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Browsing by Author "Sunde, Tafirenyika"

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The causal relationship between foreign direct investment and economic growth in Namibia
(Namibia University of Science and Technology, 2022-11-08) Sunde, Tafirenyika
Most developing countries lack the resources needed for investment to improve their economic situations, create jobs, and achieve long term economic growth and development. Foreign direct investment (FDI) can easily transfer capital from capital abundant regions to countries with a scarcity of capital. This is one of the strategies used to address the capital scarcity problem faced by most developing countries.
DETERMINANTS OF HOUSE PRICES AND NEW CONSTRUCTION ACTIVITY: AN EMPIRICAL INVESTIGATION OF THE NAMIBIAN HOUSING MARKET
(J o u r n a l o f D e v e l o p i n g A r e a s, 2017) Sunde, Tafirenyika; Muzindutsi, Paul-Francois
The demand for and supply of housing are heterogeneous and differ across countries, provinces and cities. In the Namibian context, the housing market has experienced a substantial increase in house prices. Such an unexpected growth rate in house prices suggests that the Namibian housing market may not be sustainable in the long term. This means that there is a high probability of a housing price bubble in Namibia if the house prices continue to increase. The aim of this study was to conduct an econometric analysis of endogenous and exogenous determinants of house prices and new construction activity in Namibia. This study also attempted to establish whether there is evidence of overvaluation of house prices in the Namibian housing market and this is important in identifying the possibility of a housing price bubble in Namibia. In addition, the study is relevant during the current period where Namibia is faced with a continuous increase in house prices. A restricted VAR model with a Johansen cointegration approach was used to analyse monthly data from January 2000 to December 2014. The selection of the data set was aimed at providing representatives for various housing demand drivers and housing supply determinants. For modelling on the supply side, new construction investment as a percentage of GDP was employed. The other variables incorporated as exogenous variables include the economic growth rate, the consumer price index, nominal wages as a percentage of GDP, the short-term interest rate, mortgage loans as a share of GDP and population in the 15-64 cohort as a percentage of GDP. Results show that the house price index in Namibia has proved more sensitive to changes in population, mortgage loans and inflation; whereas the construction activities were found to be more sensitive to the house price index and inflation. Granger causality results show that there is a bidirectional causality between the house price index and new construction activity in Namibia. The study therefore found evidence of overvaluation of house prices in the Namibian housing market, which may lead to a house price bubble in the Namibian economy. Namibian policymakers, through the Bank of Namibia, should come up with policies which ensure that the majority of mortgages given by the banks are for constructing new houses instead of financing the purchase of existing houses.
Determinants of intra-industry trade between Zimbabwe and its trading partners in the Southern Africa Development Community region (1990-2006).
(Science Publications, 2009) Sunde, Tafirenyika; Chidoko, C.; Zivanamoyo, James
The main objective of this study was to establish the determinants of intra industry trade between Zimbabwe and its trading partners in the Southern African Development Community (SADC) region. The study was mainly motivated by the need to establish the type of goods that Zimbabwe trades with its trading partners. Approach: The study also wanted to prove the hypothesis that similarity in per capita income is not the main determinant of intra-industry trade between Zimbabwe its SADC trading partners; and also that intra industry trade does not necessarily take place among countries with similar economic structures and level of development. The study used the Modified Standard Gravity Equation which has Intra-Industry Trade Index as its dependant variable. The model was regressed using Ordinary Least Squares in excel. Results: The results of the study show that per capita income, trade intensity, distance, exchange rate and gross domestic product explain Intra-Industry Trade (IIT) between Zimbabwe and its SADC trading partners. The study also established that most countries in SADC trade in more or less the same goods and this can be explained by the type of development that these countries were subjected to during the colonial era which resulted in the establishment of similar economic structures and per capita incomes that were more or less the same. As result, these countries produce and trade similar products. Both hypotheses above were proved wrong. Conclusion: We therefore concluded that Zimbabwe needs to get into more bilateral trade agreements with its trading partners in order to enhance trade between itself and its trading partners. We also concluded that Zimbabwe has to give incentives to its producers and also mend its relationship with the Breton Woods Institutions (International Monetary Fund and the World Bank) if it wants to reach its full trade potential.
Economic growth and tax structure in Zimbabwe: 1984-2009.
(Inderscience Enterprises Ltd., 2012) Marire, Juniours; Sunde, Tafirenyika
We examine the tax-growth nexus in Zimbabwe using parametric and non-parametric analysis. We use a two-stage estimation procedure that first generates efficiency scores for the country using a Data Envelopment Approach. We use the efficiency scores in the second stage to normalise growth to get a proxy for potential economic growth. Using this potential growth we run a translog model that allows computation of time-varying elasticities of growth to changes in tax policy. The translog model results we got indicate that economic growth is inelastic to tax structure in Zimbabwe. As such, we recommend policies that rely on non-tax stimuli to the economy to buttress growth. We find that the most inefficient years were those punctuated with bad economic governance and droughts.
Economic growth and tax structure in Zimbabwe: 1984–2009
(Inderscience Enterprises Ltd, 2012) Marire, Juniours; Sunde, Tafirenyika
We examine the tax-growth nexus in Zimbabwe using parametric and non-parametric analysis. We use a two-stage estimation procedure that first generates efficiency scores for the country using a Data Envelopment Approach. We use the efficiency scores in the second stage to normalise growth to get a proxy for potential economic growth. Using this potential growth we run a translog model that allows computation of time-varying elasticities of growth to changes in tax policy. The translog model results we got indicate that economic growth is inelastic to tax structure in Zimbabwe. As such, we recommend policies that rely on non-tax stimuli to the economy to buttress growth. We find that the most inefficient years were those punctuated with bad economic governance and droughts.
Education Expenditure and Economic Growth in Mauritius: An Application of the Bounds Testing Approach
(European Scientific Journal, 2017) Sunde, Tafirenyika
This study examines the relationship between education expenditure and economic growth in Mauritius. The study employed the ARDL bounds testing methodology for the period 1976 to 2016. The study found that education expenditure Granger causes economic growth in Mauritius in the short run. In addition, the study also found that economic growth does not Granger cause education expenditure in Mauritius in the short run. However, in the long-run, the study found that there are long run relationships between education expenditure and economic growth in both equations; and this means that an increase in either of the variables will eventually lead to an increase in the other variable. The study, therefore, found support for the hypothesis that investment in education raises economic growth. This means that Mauritius has the potential to benefit from further investments in education in the future.
The effects of monetary policy on unemployment in Namibia
(KSP Journals, 2015) Sunde, Tafirenyika
The main purpose of the article was to establish the effects of monetary policy on unemployment in Namibia. The article used the structural VAR methodology in a macroeconometric setting to achieve this. The results show that monetary policy affects unemployment in Namibia in the short run and in the long run, it is ineffective. These results differ from the results by Alexius & Holmlund (2007) and Jacobs et al. (2003) who found that monetary policy has a significant role to play in explaining unemployment in both the short run and the long run. This means that there is still need to investigate the other explanations of long run unemployment in Namibia such as the demand and supply related variables so that appropriate policies are propounded to address it effectively.
Financial development and economic growth: Empirical evidence from Namibia (1990Q1-2011Q4).
(Journal of Emerging Issues in Economics, Finance and Banking (JEIEFB), 2013) Sunde, Tafirenyika
I attempt to empirically establish the relationship between financial development and economic growth in Namibia using the cointegration framework. The main objectives of the article are to econometrically determine the nexus between financial development and economic growth using multivariate Granger causality tests, impulse response functions and variance decomposition, as well as propose some policy alternatives for the policy makers. The article contributes to macroeconomic literature on the financial development-economic growth relationship given the fact that it is one of the few researches on the same topic ever done on Namibia. The article finds that there is a unidirectional relationship between financial development and economic growth in Namibia running from economic growth to financial development. The findings imply that Namibia realises financial sector development when the economy grows and not the other way round. The fact that the financial services sector is not significantly influencing economic growth in Namibia is a real cause for concern which implies that either the banking sector is too small to have any significant impact on the economy or it is uncompetitive and therefore inefficient. The article recommends that one way of reforming the financial sector in Namibia is to subject it to some form of competition through the licensing of new banks, of course, taking into account the size of the Namibian market.
Financial sector development and economic growth in Namibia.
(JETEMS, 2010) Sunde, Tafirenyika
The main objective of the study was to determine the nature of the nexus between financial sector development and economic growth with specific reference to the amibian economy. The reason why I carried out this study is that no similar study has yet been carried out in amibia and the nature of the relationship between financial development and economic growth is still not known. This study, therefore, is the first step in attempting to provide literature that could be useful to policy makers and academics in amibia. We used the Granger causality tests to establish the relationship among the financial sector indicators and economic growth indicators after having carried out the unit root and co integration tests. The results show that the Granger causality between financial development and economic growth is by and large bidirectional. In other words, this means that when the economy grows the financial sector may respond positively and vice versa. We also found that the financial sector variable, the logarithm of the ratio of private sector credit to gross domestic product (GDP), Granger caused the real variables, logarithm of real GDP, and logarithm of real income per capita. This is in line with the conclusion above that real variables could respond favorably to financial variables. So causality in this case is running from financial variables to real sector variables. The article ended with a cautionary statement on the size of the sample used and the general availability of statistical data on the amibian economy, which could have negatively affected the authenticity of the results.
Financial sector development and economic growth nexus in South Africa
(Inderscience Enterprises Ltd, 2012) Sunde, Tafirenyika
The study investigated the nexus between financial sector development and economic growth in South Africa using cointegration and error correction modelling and; the Granger causality tests. The results of the study show that economic growth is explained by the financial sector variables and control variables such as inflation, exchange rate, and real interest rates. The Granger causality test results show that there is generally a bidirectional relationship between economic growth and financial sector development which implies that if the economy grows the financial services sector also grows and vice versa.
Financial sector development and economic growth nexus in South Africa.
(Interscience Enterprises Ltd., 2012) Sunde, Tafirenyika
The study investigated the nexus between financial sector development and economic growth in South Africa using co-integration and error correction modelling and; the Granger causality tests. The results of the study show that economic growth is explained by the financial sector variables and control variables such as inflation, exchange rate, and real interest rates. The Granger causality test results show that there is generally a bidirectional relationship between economic growth and financial sector development which implies that if the economy grows the financial services sector also grows and vice versa.
Is Namibia's inflation import-driven? An econometric investigation.
(Bethany Books, 2011) Ogbokor, Cyril A.; Sunde, Tafirenyika
The principal objective of this study was to investigate and test the hypothesis that Namibia’s inflation is mainly driven by imports using annual macroeconomic data. The study relied heavily on the Ordinary Least Squares (OLS) estimation technique. The study confirmed the results of previous studies (which used different methodologies from the current study) that inflation in Namibia is heavily import driven. The other variables that were found significant in explaining inflation in Namibia are rate of growth of GDP, broad money supply (M2), real interest rates and the real exchange rate. The main conclusion that we came to is that Namibia needs to put more emphasis in developing its manufacturing base which would ensure increased domestically produced output and less imported inflation from South Africa and the rest of the world.
The Random Walk hypothesis for the Zimbabwe Stock Exchange: January 1998 - November 2006.
(Science Publications, 2008) Sunde, Tafirenyika; Zivanomoyo, James
The main intention of this study was to investigate, using monthly data, whether prices in the Zimbabwe Stock Exchange (ZSE) follow a random-walk process as required for there to be market efficiency. The study applied the unit root tests to establish if the ZSE followed a random walk or not. If the ZSE follows a random walk it is said to be efficient and therefore managers of companies and investment specialists cannot take advantage of it to make unnecessarily huge profits. The ZSE was chosen because it represents a typical emerging stock market in Sub-Saharan Africa. The study used the Augmented-Dickey Fuller (ADF) tests with a lag length that was necessary to remove autocorrelation from residuals. Using monthly data from January 1998-November 2006 we found that the ZSE did not follow a random walk and therefore was not efficient in the weak form. This meant that past prices had an influence in the determination of future prices and this provided an opportunity for out-performance by skillful financial managers and investment specialists. During the period studied investment analysts and managers of companies were able to take advantage of these investment opportunities to make abnormal returns from the ZSE. The current study helped to corroborate the findings of a similar previous study that was carried out on the Zimbabwean economy for the period 1990-1998[8].
A review of the determinants of share prices.
(Science Publications, 2009) Sunde, Tafirenyika; Sanderson, Abel
The main purpose of the review was to qualitatively establish the determinants of share prices in Zimbabwe. The review was carried out in 2006 before the situation in Zimbabwe deteriorated to the level where it is at the moment. Approach: To gather the information that we wanted we used interviews and the archival method. We targeted the people in the various organisations/companies that are registered on the Zimbabwe Stock Exchange (ZSE), stock exchange staff, stock broking firms, investment analysts and chief executives. Results: We concluded that there are economic, political and social factors that determine the stock prices in Zimbabwe. However, economic and political factors were established to be the dominant factors in the determination of stock prices. Conclusion: We concluded that if the stock exchange is to perform well the economic and political situation in the country has to be stable. In other words government has to take some deliberate steps to ensure that the economy of the country is well run and also that there is political stability.
Seller concentration in the grain milling industry.
(Science Publications, 2010) Charumbira, Martin; Sunde, Tafirenyika
The main purpose of the study was to explore the levels of concentration in Zimbabwe’s grain-milling industry during period 1985-2005. The study could not be extended to periods after 2005 because the situation in the country had become economically chaotic. Approach: The methodology adopted involved the calculation of the concentration indices such as the Herfindall-Hirschman index, Hannah and Kay index, the Entropy index and the Four-Firm Concentration ratio. Results: The study revealed that liberalisation of the industry reduced seller concentration levels. The response to deregulation in this particular sector confirms the theoretical expectation that liberalisation promotes competition and reduces market power of existing firms, which is also consistent with the world-wide trends. Conclusion: The policies adopted at the inception of Economic Structural Adjustment Programmed (ESAP) should be pursued more vigorously to create a manufacturing base which is open to competition and which is insulated from adverse effects of possible manipulation by a few large firms. Policy should be aimed at maintaining affordability of the basic commodities to the consumers as well as ensuring viability to the manufacturers. With high levels of industrial concentration, producers are able to operate at a higher-cost system without losing market share, but this is to the detriment of the consumers.
Sources of unemployment in Namibia: an application of the structural VAR approach
(Inderscience Enterprises Ltd., 2016) Sunde, Tafirenyika; Akanbi, Olusegun A.
The main purpose of the research was to establish the sources of unemployment in Namibia for the period 1980 to 2013 using the SVAR methodology. Empirical results show that persistently high unemployment is the result of a combination of various shocks as well as the hysteresis mechanism. The impulse response functions and variance decomposition functions agree that labour supply, aggregate demand, and real wages seem to be the critical factors affecting unemployment. Moreover, the price shocks affect unemployment in the long run and productivity shocks explain only a small fraction of the forecast error variance decomposition of unemployment in both the short run and long run. This finding is consistent with the controversy of uncertain effects of productivity shocks on the unemployment rate. Aggregate demand policies, deregulation policies and structural labour market reforms can be useful policy instruments to tackle unemployment in Namibia.

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