Displaying items by tag: Industrial development

Presentations

Muhammed Patel (TIPS): Green H2: a potential export commodity in a new global marketplace

Jason Bell (CREDD): Insights from green hydrogen for sustainable (re)industrialisation in South Africa paper

Sören Scholvin (UCN): Green hydrogen and linkage-based development in Chile

Bruce Young (Wits Energy Centre): TIPS Development Dialogue Green hydrogen and industrial policy slides

Background

This Development Dialogue seeks to unpack whether green hydrogen is really the technology of the future and its commercial viability. As well as to understand global demand and some of the miss information in the industries for carbon neutralisation.

Globally, countries are mobilising resources to deal with the climate crisis. Climate change stands to impact countries collectively, with the impacts most severely felt by the vulnerable in society. Countries, including South Africa, have to think carefully about improving their resilience to the direct physical impacts of climate change and the effects of the transition. Part of the response involves transforming notorious, high-emitting industries, such as energy and petrochemicals, towards cleaner production.

Given South Africa’s high dependency on coal, and the combustion of coal being associated with high CO2 emissions, South Africa will have to transform key value chains towards more sustainable production. This transformation not only protects the country’s resources from future climate events but also secures South Africa’s future in the global marketplace. The hydrogen economy offers one potential and complementary pathway to a sustainable future. South Africa’s rich endowment of ideal weather conditions for solar and wind power generation, technological capabilities around the Fischer-Tropsch (FT) process, and access to platinum resources, place the country at an advantage for developing the hydrogen value chain and being a key supplier into the global hydrogen market.

While green hydrogen development has gone through a number of historical waves of interest, the current momentum is being driven globally, with a number of countries developing hydrogen roadmaps and strategies to capitalise domestically and in the global marketplace.

This provides South Africa with a window of opportunity to investigate and develop a domestic hydrogen economy, attract investment into developing a new capability, and benefit from this heightened interest in the creation of a new export product. Developing this sector has many potential benefits for the country.

TIPS is partnering with the Department of Trade Industry and Competition (the dtic).

About the Speakers

Presenters

Muhammed Patel is Senior Economist at TIPS. Muhammed’s background spans work in industrial development, and competition and regulatory economics as well as telecommunications and the energy sectors.

Jason Bell is an Economist and Researcher at the Centre for Competition Regulation and Economic Development. He is interested in political economy and industrial development issues, focusing on the role of regulation, governments and institutions in fostering growth and the evolution and distribution of power. his sectoral focus covers metals, machinery and equipment, development finance institutions, automotives, climate change and green hydrogen in South Africa.

Bruce Young is Senior Lecturer, Africa Energy Leadership Centre, Business School, University of the Witwatersrand. He is a Chemical Engineer with broadly based business development and technical experience related to the global petrochemical industry with specific expertise in petrochemicals. Expertise in chemical opportunities associated with Fischer Tropsch technology and synthesis gas processing. Specific expertise in formulating business unit technology strategy to support the business strategy. Significant commercial experience relating to technology and licensing agreements. Experienced in mergers and acquisitions in the chemicals business area.

Sören Scholvin is a professor at the Department of Economics, Catholic University of the North, in Antofagasta, Chile. He is affiliated with the Policy Research in International Services and Manufacturing (PRISM) unit at the University of Cape Town. Sören's research interests are extractive industries, global value chains and regional development.

TIPS Dialogues bring together academics, policymakers, civil society organisations, workers, and practitioners
to discuss important issues and share ideas on industrial policy.

TIPS is partnering with the Department of Trade Industry and Competition (the dtic).

The Black Industrialists Policy aims to increase the participation of black South Africans in operational management, rather than just financial ownership, of enterprises in key sectors and value chains. The programme was launched in 2015 by the Department of Trade, Industry and Competition, supported by the Industrial Development Corporation and the National Empowerment Fund.

The Black Industrialists Conference in August 2022 examined the impact of the Black Industrialists Programme and explored support measures to boost entry of black-owned businesses and producers into the mainstream economy. It also showcased the work of black industrialists. As an input into the conference, TIPS prepared nine case studies on black industrialists. Renee Grawitzky conducted the research and interviews, and TIPS provided the industry context and looked at the broader developmental objectives.

CapeBio Technologies: biotechnology company

Easy Farm: farms and exports cirtus 

Equal ELM Trading: designs and manufactures engine protection systems for the mining, construction, and transport industries

Flat-Foot Engineering: mechanical engineering provider

Ikusasa Green: manufactures roto-moulded cooler boxes

Microfinish: manufactures parts for the auto world industry

Pambili Media: film production company

PepsiCo ESOP: employee ownership scheme

Sindane Mining Ventures: civil engineering and equipment-rental company

This report highlights the myriad interventions available to township firms to develop a more equitable industrial landscape that supports firm growth and employment growth. Many of these response measures aim to address the constraints facing small businesses and industrial development in townships. Gaps however remain. Economic geography is a key component of industrial policy, and requires appropriate policies that supports development in a decentralised urban landscape in order to bring about inclusive and sustainable industrialisation. Based on the gaps identified in this research, the policy recommendations to strengthen small manufacturing businesses in townships include:

• Ensuring inter-governmental collaboration on township development programmes.
• Improving M&E and understanding of township economy needs.
• Addressing spatial planning and making land available in townships for firms to operate.

Working Paper prepared by TIPS for the Department of Trade, Industry and Competition

This policy brief provides a broad introduction to illicit financial flows (IFFs), some key IFF mechanisms, and how these flows serve to undermine industrial development, particularly in developing countries. IFFs are usually connected to tax havens, and serve to maximise income for a handful of people while eroding the tax base, undermining government  capacity and harming industrial development. There is strong evidence to suggest that IFFs are happening at significant scale in South Africa. This is likely to have a negative effect on the country’s existing industrial base and industrialisation efforts via a number of channels that require policy attention. Government departments and agencies with the authority to act on these illicit channels, including via industrial, competition and procurement policy, need to develop the capacity to do so. The brief concludes with recommendations of industrial policy measures that can be implemented to limit the extent and impact of illicit financial flows on industrial development in South Africa.

This policy brief is based on the Working Paper  Illicit financial flows, tax havens and industrial development in South Africa. It can be accessed at the following link: main report.

Illicit financial flows (IFFs) of various kinds, and the role of tax havens in facilitating these flows, have come under increased scrutiny since the global financial crisis of 2007-2009. A series of high-profile scandals and leaks of sensitive information about how corporates and individuals organise their financial affairs to escape their social obligations have contributed to this interest.

This report explores the relevance of these for South Africa. It looks at definitions and basic mechanisms, and provides an overview of methodologies used to estimate IFFs. It presents a set of case studies that illustrate how these mechanisms operate in practice, and provides an indication of the scale of IFFs and which tax havens play a significant role in facilitating these. It then explores the channels through which IFFs and tax havens affect industrial development, and makes the case for an active role for industrial policy in protecting South Africa’s industrial base from IFF and tax haven exposure, setting out a  number interventions that the Department of Trade, Industry and Competition and other government agencies may develop to reduce the impact on industry in South Africa, accompanied by research proposals aimed at enhancing such efforts.

Download Policy Brief: Illicit financial flows and industrial development in South Africa: A discussion of policy options