Browsing by Author "Mbelu, Noloyiso"

Now showing 1 - 1 of 1
  • No Thumbnail Available
    Item
    Domestic public debt and finacial sector development in South Africa: an autoregressive distributed lag modeling from South Africa
    (University of Fort Hare, 2025-08) Mbelu, Noloyiso; Kapingura, F; Jiza, A
    This study empirically examines the effect of domestic public debt on financial sector development in South Africa over the period 1985 to 2023, using the Autoregressive Distributed Lag (ARDL) model. The results indicate that domestic public debt exerts a negative influence on the development of the financial sector. This relationship suggests that an increase in public debt may hinder financial sector progress through channels such as reduced savings and heightened vulnerabilities, particularly those arising from short-term borrowing and debt denominated in foreign currency. The findings underscore the importance of fiscal discipline and efficient public spending. Accordingly, the study recommends that the South African government reduce wasteful expenditure and enhance fiscal efficiency by implementing targeted policy reforms. These could include rationalizing subsidies, eliminating non-essential programmes, and streamlining public sector institutions.