3. Electronic Theses and Dissertations (ETDs) - All submissions
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Item The nexus between infrastructure quantity, quality and economic growth in Sub Saharan Africa(2017) Chakamera, ChengetePublic infrastructure is believed to be important to economic growth through its role as a complementary production factor or an additional input of production. Investigation of the growth effects of infrastructure has been one of the favourable areas in academic and policy circles. Despite increased attention received in the literature on the infrastructure-growth relationship, there still exist important research gaps in the areas such as aggregate infrastructure-growth nexus, direction of infrastructure-growth causality, electricity growth effects in presence of energy-related CO2 emissions, and spatial spillovers of infrastructure investment. In these various areas, the most serious gap is failure to account for infrastructure quality. The knowledge of the quantitative and qualitative growth impacts at both aggregated and individual infrastructure sector levels, including the infrastructure spatial spillovers in Sub Saharan Africa (SSA) is extremely important in the design of optimal infrastructure investments and implementation of cost-sharing structures in the presence of vital spillovers. This thesis examines four critical themes in the infrastructure quantity and quality literature. The first essay examines the growth effects of aggregate infrastructure stock and quality, and the direction of infrastructure-growth causality. Exploiting advances in applied econometrics, the results reveal strong evidence of a positive effect of infrastructure on economic growth with most contribution coming from infrastructure quality. More so, the findings show evidence of a unidirectional causality from aggregate infrastructure to growth, which is based on hybrid indices that simultaneously capture the quantity and quality features. While SSA should continue solving the infrastructure shortage problem, the results in this essay also give much credence to infrastructure quality enhancement. This study argues that causality testing based on quantitative measures alone is not adequate as quality developments are omitted, thus the use of hybrid indices tend to be superior. The second essay presents new evidence on the economic growth effects of the stocks and qualities of electricity, telecommunication, transportation, water and sanitation infrastructures in both long-run and short-run using a five step panel analysis. The results reveal long-run positive growth effects from the stocks of electricity and telecommunication. While water stock shows no significant long-run impact, transport stock has a negative impact. Moreover, the qualities of telecommunication, transport and sanitation exhibit positive long-run growth effects. For short-term dynamics, the findings suggest positive growth effects from the stocks of electricity and telecommunication, whereas transport and water stocks suggest negative growth effects. While telecommunication and sanitation quality developments can raise short-run growth, transport and water qualities have no significant contribution. Electricity quality exerts a downward pressure on growth in SSA. Based on the hybrid indices, the long-run and short-run growth effects across the infrastructure sectors are basically positive except for electricity in the long-run. Moreover, the negative growth effects from transport stock may imply shifting of vital resources away from other investments during construction while their under (or unproductive) utilisation yields economic benefits below construction costs. The third essay critically analyses the extent of electricity shortage, efficiency, key sources and opportunities for SSA in comparison with other regions. The essay proceeds to address the issue of how electricity-related CO2 emissions may alter the growth contributions of both electricity stock and quality. First, as in essay two but here with a different approach and different proxy for electricity stock, the results suggest positive effects from electricity stock but the quality effects are negative. Second and most importantly, a high level of electricity-related CO2 emissions lower the growth contributions of electricity stock and exacerbate the negative growth impact of electricity quality. The key conclusion established is that electricity-related CO2 emissions adversely affect the economic contribution of electricity sector. This may give an insight on proper design of carbon taxes (where applicable) yet comparing the opportunity cost of carbon taxes versus investment in carbon capture technologies. Finally, the last essay analyses the spatial spillovers from aggregate infrastructure stock and quality among SSA countries. The results indicate evidence of positive and robust spillover effects from foreign aggregate infrastructure quality while the foreign aggregate stocks of infrastructure imply negative spillovers. Thus, whereas infrastructure quality enhancement invigorates the surrounding regions, infrastructure stock development may provide a competitive advantage that draws economic factors from the surrounding regions and hence exerting negative pressure on their respective economic activity. To buttress these findings, panel Granger causality tests show evidence of causality (mostly bi-directional) between the infrastructure (domestic and foreign) variables and economic growth. This essay is crucial for two key policy concerns, which are the implementation of optimal infrastructure investments and credibility of cost-sharing structures in the presence of spillovers.Item Financing of infrastructure maintenance in South Africa(2017) Ntjatsane, Matsiu ClementinahInfrastructure quality is as important as its quantity, although evidence point to lost growth opportunities due to insufficient investment in maintenance of new and existing infrastructure. Notably, bulk of infrastructure in South Africa is old and collapsing faster than planned and is presently failing to meet increased demand for services. The apartheid government invested heavily in infrastructure development that served only minority of the white population and ignored scarcity of resources that led to high poverty rates in the country. While on the verge of reversing inheritances of the apartheid government, the 1994 democratic government reached out to millions of previously disadvantaged majority population with infrastructure that further improved quality of their lives. However, there was no long-term planning for maintenance; old and new infrastructure received inadequate maintenance and much of it is in a state of disrepair. This research paper aims to explore the condition of the nation’s major economic infrastructure with the intention of discovering the infrastructure gap prevalent to South Africa. It also explores effective financing strategies through which adequate levels of maintenance can be achieved to significantly minimise or close the infrastructure gap. And most importantly discovering capacity constraints for financing infrastructure maintenance and identifying additional sources for securing maintenance funding. Findings of this research indicated that the large infrastructure gap has been a result of maintenance neglect in many areas and inadequacy of maintenance budgets except for infrastructure operated and owned by state owned entities. This study also revealed that South Africa is incapacitated in many aspects which include skills shortage, limited access to financial markets and restrictive regulations governing private sector participation.Item The implementation of the Expanded Public Works Programme (EPWP) in Gauteng(2016) Mashabela, Boy JohannesThe high rate of unemployment and poverty in South Africa remains a daunting challenge, which continues to impact on the lives of millions of people who have limited education and lack skills, particularly those in the marginalised and rural communities who have no access to income generation. Gauteng Province due to in-migration is no exception to these challenges. In an effort to address these challenges the government has adopted the EPWP programme, which is a nationwide government-led initiative, with the aim of reducing unemployment by ensuring that the unskilled gain skills so that they are able to gain access to labour market and consequently earn an income (EPWP Five-year report, 2004/5-2008/9). The five-year report states that the programme set the target of achieving approximately one (1) million temporary work opportunities, for people, of whom 40% will be women, 30% youth and 2% will constitute of people with disabilities. This programme hoped to mitigate some of the social exclusion that the society is faced with and contribute to poverty alleviation, through the creation of short-and medium-term jobs for the unskilled and unemployed. Phase 1 EPWP programme has not yielded the significant results it was intended to, particularly the reduction of unemployment, which has remained high. It should be noted that this programme created a great many expectations, in so far as it relates to maximising the spread and skilling of all intended beneficiaries, needed to gain access into the mainstream economy. The five-year report (2004/5-2008/9) identifies four sectors which are critical or have potential for creating employment opportunities within the context of the EPWP. These are described as follows: ii The infrastructure sector, which focuses on increasing labour intensity for government-funded infrastructure projects; Environment, which relates to public environmental improvement programmes The social sector, which relates to public social programmes such as community-based care programmes; and The non-state sector, which provides and creates work opportunities through collaboration with non-state organisations, as well as strengthening community participation through small enterprise learnership and incubation programmesItem Regulations, securitisation and the financing of airport infrastructure in Sub-Saharan Africa: a case study(2017) Dlamini, Phumzile ZimasaIt is well acknowledged that infrastructure provision is linked to economic growth , in particular airports are viewed a strategic catalysts to this growth bringing about increased opportunities for trade, tourism, and serving as an enabler for business. African airports have historically suffered underinvestment as a result of competing priorities for government funding; growing safety concerns, increased traffic growth and globalisation, and the need for refurbishment and modernisation of systems. African nations are now beginning to spend considerable amounts on aviation infrastructure. The purpose of this study evaluate the financing mechanisms available to governments, to access the role that airport economic regulation plays in attracting investment and the potential of leveraging the securitisation model for the financing of aviation infrastructure. It was found that, no one funding mechanism is king and that airport owners and operators should attempt a diversification strategy towards their funding sources, taking into account that the investment appetite of various investors will be different at the various phases of infrastructure project delivery. It was found that airport regulation is key to harnessing the certainly of future cash flows required by private investors , and may be the required mechanism to off load the financial burden of smaller airports from the government budgets. Lastly it was found that development finance institutions may be the biggest benefactors to utilising the securitisation model to unlock further developmental funding; key to this is the support of institutional investors.Item An investigation into the qualitative characteristics of large infrastructure and project finance ventures in Southern Africa(2016) Makovah, David TakaendisaSub-Saharan Africa faces severe infrastructure deficits including in power generation, water facilities, transportation, and telecommunications. These deficits compound the socio-economic challenges of the most impoverished region in the world. It is estimated that funding of US$ 90 billion per annum is required to address infrastructure deficiencies. Other developing regions including Asia, the Middle East, and South America, have with varying degrees of success utilised the project finance framework to address similar infrastructure deficiencies, and also develop other commercial ventures. Africa has lagged behind in this respect, and still accounts for less than 3% of international project finance flows. The ability to attract and access international and domestic project finance capital, and execute the underlying ventures is an important opportunity to address the challenges noted above. The study contributes to knowledge by deepening our understanding of project finance in South Africa, Mozambique, and Zimbabwe in the following ways. Firstly, it offers a model through which to monitor key contextual factors that influence the success, failure, and shaping of project and infrastructure ventures. Secondly, it interrogates the main capital structure theories including the static trade off and pecking order theories, and their applicability and relevance for project and infrastructure finance in the selected jurisdictions. It then compares capital structure theory with actual practice of capital structure formulation in the 7 cases studies investigated. This yields important insights as to the most important factors influencing capital structure in project finance in the three selected countries. In particular the constrained supply of capital is observed as the top factor determining capital structure. It further enhances our understanding of why ventures using project finance in these countries may have significantly lower leverage than other similar ventures in developed regions of the world. Thirdly, the study extracts key insights into how stakeholder interactions evolve in the projects by applying stakeholder agency theory to project sponsors, managers, contractors, state institutions, and community organisations. Collectively these insights should contribute to attracting increased capital to project finance in Sub-Saharan Africa, and arranging projects with greater prospects of operational success.Item In preparedness for an integrated infrastructure asset management system for the City of Johannesburg(2016) Doyle, James OliverThe research presented in this report set out to determine the extent to which cross-enterprise integration between three Municipal Owned Entities (MOEs) in Johannesburg, i.e. City Power, Johannesburg Water and Johannesburg Roads Agency (JRA), could be beneficial to the Council and users of the Council’s assets. The research included a comprehensive review of available literature to find the needs of / gaps in infrastructure asset management and examples of cross-enterprise integration. Interviews with MOEs’ personnel were conducted to determine current levels of infrastructure asset management. A library of the costs of potential hazards arising from damages caused by MOEs to other MOEs’ assets during maintenance tasks was compiled. A simulation exercise was conducted. The exercise involved the development and application of a computer program using Visual Basic for Applications programming tool. The program created a series of job cards for maintenance works by all MOEs using available asset data for a section of the city. Conflict areas were identified where work on one asset might compromise the integrity of other assets. Costs of the damage to the assets in terms of direct costs of repairs and users’ costs, due to lower levels of service, were quantified for each conflict point. The simulation exercise was run over a thirty year period. The average annual costs were costed using cost to benefit analysis. Expenses associated with the creation of new organisational structures and new cross-enterprise software systems were studied using available data in literature. The expenses and savings formed the basis of the cost to benefit analysis. The study shows that the introduction of a cross-enterprise integrated system can significantly reduce costs to the Council and users. There are several other benefits originating from cross-enterprise integration including more efficient use of skilled personnel, efficiency in issuing of way leaves, and improved integrity of asset data. The installation of such a system need not only service the three MOEs included in the study. It is possible that all owners of assets on Council property, including external organisations such as Telkom, Neotel, and Dark Fibre Africa, will benefit from cross-enterprise integration.Item Threats associated with build, operate and transfer (B.O.T) infrastructure projects in Southern Africa and the impact it has on the risk profile.(2014-01-15) Moloigaswe, Shimah.The rapid economic growth in many developing countries results in a high demand for infrastructure and governments find that they are unable to fund the vital infrastructure or to maintain the existing ones (Gupta and Sravat, 1998). To remedy this they are increasingly opting for an alternative source of funding through the large international companies which have considerable credit standing for concession contracts such as Build Operate and Transfer (BOT) since those companies have a much larger capacity to fund the large scale projects than the recipient country. The objective of this research project is to provide a brief review of the South African experience with the utilisation of the BOT approach for infrastructure developments, examining the risks and the measures used to mitigate them. This is so as to draw lessons for policy makers on how to improve the use of this strategic instrument for infrastructure provision. The emphasis will be on overall risks associated with the scheme as well as the mitigating factors in light of the current social, political and economic context of the country and the region. Data was collected using the Delphi survey method and the study targeted individuals who were knowledgeable and experienced with the issues under investigation and from different sectors involved with execution of BOT infrastructure development projects in South Africa. These included contractors, lenders, operators as well as some from the host government. The questionnaire was designed to identify the perceptions of the individuals regarding risk management in BOT projects as well as identify significant risk associated with the scheme. The 10 most critical risks were ranked based on the ratings of the respondents in the final phase of the Delphi survey. The risk that was rated the most critical turned out to be ‘Political instability in the host country’. This is defined as the danger of political or financial instability in the host country caused by events such as insurrections, strikes, creeping expropriation and outright nationalization.