Trade and Industry

Session 7: Agricultural value chains and sustainability

  • Year 2017
  • Organisation GreenCape
  • Publication Author(s) Pieter Frederik Janse van Vuuren; Catherine Pineo; Lauren Basson; Usisipho Gogela
  • Countries and Regions South Africa

Session 7: Agricultural value chains and sustainability

  • Year 2017
  • Organisation ZIPAR; CCRED
  • Publication Author(s) Francis Ziba; Reena das Nair; Maria Nkhonjera

Session 9: Unpacking the water-energy-food nexus

  • Year 2017
  • Organisation Sustainability & Resilience (su-re.co)
  • Publication Author(s) Takeshi Takama, Ibnu Budiman, Novelita Wahyu Mondamina, Yudiandra Yuwono, Cynthia J Ismail

Session 2: Mining in Support of Industrial Development 

  • Year 2016
  • Publication Author(s) Dr Paul Jourdan
  • Countries and Regions South Africa

Session 8: Minerals Beneficiation 

  • Year 2016
  • Organisation ZEPARU
  • Publication Author(s) Cornelius Dube
  • Countries and Regions Zimbabwe

This working paper presents an analysis of the dominant and growing agri-food system in South Africa, focusing on power and governance as two key factors that critically influence system outcomes. Current approaches towards agricultural development (including food security) tend to under-theorise these issues and thus they may not receive the necessary attention from policymakers. 

  • Year 2016
  • Organisation TIPS
  • Publication Author(s) Dr Tracy Ledger
  • Countries and Regions South Africa
Published in Trade and Industry

Session 2: Regional integration and SADC

This paper investigates the extent of trade integration of Sub-Saharan African countries in the global economy as well as within the region. Four key concepts are used to assess integration: 1) trade openness, 2) the centrality in the global and regional trade network, 3) gravity model estimates, and 4) global value chain (GVC) integration. We find that the region's trade openness has increased strongly since the mid-1990s, reflecting a growing partnership with emerging markets, particularly China, and budding intraregional trade. However, the region's trade flows have barely kept up with the rapid expansion of global trade. The trade centrality of the economies in the region remains relatively low, and has not increased much over the last 20 years. It remains lower than the one observed in other comparable emerging and developing economies. Likewise, the region still has some way to go to better integrate in global value chains - a feature associated with higher income growth overtime in regions such as South East Asia and Eastern Europe. Some countries are showing progress, albeit from low starting points, with the EAC and SACU particular bright spots. A better insertion into the global economy would help foster structural transformation, export diversification, and the possibility to absorb technology and skills from abroad. 

  • Year 2015
  • Organisation Celine Allard,¬†Wenjie Chen and Emmanouil Kitsios (IMF)
  • Publication Author(s) Celine Allard;¬†Wenjie Chen; Emmanouil Kitsios
  • Countries and Regions Southern African Development Community (SADC)

Session 8: Agricultural value chains in the region

Fertiliser is a key input for commercial agriculture. However, there is generally low fertiliser use in Sub-Saharan Africa and hardly any production of fertiliser in countries in Southern and East Africa, aside from South Africa. Studies have emphasised the importance of transport costs in the price of fertiliser paid by the farmer as well as the detrimental impact of lack of competition in the trucking sector in increasing prices. Many reviews over the years have considered the various reasons for the high costs of road freight in southern and East Africa, including regulations restricting participation and competition, the role of national and regional transport associations, inefficient borders and poor roads, and lobbying and rent-seeking by powerful local transport interests. This paper considers the different reasons and their changing impact over time.

  • Year 2015
  • Organisation Centre for Competition, Regulation and Economic Development, University of Johannesburg
  • Publication Author(s) Simon Roberts; Thando Vilakazi;
  • Countries and Regions Malawi, Zambia

Session 8: Agricultural value chains in the region

Paper to follow

  • Year 2015
  • Organisation University of the Witswatersrand
  • Publication Author(s) Lotta Takala-Greenish
  • Countries and Regions South Africa, Zambia, Zimbabwe

Session 7: Minerals value chains: Upstream and beneficiation

This paper presents key trends in the global value chain for mining capital equipment. It includes a section on the background of the South African and Zambian mining inputs clusters. It maps the regional value chain for mining capital equipment and presents the research findings in terms of firm entry, upgrading processes and regional inter-firm linkages, and looks at policy constraints at national and regional level.

 

  • Year 2015
  • Organisation CCRED, University of Johannesburg
  • Publication Author(s) Judith Fessehale
  • Countries and Regions South Africa, Zambia

Session 7: Minerals value chains: Upstream and beneficiation

Copper, as Zambia's economic mainstay, is a mineral whose value chain stretches beyond the country's Copperbelt Province and the recently acclaimed “New Copperbelt” Northwestern Province. The Copperbelt Province as the mining hub has several industries benefiting from both upward and downward linkages in the Sub-Saharan African market and other regions globally. Despite the challenges associated with mining and mining economies being real, Zambia needs to learn from countries within the Southern African region such as South Africa and those in other continents such as Chile in order to have a formidable escape strategy from the “natural resource-curse phenomenon”. With such a strategy, stronger industrial linkages at home as well as improved contribution to regional industrialization are possible. Ultimately, this can strengthen economic growth and usher the country into a stage where beneficiation from the mines go beyond the local value chain debate but the entire nation as people see the tangible fruits of economic growth positively impacting human development indicators. The reality in the economic indicators would then truly reflect the reality on the ground among ordinary Zambians as is the case in Chile. 

  • Year 2015
  • Organisation University of Zambia
  • Publication Author(s) Godfrey Hampwaya; Wisdom Kaleng'a; Gilbert Siame
  • Countries and Regions South Africa, Zambia

Session 7: Minerals value chains: Upstream and beneficiation

South Africa has the profile of a modern economy with well-developed financial, commercial and industrial sectors, yet mining remains an important base of the economy. Mining is dependent on physical infrastructure, such as rail, energy and water, that is provided by the state. Ideally, this is where the idea of a “joined-up economy” functions optimally, since it includes all the relevant state institutions and the private sector. It must also be sensitive to the interests of labour and the views of civil society. However, the mining companies assert that administrative prices set by state entities and the uncertainties of supply have a heavy impact on their pricing. While they cannot influence prices in the global markets, they can do so in the domestic market, due to their monopoly power. Hence they choose to sell to local customers at international prices, to raise their profit margins. This has a serious impact on the viability of downstream manufacturing industry. If South Africa is to industrialise further, this impasse has to be resolved.

  • Year 2015
  • Publication Author(s) Ben Turok
  • Countries and Regions South Africa

Session 10: Agricultural value chains in the region

This paper examines the reasons for the growth in the poultry industry in Malawi in the past 10 years. 

  • Year 2015
  • Organisation Malawi's Deputy Director of Industry
  • Publication Author(s) Clement Phangaphanga
  • Countries and Regions Malawi

Session 10: Agricultural value chains in the region

  • Year 2015
  • Organisation USAID/Southern Africa Trade Hub
  • Publication Author(s) Gerrit Struyf (USAID/Southern Africa Trade Hub)

This Working Paper is drawn from research by TIPS prepared for the Global Green Growth Institute, the Economic Development Department and the Department of Trade and Industry. The research explored the impact of electricity price increases on the competitiveness of selected mining sector and smelting value chains in South Africa, looking at whether this has incentivised mining-related companies to invest in renewable energy, cogeneration and energy efficient.

The research concluded that the response of mining value chains to the shift to a green economy cannot be business-as-usual. Successful management of the global green transition will require short-term pragmatism and longer-term planning in the South African mining industry, linking business, government, labour, non-governmental organisations and the research community in support of sustainable development

Key policy recommendations included addressing institutional and legal confusion around environmental regulations; enforcing environmental and social 'licences to operate'; accelerating and supporting the use of renewable energy and cogeneration; and the need to better understand the interplay between industrial development, trade and the green economy in South Africa,  particularly the potential risks and opportunities.

  • Year 2015
  • Organisation TIPS
  • Publication Author(s) Gaylor Montmasson-Clair
  • Countries and Regions South Africa
Published in Green Economy

Policy Paper prepared for the Economic Development Department and the Department of Trade and Industry

The impact of electricity price increases on the competitiveness of selected mining sector and smelting value chains in South Africa: Has it incentivised mining-related companies to invest in renewable energy, cogeneration and energy efficiency?

This research project was jointly commissioned by the Economic Development Department (EDD) and the Department of Trade and Industry (the dti). The Global Green Growth Institute (GGGI) was tasked with implementing the project as part of a partnership to support the South African government's green growth planning efforts. TIPS was the primary research partner and service provider. This project is the result of the collaboration of all of these institutions.

The South African government's Inter-departmental Green Growth Committee, chaired by EDD, served as the project steering committee for this research. A multi-stakeholder Technical Reference Group was also established to offer inputs on various drafts of the report.

This policy paper represents a condensed version of an earlier report, which was the result of extensive fieldwork and interviews with stakeholders across the selected mining value chains. The research team comprised Reena Das Nair, Dinga Fatman, Evans Chinembiri, Gaylor Montmasson-Clair, Georgina Ryan and Wendy Nyakabawo of TIPS. Gaylor Montmasson-Clair and Georgina Ryan were the lead authors of the policy paper. Alison Goldstuck and Katlego Moilwa were GGGI contributing authors. 

Although not directly associated with the transition to a green growth path, recent trends in South Africa's electricity supply industry, which has been characterised by energy supply problems since a load shedding crisis in 2008 and drastic price increases (i.e. a trebling of the average electricity price from 2009/2010 to 2017/2018), provide an opportunity to investigate the shift to a greener path. Using these developments as an entry point, this paper investigates the impact of electricity price increases on the competitiveness of mining-related companies and the mitigation measures which have been implemented by various firms in the four most important mining value chains in South Africa, namely platinum, gold, iron ore and coal. Particular attention is paid to the role that electricity price increases and energy security concerns have played in fostering investments by mining-related firms in renewable energy and energy efficiency.

For any enquiries related to the report that are relevant to the dti and EDD, please contact Christian Prins, Economist (macro economic policy), EDD, at cprins@economic.gov.za.

  • Year 2014
  • Organisation TIPS
  • Publication Author(s) Gaylor Montmasson-Clair; Georgina Ryan
  • Countries and Regions South Africa
Published in Energy

The National Energy Regulator of South Africa (NERSA) is the regulatory authority established in terms of the National Energy Regulator Act, 2004. 

The Regulatory Entities Capacity Building project will provide a comprehensive review of the regulators' role, linked with the policy framework and powers. 

The review includes:

  • Examining the linkages with economic development in a number of areas including links with industrial policy.
  • Assessing the key issues at each level of the Electricity Supply Industry value chain.
  • Examining electricity pricing and the process of setting prices by NERSA.
  • Evaluating the regulatory and institutional framework.
  • Looking at the role of Independent Power Producers and municipalities.
  • Undertaking case studies that highlight how actions by Eskom and the regulator have implications for industrial policy.
  • Identifying specific areas of capacity building to inform short learning programmes (SLPs).

  • Year 2014
  • Organisation TIPS
  • Publication Author(s) Reena Das Nair; Gaylor Montmasson-Clair; Georgina Ryan
  • Countries and Regions South Africa
Published in Economic Regulation

Maize is the most important staple cereal consumed in the Southern African region. Global warming and accompanying increased volatility in rainfall, rising populations and the shift to maize-fed biofuels pose risks of substantial price increases in the future that may affect food security.

The general view is that a combination of factors was responsible for the 2006-2008 food and oil crises, including increased demand for food and oil, rising prices, currency fluctuations, climatic conditions in producer countries, export restrictions, speculation in commodities markets and lack of productivity growth in key sectors.

  • Project SADRN
  • Year 2011
Published in Policy Briefs

This executive summary is not presented in the usual manner of summarising the findings of each chapter of the report. The complexity and detail covered in the report, and the nuances in the debates, makes such an option impossible. Rather, a brief overview of the key issues and approaches is presented as a separate think piece.

This study was commissioned by the Presidency as a follow up to the Review of Second Economy Programmes conducted by the Second Economy Strategy Project. In the Review, it was noted that while social delivery programmes targeting poor people had largely been successful and implemented at scale over the past 15 years, the same could not be said for economic programmes aimed at creating market based employment opportunities. Generally, these latter programmes were found by the Review to be highly project focused, not scalable and, as a result, only reached a small number of direct beneficiaries. The Review cited six contributing factors to the modest success of these economic programmes. One of the cited problems was market access for small and marginal enterprises. It was that broad issue which framed this study.

More specifically, the terms of reference required that the study contemplate mechanisms to support a change in the trajectory of small marginalised producers which will lift them out of poverty. This trajectory change is based upon exploring what it would take to shift these producers away from selling to local, thin markets in favour of selling their outputs to external, developed markets – on fair terms. The terms of reference proposed the use of value chain analysis as the theoretical construct upon which the study is based, and very importantly, that it focus on what kinds of systemic-level changes would facilitate such linkages or allow them to take place at scale.

The study is designed to deliver two outputs. The first output is a linkage framework which will guide policymakers, researchers and practitioners in identifying the systemic issues which consistently, across sectors and nations, constrain marginalised producers from entering deeper and more established formal value chains. The identification of these issues, using value chain analysis, provides a list of issues which any policy intervention will need to address. The second output of the study is to stimulate policy debate in this area by suggesting new and novel approaches to possible linkage strategies. Two strategies are presented, although, an infinite number of strategies could emerge from the framework. The terms of reference are clear that the strategies presented in the second output do not need to be developed to the point where they are ready for programmatic roll out, but should rather catalyse debate. In addition, the terms of reference remove the need for the strategies and framework to deal with all areas of second economy production and poverty, because this study sits alongside other work streams all dealing with different aspects of the challenge.

Value chain analysis has been the cornerstone of the study. The appeal of value chain theory to our linkage study is fourfold.

Firstly, value chain analysis emphasises the issues of governance and power in markets which provides us with important information on the advantages and disadvantages of entering a specific value chain and different realities which will be experienced at different links within a given chain. Importantly, governance and power also direct our attention towards understanding how and why barriers to entry are created by value chain controllers and how these inhibit, but also potentially create, opportunities for small and marginalised 5 producers. Understanding how and why barriers are created and who ‘controls’ these barriers is crucial if one wishes to breach or harness such barriers.

The second appealing feature of value chain analysis is that it directly addressed how and why economic and other rents are distributed across a chain. By understanding which activities are ‘well’ rewarded along a chain, and which activities attract poor returns, we are able to develop a feel for which types of activities in the value chain that are likely to attract a return sufficient to positively impact on incomes and returns and which activities are like to result in immiserising growth. This is a crucial point because linking marginalised and small producers to developed value chains is not a guarantee that the livelihoods of such participants will improve. It is possible to increase such linkages without improving income generation or returns to small producers. As such, chain activity and product selection within a given power and governance environment must be carefully considered to ensure that the created linkages do in fact result in improved circumstances for small producers.

The third appealing feature of value chain analysis is that product and/or process upgrading is an intrinsic part of the theory. Firms go to the trouble and expense of implementing governance structures in order to assure themselves of access to the right goods, of the right quality, at the right time. As such, lead firms often see investing in their suppliers as a sound business decision and may either offer embedded services or facilitate the access of suppliers to appropriate upgrading services. The fact that upgrading to meet standards and critical success factors is intimately tied to governance and the exercise of chain power means that at least some of the supply side issues which will need to be dealt with in relation to small, marginalised producers can be dealt with endogenously i.e.: a successful linkage programme will by its nature incorporate some upgrading within the linkage itself, thereby decreasing the need to provide extensive, external supply side support over and above that provided by the core economy linkage partner.

The final appeal of value chain analysis is the fact that it is a demand side approach. For too long, policies, programmes and strategies in South Africa (and the rest of the world) have been supply driven, often resulting in production and productivity improvements in small and marginalised economic activities which do not translate into improved livelihoods; either due to a lack of final demand or low prices/returns earned. By adopting a demand side approach, we improve fundamentally the probability that if a linkage is successfully created, the activities or products of such producers will have an effective market in which to sell their outputs and services at a price that will improve their income and return earning potential.

These four appealing features of value chain analysis have motivated us to use value chain analysis as an appropriate construct on which to base our framework and strategic thinking. Essentially, these features offer us a consistent and rigorous methodology with which to isolate and express the crucial questions that will need to be answered in any attempt to link, at a systemic level, mainstream and marginalised economy players in South Africa.

Using value chain analysis for this study has not, however, been a simple task. Value chain theory is based on investigations of a specific product or sector, in a specific location, with specific actors, at a specific time. It is an empirically driven analysis. In our study, where we are searching for systemic obstacle identification and systemic solutions to obstacles, this sector specific approach creates difficulties in terms of the level of analysis.

To counter this, a framework has been developed, and strategic options compiled, based on cross-cutting issues. The study looked at hundreds of case studies and specific sector value chain analyses undertaken in scores of countries. Surprisingly, the same issues arose time and again. This leant credence to the study’s assertion that, irrespective of sector, some characteristics of lead firms in the mainstream economy, and some characteristics of small producers in the second economy, lead consistently to the same obstacles to successful linkages. As such, we identify these cross-cutting issues as systemic in nature and believe that they reveal the key constraints which must be addressed in order to implement a successful linkage strategy.

  • Year 2008
  • Organisation TIPS
  • Publication Author(s) Sandy Lowitt
  • Countries and Regions South Africa
Friday, 13 April 2007

Trade Information Service 2005

One of the objectives of the Department of Trade and Industry (the dti) is to develop capacitiesfor improving the export performance of businesses. To do so, the dti/TISA require easily accessible practical strategic and analytical tools for identifying growing markets to which South African firms could export. This report will help the dti/TISA and its target group of South African exporters to analyse aspects of the global market in its various facets. In doing so, thedti/TISA will strengthen its role as a provider of strategic tools to be used as a basis for analysinggrowing global markets for South African exports. A key objective of the report is to assist TISA to become an important source of strategic market information identifying the most lucrative markets and value chains for South African exports.

  • Year 2005
  • Organisation TIPS
  • Publication Author(s) Owen Willcox
  • Countries and Regions South Africa
Published in Trade and Industry