Faculty of Commerce, Law and Management (ETDs)

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    Investigating alternative social funding instruments for SMMEs in South Africa
    (University of the Witwatersrand, Johannesburg, 2020) Xaba, Prudence; Sibanda, Tonderai
    Small Medium and Micro Enterprises (SMMEs) are key drivers of economy, innovation, job creation and the biggest contributor of the GDP. In 2015 there were 2 251 821 SMMEs, with only 667 433 in the formal sector and registered, the rest operating in the informal sector. South Africa today is faced high rates of poverty, unemployment and poor education levels. The current legislative framework has been unable to transform the skewed discrimination in the economic sector. Several government strategies and interventions have not yielded any positive results. The study explored the conversion of stokvels into an alternative social funding instrument for SMMEs. Stokvel is a centralised collective savings scheme, where monthly periodic contribution are paid. Stokvels are referred to as Rotating Savings and Credit Association (ROCSAs), with a membership of between 5-30 members. The study employed qualitative multi method approach, using focus groups observations, individual interviews and document analysis to collect data. Semi structured questionnaires were used for the five stokvels focus groups and three individual interviews with government executives. Data analysis was conducted using the three theories; phenomenology, ethnography and interactionism. The findings show that stokvel members are willing to convert into formal investment instruments, to manage risks and having access to better control management systems. They also stated that they would like to maintain their independence, unique identity and control of their savings. It also found that stokvels need financial training in order to make informed decisions on the available platforms. It was also found that all this is impossible without government’s intervention in transforming the sector and introduce flexible legislation accommodating stokvels. It is also stated that retail banks could hinder the introduction of progressive and flexible legislation regulatory framework as they recognise that stokvels could be disruptors in the financial sector.
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    Do Domestic Yield Curves in Emerging Market Economies Prove to be Useful in Forecasting Future Economic Growth?
    (University of the Witwatersrand, Johannesburg, 2022) Gosai, Rushai; Britten, James
    Much has been said and researched about the term spreads ability to forecast the path of Gross Domestic Product (GDP) in developed economies. The relationship holds that should the yield spread turn negative that this indicates that future GDP will retract and that a recession is eminent. At the back end of 2019, the subject found prominence again as the yield spread measured by the ten year government bond and the three month Treasury Bill (Tbill) turned negative. The Federal Reserve Bank of America (The Fed) lowered interest rates in the hope that lower borrowing costs would stimulate the economy and lead to an increase in aggregate demand. It then follows, could the domestic yield curve spread perhaps be suitable in forecasting domestic Emerging Market (EM) GDP growth? This research highlights the EM experience whilst still testing the ability of the yield curve in the US to predict future economic growth. The framework based on the work of Bosner-Neal and Morley (1997), found over the horizon of 1980 to 2020, for the EM countries of Brazil, Russia, India, China and South Africa (BRICS) unsupportive evidence that the domestic yield curve spread is a suitable indicator to forecast future GDP growth.
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    The relationship between digitalisation data and GDP
    (University of the Witswatersrand, Johannesburg, 2023) Sikazwe, Bright C.; Sithibe, Tebogo
    This academic paper examines the relationship between digitalisation and Gross Domestic Product (GDP) in Sub-Saharan Africa (SSA). The study aimed to address the limited understanding of the impact of digitalisation on the economic growth and development of SSA countries. Existing literature, as explored in the background, underscores the positive impact of digitalisation on economic growth, particularly emphasizing the role of Information Communications Technology (ICT) (Solomon & Klyton, 2020; Paul, 2021). However, a noticeable gap persists, as there is limited empirical research investigating the specific relationship between digitalisation and GDP in the context of SSA. By employing a quantitative research methodology, the study investigates the relationships between Internet usage, mobile phone usage, manufacturing value add, and GDP. The analysis utilises time series data from 1998 to 2020, obtained from the World Bank database, covering 10 countries, and resulting in 220 time series data points. It employed several statistical techniques such as time series regression, ARIMA, VAR, and exponential smoothing. It also used correlation andtrend analysis, Pooled OLS, and cluster analysis to try and further understand the relationship. The results show that in Sub-Saharan African (SSA) countries, there are slight positive connections between Internet usage, mobile phone usage, and GDP. Yet, it's important to note that the study recognizes limitations related to available data and time constraints, as highlighted in the literature (Tong & Wohlmuth, 2019). This emphasizes the necessity for more research to confirm and reproduce these findings. Moreover, a robust positive link is found between manufacturing value addition and GDP. Interestingly, when manufacturing value addition is considered as a control factor, the link between digitalisation and GDP becomes less strong. This implies that a portion of the positive impact of digitalisation on GDP is linked to the increased value addition in manufacturing. The study contributes to existing literature by providing insights into the relationships between digitalisation and GDP in SSA while controlling for Manufacturing value Add. It emphasizes the importance of considering country- specific factors and contextual nuances in future research. Policymakers are recommended to focus on promoting investment in the manufacturing sector, increasing access to mobile phones and the internet, fostering innovation and entrepreneurship, investing in digital infrastructure, providing digital skills training, and fostering public-private partnerships to promote sustainable economicdevelopment in SSA. Further research is needed to validate these findings, explore the mechanisms through which Internet and mobile phone usage impact GDP, and understand the role of manufacturing value Add in driving economic growth. This deeper understanding will enable policymakers to make informed decisions to foster digitalisation, enhance mobile phone usage, and promote manufacturing value add for sustainable economic development in SSA and other developing African nation
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    Exploring the consequences of foreign aid on economic performance in sub-Saharan Africa
    (2022) Sawyerr, David Toluwani
    Economic growth is embedded in the DNA of governments with the objective of creating shared prosperity between the state and society. Fundamental principles of political economics dictate that capital is an essential aspect of creating economic growth. In Sub-Saharan Africa (SSA), capital has often been in the form of foreign aid provided by donors. These donors often attach governance conditions to their aid, to bolster the effectiveness of aid which, it is believed, will promote economic growth and development. One of the governance conditions is the participation of civil society in public discourse and the legislative process between the state and society. To facilitate the vertical accountability between the state and society, Civil Society Organisations (CSOs) were established globally, and particularly, in Sub-Saharan Africa, to represent the interests of society, as governments enact policies that should enable economic growth. This study investigates the conditioning effect of CSO consultation on the impact of foreign aid on economic growth. Furthermore, data from 41 SSA countries, between 1960 and 2018, for which data was available, are utilised. The main purpose of the study was to examine CSO’s effect on the nexus between aid and growth as the nexus itself has been well examined. Some studies have also investigated CSOs but this study presents novel arguments on the role of CSOs in the aid-growth discourse. The study used time series cross sectional analysis to determine the conditioning effect of CSO consultation on aid and economic growth by utilising over 1,700 observations. Contrary to general assumption by donors and policymakers, the results of the econometric analysis show that while foreign aid statistically contributes positively to economic growth in SSA, the conditioning effects of CSO consultation yielded a negative relationship between foreign aid and economic growth. The results were largely consistent with varying timeframes and country classifications.
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    A comparative study of the tax considerations of traditional funding available to small, medium and micro enterprises versus alternative sources of funding
    (2019) Zungu, Sibongile Nomzamo Goodness
    During the February 2018 National Budget speech, the 2018 GDP growth projection was anticipated at 1.5% (National Treasury 2018), 0.6% higher than the percentage projected by the International Monetary fund (IMF) just a month before (Khumalo 2018). In a country with a low GDP and an unemployment rate sitting at a straggering 26.7% (Statistics South Africa 2018), small, medium and Micro Enterprises (SMME's) sometimes referred to as small businesses. play a pivotal role in the success of the economy.