Slow Growth in South Africa Spillovers to other CMA Countries

THIS PAPER INVESTIAGES the spill-over effects of South Africa’s economic growth on the Common Monetary Area (CMA). It uses simple correlation analysis and panel data econometric techniques (Fixed Effects, Difference and System Generalised Methods of Moments and Panel Vector Autoregression).

The findings reveal that even though South Africa is closely linked with the Lesotho, Namibia and Swaziland (LNS) countries through trade, financial and institutional linkages, economic growth in South Africa does not appear to have a significant spill-over effects on the CMA. However, a simple correlation analysis shows that there is indeed a statistically significant positive relationship between economic growth in South Africa and economic growth in the CMA  region, implying that a slowdown in SA economic growth is likely to have negative implications on the CMA.