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Is external debt an impediment to the South African economy?
Sanele Stungwa* 
Article | Year: 2024 | Pages: 103 - 124 | Volume: 48 | Issue: 1 Received: June 1, 2023 | Accepted: September 27, 2023 | Published online: March 1, 2024
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FULL ARTICLE
FIGURES & DATA
REFERENCES
CROSSMARK POLICY
METRICS
LICENCING
PDF
Source: Author’s own computation from data from South African Reserve Bank.
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Variables
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Description of the variables
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Source
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GDPt
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Gross domestic product at
market price
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South African Reserve Bank
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EDt
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External debt as % of GDP
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South African Reserve Bank
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EXRt
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Exchange rate in dollars
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World Bank
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Source: South African Reserve Bank; World Bank.
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Variables
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Mean ± Standard deviation
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Jarque-Bera Statistic
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GDPt
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1.989 ± 2,433
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16.735***
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EDt
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28.170 ± 9.394
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5.637
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EXRt
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-5.308 ± 12.812
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24.773***
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Note: Statistically significant at *10%, **5%, ***1%. Source: Author’s own computation.
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Variables
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Dimensions
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BDS
statistics
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ED
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2
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0.155***
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3
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0.201***
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4
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0.203***
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5
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0.193***
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6
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0.183***
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GDP
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2
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0.021***
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3
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0.015***
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4
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0.012***
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5
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0.011***
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6
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0.009***
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EXR
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2
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1.087
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3
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0.025**
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4
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0.036**
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5
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0.055*
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6
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0.410
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Note: Statistically significant at *10%, **5%, ***1%. Source: Author’s own computation.
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Variables
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Level
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First difference
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Bierens
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Breitung
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Bierens
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Breitung
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ED
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-9.462 (0.6100)
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0.017 (0.9300)
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-6.858 (0.8600)
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0.003 (0.2000)
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GDP
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-28.872 (0.1400)
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0.008 (0.5400)
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-1,988.933** (0.0200)
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0.001**(0.0000)
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EXR
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-43.247 (0.1100)
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0.002** (0.0000)
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-286.354** (0.0400)
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0.001**(0.0000)
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Note: Statistically significant at *10%, **5%, ***1%. The probability values are in brackets. Source: Author’s own computation.
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Variables
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Level
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Intercept
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Trend
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Intercept and trend
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ED
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-4.893*** (2012)
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-3.940** (2006)
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-4.404*** (2003)
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GDP
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-5.070** (1994)
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-5.236*** (2006)
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-5.264** (2009)
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EXR
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-7.269*** (2003)
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-4.918 (2005)
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-7.144*** (2003)
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Note: Statistically significant at *10%, **5%, ***1%. The break years are in brackets. Source: Author’s own computation.
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F-statistics
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Critical values
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1%
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5%
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10%
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6.421***
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I (0)
4.428
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I (1)
5.816
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I (0)
3.164
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I (1)
4.194
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I (0)
2.618
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I (1)
3.532
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Note: Statistically significant at *10%, **5%, ***1%. Source: Author’s own computation.
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Variables
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H0 vs
H1
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Simulated
T-statistics
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Critical
value
(10%)
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Critical
value
(5%)
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Simulated
prob-value
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r
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GDP
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ED
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r = 0
vs r > 0
r =1 vs r > 1
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701.40*
57.96
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596.20
222.40
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713.30
281.10
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0.03520
0.84300
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1
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GDP
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EXR
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r = 0
vs r >0
r =1 vs r > 1
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988.09**
131.92
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596.20
222.40
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713.30
281.10
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0.00530
0.29890
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1
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Note: Statistically significant at *10%, **5%, ***1%. Source: Author’s own computation.
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Variables
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Coefficient
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Prob.
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EXR
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0.013
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0.7455
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ED_ POS
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-0.171
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0.0044***
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ED_ NEG
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-0.267
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0.0080***
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INTERCEPT
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-3.020
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0.1773
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Note: Statistically significant at *10%, **5%, ***1%. Source: Author’s own computation.
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Variables
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Coefficient
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Prob.
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GDP
(-1)
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-0.838
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0.0000***
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EXR
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0.011
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0.7403
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ED_
POS
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-0.143
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0.0079***
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ED_
NEG
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-0.224
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0.0117**
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Intercept
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-2.530
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0.1800
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ECT(-1)
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-0.838
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0.0000***
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R2
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0.507
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Adjusted
R2
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0.443
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Note: Statistically significant at *10%, **5%, ***1%. Source: Author’s own computation.
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Variable – External debt
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F-statistics
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Probability value
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![]() ![]()  ![]()
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3.412
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0.0743*
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Note: Statistically significant at *10%, **5%, ***1%. Source: Author’s own computation.
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Serial-correlation
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Heteroscedasticity
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RESET test
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Statistical test
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1.924
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5.114
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0.766
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Probability value
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0.382
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0.276
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0.399
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Note: Statistically significant at *10%, **5%, ***1%. Source: Author’s own computation.
Source: Author’s own computation.
Source: Author’s own computation.
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March, 2024
I/2024
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