Country Risk Effects and Government Domestic Debt Nexus in South Africa
Country risk rating is one of the factors that determine the stability of a given country’s economy and the government's access to both domestic and foreign loans. This paper aimed at assessing the relationship that exists between country risk rating and the South African government's acc...
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| Format: | Article |
| Language: | English |
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EconJournals
2023-01-01
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| Series: | International Journal of Economics and Financial Issues |
| Subjects: | |
| Online Access: | http://www.econjournals.com/index.php/ijefi/article/view/13484 |
| _version_ | 1797916898062499840 |
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| author | Thomas Habanabakize Zandri Dickason-Koekemoer |
| author_facet | Thomas Habanabakize Zandri Dickason-Koekemoer |
| author_sort | Thomas Habanabakize |
| collection | DOAJ |
| description |
Country risk rating is one of the factors that determine the stability of a given country’s economy and the government's access to both domestic and foreign loans. This paper aimed at assessing the relationship that exists between country risk rating and the South African government's access to domestic debts or loans. Monthly data from January 2008 to December 2019 was investigated using the ARDL bounds testing approach and the error correction model (ECM). The findings of this paper indicated that all country risk components (economic, financial and political) have a significant long-run effect on government domestic debt. While economic and financial risk scores have a positive effect on government debts, an inverse relationship was found between political risk and government debt. These results imply that in order to be independent of foreign debt which comes with terms and conditions; policymakers and the South African government leaders should strive to sustain the stability of the economy and the country’s financial conditions.
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| first_indexed | 2024-04-10T13:04:37Z |
| format | Article |
| id | doaj.art-2623e79aa91d4c889b767c01d8f7cbb7 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T13:04:37Z |
| publishDate | 2023-01-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-2623e79aa91d4c889b767c01d8f7cbb72023-02-15T16:13:00ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382023-01-0113110.32479/ijefi.13484Country Risk Effects and Government Domestic Debt Nexus in South AfricaThomas Habanabakize0Zandri Dickason-Koekemoer1North-West University (NWU), South Africa.North-West University (NWU), South Africa. Country risk rating is one of the factors that determine the stability of a given country’s economy and the government's access to both domestic and foreign loans. This paper aimed at assessing the relationship that exists between country risk rating and the South African government's access to domestic debts or loans. Monthly data from January 2008 to December 2019 was investigated using the ARDL bounds testing approach and the error correction model (ECM). The findings of this paper indicated that all country risk components (economic, financial and political) have a significant long-run effect on government domestic debt. While economic and financial risk scores have a positive effect on government debts, an inverse relationship was found between political risk and government debt. These results imply that in order to be independent of foreign debt which comes with terms and conditions; policymakers and the South African government leaders should strive to sustain the stability of the economy and the country’s financial conditions. http://www.econjournals.com/index.php/ijefi/article/view/13484Government debt, economic risk, financial risk, political risk, country risk, South Africa |
| spellingShingle | Thomas Habanabakize Zandri Dickason-Koekemoer Country Risk Effects and Government Domestic Debt Nexus in South Africa International Journal of Economics and Financial Issues Government debt, economic risk, financial risk, political risk, country risk, South Africa |
| title | Country Risk Effects and Government Domestic Debt Nexus in South Africa |
| title_full | Country Risk Effects and Government Domestic Debt Nexus in South Africa |
| title_fullStr | Country Risk Effects and Government Domestic Debt Nexus in South Africa |
| title_full_unstemmed | Country Risk Effects and Government Domestic Debt Nexus in South Africa |
| title_short | Country Risk Effects and Government Domestic Debt Nexus in South Africa |
| title_sort | country risk effects and government domestic debt nexus in south africa |
| topic | Government debt, economic risk, financial risk, political risk, country risk, South Africa |
| url | http://www.econjournals.com/index.php/ijefi/article/view/13484 |
| work_keys_str_mv | AT thomashabanabakize countryriskeffectsandgovernmentdomesticdebtnexusinsouthafrica AT zandridickasonkoekemoer countryriskeffectsandgovernmentdomesticdebtnexusinsouthafrica |