Submitted in fulfillment of the requirements of the degree of Doctor of Technology: Business Administration, Durban University of Technology, Durban, South Africa, 2014. / The performance of portfolios of a fixed-rate asset and a risky asset of major companies in a South African market index the FTSE/JSE with strategies which rebalances fixed proportions of wealth in every rebalancing period is analysed in a long term. Recent findings in portfolio management theory by Dempster, Evstigneev and Schenk-Hoppé (2010, 2008, 2007, 2003) and by Browne (1988) note optimality of fixed-mix portfolios which assert fast exponential growth in stationary markets. A quantitative analysis is performed to analyse quantifiable measures in order to optimize the application of self-financing constant rebalanced portfolio strategies that contribute to the financial engineered prospects suggested by Dempster et al. (2010) for fixed-mix portfolios. The comparative performance of fixed-mix portfolios with a proxy strategy and without proxy strategy relative to a buy and hold strategy shows the superiority of fixed-mix portfolios in generic market conditions. The research extends the utilization of constant rebalanced self-financing portfolio investment strategies by assessing the market price of risk under the mean-variance model of Markowitz (1952). Effective implementation tactics of the strategy are examined by focusing on the market risk and the financial risk. The frequent reversals and trending of stochastic asset prices in the financial market are analysed to adjust the market price of risk by considering tradable financial securities to determine the financial proxy of de-trending. The proxy hypothesis which evaluates the stationary financial condition in a fixed-mix portfolio is validated by an option-based myopic strategy using a lookback straddle option. A myopic strategy is a strategy which considers a single period ahead, Fabozzi, Forcardi and Kolm (2006). The realised growth under a financial proxy is found to have a linear strategic asset allocation with a low degree of concavity relative to a buy and hold performance in the market risk of self-financing portfolio strategies. / D

M.Comm. / The aim of this dissertation is to undertake an empirical study of the determinants of the Phillips curve for South Africa (SA). The work will be concentrated on the relationship between inflation (or wage inflation) and unemployment in SA from 1980 to 1998 with a particular focus on the behaviour of the Non Accelerating Inflation Rate of Unemployment (NAIRU). Given the importance of the NAIRU in formulating monetary policy, it will be therfore be appropriate to analysed this parameter. The NAIRU tends to perform differently in the face of price and wage inflation and therefore it has been found wise to divide the model into two categories. Price/unemployment model. Wage/unemployment model. The first model will be referred to as the Price-Phillips curve where as the second will usually be referred to as the Wage-Phillips curve. Models of Price-Phillips curve and Wage-Phillips curve are valuable tools for policy makers for a number of different purposes. In its original form the wage (or price) — unemployment relationship presents politicians with a list of different trade — offs to choose between inflation and unemployment. The trade-off seems to suggest that policy makers could choose a specific inflation-unemployment combination by controlling aggregate demand. This clearly points out that the trade-off postulated in the Phillips curve can be an usefull tool for monetary policy.

M.A. / The objective of this thesis was to discuss capital account liberalization and banking crises in emerging markets, against the backdrop of the Asian financial crisis in 1997. This was discussed with an underlying objective of evaluating the soundness of the South African banking system. The basis of this thesis was that a sound banking system coupled with good macroeconomic policies would make South Africa less vulnerable to global financial volatility. On the East Asian financial crisis, we found that the main cause of this crisis was the lack of prudent lending practices by most banking institutions. Lending practices were largely shaped by institutionalized corruption. Bad lending practices originated from connected lending as banks were owned and had strong links with big family conglomerates. These conglomerates were highly leveraged with very low profit margins and survived on cross-subsidization. As a result, they could not service their debts, resulting in large bad debts and non-performing loans in the banking systems. These non-performing loans and debt defaults had significant negative effects on banks' profitability and business survival, as they eroded earnings and shot up credit exposure. Furthermore, we also found that governments' political influence in the lending system and weak macroeconomic management (large current account deficits, fixed exchange rates and expansionary fiscal policies) contributed significantly to the East Asian financial fragility. Against this background, we recommend that emerging markets that want to liberalize their capital accounts should ensure that sound banking systems are properly entrenched. When financial systems are not strong, emerging countries would be exposed to imprudent credit risk assessments by banking institutions, resulting in nonperforming loans and collapse of those banking institutions. Secondly, our view is that emerging markets should pursue and adhere to the core banking principles of the Basel Committee on Banking Supervision. The objective of these principles is to ensure that banks operate profitably and have good business frameworks. The Basel Committee requires commercial banks to have solid and efficient supervision departments, with strong intentions of evaluating credit risks associated with loans and advances. Furthermore, central banks or any other custodians of banking institutions should have capital adequacy requirements in order to protect depositors and investors against any unforeseen liquidity pressures. From this thesis, we found that the South African banking system is sound. The low level of non-performing loans in the domestic banking system is indicative of prudent credit risk management. Even with prime interest rates at an all time high of 25% in late 1998, most banks managed to escape large non-performing loans, especially from the corporate sector. The brunt was mostly felt in the small business sector and household debt category. The South African Reserve Bank's Supervision Department sets out stringent guidelines with regard to the lending practices of banks. Banks are not allowed to overexpose themselves to particular clients, as was the case in East Asia. This also extends to deposits. Banks are not allowed to take deposits above 25% from a single source. The objective is to guard against liquidity pressures that could occur when that particular depositor withdraws the funding.

Thesis (M.Com. (Development Theory and Policy))--University of the Witwatersrand, Faculty of Commerce, Law and Management, School of Economic and Business Sciences, 2015. / Food price inflation has been an important subject of debate internationally since 2008. This sharp increase in food prices experienced during 2008 lead to intense research into the causes, dynamics and responses to this particular instance of food price inflation. The international literature attributed food price inflation to such factors as climate change, increases in energy costs and speculative activity in financial markets for agricultural commodities. This research report undertakes a review of the measurement of food price inflation in South Africa, broadly assessing how it is to be linked to the poor in South Africa. The research report focuses on the work of institutions concerned with the measurement of food price inflation in South Africa. Different methodologies of identifying foods as food staples are looked at. Food prices and trends are analysed using CPI data from January 2008 until October 2008, using selected consumer price index series from Statistics South Africa. The research report finds that the institutions studied show evidence of that higher food price inflation is correlated with demographic markers of poverty, although the traditional measure, the CPI, does not suggests that this is very extensive. This, it is argued, is due to the calculation methodologies used in the published CPI, and the data period. The research report then ends with an overview of the political economy of food in South Africa, thereby makes recommendations as to why the measurement of food price inflation is important for the poor.

A Dissertation submitted to the Faculty of Science, University of the Witwatersrand, Johannesburg, in fulfilment of the requirements for the degree of Master of Science, 2012. / The purpose of this study is to investigate if the International Comparison Program (ICP) methodology could be used to examine the different buying power (worth) of the currency on the same products or goods amongst South African provinces. The method will be tested on the Consumer Price Index (CPI) food data collected from January 2006 to December 2006 from the main cities in the provinces. The food basket is obtained via the Income and Expenditure Survey (IES), which is generally updated every 5 years. South Africa (SA) has disparities and differentials in economic indicators such as the CPI, Gross Domestic Product and employment, amongst the provinces which are caused by among other things geographic set-up, urbanisation, inflation rates, and expenditure patterns. We use the monthly data to do an inter-provincial comparison of food prices by deriving annual purchasing power parities (PPPs) for each of the provinces, using the Country Product Dummy (CPD) method recommended as best practice by the World Bank. The CPI data is validated using the SEMPER software developed by the African Development Bank (AfDB). The validated data is examined for variability over the months and between the provinces using Analysis of Variance. Significant price differences are found for various products over the months and between provinces. The validated data was used to compute PPPs at the group and basic heading level. PPPs were investigated for differences in the provinces on grouped level of food products using Analysis of Variance. The reliability of PPPs between provinces is investigated both at grouped and basic heading level of products using the Cronbach-alpha statistic. The results show that there are no significant variations in PPPs across provinces. This could be due to the similar business opportunities or developments in the provinces or due to the aggregation of prices from the individual product (basic heading) to the main product group level. This implies that the cost of the food basket is the same across provinces.

A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, Johannesburg, in 25% fulfilment of the requirements for the degree of Master of Management (in the field of Public and Development Management) March 2017 / In recent years, increased attention being given to accountability on public finances in South African municipalities saw an increase in the number of municipalities establishing Municipal Public Accounts Committees (MPACs) to address deficiencies and gaps in the local government accountability mechanisms and oversight. The purpose of the study was to establish the alignment between the recently established MPACs and the generally accepted public accounts committees with respect to the institutional design, practices and performance assessment. A qualitative case study of the Nelson Mandela Bay Metropolitan Municipality (NMBM) MPAC was followed where documents were analysed and semi-structured in-depth interviews with purposively selected participants were conducted. This research study revealed some gaps in the alignment of the NMBM MPAC to the generally accepted public accounts committees. The most crucial gap that emerged pertained to the mandate and powers of the NMBM MPAC. Recommendations for enhancing the financial oversight of the NMBM MPAC were made. The study also suggests further research on a larger number of municipalities. / GR2018

Thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy in the FACULTY OF COMMERCE LAW AND MANAGEMENT SCHOOL OF ECONOMICS AND BUSINESS SCIENCES at the UNIVERSITY OF THE WITWATERSRAND / The design and implementation of the monetary policy in South Africa has been based on the idea of a trade-off between inflation and output growth. However, there is no consensus among empirical investigations on the existence of Phillips curve in the present times. While the South African Reserve Bank (SARB) has instrument independence, it does not have goal independence, which implies that there is coordination between the monetary policy and other macroeconomic policies. Thus, if the SARB objectives are in line with the other policy objectives, there should be a relationship between monetary variables and real variables. This therefore shows that in the long-run, monetary policy cannot single-handedly bring about both sustained economic growth and employment creation (SARB, 2014). Thus this study explored inflation dynamics in South Africa by using the Hybrid new Keynesian Phillips curve (HNKPC) and the augmented Gordon’s models. The study firstly estimated the Hybrid new Keynesian Phillips curve model with a view to determine whether Phillips curve exists and ascertain whether the backward-looking or forward-looking components drive inflation dynamics in South Africa using OLS and GMM estimation techniques. The results show that the Phillips curve does not exist in South Africa using various measures of demand-side variable. These findings are robust across estimation methodologies as well as different measurements of inflation expectations and data frequency. While the findings indicated that economic agents in South Africa are both rational and adaptive in predicting inflation, the results clearly showed the dominance of forward looking component over the backward looking element in driving inflation. Secondly, given the focus of the South African monetary authority in maintaining stable inflation rates and the fact that monetary policy need to go hand-in-hand with other policies in order to ensure stable inflation and economic growth (Gruen, Pagan and Thompson, 1999), this study considered the expanded Gordon’s model with a particular focus on how fiscal policy determines the inflation process in South Africa. The purpose of the Gordon’s chapter is to verify the existence or non-existence of Phillips curve in an expanded model, within the context of an augmented “triangle” model while including the monetarist and fiscal side variables, thereby checking whether the PC relationship of recent studies is robust to model specification. Thus, the augmented Gordon’s model was estimated using a holistic approach of including the fiscalist, monetarist and the structuralist schools of thought, using the Vector autoregressive (VAR), vector error correction model (VECM) and innovation accounting techniques. The results confirm the non-existence of PC whereby output growth maintained a negative relationship with inflation rate, signifying no trade-off despite the expanded specification, while the results from output-gap model are inconclusive. Further results showed that the demand-side, fiscal factors and some of the structural variables contribute more to the inflation dynamics in South Africa. Thus the changes in inflation rate are as a result of changes in output growth, government deficit, electricity price and exchange rate. The results confirmed that the Fiscal Theory of the Price Level (FTPL) applies to the South African economy, whereby not only monetary policies should be considered in controlling inflation, but also fiscal policies. On the other hand, the importance of the determinants of inflation rate is not sufficient in observing the inflation dynamics in South Africa; therefore, this study concluded by investigating the level at which inflation becomes detrimental to output growth. In the context of the low levels of economic growth and high levels of unemployment in South Africa, the study analysed the output growth implications of the inflation targeting monetary policy of the South African Reserve Bank that targets an inflation band between three and six percent. Using the Threshold Autoregressive (TAR) and the Sample Splitting Threshold Regression (SSTR) techniques, this study investigated the nonlinear inflation-growth nexus in South Africa with the purpose of identifying the inflation rate band that optimize output growth. The results showed that South Africa is able to accommodate a higher level of inflation beyond the current inflation target band by increasing the band to between seven and nine percent in order to enhance output growth. Our findings support the argument of studies that indicate that moderately higher inflation rate will not be harmful to the economy. / MT2017

A research report submitted to the Faculty of Management, University of the Witwatersrand, in 50 per cent fulfilment of the requirements for the degree of Master of Management (in the field of Public and Development Management) February 2017 / This study examines legislative oversight practice within the Limpopo Legislature (subnational government) in South Arica, over a specific historic period. Legislative oversight and executive accountability are constitutionally mandated responsibilities. This study is focused on the fourth term (2009-2014) of the government of Limpopo, when financial management and policy implementation challenges resulted in five departments being placed under national administration. Semi-structured interviews and document analysis was utilised to understand the practice of legislative oversight and explore the challenges embedded in securing executive accountability. Drawing on the literature, a conceptual framework was used to guide the process for establishing the areas for detailed exploration. These included the legal and institutional framework for oversight; the capacity availed and utilised for oversight; and the informal institutional incentives and challenges that influenced the performance of oversight. The study revealed that oversight by the legislature and accountability by the executive are intertwined mandates and there are numerous contingencies embedded in the relationships they embody. The manner in which mandates unfold and oversight is exercised is affected by the underlying political dynamics within the dominant party. These dynamics impact on the autonomy of the legislature, shape the power relations between the executive and the legislature and creates incentives for practices that impact on legislative oversight and executive accountability. Members of the legislature were junior in party structures and did not have political authority which influenced the extent to which members of the legislature held the executive answerable as well as the extent to which the executive would account. In addition, the capacity of the institution and budget were insufficient to perform adequate oversight effectively and timeously and enable the legislature to develop into an efficient and successful institution. Furthermore, the legislature relied on the executive for information which was not always credible or reliable. This combination of factors led to oversight at times not being effective. The lessons derived from this study can be used to improve oversight effectiveness at a subnational and national governance level. However, given the role that the party plays in the governance system, there is a need for further research on party functioning, party incentives and internal democracy within the party. Key words: legislative oversight, executive accountability, parliamentary system, proportional representation, electoral system, Limpopo / MT2017

This study empirically investigates the relationship between fiscal deficit, inflation, M3 money supply and the exchange rate in South Africa. The study makes use of quarterly macroeconomic time-series data sets comprising 84 observations, covering the period from 1994Q1 to 2015Q4. The unit root tests conducted employed the Augmented Dickey Fuller (ADF) and Phillips-Perron (PP) tests. The results reveal that the variables become stationary at first difference. The Johansen co-integration technique suggests that there is at least one co-integrating equation among the variables. The results of the Engle-Granger approach, which is residual based, show that the residuals are stationary, thus validating the existence of a long-run relationship between the model variables. The study carried out a Granger causality test. The results indicate that there is a strong Granger causal relationship between the variables (IF) and (FD). Another strong causal relationship emerges between inflation and money supply. The ECM model was employed to identify the speed of adjustment as a response to the departures from the long-run equilibrium path. The estimated coefficient of the ECM error term has the required sign and is statistically significant at the five per cent level of significance. The error term indicates a quick convergence to equilibrium. The study concludes that the dependent variable (FD) is jointly caused by all the independent variables in the long-run. The results of the variance decomposition of the variable (FD) to innovations resulting from IF, MS and RER indicate that own shocks remain the dominant source of total fluctuations in the forecast error of the variables. The findings of the study are efficient and reliable as the estimated model passed all the major diagnostic tests. By implication the findings suggest that the estimated model show high goodness of fit and is thus reliable for policy making. The study recommends a fiscal adjustment that will enhance economic growth. Additionally, a fiscal policy that will aim at identifying and mitigating other possible leakages that narrow the tax base should be considered.

A research report submitted to the Faculty of Engineering and the Built Environment at the University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Built Environment (Housing) / A research report submitted to the Faculty of Engineering and the Built Environment at the University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Built Environment (Housing) / In South Africa, there is a group of families that live in small four-room houses that were transferred to them by the apartheid regime in 1978. As elsewhere in the developing world, many of these families are extended families which live together because they do not have any other options. This study explores the housing needs and living conditions of the Ndala family and three other extended families living in or near Pimville, Soweto. Structured interviews, observations and evaluation research are utilised to determine the extent to which poor extended families in South Africa are excluded from housing finance. Literature discussing self-help housing, livelihoods, poverty and enablement is presented in order to construct a theoretical framework, after which an overview of housing finance arrangements in the developed world, developing countries and South Africa in particular provides the backdrop against which the findings are discussed. The findings and analysis demonstrate that extended families such as those included in the study fall into a gap in the provisioning of housing finance in South Africa. They do not qualify for government housing assistance, and they also cannot obtain loan finance from banks because they do not meet the strict lending criteria. As a result, the extended families turn to non-conventional sources of income and finance such as rental income, loans from relatives and stokvel funds in order to survive and in some cases extend their houses. It is recommended at the end of the study that South Africa review its current housing policies. Specifically, the study recommends that a new strategy called “rent a room” be put into place in order to assist poor extended families like the Ndalas.