Thomas Habanabakize

The efficient integration of young people into the global job market is fundamental to sustainable development, significantly impacting economic stability, social unity, and demographic benefits. This study examines the determinants of youth labour absorption across key economic sectors in South Africa. The study uses the autoregressive distributed lag (ARDL) model to analyse sector-specific time-series data. The empirical findings show that youth labour market outcomes are influenced by both macroeconomic and microeconomic factors, with varying effects across economic sectors. The identified key determinants of youth labour absorption include economic growth, skills levels, labour costs, capital- or labour-intensity, profitability, and investment. In the manufacturing sector, for example, a rising capital-to-labour ratio was identified as one of the key constraints on youth labour absorption, while relatively low labour costs supported youth labour absorption in the community and social services sector. These sector-specific insights highlight the necessity of differentiated policy responses. Accordingly, the study recommends targeted strategies to promote inclusive economic growth, bridge skills mismatches, and encourage investment in labour-intensive industries.

Agricultural industry plays a significant role in the South African economy, specifically in creating jobs. However, this sector is facing significant challenges owing to economic and social unrest. Within the application of both Autoregressive Distributed Lag (ARDL) and Error Correction Model (ECM) on time series data from 2010q1 to 2021q4; this paper assessed the effects of food imports, inflation, and real wage on agricultural employment in South Africa. The results from bounds testing indicated that food imports, inflation and real wage stimulate longterm disruptions in agricultural employment. However, short-run results indicated that agricultural employment is only affected by the real wage. Based on these findings, this study suggests a policy that incorporation of both inflation rate and real wages policy to improve employment in the agricultural industry. Additionally, easing the import of food products that are complements to domestic agricultural products should be another strategy to increase the number of people employed in the agricultural industry.

The housing market is one of the key drivers of economic growth and social welfare in South Africa. However, the performance of the market depends on housing prices which are also subjected to changes in various socio-economic and political factors. The main purpose of this study is to determine the effects of inflation (consumer price index), interest rate, rental price and political risk on housing prices. To achieve this objective, the study applies Vector Autoregressive (VAR) model, the Johansen test for cointegration, Vector Error Correction Model (VECM) and Granger causality test on monthly data starting from January 2002 to December 2019. Findings of the study suggest that inflation, interest rate, rental and political risk influence the housing prices in both the long run and short run. Changes in political risk and rental price cause a long-run decline in housing prices while high-interest rates and inflation cause an increase in housing prices. Based on findings, researchers propose stability in the inflation rate, interest rate and political situation as a solution that can assist to improve the housing market and create price stability. Additionally, interest rate reduction can generate growth in housing demand resulting in the country’s economic improvement.

Purpose of the study: The manufacturing sector plays a crucial role in various countries' economies, especially in developing countries. However, due technology growth and the emerging services sector, the possibilities and abilities of the manufacturing ...

One of the core objectives of economic development is to improve people’s standards of living. However, both standards of living and consumption expenditures are often determined by disposable income, crude oil prices and exchange rate volatility. The current paper employed quarterly time series data from 2002 to 2020 to analyse the responsiveness of household consumption expenditure to the petrol price, disposable income and exchange rate volatility in South African. The empirical outcome suggested that a long-run relationship exists between variables under consideration. Additionally, the current level of consumption expenditure was found to be determined by income level and exchange rate volatility whilst changes in petrol price had no significant effect on short-term consumption expenditure. Based on these findings, the study suggests that the South African policymakers and government authorities implement policies and strategies that enhance both household income and exchange rate. Those strategies may include strengthening the country’s currency, production improvement, inflation rate reduction, and the creation of job opportunities.

Imports and exports play a vital role in every country’s economy. Both of these variables depend to a great extent either on the appreciation or depreciation of the country’s currency. Imports, exports and exchange rate are some of main determinants of economic growth and are also affected by economic growth. This paper aims to determine the effect of exchange rate and economic growth on both exports and imports in the South African economy. To achieve this objective, a test for cointegration was carried out using the autoregressive distributed lag (ARDL) model. This model was applied on a time series quarterly data from 2008 to 2018. The error correction model and Granger Causality tests were performed to define the short-run and causal relationship amongst variables. The regression analyses reveals the existence of a long-run relationship within the estimated variables. In support of the economic literature, the study findings indicated that economic growth positively effects on both exports and imports. Nonetheless, the analysis depicted that in the long-run, Rand appreciation leads to more imports and fewer exports. Furthermore, the Granger Causality text suggested a bidirectional causality between the exchange rate and imports; between economic growth and imports, and between the exchange rate and economic growth. Succinctly, the used variables have a causal relationship with one another. Based on the findings, the study highlighted the pertinence of economic growth and emphasised the role played by the exchange rate in maintaining the balance between imports and exports. The study recommended that both currency value and economic growth should be given urgent attention in order to revive the deteriorating economy of South Africa.

Many developing countries are facing high levels of unemployment and most people who are employed are poorly remunerated due to low skills and productivity levels. Although jobs are important, a productive job is even more important, not only for employees, but also for employers. South Africa, being a developing country, is also facing the challenge of dramatically high levels of unemployment. This study’s aim was to examine both the short- and long-term impacts of real wages, labour productivity and investment spending on employment absorption rates in South Africa. To establish the existing relationship between variables, the study applied several econometric approaches, such as an autoregressive distributed lag (ARDL) model, error correction model (ECM) and a Toda–Yamamoto causality analysis on quarterly time series data from 1995Q1 to 2019Q1. The results revealed the existence of both short- and long-run relationships among the variables. While a positive relationship was found between employment absorption, investment spending and labour productivity, it was found that real wages negatively impact on long-run employment absorption rates. Additionally, the short-run analysis indicated that the lagged employment absorption rate influences the current rate of employment. Furthermore, the causality tests indicated that a bi-directional causal relationship exists between employment absorption and investment spending; and a uni-directional relationship between employment and both real wages and labour productivity. Based on the findings, the study recommends increments of investment spending and labour productivity that enables the South African economy to carry out more activities that would require more workers, thereby improving the employment absorption rate. The fact that labour productivity positively impacts the employment absorption rate infers the requirement for quality and skilled workers to be absorbed in the South African labour market. Therefore, labour skills improvements appear to be a prerequisite for productivity enhancement and job creation.

Macroeconomic indexes are useful tools in forecasting long and short-run changes in the economy. The purpose of this study is to assess the usefulness of the Purchasing Managers’ Index (PMI), and changes in the manufacturing sector as predictors of economic output. This study is quantitative in nature and employed an ARDL econometric model, vector error correction (VEC) and Granger causality approaches to determine the short and long-run relationships amongst the variables. The ARDL method was used as the variables had a mixture of stationarity at levels I(0) and first difference I(1). The model used economic output measured as GDP, as the dependent variable, while PMI, output in the manufacturing sector and CPI (used as the control variable) were the independent variables. Quarterly data sets were obtained from Statistics South Africa and the Bureau of Economic Research (BER) for the period 2000 to 2017. Findings of the ARDL estimation revealed that the variables cointegrate in the long run and changes in manufacturing output had the highest impact on long-run economic growth of the three variables. In the short run, all independent variables had a significant impact on economic growth. The main findings from the Granger causality tests indicate that bi-directional causality exists between both PMI and GDP as well as between PMI and manufacturing output. Additionally, bi-directional causality was found between GDP and manufacturing, while CPI just causes manufacturing changes. The implications of the research is the confirmation of the importance of PMI, CPI and output of the manufacturing sector as indicators for changes in overall economic activity on a macro level.