This policy brief aims to lay the ground for a just transition in South Africa’s metals value chain as it pertains to climate change only. It contributes to understanding: a) the nature of the impacts facing the value chain; b) the characteristics of the stakeholders at risks (namely workers, communities and small businesses); and c) the nature of the resilience plan which is required to ensure a just transition.

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.

Over the next few months, the Tracker will explore the challenges facing different industries, looking in this issue at autos and music.

KEY FINDINGS FOR THE WEEK

On the pandemic

• Since 18 August, when the country moved to Level 2 of the lockdown, the number of cases has plateaued at over 1 500 new cases daily. For comparison, reported infections peaked at over 12 000 a day in mid-July. The current level of reported daily diagnoses was last seen in early June. The rate of transmission remains far lower than three months ago, but has climbed by 75% over the past month, leading to a modest increase in new cases in the past week.
• With new cases falling until last week, the government further relaxed restrictions from 21 September, mostly permitting much larger gatherings and shortening the curfew. Unless stronger behavioural changes bring transmission again under control, however, cases will start accelerating in the coming weeks.
• The results of reopening without adequate protection can be seen Europe and the US. In some areas, new cases now exceed April levels, bringing renewed restrictions on businesses, especially bars and personal services, and on the size of gatherings. The evidence indicates that higher transmission resulted largely from reopened nightlife and universities combined with increased tourism. In the US, initial studies suggest that around a fifth of cases are traceable to bars alone.

On the economy

• The GDP figures for the second quarter of 2020, released on 8 September, revealed the extraordinary impact of the pandemic. Evaluation of the (limited) data on monthly trends shows that the decline took place exclusively during the full lockdown in April. It was followed by a strong although incomplete rebound in May. Since then recovery has slowed, despite the elimination of almost all legal restrictions with the move to Level 2.
• The pandemic has ushered in a new world for state-owned companies, which have found they can no longer easily obtain subsidies from the state when they run substantial losses, especially when they have no core socio-economic mandate. Among others, SAA, Denel and the SABC are in a financial quandary with no obvious resolution, and Eskom has had to accept that recovery will require faster erosion of its monopoly on the national grid.
• Efforts to develop recovery plans intensified in the past month as the reopening of the economy has returned attention to more fundamental constraints on growth. The discourse has generally centred on supporting existing formal businesses, however, without complementary programmes to promote more inclusive growth. The auto and music industries point to the tough choices required in light of the economic havoc caused by the pandemic both nationally and globally.

Download the Tracker or read online

Business Day - 14 September 2020 by Neva Makgetla (TIPS Senior Economist)

Read online at Business Day.

Or read as a PDF.

Business Times (Sunday Times) - 13 September 2020 by Hilary Joffe

Read online at Business Live

Or read as a PDF

South Africa had a trade surplus of R30 billion in the second quarter of 2020, up from R4 billion in the second quarter of 2019. Generally, South African trade performs better in the second quarter of the year, compared to the first quarter. With the exception of 2012 to 2014, there has been a trade surplus every year in the second quarter for the past decade.

See Imports localisation and supply chain disruption study - Second Quarter 2020

South Africa, a carbon-intensive economy, has initiated a transition to a more sustainable development pathway. While this is centred on the energy sector, the transition is an economy-wide transformation. In a highly unequal society like South Africa, the need for a just transition which would empower vulnerable stakeholders has emerged as an imperative. Yet tensions remain, which hinder an inclusive process and outcomes. Part of the early process is forming a unified understanding and pathway that is inclusive and just. What do stakeholders mean when they talk about a just transition? How can South Africa achieve a just transition? This dialogue explores stakeholder perspectives from government, the private sector, the labour movement and civil society. It builds on a first dialogue hosted on 7 July (see recording below).

About the Speakers

Tracey Davies is the Executive Director of Just Share, a non-profit shareholder activism organisation. She is admitted as an attorney in South Africa, and is a renowned expert on responsible investment, shareholder activism, and corporate governance and transparency in South Africa.

Ashraf Kariem is Chief Expert Economy in the National Planning Commission (NPC) secretariat, within the Department of Planning, Monitoring and Evaluation (DPME). He was part of the team overseeing the NPC's just transition dialogue process.

Jacklyn Cock is a professor emeritus in the Department of Sociology at the University of the Witwatersrand and an Honorary Research Professor in the Society, Work and Development Research Unit (SWOP). She has written extensively on environment, gender and militarisation issues.

Sherman Indhul is the Executive Manager: Corporate Sustainability at Transnet. His experience over the past 15 years in the public and private sectors has led to a focus on sustainability, and specifically on climate change. He notably sits on the Steering Committee of the National Business Initiative's (NBI) Just Transition Pathways Project.

Muhammed Patel is an Economist at TIPS. He has experience in the coal and petrochemical value chains. He is the lead author of the National Employment Vulnerability Assessment (NEVA) and Sector Jobs Resilience Plan (SJRP) for the coal value chain in South Africa.

About the Facilitator

Gaylor Montmasson-Clair is a Senior Economist at TIPS, where he leads work on Sustainable Growth. He has carried out extensive research on the transition to an inclusive green economy from a developing country perspective, with a focus on policy frameworks, industrial development, just transition and resource security.

Please register: https://zoom.us/webinar/register/WN_wgNwl1ZwTpmlou9Vpl3JEQ

This webinar builds on a first dialogue hosted on 7 July. 

Radio France International (RFI) - 10 September 2020 by Claire Bargelès

Read online at Radio France International (RFI).

Bizcommunity - 9 September 2020

Read online at Bizcommunity.

ESI Africa - 7 September 2020 by Babalwa Bungane

Read online at ESI Africa.