TIPS In the News

Mail & Guardian - 9 March 2012

“A carbon tax that kicks in only above a certain threshold acknowledges that, in the course of economic activity, some carbon emissions are inevitable and, in the short term, unavoidable,” said Du Plooy. “The revised form of the carbon tax is, in a way, a tax on excess carbon emissions. The rationale for the RRT is similar. It recognises that, for mineral resources to be extracted, the companies that do so must be able to make a profit but argues that an excess profit, or rent, is neither sustainable nor fair.”

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Mail & Guardian - 2 March 2012

A mineral being discarded as "waste" may well be able to provide South Africa's -- and the world's -- energy needs for the next thousand years or more. Thorium, aptly named after the Norse god of thunder, Thor, is a nuclear fuel that is four times more abundant in the Earth's crust than uranium. It was the topic of a conference in Cape Town last week, organised by the South African Institute for Mining and Metallurgy.

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Engineering News - 25 January 2011

As increasing environmental pressures take hold in South Africa, the country's major construction companies showed that they were starting to focus on pursuing green practices and projects, particularly in renewable energy projects where opportunities were emerging.

For Group Five in particular, a view has developed that climate change opportunities exceed risks, and the company sought to develop capabilities around greener practices and technologies on a wide scale across its business units.

“Group Five and other construction groups, such as Murray & Roberts see it as critical for the group to have the ability to offer low carbon solutions as required by clients,” said climate change consultancy Camco in its recently released case study called 'The Construction Industry's Path towards a Low Carbon Trajectory'.

The research was conducted by Camco and the Trade and Industrial Policy Strategy institution, with funding from the British High Commission, for the 'Climate Change: Risks and Opportunities for the South African Economy' project.

The study highlighted that South Africa's construction sector has a key role to play directly and indirectly in moving the process of greenhouse gas emissions reduction forward.

It also suggested that a sectoral climate change development plan could assist the construction industry in taking its green practices forward, although this would require interactive discussions between government and construction industry players as well as a transformation of mind-sets within the sector.

A number of trends were evident in the construction sector, which were signalling changes in construction practices, an increased focus on the environment and, the introduction of greener practices and technologies.

It was also noted that there was clarity required from the South African authorities in terms of environmental priorities, as these influenced the type of interventions, investment and training in which construction firms needed to engage.

Another trend in the construction sector was that firms were engaging with products or strategies focusing on reducing energy consumption.

“Of note in terms of progress is that large firms are influencing the practices of suppliers. There is thus the opportunity for a more extensive process of energy efficient and environmentally-friendly products emerging within South Africa beyond construction firms – in manufacturing and through to service providers,” said the report.

The case study highlighted that greater efforts were required from authorities on South Africa's objectives around various environmental commitments – at an international level, national level, and locally at municipal level.

Municipal governments were said to have a crucial role to play in the implementation of climate change mitigation policies, as well as the monitoring and evaluation thereof.

Cities were responsible for 80% of all carbon dioxide emissions and 60% of all freshwater consumption in South Africa. “However, for local governments to have authority to enforce policies, it requires clarity on the structure thereof – which is communicated to them from a national government level,” the report stated.

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Business Day - 31 January 2011

WITH the African National Congress's announcement this month that job creation will be its main focus this year, the government could do well to boost support to small businesses. In this, India and Brazil hold some promising lessons.

Small businesses are key as they create by far the most jobs the world over. In SA between 1985 and 2005, 90% of all new jobs were created by small, micro and medium companies, according to the Finscope Small Business Survey Report of 2006.

In Brazil, the labour minister's General Register of Employed and Unemployed for last year revealed that between 1995 and 2000, 96% of new jobs were created by enterprises with fewer than 100 employees.

According to Finmark Trust's Finscope 2010 survey, small businesses could create 2,5-million jobs in SA by 2020. Added to this, Finmark believes the government could take about 500000 people off social grant schemes if it supported small businesses more actively.

However, numerous factors, such as a lack of business and financial management skills, make it difficult for small enterprises in SA to expand or for entrepreneurs to start up.

So what can India and Brazil teach us? Some might say Brazil and India's larger populations and land areas make it difficult to draw much in the way of lessons from them, but SA does share some similarities.

All three are grappling with similar development issues, such as a lack of quality education, a shortage of quality infrastructure and a low share of international trade, while Brazil, like SA, is one of the most unequal countries in the world. Despite these similarities, Brazil is ranked as the sixth most entrepreneurial country in the world, while SA is ranked a lowly 35th out of 54 countries, according to the 2009 Global Entrepreneurship Monitor (Gem) Report. India was ranked 15th out of 43 countries when it last took part in the Gem Report, in 2008.

In general, small-business policies and schemes appear to be working best in Brazil and less successfully in India and SA, according to my assessment in a report for local economic think-tank Trade and Industrial Policy Strategies (Tips).

In SA and India, policies have done little to create effective support agencies to help business owners start up and grow their businesses. And awareness of many government support schemes remains low.

In SA, much of this is as a result of the government's lack of co-ordinated strategies aimed at small business as well as a government support architecture that is clumsy and confusing to business owners and public servants alike.

The government has too many agencies aimed at assisting business owners, which are spread across two different departments — confusing government officials.

Much of Brazil's lending to small businesses is channelled through its development bank, BNDES, allowing the state to play a strategic role in funding small businesses. In this way, the South African government's various funds for businesses might be more strategically deployed if they were all housed under a single body, such as the Industrial Development Corporation.

 

- Timm is a small-business journalist. He is the author of the TIPS report, How South Africa Can Boost Support to Small Businesses: Lessons from Brazil and India.

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Financial Mail - 17 February 2011

The R9bn jobs fund announced by President Jacob Zuma in his state of the nation address last week will invite competitive bids from projects with innovative ideas on how jobs can be created.

The fund will be run by national treasury, which proposed the idea to the cabinet lekgotla last month. It will operate on the basis of a competitive process, allocating funds to projects that show promise rather than on the usual budgeting principle of carving up funds among government departments.

It will look for innovation and ideas, say treasury officials, and will be open to experimenting with different approaches to find out what works. It will also look for co-funding from municipalities, donors and business.

With R9bn to give away over the next three years — R2bn in the first year — the challenge will be to get going quickly. What kind of projects are likely to secure support?

With the nation's attention focused on the problem of youth unemployment — more than 50% of people between the ages of 15 and 24 are unemployed — the idea of a wage subsidy for first-time workers, mooted by finance minister Pravin Gordhan a year ago, has been gaining currency in the ruling party. The fund could provide the opportunity for the subsidy idea, which was vehemently opposed by Cosatu, to be tested.

However, only one study on whether a wage subsidy would encourage employers to hire young workers has been initiated in SA. Though not a project of national treasury, the study by the African microe conomic research umbrella in the department of economics at Wits University is being keenly watched. First results are expected by mid year.

Proven examples of successful job creation schemes are more likely to get immediate attention. A prime example would be projects modelled along the lines of the community works project (CWP), a cost-effective form of government's expanded public works programme (EPWP) that over the past two years has been quietly piloted and has grown from 28000 participants in 2009 to more than 80000 in 2010.

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25 Degrees in Africa Volume 6, Number 2 - 2 May 2011

Camco, an international company specialising in climate change solutions, and Trade & Industrial Policy Strategies (TIPS), an independent economic policy research institution, recently released a case study entitled “The Construction Industry's Path towards a Low Carbon Trajectory” with funding from the British High Commission. According to the case study, the South African construction industry has been increasingly focused on both the introduction of green practices and on energy-saving technologies.

Globally, the building sector is said to contribute more than one-third of the total energy usage and associated greenhouse gas (GHG) emissions in society. Major South African construction companies, such as Group Five and Murray & Roberts, are starting to pursue green practices and projects. This has, in some cases, involved voluntary compliance with the Green Building Council of South Africa's (GBCSA) Green Star South Africa Office rating tool and the implementation of energy-efficiency and demand side management measures.

Recent media reports have also indicated that some construction companies (including Group Five and Aveng) are moving quite discernibly into renewable energy (RE) developments in the hope that they can secure a share of the renewables allocation under the Integrated Resource Plan (IRP) for electricity. In this regard, Group Five has set up a specific new unit which deals with RE projects and Aveng has recently appointed an environmental manager for the group. Aveng is particularly positioning itself around wind and solar energy for bids that will emerge in this sector in the near future. Murray & Roberts have also adopted a new environment-friendly asphalt technology (Much Asphalt) that saves energy.

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New Age - 21 April 2011

Response to Stephen Timms research on small enterprise development in South Africa, Brazil and India.

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Economic Times, Zambia - 9 June 2011

LUSAKA — US Secretary of State Hillary Clinton urged African countries to lift trade barriers with the United States here Friday and voiced concern about China's aid and investment practices in Africa.

The first US chief diplomat to visit Zambia since 1976, Clinton attended annual talks over a US preferential trade deal at a time when China has overtaken the United States as Africa's top trading partner.

"China's presence in Africa reflects the reality that it has important and growing interests here on the continent," Clinton said during a press conference with Zambian President Rupiah Banda.

"The United States does not see these interests inherently incompatible with our own interests. We do not see China's rise as a zero-sum game. We hope that it will become successful in its economic efforts," she said.

"We are, however concerned that China's foreign assistance and investment practices in Africa have not always been consistent with generally accepted international norms of transparency and good governance," she added.

She said the United States has begun a dialogue with China on its activities in Africa.

Some African nations have leaned toward China because Beijing makes no demands on human rights or democracy.

"Generally speaking, I think the Chinese have been more aggressive in terms of trade into the region," said Mupelwa Sichilima, of Trade and Industrial Policy Strategies, a South African think-tank.

But Sichilima said that in practice, other restrictions hinder African trade with both the United States and China -- mainly practical considerations like safety standards for food products.

"China is just an alternative market that has come on board, but it doesn't mean it will swallow everything from Africa."

China-African trade soared more than 40 percent last year to $126.9 billion.

During his press conference with Clinton, Banda said Zambia has been dealing with China since even before independence in 1964 and was "fortunate" that China continued to buy Zambian copper during the global financial crisis.

But he said Zambia makes sure that foreign countries doing business here treat Zambians well and follow the nation's laws.

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City Press - 10 July 2011

Real policy innovation which is able to change society is rare. But the introduction of an employment guarantee in India is an innovation of this sort of magnitude, with far-reaching implications for social and economic policy.

Labour federation Cosatu's general-secretary, Zwelinzima Vavi, recently praised the Indian programme, saying that a similar approach could help defuse the “ticking time bomb” of poverty and unemployment in South Africa.

The Mahatma Gandhi National Rural Employment Guarantee Act was passed in India in 2005. It guarantees 100 days of work to every rural household with unemployed adult members.

The scheme has been rolled out across India and now has more than 55?million participants. And Vavi is correct: it is a model of obvious interest for South Africa, and has been a key source of inspiration for the design of the Community Work Programme.

While the programme is not an employment guarantee, it is designed to explore how this concept could be adapted to South African conditions.

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Polity.org.za - 19 July 2011

Initiatives that encourage local communities to work together to create social justice are vital in preventing collective violence carried out through service delivery protests and xenophobic violence, state the findings of a joint research report released by the Society, Work and Development Institute and the Centre for the Study of Violence and Reconciliation.

The report, titled 'The Smoke that Calls: insurgent citizenship, collective violence and the struggle for a place in the new South Africa', identifies the underlying causes of collective violence and argues that violent protest is often the result of community frustration and is a last resort.

The report looked at eight cases of local communities that had experienced collective violence and, on the whole, argued that marginalisation, lack of community representation and the lack of economic and social citizenship were the main reasons why community members feel compelled to commit violent acts to convey their grievances.

Young men were identified as being the main instigators and participants in the violence due to their frustration at being unemployed with no real economic opportunity or prospects available to them. Further, the report argues that these young men use violence as an avenue to express their masculinity.

These violent strategies employed by certain communities are counter-productive in the sense that they simply reinforce the root cause of their grievances by alienating municipal leadership through violence and intimidation.

On this basis, the report argues that encouraging the community to address issues, through workshops that facilitate open dialogue and through community work programmes (CWPs), is key in preventing communities from venting their frustration through violent means.

The report identifies the case of the community of Bokfontein, in the North West province, that implemented a series of CWPs that were successful in creating local job opportunities through public works programmes and, in the process, created social justice in a community that was culturally diverse with high levels of inequality.

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Mail & Guardian - 14 October 2011

Treasury and business are set for a showdown on the proposed carbon tax that is expected to come into force early next year after Finance Minister Pravin Gordhan delivers his 2012 budget speech.

South Africans are likely to catch a glimpse of the controversial new policy ahead of the climate change conference, COP17, which starts in Durban on November 28.

The carbon policy, released in December last year, imposes a tax on emissions calculated at R75 a tonne of carbon dioxide (CO²), eventually rising to about R200 a tonne. But these numbers are not a given in the draft policy paper, which treasury spokesperson Bulelwa Boqwana confirmed would be released next month.

Internationally, carbon tax is used as a way to provide incentives for businesses to make choices about energy usage. "But in South Africa the integrated resource plan is used to do that already," said energy analyst Peet du Plooy. 

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Mail & Guardian - 14 October 2011

Durban, December 2011, will be the place where the Kyoto Protocol is either buried or resurrected. The protocol is the only legally binding international instrument the world has today for fighting climate change.

When nations gathered in Copenhagen, Denmark, in December 2009 for the 15th annual Conference of the Parties (COP15), the world was looking for a climate deal that was "fab" -- fair, ambitious and binding.

What they got -- the Copenhagen Accord -- was something that was "fair" in as much as it promised money to poorer nations to help them cope with climate change (so-called "adaptation") and also included countries such as South Africa and China, which are significant emitters of greenhouse gas but did not previously have any obligations under the protocol.

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Financial Mail - 1 September 2011

Donovan van den Bergh, a smart-talking native of Cape Town's notorious Manenberg gangland; Pamela Eksteen, a devout and respected member of the Lutheran church in Intabazwe, Harrismith's windswept and dusty township; and Papati Nkosi, an aged gogo whose home is in the remote hills of Mpumalanga on the Swaziland border, live worlds apart from one another.

This, says Kate Philip, one of the architects of the plan, means that the CWP is able to take account of the reality that unemployment in SA is deep and structural. Even when the economy improves, unemployment among the least skilled and most marginalised will be here to stay. While other developing economies are able to use subsistence agriculture as a safety net to soak up those who cannot find work in the formal economy, colonialism in SA destroyed subsistence agriculture and intentionally forced people off the land.

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Financial Mail - 10 November 2011

SA has one of the highest unemployment rates in the world but proportionately one of the smallest informal sectors. Claire Bisseker asks what this contradiction means for economic growth and job creation.
This is the view of Kate Philip, an adviser to the presidency on public employment and head of inequality & economic marginalisation at Trade & Industrial Policy Strategies , an economic think-tank.

SA's economy is not typical of a developing country. The key difference between SA and other African countries is that SA has a sizeable manufacturing sector (14% of GDP), of which 97% of value added comes from formal businesses.

What many people don't know is how this structure influences the survival of those living at the margins and constrains the scope for the growth of the informal sector.

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Public Eye - 28 November 2011

The article appeals in many respects. First, it takes us through the historical aspects of the way the borders were demarcated in Africa and on the southern part of the continent. As noted, this was done by people who had no interest in the economic, social and political welfare of the natives of the land. It was done to serve their selfish interests. Second, the article takes us back to the formation of Africa's biggest liberation movement, the African National Congress (ANC) and the role that was played by, among others, the then Paramount Chief of Lesotho, Letsie II. In fact, most regional rulers in Botswana, Mozambique, Swaziland, Tanzania, Zambia, Zimbabwe etc. had a hand— directly and indirectly—in the formation of the ANC. Third, by quoting the former President of Tanzania, Julius Nyerere when an agreement was reached between the Republic of Tanganyika and the People's Republic of Zanzibar in 1964, to form a new state, the Republic of Tanzania, it gives us a glimpse of how some leaders felt about the way the borders were demarcated.

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Engineering News

Climate change is increasingly recognised as one of the defining issues of the 21st century, drawing all elements of society towards the promotion of a prosperous, low carbon future. Even in times of economic recession, climate change has not fallen off the radar, with many major economies rather viewing 'green' led investment as an engine for economic recovery.

South Africa has become increasingly involved in addressing climate change issues, from our involvement in international climate negotiations, the modelling of potential mitigation scenarios under the Long Term Mitigation Scenarios (LTMS) process, and the current development of a national Climate Change White Paper. A significant amount of work has also been done to consider the direct impacts of climate change on the South African environment, including physical impacts related to higher temperatures, sea level rise, increased risk of wild fire and concerns over future water availability.

Despite these efforts, less emphasis has been placed on the indirect impacts of climate change, including how industry could be affected by shifts in consumer preferences, how the evolving carbon regulation environment in South Africa might affect industry, and how business and the economy as a whole should respond to these challenges.

To address this gap, research is currently underway that considers the indirect effects that climate change could have on South Africa's economy, ranging from impacts on the tourism sector, aviation and food exports, through to commercial opportunities in low carbon technologies and the promotion of alternative carbon markets. The project is being led by Camco, an international consulting firm specialising in climate change solutions, in partnership with Trade and Industrial Policy and Strategies (TIPS) and the ComMark Trust, with support provided by the British High Commission.

As part of the project, a stakeholder workshop including representatives from the private sector, national and local government, non-governmental organisations and the donor community is to take place in Sandton in mid-August, in order to discuss and debate the economic risks and opportunities posed by climate change for South Africa. Key questions to be discussed at the multi-stakeholder workshop include:

  • What commercial risks and opportunities do companies face from climate change?
  • How can we address these issues?
  • How will 'air miles' and the demand for low carbon goods impact South African manufacturing and exports?
  • Is the tourism sector adequately prepared for pressures to promote 'local tourism' within industrialised nations?
  • What opportunities are presented for trade in environmental services by climate change, including through land use improvements and carbon sequestration?
  • How can industry respond to a carbon tax regime in South Africa, and are there alternatives?
  • How can we fast-track activities that combat climate change and promote poverty alleviation and socio-economic development?

The research underway is premised on the understanding that climate change is not just an environmental issue, but could have significant implications for trade, investment and industry competitiveness. South Africa is a carbon intensive economy, and is therefore exposed to a number of potential climate change related liabilities. Nevertheless, risk is often the precursor of opportunity, and considerable scope exists for the South African economy to shift these potential liabilities into market enablers, as the LTMS and other studies have begun to explore.

The research will help to take the climate debate in South Africa forward, identifying economic opportunities presented by climate change and exploring synergies with national priorities relating to job creation, enterprise development and poverty alleviation. The notion of 'green jobs' has come increasingly to the fore in recent years, and highlights that a number of national efforts to address climate change could promote economic growth as well as support environmental protection.
Across the globe, companies are exploring opportunities in low carbon development in a bid to differentiate themselves and maintain market share. Effectively positioned, the South African economy could weather any severe 'climatic' storms, whilst maximising on commercial opportunities and new markets.

For media enquiries please contact:

Alex McNamara Camco South Africa
Tel: (0)11 253 3400 Cell: (0)79 699 3284 Email: alex.mcnamara@camcoglobal.com
To view the article published on the Engineering News click here

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The Botswana Institute for Development Policy Analysis (BIDPA) hosts the thematic research area "Trade Policy and Pro-Poor Growth", under the Southern African Development Research Network (SADRN). SADRN is hosted by the Trade and Industrial Policy Strategies (TIPS) in South Africa and is funded by the International Development Research Centre (IDRC).

The mandate of the network is to ensure that the Southern African Development Community (SADC) countries have the requisite research and negotiating capacity to enable them to negotiate for a fair share of the benefits of global trade at the WTO and other fora. Specifically, the network has the objective to achieve trade, growth, globalization and poverty reduction through:

  • Increasing supply of policy-relevant research in SADC by increasing the pool of suitably-skilled researchers based in institutions in SADC;
  • Improving the policy relevance of research by developing the capacity of policy makers to discerning research users;
  • Developing an appreciation of evidence-based policy making by engaging policy makers in the design, specification, implementation and review of research projects; and
  • Building institutional capacity in key organizations in SADC by creating centers of excellence in focus thematic areas of research.

To meet the SADRN objectives of increasing supply of policy relevant research in SADC, BIDPA, under the auspices of the "Trade Policy and Pro-Poor Growth" theme invites government departments (or government research departments) from SADC Member States to submit proposals to be considered for research on Trade Policy and Pro-Poor Growth.

Submission Instructions

Submit a proposal describing your topic of interest; proposed methodology; motivation for the topic and its potential impact in your respective country (or in the SADC region) and the proposed budget.

Please note that the identified research topic should be in line with the theme and should be of policy relevance to the country concerned.

Guidelines for submission:

Deadline for submission: 24th April, 2009

Notification of the accepted paper: 4th May, 2009

  • Notification of receipts will be sent to the designated authors soon after receipt of the proposal.

Funding

Funding is available for only one project and as such only one proposal will be selected from the submitted proposals.

For further information regarding the project please contact, Professor Roman Grynberg

BIDPA Thematic Working Group Project Coordinator at rgrynberg@bidpa.bw or ? 3971750 or fax to ? 3971748.

For more general information on SADRN, please see: http://www.tips.org.za/programme/sadrn

FABCOS & TIPS - 1 November 2008

TIPS was commissioned by FABCOS (The Foundation for African Business and Consumer Services) to undertake a study on the impact of fuel and food price increases on small business. As FABCOS has a large constituency of informal or previously informal businesses, a strong emphasis was placed on the impacts for informal businesses. Some key outcomes are highlighted below:

Fuel Prices

The main effects of high fuel prices can be observed within the macro-economic framework. The first impact reflects the role of transportation in determining the price of goods: South Africa is a large country, and highly dependent on the transportation of goods by road (given the currently very poor state of the rail network). Most micro enterprises are dependent on hired transport to fetch items from wholesalers and/or manufacturers. Although the cost of these services increases as the fuel price increases, there is good evidence to suggest that these prices are both downwardly "sticky" (i.e. that they do not go down when the petrol price declines) and that transport service providers take advantage of general perceptions about rapidly rising fuel prices to increase their margins. The result is that small business owners who are dependant on these forms of transport probably face disproportionate transport costs increases, compared to bigger businesses that control their own logistics. This reduces the competitiveness of the smaller businesses.

The second impact is through the regulatory response to inflation. Higher interest rates reduce the disposable income of consumers, by raising debt service costs. As consumers spend more of their disposable income on servicing debt, so they have less to spend on other items.

The third issue for small businesses arising from higher inflation is that, generally, they are not in a position either to negotiate price concessions from manufacturers or wholesalers or to pass inflationary costs on to their consumers. While it is, of course, true that lower consumer expenditure affects all business; small businesses are generally in a much weaker position to ride out periods of reduced consumer spending. The smaller the business, the more vulnerable it is to this.

To date, the ability of many small retail enterprises to survive has been based in large part on their proximity to their clients (convenience), and the (rising) cost of travelling to shop at a large retail centre. However, the official development policy of most Metros in South Africa is to encourage large retailers to penetrate enter the townships, and this is having a considerable impact on the ability of small traders to survive. These small businesses are not opposed to anti development in the townships per se, but they do feel a certain level of resentment towards economic planners who trumpet the necessity of encouraging small business development on the one hand, whilst but on the other hand encouraging development that puts those enterprises at considerable risk.

Food Prices

According to Statistics South Africa, food's weight in the Consumer Price Index (CPI) is just under 21%. As such, an increase in food prices will have an impact on general price levels. However, we should not confuse the official weighting of food in the CPI with the actual role of food in monthly household expenditure for many South Africans. Given that South Africa has one of the world's worst distributions of income, there is really no such thing as an "average" consumer. In general terms, the poorer a person, the greater the share of their income that they will spend on food, and the greater the impact on their disposable income of food price inflation that exceeds the rate at which their wages are increasing. Data indicate that the very poorest South Africans spend as much as 80% of their income on food.

Whilst general prices have increased steadily over the past five years, the data show that food inflation (CPI-F) generally increased faster than general inflation, but has done so in particular since the end of 2005. Except for the periods between August-October 2005 and the same period in 2006, food inflation has tended to be higher than the general price level (CPI) of all items. In particular, for the period between September 2007 and 2008, the gap between the two has been widening, implying that more price pressure is being observed in food than for other items.

Another key issue is that for the period between November 2005 and 2006, price increases in rural and urban areas were similar. However, since early 2007, rural prices have tended to grow faster than urban prices. The fact that rural populations spend roughly double (IES, 2006) on food compared to urban groups leaves rural populations at a disadvantage since generally have less disposable income than urban populations.

The two main impacts of rising food prices on micro enterprises are a direct impact (through the erosion of purchasing power of their clients) and an indirect impact (through the erosion of the businesses own purchasing power).

In terms of the direct impact on business through the erosion of their clients' purchasing power, the first point to be made is that the small enterprises that we are considering tend to have lower-income people as their main clients. When food prices are rising more rapidly than the "official" rate of inflation (which sets wage and social grant increases) then these people will have less non-food disposable income and may be forced into actually purchasing less food. Both of these are bad news for small business.

The indirect impact of rising food prices on small businesses comes via the reduction in the disposable income of the business owner. Most of the small businesses under consideration are owned by people who do not fall into the high-income category. Therefore, they tend to spend a relatively high portion of their income on food, and higher food prices mean less income available for other items. The reason why this is important is because most of these small businesses finance their expansion and cash flow requirements from their own savings, and are not able to source other types of finance. Therefore, a reduction in disposable income means less money is available for investing in the business or helping to ride out adverse business periods. This makes small businesses relatively more vulnerable than other type of businesses to adverse price changes.

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19 June 2008

The Think Tank Initiative invites applications from independent African organisations that are committed to using research to inform and influence social and economic policy. The Initiative will provide multi-year funding to promising think tanks, and will work with successful applicants to improve their organizational performance.

For more details on the Initiative and the application process, visit The Think Tank.
Deadline: August 19, 2008

The Think Tank Initiative is a new, multi-donor programme dedicated to strengthening 'independent policy research institutions¬ď' or '¬úthink tanks' in developing countries, enabling them to better provide sound research that both informs and influences policy.

The Initiative will focus its activities in East and West Africa, South Asia, and Latin America.

14 February 2008

In his State of the Nation address in February 2007, President Thabo Mbeki announced some stimulus towards the industrial policy strategy totalling over R7-billion in tax incentives and support. This was followed by some details in the Budget Speech provided by Minister of Finance Trevor Manuel in the subsequent week. Read more...

28 January 2008

The inconclusive economic partnership agreement (EPA) of 2007 has had to give way for other trade-related topics as developing countries having other challenges to face. EPAs have always been associated with additional confusion beyond multiple memberships. Implementation of the regional integration in Southern Africa in conjunction with the EPAs was always going be complicated from a developing country view and there are still concerns that EPAs will undermine regional integration initiatives. Read more...

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