Janet Wilhelm
A chrome export tax: An important intervention to support industrial development in South Africa
The introduction of a chrome export tax, announced by Cabinet on 21 October 2020, will bring immediate benefits to the ferrochrome industry, and also presents an opportunity for South Africa to support the development of the downstream industry. In the context of a post-COVID-19 recovery plan, industrial development is a priority and requires the use of a multiplicity of measures by the state to strengthen its industrial base.
The implementation of the export tax will mean South Africa is able to take advantage of its natural resources by giving South African ferrochrome producers a price advantage over Chinese firms. Further, it will see the benefits of mining being utilised in support of beneficiation and potentially further downstream. This policy brief discusses the benefits of a chrome export tax, why it makes sense for South Africa as a measure to support the ferrochrome industry, and that this measure alone is not sufficient to grow the stainless steel and downstream industry – an additional set of industrial policy measures are also required.
Media release: 27 October 2020
Government moves to strengthen its industrial capacity by boosting the ferrochrome industry
Climate change and trade risk
This research project for the Department of Trade, Industry and Competition examines the vulnerability of South African trade to evolving climate change legislation. It aims to shed light on the trade-related risks faced by South Africa as a result of the global transition to a low-carbon economy. From a trade and industrial perspective, this transition has implications on the composition and dynamics of entire value chains. This concerns what inputs are accessed, the processes that underlie production, what goods and services are produced, as well as what happens to these products post-consumption. The research is available in a number of related documents. A main report on The global climate change regime and its impacts on South Africa's trade and competitiveness: case studies on various sectors; detailed briefs that explore South Africa’s trade risks with different countries; and key data in Excel format.
Main report
The global climate change regime and its impacts on South Africa's trade and competitiveness
Sector studies
Managing economic risks linked to climate change: Securing market access for South African wines
Green hydrogen: A potential export commodity in a new global marketplace
Country briefs
Climate change and trade risk: South Africa's trade with China
Climate change and trade risk: South Africa's trade with India
Climate change and trade risk: South Africa's trade with Japan
Climate change and trade risk: South Africa's trade with Russia
Climate change and trade risk: South Africa's trade with South Korea
Climate change and trade risk: South Africa's trade with the European Union
Climate change and trade risk: South Africa's trade with the United States of America
Climate change policy framework: key data (Excel spreadsheet)
South Africa: Climate change policy framework
China: Climate change policy framework
India: Climate change policy framework
Japan: Climate change policy framework
Russia: Climate change policy framework
South Korea: Climate change policy framework
European Union: Climate change policy framework
United States of America: Climate change policy famework
MEDIA
Press release: Green hydrogen - potential news export for South Africa
Engineering News 23 February 2021: TIPS research confirms business case for developing hydrogen economy
Master plans could change save-the-big-firms-first policies
Business Day - 12 October 2020 by Neva Makgetla (TIPS Senior Economist)
Read online at Business Day.
Engineering News - 9 October 2020 by Irma Venter
Read online at Engineering News.
Read online at Engineering News
TIPS Tracker: The economy and the pandemic
Read online at Engineering News.
Jobs bloodbath, tourism gutted
Business Times (Sunday Times) - 4 October 2020 by Hilary Joffe
Read online at Business Live
TIPS Webinar - Unravelling South Africa's Just Transition: Unpacking the ground-level impacts in the coal value chain
Muhammed Patel - TIPS
Report: Sector Jobs Resilience Plan: Coal value chain
Pulane Mafoea Nkalai - Sam Tambani Research Institute
Presentation: Energy Mix choices and the protection of workers’ interests in South Africa
Michelle Cruywagen, Megan Davies and Mark Swilling - Centre for Complex Systems in Transition, Stellenbosch University
David Hallowes - groundWork
Presentation: Down to Zero
Report: Down to Zero - The politics of just transition (David Hallowes and Victor Munnik 2019)
Gemma Gatticchi, Bloomberg. 4 November 2020: Renewable energy drive threatens 120,000 South African jobs
Pulane Mafoea Nkalai is a Senior Researcher at the Sam Tambani Research Institute (SATRI), the research arm of the National Union of Mine Workers (NUM). She has conducted extensive research on the welfare of workers and workers communities especially in the mining, energy and construction sectors of Southern Africa. Pulane will present on Energy mix choices and the protection of workers’ interests in South Africa.
About the Facilitator
Background
South Africa, a carbon-intensive economy, has initiated a transition to a more sustainable development pathway. While this is an economy-wide transformation, the progressive decline of the coal value chain is at the centre of this shift. In a highly unequal society like South Africa, the need for a just transition, which would empower vulnerable stakeholders, has emerged as an imperative. Beyond the stakeholders who rely on it for their livelihood, the coal value chain plays a singular role in the South African economy, society, politics and psyche. As such, the transition in South Africa’s coal value chain has the potential to influence the country’s entire socio-economic trajectory. This dialogue aims to inform this just transition process. It explores the ground-level impacts associated with a just transition away from coal.
This webinar builds on a two earlier dialogues, hosted on 7 July and 29 September.
FDI Tracker Q1 and Q2 2020
This report presents investment projects captured in Q1 and Q2 of 2020. Q1 and Q2 have been combined mainly because of the low number of investment projects announced in Q1 2020, combined with general delays in the release of certain data, such as those which inform the investment environment analysis. This was anticipated when investment globally was impacted by the slowdown in economic activity as strict measures were implemented in response to the COVID-19 pandemic. A total of 35 projects were recorded over the two quarters, with 27 projects identified in Q1, and eight projects in Q2. Over half the number of investments captured over the two quarters were by three companies. The total pledged investment value is R43.8 billion from 30 projects. Tracking further captured 3 320 job opportunities from eight projects, seven of which are by one company representing 3 300 jobs. These jobs are likely a mix of permanent and temporary opportunities as the company did not explicitly distinguish jobs by this segmentation. In this period seven projects were upgraded.
The forestry value chain faces many challenges. These include rising costs for transportation, labour, raw material inputs, energy and imported raw materials, exacerbated by poor road infrastructure that contributes to high maintenance costs and inefficiencies. Increasingly, climate change is an additional stressor that demands transitioning from business-as-usual practices. There is a close link between climate change and the forestry value chain. On the one hand, forests are affected by climate change physically through higher mean annual temperatures, changing precipitation patterns and more frequent and extreme weather events, and also economically through climate change related policy measures. On the other hand, forests help to mitigate climate change through sequestrating carbon if the forests are sustainably managed, but with land-use conversion and forest degradation, can contribute to climate change through more carbon emissions. Climate change thus represents both a challenge and an opportunity. As such, a proactive approach is required to harness the profitability associated with embracing sustainability.
While climate change impacts have been assessed for various ecosystems across the world, the risk to industrial forestry plantations in South Africa is not yet well understood. The objectives of this report are to identify and explore the climate-compatibility in South Africa’s forestry value chain; and to suggest solutions to address the climate-compatibility problems in South Africa’s forestry value chain.