Debt Sustainability and Financial Crises in South Africa

Naraidoo, Ruthira; Raputsoane, Leroi

doi:10.1080/1540496x.2015.1011534

Cited by 16 publications

(10 citation statements)

References 33 publications

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“…Using historical time series data spanning the period 1865-2010, Naraidoo and Raputsoane (2015) examined debt sustainability in South Africa, taking into consideration the possibility of nonlinearities in the form of threshold behaviour by fiscal authorities based on recent history of indebtedness as well financial crises. The results showed a debt-to-GDP threshold ratio of about 56 per cent.…”

Section: Literature Reviewmentioning

confidence: 99%

Public debt sustainability and debt dynamics: The case of Tanzania

Were¹,

Mollel²

2020

WIDER Working Paper

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Section: Literature Reviewmentioning

confidence: 99%

Public debt sustainability and debt dynamics: The case of Tanzania

Were¹,

Mollel²

2020

WIDER Working Paper

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“…However, many countries especially in Africa end up being caught in a vicious circle of debt trap which can have dire consequences for fiscal sustainability and future generations end up bearing the biggest brunt of the wrath of debt. Two crucial macroeconomic variables that shape the fiscal policy of a country are public debt and budget deficit (Redda, 2020) and finding the right balance between the these variables is often elusive and a challenge for policymakers, lenders, and borrowers alike (Naraidoo and Raputsoane, 2015).…”

Section: South Africa's Public Debt and Fiscal Deficitmentioning

confidence: 99%

A Sankarian Perspective on the IMF Loans to South Africa – ‘Debt as a Cleverly Organised Reconquest of Africa’

Leshoele

2022

Afr. Rev.

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The COVID-19 pandemic that continues to ravish the world economies and snatch lives of millions of people across the world has without a doubt exacerbated the already fragile over-indebtedness of many countries globally, more especially in Africa. South Africa was used as a case study to better understand the International Financial Institutions and debtor countries nexus through the prisms of Sankarian Thought and philosophy concerning debt and loans. This was because South Africa had not borrowed money from the twin IFIs, IMF and the World Bank, for many years until recently when the pandemic struck the world. It is useful to understand why the multilateral financial institutions such as the IMF, the World Bank and others had to be the last resort in the fight against this pandemic by the South African government. The role of these two main predators that have since flag independence of Africa been the engineers and custodians of debt neo-enslavement of African countries is the common thread in this article. As Sankara argued and was eventually assassinated for, in part, lobbying African States to form a united front in repudiating illegitimate debt, the solution to the African development challenge does not lie in acquiring more aid and loans. It lies in harnessing their own resources and optimally using them to uplift the lives of their people ethically, and that is the only way Africa would eventually be able to call its soul its own. Amongst others, the paper found that a strong case can be made by many African countries for repudiation of odious debt, however, the same cannot be argued for South Africa.

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“…A plethora of studies in the literature used a linear approach Ganyaupfu 2014;Ganyaupfu and Robinson 2019;Ghartey 2010;Jibao et al 2012;Kavase and Phiri 2018;Lusinyan and Thornton 2007;Narayan and Nayaran 2006;Ndahiriwe and Gupta 2010;Nyamongo et al 2007;Siebrits et al 2014). Other studies (Baharumshah et al 2016;Burger and Marinkov 2012;Naraidoo and Raputsoane 2015;Phiri 2019) used non-linear techniques and found sustainable fiscal policy, while the empirical works of Cronje (1995), Roux (1993), and Schoeman (1994) investigated the fiscal sustainability of South Africa and found unsustainable fiscal policy. Reviewing the past and recent literature reveals a wide range of mixed results and no consensus.…”

Section: Empirical Literature Reviewmentioning

confidence: 99%

Do fiscal regimes matter for fiscal sustainability in South Africa? A Markov-switching approach

Woldu¹

2020

WIDER Working Paper

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This paper empirically examines South Africa’s fiscal sustainability through a Markov-switching model which utilizes quarterly datasets for the period from 1960 to 2019. The results show that public debt responds positively, demonstrating a sustainable fiscal policy. Furthermore, considering the regime-specific feedback coefficients of the fiscal policy rule and the durations of fiscal regimes, the study finds that South Africa’s fiscal policy satisfies the No-Ponzi game condition. Therefore, from a policy perspective, the South African government should take measures such as pension reforms, reducing operational expenses, reducing subsidies, and funding micro and small enterprises to gain the double dividend on the expenditure side along with revenue-enhancing measures on consumption taxes to achieve stable public finances and lower debt levels.

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Debt Sustainability and Financial Crises in South Africa

Cited by 16 publications

References 33 publications

Public debt sustainability and debt dynamics: The case of Tanzania

Public debt sustainability and debt dynamics: The case of Tanzania

A Sankarian Perspective on the IMF Loans to South Africa – ‘Debt as a Cleverly Organised Reconquest of Africa’

Do fiscal regimes matter for fiscal sustainability in South Africa? A Markov-switching approach

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