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Determinants of external debt in South Africa: a VAR-based approach

Author

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  • Genius Murwirapachena
  • Forget Mingiri Kapingura

Abstract

The external debt issue has recently been a subject of topical concern in South Africa. In the 2014 budget review, the Treasury proposed to increase external debt as a percentage of GDP from the 2013 figure of 39.9% to about 43.9% by 2016. This proposal was contrary to the IMF recommendation that South Africa should cut its external debt to figures below 40% of its GDP. In this paper, the vector auto-regression model was used to analyse the determinants of the South African external debt utilising annual data from 1980-2013. Empirical results reveal that external debt in South Africa is mainly due to sluggish levels of economic growth and high levels of government spending on infrastructure.

Suggested Citation

  • Genius Murwirapachena & Forget Mingiri Kapingura, 2015. "Determinants of external debt in South Africa: a VAR-based approach," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 8(2), pages 138-152.
    • Handle: RePEc:ids:ijepee:v:8:y:2015:i:2:p:138-152
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    Citations

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    Cited by:

    1. Chukwuebuka Bernard Azolibe, 2021. "Determinants of External Indebtedness in Heavily Indebted Poor Countries: What Macroeconomic and Socio-Economic Factors Matter?," The American Economist, Sage Publications, vol. 66(2), pages 249-264, October.
    2. Hlongwane, Nyiko Worship & Daw, Olebogeng David, 2022. "Determinants of public debt in South Africa: A Regime-Switching Approach," MPRA Paper 113203, University Library of Munich, Germany.
    3. Zahir Mohamed Omar & Mohamed Isse Ibrahim, 2021. "Determinants of External Debt: The Case of Somalia," Asian Development Policy Review, Asian Economic and Social Society, vol. 9(1), pages 33-43, March.
    4. Jean Marie Gankou & Marcellin Ndong Ntah & Kirsi Zongo, 2019. "Determinants of external debt in Mauritania [Déterminants de la dette extérieure en Mauritanie]," Post-Print hal-03577999, HAL.

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