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Browsing Theses and Dissertations by Author "Dagume, M. A."
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Item Open Access Determinants of private investment and its effects on economic growth in South Africa 1982-2019(2021-10) Rhangani, Avhasei Shiela; Dagume, M. A.; Munzhelele, T.Private investment stimulates growth in any economy, and increasing it is one of the prerequisites for achieving a sustainable economic growth, hence, private investment is another source of employment, in addition to positively contributing to national economic output. Countries which can accumulate high levels of investment achieve faster rates of economic growth and development. Motivated by concerns on the persistent decline in private investment, the purpose of this study is to investigate effects of private investment on economic growth in South Africa using time series data for the period 1982 - 2019. A total of 37 observation of economic growth, inflation rate, public investment, credit to private sector, real exchange rate, Human capital, Labour force, Private investment and interest rate were be used in this study. Multiple regression and co-integration methods were employed to analyse the data. To avoid spurious regression results on time series data, the first step was to test for the stationarity of the data by using Augmented Dickey- Fuller. The study used Johansen co-integration technique to establish if the nonstationary variables are co-integrated. The study concludes that private and public investment are positively correlated with economic growth in the short and long run in South Africa. The study informs policymakers and stakeholders, including the government, municipal authorities and employers in the private and public sectors in relation to formulation of possible policy intervention to help stimulate and sustain private investment and therefore economic growth.Item Open Access Government expenditure on education and economic growth in South Africa(2023-10-05) Sadiki, Ronewa Candy; Nemushungwa, A. I.; Dagume, M. A.Education is one of the most important factors influencing a country's progress, welfare, and level of economic and social development. Therefore, this study aims to empirically investigate the relationship between government expenditure on education and economic growth in South Africa. The study employed annual time series data spanning from 2000 to 2021. The data was analysed by means of the Autoregressive distributive lag technique and Granger causality analysis. The findings revealed that government spending on education and economic growth are positively related in South Africa. Furthermore, the findings revealed that government expenditure on education granger causes economic growth, implying that in the long run, government educational expenditure, through its impact on human capital, positively influences economic growth. The results also revealed that reveal that in the short run, education expenditure and gross fixed capital formation have a positive impact on economic growth. This demonstrates that any investment (spending) on education is a critical factor in significantly promoting economic growth, especially in the long-term. Another implication is that, as the government invests more funds in education, this tends to boost human capital, which in turn, is translated into economic growth in the long run.Item Open Access The impact of foreign direct investment on economic growth in South Africa(2023-10-05) Mathebula, Rito Sonny; Dagume, M. A.; Khangale, A. R.Foreign direct investment (FDI) is considered one of the most essential drivers for economic growth. Despite their previous small or even declining share of global investments, foreign direct investment (FDI) has risen to become the most prominent means of generating external resource flows to developing countries and has become an important portion of capital formation in these economies. Motivated by the concerns of global decline in FDI distribution, this study examined the impact of foreign direct investment on economic growth in South Africa, using time series annual data for the period 1985 to 2019. The study employed a total of 170 observations of foreign direct investment, economic growth, inflation, real interest rate, and saving rate. Co-integration methods, ARDL and ECM were used to analyse the data. To avoid spurious regression results on time series data, the researcher tested for stationarity of the data by using Augmented Dickey-Fuller test and Phillips-Perron unit root tests. The unit root analysis was conducted on the variables and the results show that GDP and FDI do not exhibit any trends suggesting that they are integrated of order zero. Trends, however, are noticeable in the rest of the variables - interest rate, inflation and saving rate. This implies that the variables are not stationary at level form. After first differencing, all variables are stationary as none of them exhibit any trend. This implies that the variables used in this study are integrated to order I(0) and I(1). The cointegration test results show that the null hypothesis of no cointegration was rejected to conclude that a long-run relationship exists between economic growth, foreign direct investment, inflation, interest rate and saving rate. ARDL-ECM model regression results of the long run model show a negative relationship between foreign direct investment and economic growth whilst foreign direct investment was found to be insignificant in explaining short-term growth. The granger causality shows no causality between FDI and economic growth. The negative relationship between FDI and economic growth registers uncertainty on whether FDI has benefited the economic growth of South Africa. The researcher recommends that government should come with ways or strategies which would best attract foreign direct investment and ensure that the country’s affairs are in order, for example, combat corruption and crime while also ensuring that there is political stability and well managed state-owned enterprises.Item Open Access Investigating consumer willingness to pay for improvements in water service attributes in and around Vuwani Town, South Africa(2023-10-05) Rasimphi, Mokgadi Grace; Dafuleya, G.; Dagume, M. A.Water scarcity is a major problem in South Africa given the country’s classification as “water stressed” and the thirtieth driest country in the world. Moreover, and like many other developing countries, the country faces severe challenges with the reliability of water supplies. These challenges includes but are not limited to, the frequency of water supply, low water pressure and poor water quality among other challenges. Although these challenges impose difficulties in the country in general, they impose a severe burden in rural settings and outlying towns such as Vuwani town and the surrounding villages in Limpopo. To this end, this study investigates the willingness to pay (WTP) by households of the Vuwani town and surrounding villages in respect of potential improvements of attributes of a water service. The study also sought to uncover potential heterogeneity in the preferences for improvements of attributes of a water service. Using the Conditional and Mixed Logit models, and a sample of 230 households, the study’s findings indicated evidence of respondents expressing willingness to pay for improvements in the attributes of a water service in Vuwani. The results also demonstrated strong evidence of preference heterogeneity among the respondents as well. Since the findings of the study makes it possible to estimate the potential benefits of an improved water service in Vuwani, the results of the study should provide local policy makers with evidence based information of one component of a potential cost – benefit analysis study necessary to inform the potential level of investments required to improve water services in rural settings.Item Open Access Investigating consumer willingness to pay for improvements in water service attributes in and around Vuwani Town, South Africa(2023-10-05) Rasimphi, Mokgadi Grace; Dafuleya, G.; Dagume, M. A.Water scarcity is a major problem in South Africa given the country’s classification as “water stressed” and the thirtieth driest country in the world. Moreover, and like many other developing countries, the country faces severe challenges with the reliability of water supplies. These challenges includes but are not limited to, the frequency of water supply, low water pressure and poor water quality among other challenges. Although these challenges impose difficulties in the country in general, they impose a severe burden in rural settings and outlying towns such as Vuwani town and the surrounding villages in Limpopo. To this end, this study investigates the willingness to pay (WTP) by households of the Vuwani town and surrounding villages in respect of potential improvements of attributes of a water service. The study also sought to uncover potential heterogeneity in the preferences for improvements of attributes of a water service. Using the Conditional and Mixed Logit models, and a sample of 230 households, the study’s findings indicated evidence of respondents expressing willingness to pay for improvements in the attributes of a water service in Vuwani. The results also demonstrated strong evidence of preference heterogeneity among the respondents as well. Since the findings of the study makes it possible to estimate the potential benefits of an improved water service in Vuwani, the results of the study should provide local policy makers with evidence based information of one component of a potential cost – benefit analysis study necessary to inform the potential level of investments required to improve water services in rural settings.Item Open Access The relationship between household consumption expenditure, disposable income and indebtedness in South Africa: An application of the vector error correction approach(2021-04) Khangale, Azwifarwi Richard; Dagume, M. A.; Dafuleya, G.In a demand-led economy like South Africa, household consumption expenditure is a major source of economic development. The availability of consumer credit has allowed consumption spending to play a more active role. This, however, is followed by a disconnect between household spending and disposable income. One potential cause of the observed disconnect, according to the relative income hypothesis, is households' proclivity to imitate contemporary consumption expectations set by others. The difficulties that have resulted from the disconnection influence the factors that affect household consumption expenditure. The aim of this study was to use time series data to empirically analyse the South African household consumption function. For this analysis, the variables chosen were household spending expenditures, disposable income, and debt service burden for the years 1969 to 2019. The thesis was carried out using the Vector Error-Correction technique. The Augmented Dick-Fuller (ADF) and Philips-Perron (PP) tests were used to determine stationarity. Consumption expenditure and disposable income were found to be nonstationary at levels, they became stationary after first differencing. To assess the long-run relationship and assess the roles played by the three variables in achieving equilibrium after a shock, the Johansen Cointegration approach was used. Both disposable income and debt burden have a positive relationship with consumption spending. Furthermore, according to the findings, consumption spending does all the adjusting after a shock and does so slowly. The positive, though weak, relationship between consumption expenditure and debt burden is a noteworthy outcome. In South Africa, disposable income was found to have a positive impact on household consumption spending. As a result, the study suggests that the South African government consider implementing a basic income grant to help relieve the effects of high unemployment and poverty. Given that most people invest a substantial portion of their discretionary income on consumption, the government's revenue in the form of taxation would help to alleviate the fiscal burdenItem Embargo The impact of macroeconomic variables on stock market performance in South Africa(2024-09-06) Mafuna, Mihuvho; Nyamazunzu, Z.; Dagume, M. A.A well-functioning stock market is regarded as a reflection of a working economy. The stock market raises primary capital by rechannelling cash resources into productive economic projects aimed at building the economy while enhancing jobs and wealth creation. The South African economy has for the past decade been affected by different macroeconomic challenges which subjected the bourse into different risk factors, most specifically, the systematic risk factors. It is against this backdrop that this study aims to provide a critical review of the impact of macroeconomic changes on stock market performance in South Africa. This study used the Financial Times Stock Exchange (FTSE) and the Johannesburg Stock Exchange (JSE) top 40 index as the stock market performance benchmark, using time series quarterly data covering the period spanning from 2008 to 2021. Seven macroeconomic variables namely: economic growth, interest rate, inflation, money supply, exchange rate, crude oil prices and industrial production were used in the study. A multifactor regression model based on the arbitrage pricing theory was used to estimate the impact of each variable on market performance. Furthermore, the Ordinary Least Squares (OLS) method was used to establish the relationship between stock returns and macroeconomic variables. The study findings shows that economic growth, industrial production, and exchange rate affect stock market positively while inflation, interest rates have a negative impact. The implication of these results is that the government of South Africa should craft policies that increase the Gross Domestic Product (GDP) and industrial production to positively influence stock market performance, while policies to reduce inflation are recommended.