Browsing by Author "Ocran, Matthew Kofi"

Now showing 1 - 6 of 6
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    The effect of South African public debt on economic growth: An ARDL cointegration approach from 1961-2017
    (University of Western Cape, 2019) Hlongwane, Tshembhani Mackson; Ocran, Matthew Kofi
    This study investigates the effect of public debt on economic growth in South Africa since 1961-2017. Public debt stock is disaggregated into external debt and domestic debt in order to determine the effect of each on economic growth independently. The study employed the ARDL bound test to estimate the long and short run relationship among several macroeconomic variables - real economic growth, domestic debt, external debt, budget deficit, inflation rate and investment. An error correction model was used to analyses the short-run disequilibrium. The results show that there is a short and long run equilibrium relationship between foreign debt, domestic debt, budget deficit, inflation rate and economic growth. The empirical results indicate that external debt negatively affects the real GDP growth in South Africa, both in the short and long-run. Several policy implications emerged from the empirical results. To keep public debt more manageable, South Africa should improve its debt management. Furthermore, the country can make use of debt to equity swaps by privatizing underperforming parastatals. This would make them competitive and efficient.
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    Financial development and health care expenditure in Sub Saharan Africa Countries
    (Taylor & Francis, 2020) Chireshe, Jaison; Ocran, Matthew Kofi
    The study aimed to examine the relationship between financial development and health care expenditure in 46 Sub Saharan Africa (SSA) countries. The paper argues that health care expenditure is a key transmission mechanism through which financial development influences better health outcomes. The study used random and fixed effects as well as instrumental variable estimation methods using data from 1995 to 2014. The results showed that financial development leads to increased health care expenditure. In terms of policy implications, the findings underscore the need to foster financial development in SSA economies to assist with domestic resource mobilisation to finance health care expenditure.
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    Forecasting volatility in sub-Saharan Africa’s commodity markets
    (Business Perspectives, 2007) Ocran, Matthew Kofi; Biekpe, Nicholas
    Using spot prices from eighteen commodities traded by most Sub-Saharan African countries, this paper evaluates the out-of-sample volatility forecasting efficiency of seven models. The models evaluated included random walk, simple regression and five models from the ARCH family of models. Standard loss functions are used to examine the relative performance of the competiting models. The non-ARCH family of models consistently outperformed the ARCH family of models on all the evaluation criteria. Of the two non-ARCH family of models, the autoregressive model was superior. The results of the study suggest that government agencies in Sub-Saharan Africa that manage inflows from commodity markets can use autoregressive models in predicting volatility of inflows. Again, risk management strategies will be best served with autoregressive models.
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    The impact of microfinance on household livelihoods: Evidence from rural Eritrea
    (Palgrave Macmillan, Cham, 2017) Habte, Amine; Visser, Kobus; Ocran, Matthew Kofi
    This study examined the impact of microfinance on the livelihoods of households in rural Eritrea. It specifically sought to find out whether the Saving and Microcredit Programme (SMCP), introduced by the Eritrean Government in 1996 to support the poorest of the poor, had a significant impact on the livelihood of its clients. The study employed logistic regression and propensity score matching estimation techniques. The findings reveal that households that participated in the SMCP had reported significantly higher profits from their microenterprises, had more valuable assets, higher consumption expenditure, significantly improved nutrition and increased savings. The findings have important social and economic policy implications regarding the role of finance in rural development in an African context.
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    Interrelations among stock prices of South Africa and the United States and the rand/dollar exchange rate
    (Stellenbosch University, 2007) Ocran, Matthew Kofi
    This paper seeks to examine the dynamic short-term causal relations and the long-term equilibrium relations between the two major financial assets, stock prices of the US and South Africa and the rand/US$ exchange rate. The study uses a mixed bag of time series approaches such as cointegration, Granger causality, impulse response functions and forecasting error variance decompositions. The study identifies a long-run relationship among the rand/US$ exchange rate and the stock prices of South Africa and the United States. It was also observes that there is a causal relationship from the stocks in the United States to the rand/US$ exchange rate. In the short run however, the interactions among the variables are quite modest. The result of the study has implications for investors, policy makers and researchers.
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    The relationship between inflation and unemployment
    (University of the Western Cape, 2017) Govera, Hemish; Ocran, Matthew Kofi
    The nature of the relationship between inflation and unemployment has implications for the appropriate conduct of monetary policy. However, the question as to whether the traditional Phillips curve relationship holds true remains debatable despite advances in both theoretical and empirical evidence. This study revisits this debate for South Africa by examining data on unemployment, the repo interest rate and core CPI for the period from 1994Q1 to 2015Q4. This was in the light of recent developments in both theoretical and empirical Phillips curve literature. The research employed a hybrid version of the NKPC and various econometric techniques. The Augmented Dickey-Fuller test was used to examine the unit root properties of the data series. The Johansen cointegration technique was applied to test for cointegration among the variables. The research derived and estimated an error correction model for inflation. The model results demonstrated that the repo interest rate is statistically significant in explaining inflation. The VECM was derived and estimated to examine both short-run and long-run relationships among the variables. The results confirmed the existence of a positive but insignificant long-run relationship between unemployment and inflation. The study used the Granger causality test to ascertain the nature of causality among the variables. The research established the presence of unidirectional Granger causality running from core CPI to unemployment. Forecast error variance decomposition shows that large percentages of variations in each variable are attributable to each variable respectively. The empirical findings are helpful to the understanding of the Phillips curve relationship in South Africa and emerging economies in general.