Assessing the relationship between foreign investment flows and foreign exchange reserves in Namibia
| dc.contributor.author | Sheefeni, Trofimus N. | |
| dc.date.accessioned | 2024-05-28T07:07:28Z | |
| dc.date.available | 2024-05-28T07:07:28Z | |
| dc.date.issued | 2024 | |
| dc.description | Thesis submitted in partial fulfilment of the requirements for the degree of master of science in economics | |
| dc.description.abstract | The purpose of this study was to examine the relationship between foreign investment flows (FIF) and foreign exchange reserves (FER) in Namibia for the period of 32 years, from 1991 to 2022, using exchange rate (EXR), real interest rate (RIR), and political stability (POLSTB) as the control variables. The study sought further to determine the nature of the relationship between the variables, as well as the direction of causality. To attain these objectives, the study used macroeconomic time series data and analysed them using various econometrics tools in EViews software, version 9. In detail, the study conducted a unit root test and found the data stationary at mixed orders [I(0) and I(1)]. Thus, the study employed the bound test of cointegration to measure whether the variables are cointegrated in the long-run. The results reveal that a long-run exists between the variables. Therefore, the study applied the ARDL-ECM model to estimate the short-run and long run relationships between the variables. In that light, the results indicate a negative but not statistically significant relationship between EXR and FER in both lags. Against that, the results show a positive but insignificant relationship between RIR and FER, as well as between POLSTB and FER in both lags. Additionally, the results also reveal a positive relationship between FIF and FER, which is significant in lag 2, unlike in lag 1. Finally, the study employed the unrestricted Granger causality test to establish the direction of causality between the variables. The results indicate a unidirectional causality from EXR to FIF, while the rest of the variables are independent of each other. Based on the results, the study recommends that policymakers should enhance foreign investment policies aimed at attracting and retaining foreign investment flows, sustain political stability by implementing effective governance and institutional reforms, and diversify of reserves management to mitigate risks and maximise returns. Finally, the study suggests future research to examine the dynamic impacts of monetary and fiscal policy, assess the effects of global economic trends such as commodity price volatility, and analyse the impact of regional integration agreements on foreign exchange reserves | |
| dc.identifier.uri | http://hdl.handle.net/11070/3835 | |
| dc.language.iso | en | |
| dc.publisher | University of Namibia | |
| dc.subject | Foreign exchange reserves | |
| dc.subject | Foreign investment flows | |
| dc.subject | Exchange rate | |
| dc.subject | Real interest rate | |
| dc.subject | Political stability | |
| dc.subject | ARDL | |
| dc.subject | ECM | |
| dc.subject | Namibia | |
| dc.title | Assessing the relationship between foreign investment flows and foreign exchange reserves in Namibia | |
| dc.type | Thesis |