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dc.contributor.authorMiruka, Ogutu
dc.contributor.authorMah, Gisele
dc.contributor.authorNchake, Mamello A.
dc.date.accessioned2017-10-04T07:49:26Z
dc.date.available2017-10-04T07:49:26Z
dc.date.issued2015
dc.identifier.citationMiruka, O. et al 2015. Financial guarantees and public debt in South Africa. Risk Governance and Control: Financial Markets & Institutions, 5(3):214-223. [http://dx.doi.org/10.22495/rgcv5i3c2art7]en_US
dc.identifier.issn2077-429X
dc.identifier.issn2077-4303 (Online)
dc.identifier.urihttp://hdl.handle.net/10394/25737
dc.identifier.urihttp://dx.doi.org/10.22495/rgcv5i3c2art7
dc.description.abstractA few years since the worst of the Euro sovereign debt crisis, many nations, from Cyprus to Ireland, including South Africa are re-visiting their public debt management to avert or lessen the impact of similar such happenings in the future. There are a number of studies on risk assessments of fiscal sustainability; however, few focus on contingent liabilities and even fewer on financial guarantees. In South Africa, financial guarantees have consistently comprised just above or below 50% of all contingent liabilities since the early days of majoritarian rule. In lieu of this, the paper analyses the risks posed by financial guarantees to fiscal sustainability in South Africa. We estimate the effect of financial guarantees on public debt in South Africa via the Engle Granger and causality model with quarterly time series data obtained from the South African Reserve Bank (SARB) as well as the National Treasury. The data covers the April 1997 to December 2011 period. All econometric methods were executed using the statistical software package E-Views 7. We found that no long run relationship exists between national net loan debt and financial guarantees in South Africa. The pass rate of financial guarantees significantly affects its present value. The pass rate of financial guarantees has a predicting ability in determining the present value of national net loan debt. These findings may be contrary to what would be expected in the case of South Africa considering that the country is managing the issuance of financial guarantees prudently and that at present levels, there is no need for a radical policy shift. The study therefore offers a lesson to similar merging economies on the good governance of contingent liabilities.en_US
dc.language.isoenen_US
dc.publisherVirtus Interpressen_US
dc.subjectFinancial Guaranteesen_US
dc.subjectContingent Liabilitiesen_US
dc.subjectFiscal Risksen_US
dc.subjectFiscal Sustainabilityen_US
dc.subjectGranger Causalityen_US
dc.subjectSouth Africaen_US
dc.titleFinancial guarantees and public debt in South Africaen_US
dc.typeArticleen_US
dc.contributor.researchID22709320 - Miruka, Collins Ogutu
dc.contributor.researchID23098880 – Mah, Gisele


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