MSUIR Collection:
https://cris.library.msu.ac.zw//handle/11408/185
2024-03-28T14:11:19ZDemystifying macro-financial linkages in Zimbabwe: a panel analysis of economic shocks and non-performing loans (2009-2017)
https://cris.library.msu.ac.zw//handle/11408/3980
Title: Demystifying macro-financial linkages in Zimbabwe: a panel analysis of economic shocks and non-performing loans (2009-2017)
Authors: Katuka, Blessing
Abstract: This study investigated the determinants of non-performing loans as well as demystifying macrofinancial linkages in Zimbabwe using a panel of nine banks and semi-annually decomposed data from 2009 to 2017. A combination of panel regressions techniques and panel VAR analysis was employed to meet research objectives. Findings revealed that growth in non-performing loans is driven by both bank-specific and macroeconomic factors in Zimbabwe. Findings confirmed that the main drivers of nonperforming loans in Zimbabwe are loan-to-deposit ratio, equity-to-assets ratio, loans-to-assets ratio and capital inflows and one-period lagged non-performing loans ratio. Findings suggested positive association between the loans to assets ratio and non-performing loans and this supports the moral hazard hypothesis which stipulates that high loans to assets ratio results in the growth of NPLs. The study uncovered the presence of feedback effects from banking sector to the real economy and spill-over effects from real economy to the banking sector. Orthogonalized impulse response function results showed that non-performing respond positively in the short run and negatively in the long run to an innovation in lending rates, real GDP growth rate and capital inflows growth whereas response of non-performing loans to own shock is negative both in the short run and in the long run. Findings indicated that shock in lending rate initially results in a short-lived rise in real GDP growth rate and then a decline in real GDP growth rate in the later stage of the short run period and the decrease continues into the entire long run period. Undoubtedly, the researcher recommends authorities to maintain interest rate capping policy in order to ensure reduction in non-performing loans in the long run. Monitoring of lending rates through capping policy is also of paramount importance since the study uncovered that lending rates adversely affects real GDP growth rate and capital inflows in the long run. Furthermore, policy implications of this study would be that banks must strengthen the loan origination process so that high loan-to-assets do not necessarily translate to high non-performing loans.2017-11-01T00:00:00ZKatuka, BlessingAssessing the dynamics of fiscal performance in Zimbabwe (1990-2018)
https://cris.library.msu.ac.zw//handle/11408/3894
Title: Assessing the dynamics of fiscal performance in Zimbabwe (1990-2018)
Authors: Nyabunze, Admire
Abstract: The thesis examines the dynamics of fiscal performance in the Zimbabwean economy. The study used annual time series data starting from the year 1990 up to 2018 to establish the economic factors contributing to budget deficits. During the period under review, Zimbabwe has experienced perpetual budget deficits except during the years 2009, 2010 and 2011 were budget surpluses were chronicled. The fiscal imbalance that has characterised the economic landscape of Zimbabwe has had negative pass through effects to the broader economy at large. The variable budget deficit was used as the depended variable whilst the explanatory variables used in the study are unemployment, gross domestic product, gross fixed capital formation, foreign debt and real interest rates. The lagged value of the budget deficit was also included amongst the independent variables. Using the robust Ordinary Least Squares regression methodology, the empirical results indicated that unemployment and gross domestic product are significant in explaining budget deficits in Zimbabwe. The lagged value of the budget deficit was also found to be significant in determining budget deficits in Zimbabwe. The variable unemployment was found to be positively related to budget deficits meaning that an increase in unemployment is associated with an increase in the fiscal deficit. The GDP variable was found to be inversely related to budget deficits meaning that an increase in the GDP level helps in reducing the size of the budget deficit. The lagged value of the budget deficit was found to be positively related to budget deficits in the current period. This means that if the government runs a fiscal deficit in the current year, the government will continue to incur deficits in the coming years. It is against this background that this research recommends the government to reduce unemployment so as to increase final demand in the economy which boosts tax revenues thereby reducing budget deficits. The government also need to increase gross investment levels in the country so as to boost GDP which will result in the reduction of the budget deficit via multiplier effects. This goes a long way in ensuring that the government will balance its books thereby avoiding the rolling over budget deficits in the coming years.2019-06-01T00:00:00ZNyabunze, Admire