Janet Wilhelm
The paper begins with a broad contextual overview of the Southern African Development Community’s (SADC’s) transport and logistics performance in terms of the Logistics Performance Index and tracks the performance of individual member states in the decade from 2007. Two interesting findings emerge. First that the better performing SADC member states have been improving their logistics performance over time while the worst performing states have seen their performance decrease and deteriorate since 2007. The second interesting (and controversial) finding is that improved logistics service and operations is viewed as more important than additional investments in infrastructure in the region.
The paper then identifies the cross-cutting logistics issues collated from a literature review, a small sample of interviews with logistics firms operating in the region, completed value chain reports from the Regional Value Chain Project (see www.competition.org.za/regional-value-chains), SADC documentation, and finally the tradebarriers.org website, a Tripartite Community – comprising Common Market for Eastern and Southern Africa (COMESA), the East African Community (ECA) and SADC and Member States – initiative to report, monitor and eliminate NTB complaints.
A key finding of the paper is that from an economic perspective it is the standing time of trucks stationary at border posts which is the most powerful explanatory variable of SADC’s high transport costs and low logistics competitiveness. The research suggests that standing time is largely due to border post management issues rather than the commonly assumes infrastructure constraints.
SA's Industrial, Economic Policy Under Spotlight
AllAfrica - 13 December 2017 by Malebo Ralehlaka
Read online at AllAfrica
Fighting corruption needs much more than new leaders
Business Day - 5 December 2017 by Neva Makgetla (TIPS Senior Economist)
Read online at Business Day
Business Day - 16 November 2017 by Michael Nassen Smith, Institute for African Alternatives.
The Real Economy Bulletin - Third Quarter 2017
Main Bulletin: The Real Economy Bulletin - Third Quarter 2017
In this edition
GDP growth: The past six months have seen the GDP recover from the contraction that marked the previous six months. Still, growth remains more variable, and generally slower, than it was before 2014. Increased variability in the GDP results in part from the end of the commodity boom and in part from fluctuations in agriculture as a result of the 2015 drought. While mining and manufacturing have seen fairly stable growth, construction slowed markedly in the year to September 2017. Private investment has continued to fall, and was a significant drag on GDP growth in this period. Read more.
Employment: While total employment climbed in the third quarter of 2017, in figures that are not seasonally adjusted, employment in the real economy fell. The main factor behind job losses in the real economy was a sharp fall in construction employment, followed by manufacturing. In contrast, mining employment appears to have stabilised after significant job losses from the end of the commodity boom in 2011/12. Read more.
International trade: In dollar terms, exports have recovered rapidly over the past two quarters, mostly due to a sharp uptick in mining exports. Imports also increased, but at a slower rate, over this period. Manufacturing exports, however, declined from the third quarter of 2016 to the third quarter of 2017. Read more.
Investment and profitability: Investment levelled out in constant terms from mid-2016, and remained under 20% of the GDP. Mining and construction profits dropped sharply in the second quarter of 2017, the latest available data, while the returns in manufacturing remained fairly stable. Read more.
Foreign direct investment projects: The TIPS Foreign Direct Investment Monitor tracks FDI projects, analysing new and updated projects on a quarterly basis. Read more.
Briefing note: Slowdown in the construction industry: The construction industry saw a sharp slowdown in the past year, after being a key driver of growth in the South African economy for most of the last 15 years. The main factor behind its slowing expansion appears to be the flattening out of investment in buildings and construction works as part of the overall downturn in investment over the past two years. Read the briefing note online: Slowdown in the construction industry.
Briefing note: The unbalanced economy - A cause for concern: Since the first quarter of 2015, the South African economy has experienced its worst period of growth since the transition to democracy (aside from the global financial crisis in 2009). The economy has been dipping in and out of negative growth on a fairly consistent basis over the past three years. Read the briefing note online: The unbalanced economy - A cause for concern.
Briefing note: The transition to a green economy - A manufacturing and trade opportunity for South Africa: South Africa’s green economy strategy has traditionally rested on the Renewable Energy Independent Power Producer Procurement Programme, and has attempted to leverage off government procurement to promote the development of local manufacturing capacity for the likes of solar panels or wind towers. But with the programme in a state of paralysis, now is an opportune moment to reassess the opportunities available to South Africa, and expand the strategy to best position the country to take advantage of the industrial opportunities offered by the global transition to sustainable development. Read the briefing note online: The transition to a green economy - A manufacturing and trade opportunity for South Africa.
Mapping out how manufacturing can mend SA’s economy
Business Day - 24 November 2017 by André de Ruyter, chairman of the Manufacturing Circle.
Narrow business perceptions open door to backlash
Business Day - 21 November 2017 by Neva Makgetla (TIPS Senior Economist)
Read online at Business Day
Revisions to South Africa’s Gross Domestic Product
Even though data revisions are a normal feature of any statistical compilation process, such revisions are seldom taken into account or understood by users of statistics. This results in an over reliance on initially published preliminary estimates that are subject to change. Gross domestic product (GDP) estimates, for instance, are needed for the Monetary Policy Committee to set interest rates and the National Treasury to set budget limits, but because of the need for timely data, policy decisions are often based on preliminary estimates which are later revised as more comprehensive data become available. At the same time, changes to the initially published estimates may lead to adjustment measures being made to the assessment of the performance of the economy.
This brief focuses on revisions to South Africa’s quarterly GDP estimates for the period 1999 to 2013. Based on the study of revisions to the South African quarterly GDP growth rates the following conclusions are made. First, the initially announced estimates are most likely to be revised upward. This is because initial announcements of the quarterly GDP growth rates are on average underestimated. Second, a bias exists in the estimation of the initially announced quarterly GDP growth rates. This suggests that the estimates contain measurement errors that can be eliminated to become better estimates of the final or true value. The brief looks at why data revisions happen and highlights how the study of revisions can be used to evaluate the reliability of initially published estimates. It then provides an analysis of revisions to the South African quarterly GDP growth rates followed by recommendations.
Working paper: The crisis at Eskom and industrialisation
The current electricity model incorporates a paradox in which continual increases in price contribute to falling demand, which in turn leads to higher unit costs and prices. In this context, high levels of capital expenditure by Eskom have become a critical cost driver.
The contradictory response of raising prices in the midst of declining sales results in part from weaknesses in the regulatory framework for electricity prices, and in part from Eskom’s business model
This working paper reviews the factors behind stagnant Eskom sales. It then analyses why Eskom’s response to these changing conditions has become so paradoxical. It finds that Eskom’s path dependency is generated by the current regulatory framework for electricity prices combined with Eskom’s attachment to an outdated business model.
It then provides a systematic assessment of the costs, benefits and risks of three options for responding to the new conditions.
Using the green economy and youth inclusion for sustainable development in South Africa
South Africa’s economic growth relies strongly on resource and energy-intensive sectors, which worsens the pressure on the environment and exacerbates the threat of climate change (Montmasson-Clair, 2012). The country is also grappling with high income inequality, unemployment and poverty levels. Economic growth has not been inclusive (Mayer et al, 2011). Related to this is the limited inclusion and participation of the youth, in the broader development of the country. Youth is defined in South Africa as people in the age category of 14 to 35 years (NYDA, 2011). The National Youth Development Agency (NYDA, 2011) highlighted the plight of the youth in South Africa as characterised by: low economic participation, low levels of education and skills development, poor health and well-being, and low levels of civic participation and social cohesion. Given this background, how can development be made inclusive? And how can the green economy be used for inclusion of youth and sustainable development, not only in South Africa but also in the rest of the continent.