Magister Commercii - MCom (Economics)

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A comparative analysis of the different measures used o determine the size of the informal sector of the South African economy
(University of the Western Cape, 2011) Davids Shafeeqa
Since the concept of informal sector was first introduced in a 1971 analysis of the Kenyan economy, there were debates about the appropriate definition of informal economic activity, as well as about the estimation of its size. I n recent years, there seems to be a universally accepted definition of informal economic activity, which refers to enterprises that are unregistered, including those that employ workers with inferior working conditions and weak employment relationships. However, there i s still no real consensus on the method to estimate the size of this sector, as well as which aspects of the informal economy should be measured (for instance, informal employment, or informal economic activity as proportion of GDP). In South Africa, the informal economy is expected to play a significant role mainly because informal employment is relatively high (as proportion of formal employment). The formal economy is characterised by a slow pace of employment creation and a high rate of unemployment. Yet, according to recent studies the country is an international outlier with regard to the size of informal employment as proportion of total non-agricultural employment. Some researchers believe that informal employment is under-estimated due to shortcomings of the specific method used by Statistics South Africa (which is the official method). Furthermore, there is a Jack of South African studies investigating the specific nature and reasons behind inform a l economic activity, as well as the contribution of the informal economy y to GDP. As informal economy is important to absorb the unemployed who are retrenched and those who are unable to find formal employment due to reasons like a skills mismatch. an economic recession, and there are important linkages between formal and informal economies, which cannot be ignored by policy makers. Hence, various researchers suggested that other approaches to measure the informal economy should be considered . This study provides a critical evaluation of the various methods to estimate the size of the informal economy and of the results of the empirical evidence applying these methods to both South Africa and other (developed and developing) countries. It was found that there is no indication that the informal economy has diminished as a country develops. In contrast, in general, in both developed and developing countries, the size of the informal economies showed an upward trend throughout the years. The results indicate that in the South African context, the informal economy does play a significant role in terms of job creation and contribution to the national product. However, the method used by Statistics South Africa seems to have under-captured informal employment. This has important pol icy implications and it is thus recommended that more research should be done with a specific focus on the estimation of the size of the informal economy as proportion of GDP.
A critical assessment of informal networking as contributing to manufacturing firm competitiveness in the clothing cluster of the Western Cape.
(University of the Western Cape, 2011) Peters John Edward
The clothing industry remains an important contributor to the Western Cape economy both in terms of employment and manufacturing. During recent years the sector , viewed and supported by government as a cluster, has been battling against both internal challenges such as low productivity and unwillingness to change, and external factors which include trade liberalisation and cheap imports. Additionally , co operation and interaction among role-players seem to be lacking and ultimately affecting firm and cluster performance. Recent research has focussed on networking within a cluster context. That research questions the assumption that the mere existence of a cluster contributes to firm and industry competitiveness. The extent of informal networking was identified as critical to the competitiveness of firms located within a cluster. The clothing sector of the Western Cape presented an ideal opportunity to consider this link between informal networking and firm performance within a cluster context. Six clothing manufacturing firms comprising four CMTs and two full line manufacturers were selected as respondents. A literature review of past and recent publications on industrial policy, the clothing sector , clusters and networking was conducted. Qualitative data was collected by means of questionnaires and semi structured interviews with the six firms located in the Western Cape. Case studies for each of the six firms were developed. The findings of the research indicated that the successful firms proactively engaged in informal networking in maintaining and improving their competitiveness. The firms that reported limited engagement in informal networking experienced challenges related to productivity and firm growth and were ultimately significantly less competitive. Furthermore, network intensity and network range correlated with firm productivity and growth.
A panel data analysis on the formal-informal sector linkages in South Africa
(University of the Western Cape, 2017) Nackerdien, Moegammad Faeez; Yu, Derek
There are few studies on linkages between the formal and informal sectors in South Africa. This study explores the types of linkages between the informal and formal sectors with empirical research concentrating on labour churning (movements between the informal and formal sectors). Using National Income Dynamics Study (NIDS 2008-2014) data from four waves, individuals are classified into labour market statuses based on the Heintz & Posel (2008) methodology. This study conducts labour market transitional matrices and finds formal employment to provide the most stability in terms of employment. The main focus is on the following three groups of employed: working in the formal sector in all four waves; working in the informal sector in all four waves; moving between the formal and informal sectors across all four waves. For those always working in the formal sector, they are predominantly females and Africans. Those who always work in the formal sector are most educated, while those always working in the informal sector are associated with low educational attainment. The descriptive statistics are followed by econometric analysis: in terms of attaining employment, being male and a higher educational attainment significantly increase the probability of finding employment. In terms of sustaining work, the same two covariates significantly increase the probability of sustaining work. Being the head of household is also a key covariate in significantly increasing the probability in maintaining and sustaining employment. In terms of transitioning to formal employment, being male, an increase in education and living with a partner (married or unmarried) significantly increase the probability of moving to formal sector employment. In addition, multinomial logistic regressions are conducted, and the results indicate that being a male significantly increases the probability of working in the formal sector for all four waves. Africans are also significantly more likely to be employed informally for all four waves and an increase in the years of education significantly increases the probability of being formally employed for all four waves. The household-level variables reveal that being the head household significantly increases the probability of being employed (especially formally employed for all four waves) while having children has a negative impact on being employed for all four waves.
Access in the South African public health system: factors that influenced access to health care in the South African public sector during the last decade
(University of the Western Cape, 2014) Christian, Carmen Sue; Burger, Ronelle; Yu, Derek
The aim of this mini-thesis is to investigate the factors linked to access in the South African public health sector - using General Household Survey Data - in order to contribute to a better understanding of the role of access in achieving the National Department of Health’s primary goal of universal coverage. Even though the multi-dimensional interpretation of health system performance has gained acceptance and traction in recent years, much of the research linked to it remains supply-focused. The implicit truth is that demand-side health issues are largely ignored, under-researched and ominously absent from health policies. This is particularly true with regard to the access dimension of health performance, where research and policy focus almost exclusively on availability and affordability perspectives of access while neglecting demand-side aspects of health-seeking behaviour, such as acceptability. The study, therefore, pursues an in-depth exploration of access across its three dimensions - availability, affordability and acceptability - in the South African public health sector and aims to empirically investigate access to public health care from 2002 to 2012. It also identifies the underlying reasons for the observed trends, supplementing and reorienting the current understanding of access to public health care. The empirical findings reveal mixed results: it supports current literature by suggesting that equity has been achieved in terms of making public health care services more affordable, especially for the most vulnerable groups of South African society. However, acceptability and availability issues persist. It is safe to say that the availability of public health care – mainly a supply-side issue – is being addressed in the South African context with Government taking steps to address it. Unfortunately the same attention has not been given to issues of acceptability on the demand-side. Failure to fully understand the demand-side dimension of access and the role health-seeking behaviour plays in public health issues threatens to weaken health policies aimed at improving access. It is imperative that demand-side aspects of health-seeking behaviour and institutional responsiveness to health-demand occupy a more prominent role in South African public health debates, research and policy.
Adverse welfare effects of regulations on small tobacco exporters: the case of Zimbabwe
(University of the Western Cape, 2005) Matemba, Edward; Jacobs, Peter; Dept. of Economics; Faculty of Economics and Management Sciences
Regulations to reduce the consumption of tobacco products have dual effects on economies. Economies that are net consumers of tobacco products experience welfare enhancing effects as a result of these regulations. However, these regulations can have adverse welfare effects among net producing economies. Many studies have explored these welfare effects on net consuming economies, whereas the impacts among net producing economies have been neglected. This research paper examined the adverse welfare effects of smoking regulations on small tobacco exporting economies with, a comparative advantage in tobacco production.
Allocation and use of water for domestic and productive purposes: an exploratory study from the Letaba river catchment
(2009) Masangu, T.G.; Lahiff, Edward; Derman, Bill
In this thesis, I explore the allocation and use of water for productive and domestic purposes in the village of Siyandhani in the Klein Letaba sub-area, and how the allocation and use is being affected by new water resource management and water services provision legislation and policies in the context of water reform. This problem is worth studying because access to water for domestic and productive purposes is a critical dimension of poverty alleviation.The study focuses in particular on the extent to which policy objectives of greater equity in resource allocation and poverty alleviation are being achieved at local level with the following specific objectives: to establish water resources availability in Letaba/Shingwedzi sub-region, specifically surface and groundwater and examine water uses by different sectors (e.g. agriculture, industry, domestic, forestry etc.,); to explore the dynamics of existing formal and informal institutions for water resources management and water services provision and the relationship between and among them; to investigate the practice of allocation and use of domestic water; to investigate the practice of allocation and use of irrigation water.The study concludes that there is a problem of water scarcity in the study area and that the water scarcity is caused by the growth in the population, specifically in the Giyani area; these problems are exacerbated by financial and institutional obstacles within local institutions of governance. The water scarcity is not, therefore, natural but anthropogenic in nature.The water scarcity is not felt by all sectors, however: some farmers have access to water for irrigation, while many others face great challenges in their farming activities.Overall, people in Siyandhani and surrounding villages surrounding villages in the Letaba Catchment do not have access to water because of human action, hence the use of the concept of manufactured scarcity. The lack of access to water, it is argued,leads to the violation of the human right to water. This study concludes that water reform, which is widely seen as a priority for South Africa, has not yet reached the villages of the Klein Letaba.
An evaluation of non-credit bearing entrepreneurial programmes of selected South African universities
(Univeristy of the Western Cape, 2007) Ramontja, K.S.
At its core the study evaluates the non-credit bearing entrepreneurship programmes, Skills Training and Enterpri e Programme (STEPP) offered by the University of South Africa and Students Enterpri e Programme (SEP) offered by the University of the Western Cape. The academic debate regarding whether entrepreneurship can be taught has reached a maturity, but there is still a concern regarding the best or appropriate methods of delivery. The rationale of this tudy is to ascertain whether a non-credited bearing entrepreneurship programme linked to experiential learning could create awareness about entrepreneurship to students across academic disciplines. Currently, there is no study in South Africa that looks at the is ue on non- credited entrepreneurship programmes. The main objective of the study is to evaluate the effect of non-credit bearing entrepreneurship programmes. Having a university degree in entrepreneurship does not guarantee a successful entrepreneurial career. Non-credit bearing entrepreneurship programmes accessible to students from a range of academic disciplines could create or develop student awareness about entrepreneurship. The survey is the research method used, and the questionnaire is the instrument utilised in gathering data.
An exploration of female educational outcomes in South Africa over the nineteenth century
(Universty of the Western Cape, 2025) Damon, Faith
The study of female education, especially in South Africa during the 19th century, has been an understudied area of historical economic research. This thesis will aim to fill this gap by investigating whether gender parity existed between male and female educational outcomes. Using historical data from the Western Cape Archives Records Service and Cape Colony Census data, the educational outcomes of males and females will be compared and discussed. This thesis highlights the importance of female human capital development for economic growth. During British rule in 19th-century South Africa, Missionary activities proliferated. Mission schools provided education to mainly Indigenous and Coloured communities. The Missionary impact expanded with government aid but also reinforced racial segregation in schooling. In the 19th century, there were significant changes in the labour market, influencing educational access and gendered roles into the 20th century. The regression analysis of the late 19th century highlighted that Coloured females surpassed Coloured males in attendance rates. White males slightly surpassed White females. The analysis studied the impact of average attendance, school order ratios and total teachers on the enrolment of males and females. The early 20th century data analysis showed the same trend (Coloured females surpassing males, while White males surpassed females) for literacy rates. Coloured females surpassed Coloured males in terms of the ability to read, while White males slightly surpassed White females in terms of literacy. These confounding trends indicate a need for further research to understand these unexpected gender dynamics.
Analysing the effects of public expenditure on economic growth in South Africa
(University of the Western Cape, 2022) Woodhouse, Carla; Sheefeni, Johannes P S
Since the commencement of South Africa’s democracy in 1994, South Africa has made tremendous progress with a focus on sustainable economic growth. Due to data limitations because of the Covid-19 pandemic, the study drew on quarterly data for the period 1997 to 2018 to examine the effect of public investment on economic growth in South Africa. The study drew data from World Bank and The International Monetary Fund, making use of real gross domestic production, general government capital stock, private capital stock, research and development and total employment were used. The analysis was conducted with the use of EViews 12.
Analysing the relationship between economic growth and the insurance sector: Evidence from South Africa
(University of Western Cape, 2021) Makeleni, Mphumzi; Sheefeni, Johannes P. S.
The connection between the real economy and the financial sector continues to be a subject of debate amongst scholars. There is a plethora of studies dedicated to unravelling the relationship between economic activity and financial progress. However, a large share of those studies has concentrated on banking and the capital market industries; the studies that have undertaken to decipher the connection between the insurance industry and prosperity in the economy are insufficient. An understanding of the connection between the insurance industry and advancement in the economy is immensely important to effect judicious policy making, which will enhance and boost the economy. The primary goal of this study is to establish if there is a connection between the insurance industry and economic advancement in the South African context.
An analysis of management's approach to occupational health and safety in the Western Cape chemical sector
(University of the Western Cape, 2002) Le Roux, P.J; Hirschsohn, P
Employers in South Africa are keen to be referred to as being responsible when dealing with workplace health and safety. However, the poor health and safety record of South African companies generally and especially in the mining and fishing sectors is internationally known. Many observers comment that the picture at plant level does not reflect a commitment and willingness by management to even implement the minimum standards stipulated by legislation without pressure from external sources such as government enforcement agencies or export market pressure. It is well known that the lives of black labourers were worth little during the apartheid era as workers were simply replaced when injured, killed or unable to perform duties due to illness. This legacy still exists today under high unemployment rate in the country does not allow workers the freedom to turn down jobs in high-risk environments or to refuse unsafe tasks. The steady increase of work-related injuries and diseases reported under the Compensation for Occupational Injuries and Diseases Act it came into effect in 1993, is sufficient proof of this sad state of affairs with 289 952 accidents and 3615 occupational diseases reported during the 199711998 financial year. The fatality rate reported in 1996 was 2 220 inclusive of all sectors in the economy. These figures illustrate the need for a new mental model that will value human life irrespective of colour or status in the economy.
An analysis of the effectiveness of microfinance: A case study in the Western Cape
(University of the Western Cape, 2004) Sheraton, Marcia; Adams, Ismail; Dept. of Economics; Faculty of Economics and Management Sciences
The aim of this study is to determine the extent to which the UN/OSCAL (United Nations Office of the Special Coordinator for Africa and the Least Development Countries) model of microfinance is being applied in the South African context, its scope for application and recommendations for implementation. The hypothesis is that, the better South African microfinance initiatives conform to the model, the more successful it will be in fulfilling the ultimate mission of microfinance which is to supply financial services to the poor by cutting the cost of outreach with beneficial effects on poverty..
An analysis of the impact of crude oil price shocks on the exchange rate in South Africa
(University of the Western Cape, 2016) Sedick, Afiefa; Van Lill, Dawie
Numerous studies have investigated the impact of oil price shocks on the exchange rates in developed economies. However, fewer studies have examined the effect of oil price shocks in developing economies. One study by Turhan, Hacihasanoglu and Soytas in 2012 examines the dynamic effect of oil price movements in thirteen developing markets, including South Africa. Another study by Kin and Courage (2014) investigate the effect of crude oil prices on the South African exchange rate, but their modelling, time period and variables differs. The intention of the current mini-thesis, however, is investigate the effect of crude oil prices on the exchange rate of South Africa from January 1980 to December 2014. The aim of this mini-thesis is to explore the impact of crude oil price movements on the volatility of the exchange rate on the South African market. Currently emerging economies are consuming an increasing share of the world’s oil and they have therefore become larger players in the global financial markets. Basher and Sadorsky (2006:224-227) state that as countries modernise and urbanise, their demand for crude oil and its related products tends to increase. The rising economic importance of the BRICS (Brazil, Russia, India, China and South Africa) economies implies that the possibility of the consumption of oil in the developing economies could surpass the global oil consumption of developed economies. It is important to note that future oil demand cannot be predicted, but oil demand growth is highly correlated with the growth in the industrial production of a country. The use of oil for energy consumption and the use of oil trading on the stock markets and the financial markets are all linked on the path of a country’s economic growth. In order to evaluate the link between the four variables of oil prices, exchange rates, manufacturing production index and the prime rate, qualitative research methods will be used. The methods which will be applied are the vector autoregressive model and the vector error correction mechanism. This study reveals that the movement in Brent oil prices has a relatively insignificant impact on the movement of the South African rand on a monthly basis.
An analysis of the non-traditional agricultural export potential for Rwanda: a case of flowers
(University of the Western Cape, 2004) Rwigema, Jean Bosco Minega; Huda, S.N.; Dept. of Economics; Faculty of Economics and Management Sciences
Rwanda is constrained by an export structure that is heavily dependent on one or a few agricultural export products such as coffee, tea , pyrethrum and cinchona. The country did not manage to industrialize or to diversify its export structure significantly during the post-independence period. The situation was worsened by the civil war of 1994, which almost destroyed all sectors of the economy. Traditional export crops, such as coffee, cotton, tea, cocoa, palm oil, and tobacco are all subject to large price fluctuations and declining world market prices. This paper considered the case for diversification into non-traditional agricultural exports as a strategy for improving a developing country's terms of trade. The study put forward a case of Higland Flowers Project; a flowers project located in rural Kigali about 5 kilometers to the Kigali International airport.
The application of the marketing concept to independent radio and appliance retail
(University of the Western Cape, 1982) Venter, J; van de Byl Smuts, Michael
Independent Radio and Appliance retailers face very strong competition from chain groups, discounters and hypermarkets. These organisations rely on bulk-buying and negotiated deals to elicit favourable terms from suppl iers. Due to the volume of their turnover they can afford to work on lower profi t margins than the independent operator. Large marketing organisations also benefit from economi es of seal e in adverti si ng and promoti ons. In short the 1arge groups have a di fferenti al advantage over the small er i ndependents i n that thei r cost of sales and overhead structure is generally lower. The purpose of this study is to develop a marketing strategy for independent radio and appliance retailers which will enable them to survive, grow and trade profitably under current highly competitive conditions.
Are microfinance institutions in South Africa efficient? - A case study in the Limpopo province
(University of the Western Cape, 2002) Kallis, Denver; Huda, Syed
This minithesis aims to determine whether South Africa's microfinance institutions are operating efficiently and whether efficiency can be enhanced. Using the United Nations model and framework for efficiency, it examines the key principles of operational efficiency in the South African microfinance context. The paper begins with an overview of the literature relating to the principles of efficiency as underscored in the United Nations model.
Assessing the economic viability of biofuel production in South Africa
(University of the Western cape, 2016) Jacobs, Denver; Ocran, Matthew
Against the backdrop of rising fuel prices and increasing transport fuel demand, biofuel production, driven by the potential to contribute to energy security, climate change mitigation and rural development has experience rapid growth in recent years. Apart from a few private initiatives, South Africa has no commercialized biofuel industry to date. The concerns are that economic, environmental and socio economic issues can be a hindrance to the success of the industry. In response to these concerns this research intends to ascertain whether biofuel production could offer a viable economic alternative to fossil fuels in South Africa. For decision makers it is hard to find reliable reference material and solid guidance. Uncertainty over the potential risks and benefits has left potential investors unsure whether biofuel production could be a viable investment opportunity. The aim of this study was to determine if the benefits derived from biofuel production are significant enough to justify the substantial investment required. The findings reveal that in the absence of clear government strategies and the availability of low cost feedstocks the production of biofuel cannot be viewed as viable. The results show that bioethanol from grain sorghum and sugarcane are not economically viable since the results turn out to be negative in terms of both net present values (NPV) and internal rate of return (IRR) calculations, thus rendering a viable payback (PBP) period as unattainable. Similarly, the NPV and IRR for biodiesel from soya beans and sunflower is negative and the PBP also unattainable. Sensitivity analyses indicate that these crops (except for sunflowers) could only become viable if there were to be a substantial reduction in feedstock prices. All other changes in parameters would not render any of the production plant viable.
Assessing the financial inclusion of micro-, small, and medium enterprises(MSMEs) in South Africa: 2010 and 2020 FinScope MSME data
(University of the Western Cape, 2024) Anthony, Calynn Kristen; Matsebula, Velenkosini
The financial inclusion of micro-, small, and medium enterprises (MSMEs) as major stakeholders in the economy remains meagre. MSMEs are the strongest economic activity drivers worldwide, yet many researchers have studied the effect of financial inclusion on MSMEs as it has become a global priority. International and local studies have agreed that removing certain financial system constraints can improve the financial inclusion status of MSMEs. Yet, local studies focused on this concept for South African MSMEs are scarce. The objective of this study is to assess the financial inclusion of micro-, small, and medium enterprises (MSMEs) in South Africa. This study offers the first of its kind to use FinScope MSME 2010 and 2020 surveys to assess the financial inclusion of MSMEs in South Africa and uses the Multiple Correspondence Analysis (MCA) to derive a financial inclusion index to assess the financial inclusion status of MSMEs. This study aims to fill the gap in the literature by using recent data and a different methodology to measure the financial inclusion of MSMEs in South Africa. The relationship between the computed MSME financial inclusion index and various explanatory variables is tested using the Ordinary Least Squares regression model. Thereafter, the likelihood of being financially excluded is measured by running probit regressions.
Assessing the ICT-enabled agricultural commodity exchange market and its impact on small-scale farmers in South Africa Takudzwa
(University of the Western Cape, 2013) Musiyarira, Takudzwa Taurai Christopher
Pre-democratic South Africa was highly regulated by the apartheid government with the black small-scale farming community actively marginalised. Following the deregulation of the South African agricultural market came the opening up of the market to accommodate these small-scale farmers and also the introduction of South African Futures Exchange. South Africa has done well in terms of development of ICT over the past years, making it a country with characteristics of both first and third world countries. This study aims to assess the agricultural commodity exchange market and how small-scale farmers may participate more actively in the market. This study finds that though South Africa has world class ICT infrastructure this has not made it easier for small-scale farmers to enter the agricultural market and value chain. The study finds that there is little or no participation by small-scale farmers in South African Futures Exchange. It finds that mobile phones and applications may be the way forward in the efforts to ensure their participation in the commodity exchange market through provision of services such as price discovery and price risk management as is the function of South African Futures Exchange. It is also found that there is need to invest in high value agricultural products in order to benefit more from commodity exchanges.
An assessment of the benefits of offshore services to South Africa's economic growth
(University of the Western Cape, 2014) Baidoo, Emmanuel; Loots, Lieb
Throughout its development, trade has been regarded as a vital component of economic growth and development. Both theoretical and empirical studies consider international trade to be a major determinant of the growth of any economy. International trade in services has been rising ever since trade in services was incorporated into international trade agreements after the Uruguay Round of trade negotiations in 1994. This, coupled with the ever-improving state of technological innovation, has made services trade an important aspect of the development agenda of most countries. However, just like any other endeavour, offshoring of services has both opportunities as well as threats. The study examines two research questions relating to the growth-enhancing impact of South Africa’s exports and imports of services. Firstly, the study examines the contribution of services exports to economic growth in South Africa. Secondly, the study determines the impact that imported services has had on South Africa’s economic growth. In spite of the global rise of trade in services, South Africa’s export of services accounts for only 14 percent of total exports, while the import of services constitutes 20 percent of total imports. Using quarterly time series data for the period 1980 to 2012, the study adopts the ordinary least squares method to estimate the contribution of both exports and imports to output expansion within an aggregation production function setup. The empirical results show that the export of services influences influence South Africa’s economic growth significantly in both the long-run and the short-run. While the relationship is positive in the long-run, it is negative in the short-run. The results also indicate that the import of services significantly and positively affects real output growth in both the long-run and the short-run.

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