Issue #3 (Volume 6 2017)

The aim of this article was to assess the financial and socio-economic impact of the two Industrial Development Zones (IDZs) emanating from the public-private partnerships (PPPs) arrangement in the Buffalo City and Nelson Mandela Metropolitan Municipalities, located in the Eastern Cape of South Africa. The metropolitan municipalities, despite the introduction of PPPs, are still faced with serious socio-economic challenges such as slow economic growth, increased poverty levels, unemployment and mostly stagnant infrastructure development as a result of underfunding. In addition, metropolitan municipalities remain obliged to deliver on their constitutional mandate, which is the provision of services to communities consistent with the Municipal Financed Management Act (MFMA) and Municipal Systems Act (MSA). Municipal financial planning and management leads to the development of methods to achieve sound financial performance in municipalities in line with service delivery demands. Sound municipal financial performance enables the municipalities to provide goods and services to all citizens.
The study adopted a quantitative research approach, where a structured questionnaire was administered to 50 purposely selected participants. A core finding of the study suggested that the metropolitan municipalities benefited from the IDZs PPP arrangements where project planning, development and management skills were transferred to government officials, impacting on improved service delivery. A key recommendation forwarded suggests that both the national government and metropolitan municipalities need to champion PPP procurement through the enhancement of the Municipal Public Private Partnership Implementation Framework. The study concluded that a regulation, such as the aforementioned, without a structured implementation plan, eminently jeopardizes an investor’s interest in PPP arrangements, with negative financial consequences for the state.

According to reports data of the International Institute of Management Development (IMD) and World Economic Forum (WEF), contries’ competitiveness tendencies were defined: rate of global competitiveness index remains lower than the rate, achieved before the global financial and economic crisis, non-linear distribution of benefits from economic growth between EU countries, Ukrainian rating falling by macroeconomic stability by 21 points in 2017 in comparison with 2018. It is not unexpected that realization of countries’ policy concerning their competitiveness growth requires some cost. Thus, author supposes that it is important to study key aspects of state finance, which can have great impact on the international competitiveness and solve the country’s macroeconomic stability problem. This paper shows results of author’s own research, carried out using methodic tools of scientists Ahvaz Shahid Chamran University, Ahvaz, Iran Abdolmajid Ahangari and Aziz Arman. It is based on evaluation of instability time rows of four economic variables of inflation (TINF), the ratio of budget deficit on growth domestic product (GDP) (TBD), foreign debt on GDP (TFD) and exchange rate deviation from the previous period (TRO) and calculation of macroeconomic instability index on their base MII_tn. Research showed that all variables of macroeconomic instability index MII_tn have a positive correlation; therefore, subindex of inflation rate instability and subindex of exchange rate to the previous period have the largest impact on the macroeconomic instability index MII_tn .

This study determines the causal relationship that exists between government revenue and government expenditure in South Africa. The study employed annual time series data from the year 1980 to 2015 taken from the South African Reserve Bank. The Johansen multivariate method was employed to test for co-integration and for causality the Vector Error Correction/Granger causality test was employed. The empirical results suggest that there is a long-run relation-ship between government revenue and government expenditure. The causality result suggests that there is no causality between government revenue and government expenditure in South Africa. Thus, policy makers in the short run should determine government revenue and government expenditure of South Africa independently when reducing the budget deficit.

The research article presents catalytic and innovative mechanisms for the use of fiscal grant funding to crowd in private sector investment for water infrastructure projects in the Republic of South Africa. Chapter Two of the South African Constitution (1996) includes a series of socio-economic rights, of which the right of access to water is one of those afforded its people, but this access is not currently provided to the entire population. The study uses a mixed methods approach, utilizing both quantitative and qualitative data sequentially. The data gathered involved a non-random purposive sample of best practice from European Union-funded projects internationally, South Africa-based projects, and qualitative interviews with officials from international development finance institutions and the National Treasury. It was found that the strategic targeting of grant funding to mitigate project risks, better enabled investor confidence. Through the use of three innovative financing tools, specifically investment grants, interest rate subsidies and technical assistance, government was able to leverage further investment into projects. The research concluded that blended grants for debt financing should be a consideration in South Africa. Specifically, as the current challenges in the water sector relate to constrained financial gaps, as well as capacity and skills deficits, these could be addressed strategically and deliberately through the use of blended fiscal grants targeting innovative financing tools. To allow for blending as recommended, budget reforms in South Africa are necessary.