Commerce

This study reviews the public sanitation expenditure policies in South Africa and investigates the policies' spill-over effects in KwaZulu-Natal, over the period 1998 to 2014. The use of government funding to provide sanitation highlight's the state's role in social welfare. However, little is known about the spill-over effects of this involvement. Government's actual objectives for the sanitation subsidy were to achieve equality, restore human dignity, environmental and health care improvement, and poverty eradication. This work relies heavily on Mann's 1980 application of Wagner's Law in the Mexican economy. This study draws from Mann 1980 to investigate the spill-over effects on urbanisation and industrial growth in KwaZulu-Natal. An ARDL methodology was applied to the specified model to test for the spill-over effects as real life time series tend to be in polynomial form; ARDL (p,r) was thus applied. The results from testing suggest that operational expenditure tends to have a positive and larger impact on sanitation subsidies than capital expenditure, which is inconsistent with Mann (1980). Therefore this has the following implications on the sanitation policy, government operational spending on sanitation needs to be higher than capital spending.

This study reviews the public sanitation expenditure policies in South Africa and estimates supply of toilet facilities by forecasting in KwaZulu-Natal, over the period 2014-2018. The use of government funding to provide sanitation highlight's the state's role in social welfare. The sanitation subsidy system was implemented in South Africa 21 years ago and is ongoing , the total sanitation backlog reported by KwaZulu-Natal (KZN) municipalities alone in 2014 was 775 116 households. This raises the question of the efficacy of the supply side policy in increasing coverage. This research applies the ARIMA (1, 1, 1) model to dynamically forecast 16 additional lags for the supply of toilets facilities based on government subsidising capital expenditure. This study quantified quarterly data for the periods 1998 to 2014 and the study projects the estimated change in the supply of adequate toilet facilities in the province till 2018 based on annual estimated 13% increase in infrastructure investment. Fay and Yepes (2003) estimated the level of infrastructure investment required to satisfy both consumer and producer requirements in the future using a production function based on predicted GDP growth, this paper relies on their work. The projected estimates show the decline in resources over time and therefore the supply of basic sanitation infrastructure by government. The projections indicate a mismatch between the supply and demand of toilet facilities.

Time Allocated: 1 ½ hours Total Marks: 80 INSTRUCTIONS TO STUDENTS: This test consists of 6 questions and is 11 pages long. All questions and their components are COMPULSORY No negative marking will be applied for the multiple choice questions in Question 1. Round off final answers to three decimal places. Show all calculations where applicable. A formula sheet and table/s are appended.