Throughout South Africa’s post-Apartheid history, the ANC-led government has undertaken a distinct nation-building program in pursuit of “a truly united, democratic and prosperous South Africa” (ANC, 2007). This is reflected in a two-pronged approach, coupling political and socioeconomic transformation with the social-psychological aspect of forging a broad and inclusive national consciousness. The ANC’s “rainbow nation” approach embraces cultural diversity through what I shall call the practice of “interculturalism”. Interculturalism is a way of recognizing commonalities, reducing tensions and promoting the formation of social partnerships among different cultural groups. The ANC has also promoted a civic culture based on the principles of liberal democracy, non-racism, equality and the protection of individual rights. Interculturalism and civic nationalism are critically important factors to South African nation-building since together they foster a shared public culture and support meaningful participation in the creation of a truly just and democratic South Africa. Unfortunately, in many ways South African society remains deeply divided by race, ethnicity and economic inequality. This thesis analyses various theoretical approaches to national identity and nationbuilding with the aim of identifying several concepts which arguably throw light on the problems of South African nation-building and national identity formation. It is argued that interculturalism and civic nationalism are context appropriate approaches which have been adopted by the ANC to further an inclusive sense of shared public culture and promote participation in the creation of a shared public future. These approaches have led to the limited emergence of a broad South African national identity. However, South Africa’s commitment to socio-economic transformation has been less successful in generating widespread support for a broad national identity. While some of those previously disadvantaged under Apartheid have benefited from poverty alleviation schemes, service delivery initiatives and black economic empowerment programs, many continue to suffer from homelessness, unemployment and worsening economic conditions. Increasing economic marginalization has caused growing discontent among South Africa’s poor and constitutes the biggest threat to the formation of a cohesive national identity in South African society. Ultimately, it is argued that while interculturalism and civic nationalism have played an important role in fostering the growth of a broad national identity, true South African social cohesion will fail to emerge without a massive and sustained commitment to wide-ranging socio-economic transformation.

This thesis investigates the relationship between expected inflation and nominal interest rates in South Africa and the extent to which the Fisher effect hypothesis holds. The hypothesis, proposed by Fisher (1930), that the nominal rate of interest should reflect movements in the expected rate of inflation has been the subject of much empirical research in many industrialised countries. This wealth of literature can be attributed to various factors including the pivotal role that the nominal rate of interest and, perhaps more importantly, the real rate of interest plays in the economy. The validity of the Fisher effect also has important implications for monetary policy and needs to be considered by central banks. Few studies have been conducted in South Africa to validate this important hypothesis. The analysis uses the 3-month bankers’ acceptance rate and the 10-year government bond rate to proxy both short- and long-term interest rates. The existence of a long-run unit proportional relationship between nominal interest rates and expected inflation is tested using Johansen’s cointegration test. The data is analysed for the period April 2000 to July 2005 as the research aims to establish whether the Fisher relationship holds within an inflation targeting monetary policy framework. The short-run Fisher effect is not empirically verified. This is due to the effects of the monetary policy transmission mechanism and implies that short-term nominal interest rates are a good indication of the stance of monetary policy. A long-run cointegrating relationship is established between long-term interest rates and expected inflation. The long-run adjustment is less than unity, which can be attributed to the credibility of the inflation-targeting framework.

This thesis presents a theoretical analysis of developments in the South African monetary banking sector and money market. In the first section, evolution of the political, social and economic environments over the past few decades are discussed to provide the reader with an idea of some factors responsible for the underdeveloped nature of this market. It has been argued that the domestic political and economic landscape is relatively stable. Nevertheless, factors such as Zimbabwe’s political and ensuing economic turmoil, coupled with numerous financial crises in other developing nations have had negative consequences on domestic financial market development and economic growth. The current state of monetary policy is also analysed, within the economic environment, and various policy considerations have been put forth concerning the inflation targeting policy. The thesis then goes on to scrutinise the statutory and institutional environments within which the monetary banking institutions operate. Recent changes in the regulations governing the operations of these institutions are identified, together with the consequences of such laws on banking institutions and possible amendments have been suggested. In particular, a system of Asset Based Reserve Requirements (ABRR) has been recommended, in place of the current cash reserve requirement, to ensure regulators create a level playing field in the financial sector. The system can also provide authorities with the necessary control required to direct funds to the most desirable sectors of the economy. Development of the interbank market and the effect of reduced banking competition on the efficacy of the South African Reserve Bank’s refinancing operations and inflation targeting policy are also considered. Finally, the thesis analyses some effects of financial development on the South African economy, and whether it is in the best interests of the country to pursue financial reforms with such vigour. While financial development may bring South Africa closer to international standards of best practice, the timing and extent of the reforms will be critical to guarantee success.

The influence of local economic development strategic leaders on how Integrated Development Plans (IDP) are developed is critical to gain insights into strategic planning directed towards economically developing municipalities. Concisely, the aim of this qualitative study was to gain a multiple understanding of how LED strategic leaders, namely managers of the LED directorate and sub-directorates at Makana local municipality influenced the IDP formulation. The fact that these LED strategic leaders, ‘make consequential or strategic decisions’ suggests that their decisions have an influence on the IDP formulation. Thus, the key research question in this study was: How do LED strategic leaders at Makana local municipality influence the formulation of the IDP at this municipality? This qualitative research used purposive sampling of incidents upheld by LED Strategic leaders. A total of ten in-depth and semi-structured interviews were conducted with four LED strategic leaders regarding incidents of their perceived influence on the formulation of the Integrated Development Plan at Makana. The interviews were in-depth in order to gain a rich understanding of their perspectives of reality. As the number of LED strategic leaders was already very small, all the four leaders at Makana participated in this study. Interview data was transcribed and analyzed using open coding and constant comparison. Member check was conducted to enhance confirmability of the findings of this study. Findings indicate that LED strategic leaders perceived their influence on the formulation of the IDP Makana municipality in four varied ways. Predominantly, LED strategic leaders commonly perceived that they had influence in setting evidence-driven direction, and searching for fitness of activities and issues with LED strategy. Thereafter, the other ways in which these LED strategic leaders perceived how they influenced the IDP formulation involve the facilitation of clarity and local relevance of LED mandates, and finally the integration of multiple economic voices of stakeholders. This demonstrates that LED strategic leaders at Makana emphasize proactively managing strategy process rather than content in terms of identifying key opportunities and major economic drivers in the local milieu. Instead, they perceived their influence as characterized by enhancing compliance with bringing the process of municipal strategy formulation closer to stakeholders. Implications of these findings are highlighted.

Various studies conclude that accelerated economic growth and development are necessary in South Africa to make a significant contribution towards reducing high levels of unemployment, inequality and poverty. Moreover, in theories of economic growth the export sector is frequently accorded a special role in encouraging faster economic growth, which is often supported by empirical evidence. Nonetheless, a question that remains unresolved is whether higher export growth leads to higher economic growth in South Africa and what particular role exports may play within the overall economic growth process of the country. This study applies Johansen’s cointegration procedure, impulse response functions, variance decomposition analysis and Granger causality tests to shed light on the channels through which export growth may impact South Africa’s economic growth rate. Quarterly time series data ranging from 1975q1 to 2012q4 is employed in the study’s empirical tests. The empirical results lend support to the idea that the role of exports in the economic growth process fundamentally lies in their ability to encourage investment and capital formation. While export growth supports higher economic growth in the short-run, it does not have the same effect in the long-run. Nonetheless, with export growth supporting faster capital formation in South Africa, and capital formation, in turn, significantly increasing economic growth in the long-run, the impetus to growth stemming from exports has been found to lie in the channel to capital formation. On the basis of the empirical results, not only are exports a critical requirement of higher investment, but they are also anticipated to play a prominent role in lifting the balance of payments constraint that would make investment-led growth possible in the first place. Overall, a strategy of export-led growth that does not explicitly emphasise the export-capital-growth connection is likely to fall short of reflecting the dynamics contained within the exports-growth relationship in South Africa.

Few legal developments in South Africa and elsewhere in the world in recent times have excited such controversy as the legal recognition of social and economic rights. South Africa has created a special place for itself in world affairs for being one of the countries that recognise socio-economic rights in a justiciable Bill of Rights. Partly this is in response to the appalling levels of poverty prevalent in the country which could potentially destabilise the new democracy. Improvement of the quality of life of every citizen is a crucial step in consolidating the constitutional democracy. The question that will face any court in giving effect to socio-economic rights is: how are these rights to be judicially enforced in a given context? The crux of this thesis lies in the resolution of this question. Firstly this thesis traces the philosophical foundations to the legal recognition of socio-economic rights. It is stated that the recognition of these rights in a justiciable bill of rights requires a conceptually sound understanding of the nature of obligations that these rights place on the state. It is emphasised that it is imperative that access to justice be facilitated to poor and vulnerable members of society for the realisation of the constitutional goal of addressing inequality. Particular concern and priority should in this context be given to women, children and the disabled. The study explores various judicial remedies and makes suggestions on new and innovative constitutional mechanisms for judicial enforcement of these rights. It is concluded that there is an important role to be played by civil society in giving meaningful effect to socio-economic rights.

The goal of the study is to examine the relationship between financial sector development and output growth in the agricultural, mining and manufacturing sectors in South Africa. The analysis is based on the hypothesis that financial development is essential for promoting production growth in an economy. To test the hypothesis, in the South African context, the vector autoregressive model (VAR) framework and Granger causality test are applied to a quarterly data set starting from 1970 quarter one to 2009 quarter four. The results suggest that financial intermediary development (bank based measure) and stock market development (market based measure) have a positive impact on output growth in the agriculture, mining and manufacturing sectors in South Africa. There is evidence of a one way causal relationship between financial sector development and sectoral output growth. Particularly, there is evidence that financial intermediary development and stock market development causes output growth in the agriculture, mining and manufacturing sectors in South Africa. However, there is no evidence showing causality running from sectoral output growth to financial sector development. The results provide evidence supporting the theory which states that financial development is essential to promote output growth in a country i.e. in our case South Africa. Thus an efficient financial system which promotes efficient channeling of resources towards the agricultural, mining and manufacturing sectors should be built.

This study examines the nature of the relationship which exists between mining sector production and development of the financial systems in South Africa. This is particularly important in that the mining sector is considered to be one of the major contributors to the country’s overall economic growth. South Africa is also considered to have a very well developed financial system, to the point where the dominance of one over the other is difficult to identify. Therefore offering insight into the nature of this relationship will assist policy makers in identifying the most effective policies in order to ensure that the developments within the financial systems impact appropriately on the mining sector, and ultimately on the economy. In addition to using the conventional proxies of financial system development, this study utilises the principal component analysis (PCA) to construct an index for the entire financial system. The multivariate cointegration approach as proposed by Johansen (1988) and Johansen and Juselius (1990) was then used to estimate the relationship between the development of the financial systems and the mining sector production for the period 1988-2008. The study reveals mixed results for different measures of financial system development. Those involving the banking system show that a negative relationship exists between total mining production and total credit extended to the private sector, while liquid liabilities has a positive relationship. Similarly, with the stock market system, mixed results are also obtained which reveal a negative relationship between total mining production and stock market capitalisation, while a positive relationship is found with secondary market turnover. Of all the financial system variables, only that of stock market capitalisation was found to be significant. The result with the financial development index reveals that a significant negative relationship exists between financial system development and total mining sector production. Results on the other variables controlled in the estimation show that positive and significant relationships exist between total mining production and both nominal exchange rate and political stability respectively. Increased mining production therefore takes place in periods of appreciating exchange rates, and similarly in the post-apartheid era. On the other hand, negative relationships were found for both trade openness and inflation control variables. The impulse response and variance decomposition analyses showed that total mining production explains the largest amount of shocks within itself. Overall, the study reveals that the mining sector might not have benefited much from the development in the South African financial system.

This thesis is about the relationship between local government, grassroots organisations and the organisation of power resulting from the interaction of the two. Exploring this relationship this thesis investigates whether the actions of grassroots movements can bring local government in line with their developmental role as accorded to them by the Constitution. The assumption embedded in this question is that the current balance of power at the local level exists outside of the service of the historically disadvantaged. Following on from that, the thesis explores, through different modes of analysis, theoretical and historical, the policy and constitutional framework for local government, and then it unravels the context set by the political economy of South Africa. The aim is to make a significant attempt at understanding the possible implications of the interventions grassroots movements make in the public space. The thesis does this also by looking at the strengths and weaknesses of the strategies of the UDF to makes an assessment of the possible endurance of post-apartheid grassroots movements. Since civil society ‘suffers’ from nationalist politics, with its own corporatist institutions, the thesis searches deep within or arguably 'outside of civil society', subjecting AbM and UPM to academic critique, to see how movements embedded among the poor and carrying the political instrument of anger and marginalisation, can dislodge the power of capital. More importantly, the thesis situates the post-apartheid moment within postcolonial politics; navigating through the legacy of Colonialism of a Special Type (CSP), the thesis explores the limits and opportunities at the disposal of grassroots movements. From a different perspective, the thesis is an examination of the organisation and movement of power and the spaces within which power and ideas are contested. Drawing on the political and economic engagements, dubbed the Dar Es Salaam debates, in the 1970’s and 1980’s spurred on by Issa Shivji, the late Prof Dani Wadada Nabudere and Mahmood Mandani, the conclusions of this thesis develops these engagements, essentially making a case for the continued centrality of the post-apartheid state. However, the thesis also asserts the indubitable role that both grassroots movements and civil society need to play, not necessarily in the democratisation of the state, though that goes without saying, but in taking the post-colonial state on its own terms. Consequently, the thesis puts forward the idea that issue-based mobilisation does exactly this, and in the manner that acknowledges the state’s centrality and makes paramount the self-organisation (popular assemblies) of ordinary people in public affairs. The thesis categorically concludes that the centrality of the post-apartheid state and its progressive outlook (constitutional values) is contingent on organs of popular assemblies which need to take the state on its (progressive) terms.

Monetary policy in South African is the primary means by which the authorities can influence activity in the overall economy. The South African Reserve Bank accommodates banks through repo transactions for which they charge the repo rate. The most important market in the transmission of the repo rate to the rest of the economy is the interbank market. As such, a detailed discussion of this market is given. In September 200 I the monetary authorities made certain adjustments to the repo system of accommodation, which included changing the repo rate from a floating rate to a fixed rate that would be administratively determined by the MPC. This was done to address certain weaknesses in the floating rate system. This thesis examines and compares the period before and after the adjustments to the repo system, with the aim of determining whether or not the monetary authorities achieved the goals intended from making this change. The repo rate, prime interbank rate, 3-month NCO rate and the prime lending rate are analysed using the Engle-Granger two variable approach and an ECM model to test for causality. It was found that the monetary authorities did not achieve their intended goals as the relationship between the repo rate and the interbank rate was more significant in the first period. Furthermore, the direction of causality the authorities hoped to achieve by implementing the changes were in fact already in place. As such the adjustments to the system changed the transmission mechanism from the one desired by the authorities to one that was not intended. The conclusions reached by this study show that, in terms of the objectives of the monetary authorities, the previous repo system functioned better. / KMBT_363 / Adobe Acrobat 9.54 Paper Capture Plug-in