further, the result of the Vector Error Correction Model (VECM), shows a coefficient value of 0.0038 indicating the short-term adjustment speed of the system towards its long-run equilibrium. The result of Granger causality shows no bidirectional Granger causality among any of the variables. There is a Unidirectional Causality between GDPC and NRENW. Conclusion The study concluded that non-renewable energy can enhance economic growth in these countries, but it can aggravate the degradation of the environment. Essentially, foreign direct investment (FDI) significantly and negatively affects growth, suggesting that FDI entry into African nations negatively affects the environment.

Effect of Human Capital on Economic Growth in South Africa: an ARDL Approach

This study tests the influence of human capital expressed by spending on education on South African GDP during the period 2021-2000, depending on the self-regression model of the distributed time gaps (ARDL). This work aimed to study the effect of Human Capital (H) on GDP per capita in South Africa during the period 2000-2021, based on the autoregressive distributed lag (ARDL) model. The study results concluded that there is a long-run equilibrium relationship between GDP and the independent variables (physical capital K, labor force L, and Human Capital H). The results revealed that there is a positive effect of Human Capital on GDP (moral for K) in the short run, and an adverse effect of Human Capital on GDP in the long run due to the interest in employing internationally qualified professionals, contributing to an increase in unemployment and indigenous workers’ health and well-being rates. These findings are consistent with the H-related literature. Likewise, from the results of the short-run test, L is the largest among the independent variables by (0.65), K by (0,086), the least of which is H with a coefficient of (0,029). This indicates that H (skilled workforce) in South Africa does not play an important role in the individual GDP in South Africa compared to the regular labor force due to its large size compared to the qualified labor. With regard to the long-run results, there is a negative impact of H on the local product due to the fact that the interest in supporting the qualified workforce coming to South Africa contributed to increasing unemployment rates and influencing the luxury of indigenous workers in South Africa. The study recommended the necessity of supporting local skills. The support must include enhancing skills for all three categories of workers (skilled, semi-skilled, and unskilled).

Sustainable Connection Amid Renewable Energy, Non-Renewable Energy Usage, and Economic Growth in South Africa

Purpose This paper assesses the relationship between renewable and non-renewable energy sources and economic growth in South Africa. Methodology The study employs the Vector Error Correction Model (VECM) and the Wald-Granger Causality Approach, utilizing data spanning the period from 1990 to 2020. Findings The findings reveal an absence of bidirectional Granger causality among the variables. The VECM results further indicate that, in the short run, imports (IMP) and non-renewable energy (NREN) have a slightly more pronounced impact on GDP growth than exports (EXP) and renewable energy (REN). In the long run, both imports and non-renewable energy significantly influence GDP growth more than renewable energy and exports. Conclusion In essence, strategic policies in the energy sector are imperative for ensuring a positive impact of energy consumption on the economy. Given the critical role of the energy sector, the South African government must implement policies conducive to enhancing the overall performance of the economy.

The Connection Amid Economic Advancement and Renewable Energy Usage: An Empirical Evidence from South Africa

Objective: The of this study is examining the connection amid economic advancement and renewable energy usage; empirical evidence from South Africa.   Method: The ARDL quantitative approach was utilized to analyse the cointegration of the variables, short-run model and the long-run model of the variables covering 1990-2020.   Results: following the results, the ARDL long-run model shows an inverse connection of GDP on renewable energy which reduce usage of renewable energy to facilitate growth in the economy. Essentially, import also signifies indirect relationship with renewable due to the fact that South Africa economy is based on other sources of energy such as fossil fuel and natural gas rather than renewable energy.   Conclusion: In sum, it is shown that renewable energy signifies negative significant contribution to economic growth in South Africa.

The Role of Industrialization on Employment and Economic Growth in South Africa

Nowadays economic performance and people's well-being are driven by various factors linked to technological improvement and industrialization. South Africa is one of the countries that adopted technology and innovation to improve its economic performance and employment conditions. However, the country is still facing a growing unemployment rate and sluggish economic growth. The current study investigated the role of industrialization in heightening employment and economic growth. The autoregressive distributed lag (ARDL) and error correction model (ECM) approaches were applied to time series data from 1998 to 2019. Empirical findings indicated that industrialisation has a significant impact on South African economic growth and employment opportunities. While automotive, food and beverage, chemical and metal industries positively affect economic growth; employment growth is fuelled by high production in food and beverage, chemical, automotive and metal industries. Nonetheless, high production in clothing and chemical industries have adverse effects on economic and employment growth respectively. In the short run, employment behaviour is determined by the production of metal, food and beverages industries while changes in economic growth are driven by production in the automotive and metal industries. Grounded on findings, South African policymakers should consider pro-industrialization strategies, especially in those industries whose production is highly demanded such as metal, food and beverages. These industries enhance trade and the latter improve economic growth and create employment.

Assessing the role of entrepreneurship industry and SMEs to economic growth in South Africa

The study looked at the role and contribution of entrepreneurship industry to foster social and economic development through small, micro, and medium-sized businesses in South Africa. The conceptual research looked at the influence of small, micro, and medium-sized businesses (SMMEs) on South African development. The study's objective was to evaluate how small, medium-sized businesses (SMMEs) are now driving economic growth and solving social issues in a setting where big businesses and governments appear to be doing very little. As a result, the study examines how SMMEs might help the nation solve persistent societal evils including poverty, inequality, and social isolation. A desktop literature review research design was adopted to collect data on the role of entrepreneurship in South Africa, policies and practices of big business and government that exacerbate social issues in communities and impede socioeconomic development, as well as the specific roles that SMMEs play in achieving socioeconomic development goals. Findings from research indicate that, among other development outcomes, SMMEs are at the vanguard of creating jobs and fostering social and political justice in the nation. Future empirical studies that account for and evaluate the importance of SMME contributions to the construction of economic, social, and political justice in the nation are advised because this work lacks the empirical support necessary to substantiate its conclusions and observations.  

Exploring the relationship between exchange rate misalignment uncertainty and economic growth in South Africa

Exploring the relationship between exchange rate misalignment uncertainty and economic growth in South Africa

The dynamic relationship between government debt, fiscal consolidation, and economic growth in South Africa: A threshold analysis

The dynamic relationship between government debt, fiscal consolidation, and economic growth in South Africa: A threshold analysis

Güney Afrika'da Ekonomik Büyüme ve Sabit Sermaye Oluşumu Arasındaki Granger Nedensel İlişkiler: Bir Frekans Alanı Analizi

The purpose of this study is to examine the Granger causal linkages between gross fixed capital formation (GFCF) growth and economic growth in South Africa. To provide a more comprehensive analysis of the Granger causality (GC) relationships between these macroeconomic indicators, this study investigates these causalities in the frequency domain. The methodology is based on decomposing time series into weighted sinusoidal components and performing separate GC tests for each component. Test results reveal that there is feedback between capital formation and economic growth in South Africa in the frequency domain, even at the 1% significance level. Furthermore, the test results indicate that the GC from fixed capital formation to economic growth is detected in lower frequencies compared to the GC from economic growth to capital formation. This means that the severity of the GC from economic growth to capital formation is stronger than the reverse direction GC in South Africa.

THE IMPACT OF POPULATION AGING ON THE SOUTH AFRICAN ECONOMY: A CASE OF THE KING CETSHWAYO DISTRICT MUNICIPALITY

Population aging presents numerous challenges, such as a reduced fiscal balance, changes in the savings patterns of households, and higher age dependency ratios. These consequences are evident for older individuals, the government, and the economy at large. This study examined the impact of population aging on the economic growth of South Africa, studying the King Cetshwayo District Municipality specifically. A panel data set for the period 2002-2020 by Quantec Easy Data was used for the study. A FE regression model was used to examine the relationship between economic growth (GDP per capita), population aging, savings, education, and other independent variables. The findings from the panel data analysis revealed that population aging negatively affects economic growth only in the short run but not in the long run. Also, other factors like education, savings, and income affected economic growth in the King Cetshwayo District Municipality. This study recommends a transformation in the country’s savings by educating the population about the importance of savings in order to improve GDP per capita and the economic wellbeing of the people.

An analysis of the relationship between exports and economic growth in South Africa, 2000–2020

An analysis of the relationship between exports and economic growth in South Africa, 2000–2020

Electricity Trade and Economic Growth in South Africa

The study investigates the relationship between electricity trade and economic growth in South Africa. The study utilised time series data spanning from 1985 to 2022 collected from secondary sources like the Quantec. The study employed DF-GLS and KPSS unit root, ARDL Bounds cointegration test, ARDL ECM model, Granger causality and residual diagnostics tests. The study discovered the presence of short and long run negative relationships between electricity trade and economic growth in South Africa. The Granger causality revealed unidirectional causality running from economic growth to electricity generation in South Africa. The study recommends the reduction of electricity trade to boost economic growth in South Africa for the period understudy. The study further makes the following recommendations, in future the studies should consider investigating electricity infrastructure and economic growth in South Africa utilising either time series or panel data analysis.

An Empirical Retrospect of the Causal Effect of Government Education Spending on Growth in a Neoclassical Growth Model

There has been consensus on the notion that education results in economic prosperity and growth in many countries. This has resulted in a strong focus on education policy, with large investments and a lot of public debates concerning the subject. Various schools of thought have made differing suggestions about how government spending impacts economic growth over the years. The Keynesian view is that there is a positive relationship between government spending and economic growth, where the causal effect runs from government spending to economic growth. Conversely, the Neo-classical school asserts that the relationship between the two variables is negative. The topic, therefore, remains a debatable issue. The present study, therefore, tests the causal effect of education expenditure on economic growth in South Africa for the period 1994 to 2021, with the aid of the autoregressive distributed lag approach. Consistent with Keynesian theory, the study results confirm the positive impact of government spending on economic growth. A Granger causal relationship exists between government education expenditure and economic growth, indicating that over time, education expenditure positively impacts economic growth through human capital. This implies that investing (spending) in education is critical in promoting economic growth, especially in the long term.

Clean versus dirty electricity generation and economic growth in South Africa: time–frequency study

The purpose of the study is to contrast the impact of ‘clean’ and ‘dirty’ electricity production on economic growth for South Africa and determine whether a faster transition from fossil fuels to renewables is beneficial for growth. To this end, we use wavelet coherence analysis to examine the time–frequency relationship between electricity and economic growth for aggregated and disaggregated measures of clean and dirty sources over the period 1985–2021 At an aggregated level, the low frequency (long-run) correlations are eventually substituted with high frequency (short-run) co-movements. At disaggregated level, the results are mixed, with dirty energy components (coal, oil, gas) having a weakening effect on economic growth over time whilst clean energy sources (solar and wind, biomass, hydro) show the greatest potential for growth over both low and high frequency relationships. Moreover, the various structural breaks identified in the frequency bands for different electricity sources allow us to evaluate the impact of energy policies and load shedding on the electricity-growth relationship and offer further insights to which clean sources of electricity production have more potential to be growth enhancing.

Does primary and secondary education contribute to short and long-term economic growth in South Africa

The human capital school of thought considers education in primary and secondary education as the foundation for the development of human capital that promotes economic growth. Persuaded by an empiricist paradigm this study used an Autoregressive Distributed Lag (ARDL) bounds testing analysis was conducted to examine the short and long run relationship between education and economic growth in South Africa. Economic growth, primary and secondary education data from 2002 to 2018 was used. The diagnostic tests revealed that variables are integrated at order level 1. The cointegration of the examined variables is confirmed by an ARDL bound test. Error Correction Model test found that, primary school, government expenditure on primary education has a significant relationship with economic growth in the short term but has no contribution in the long term. Drawing on the insignificant contribution of both primary and secondary education in the long it can be concluded that these education phases appear not to matter for economic growth in South Africa. This study thus recommends that primary and secondary school education should be restructured to align the curriculum with potentially productive sectors to improve its potential contribution to economic growth.

The relationship between education expenditure and economic growth in South Africa from 1987 to 2021

The relationship between education expenditure and economic growth in South Africa from 1987 to 2021