This policy brief identifies the benefits of implementing a comprehensive credit guarantee scheme that would move the needle in small business support and improve liquidity. Three possible measures that could be used are proposed: a credit card that is guaranteed by the government; a guarantee for trade credit providers; and a credit guarantee for bank SME portfolios. These are by no means the only measures needed, with multiple others required which could include grants, venture capital finance, and improving demand through general stimulus measures.

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The economic effects of Moody’s recent credit ratings downgrade have been overtaken by the whirlwind effects of the COVID-19 crisis. It is, however, also important to understand the likely effects of the downgrade, which vary for different sectors and stakeholders,  to ensure a reasoned response. This policy brief looks at the economic impacts of the decision. It also considers the policy implications. While the ratings agencies have indicated that changes in economic policies and practices could reverse the downgrade, these policy demands on South Africa are contradictory. They suggest that, to improve its credit rating, South Africa must reduce worker protections, limit land reform, and cut government spending. However, these measures would all in turn aggravate social inequalities and policy contestation, increasing investor uncertainty and risks over the long run.

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Daily Maverick - 3 April 2020 by Gaylor Montmasson-Clair (TIPS Senior Economist)

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Daily Maverick - 2 April 2020 by Shakespear Mudombi (TIPS Economist)

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Business Day - 30 March 2020 by Neva Makgetla (TIPS Senior Economist)

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RESPONSE TO COLUMN

Letter in Business Day - 1 April 2020 by Prof Ivan Turok (Human Sciences Research council)  

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The South African economy is affected by the COVID-19 pandemic through:

• The sharp fall in growth initially in China and then in Europe and the US as a result of measures to contain the virus; and
• The increasing pressure to exercise social distance and lock down households and businesses to slow the spread of COVID-19, including in South Africa (from 26 March 2020) as well as all its major trading partners.

These measures brought an extraordinarily sharp decline in global production and
employment, especially in the US and Europe, over the past month. The result will likely be a global recession, with very uncertain prospects for recovery despite the adoption of extremely large stimulus packages in the US and much of Europe.

This briefing note first outlines the progress of the pandemic internationally and in South Africa. It then summarises key economic consequences, which have led to (widely varying) projections for global and South African growth. A final section reviews international and South African economic policy responses to the sharp slowdown.

The economic impacts of COVID-19 are changing rapidly. Information in this briefing note is valid as of 26 March 2020.

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This fourth quarter report of the Import Tracker is in two sections. The first section focuses on import trends for the fourth quarter of 2019, similar to previous reports. The second section of the report provides a brief review of some of the major trends for 2019. The review focuses on the major imports in both Rand and quantity terms.

Business Day - 16 March 2020 by Neva Makgetla (TIPS Senior Economist)

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Mining Journal - 16 March 2020 

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Although many issues affect the water and sanitation sector, this Working Paper focuses on the access to those services. An in-depth assessment of the progress made in providing water and sanitation services can help inform various stakeholders and decision-makers about the need for renewed effort towards universal access. Against this backdrop, the objective is to meaningfully understand the extent of access and the quality of access to water and sanitation services at the household level in South Africa. 

To avoid a one step forward, two steps backwards scenario, which would erode gains already made, the situation demands renewed effort, coordination and collaboration by various stakeholders, supported by significant resources targeted towards the unserved as well as paying attention to those already served. It is imperative to focus on both the quantity and quality of access to water and sanitation services, as neglect of one will further reinforce the overall backlog. This is particularly relevant with the increasing need to prevent the outbreak of waterborne diseases and the spread of new and less known pathogens and diseases such as coronavirus disease (COVID-19). These demand well-functioning water and sanitation systems that allow proper washing of hands as well as cleaning of contaminated items and spaces. In this regard, embracing the systems and multidimensional view on access to water and sanitation will contribute to improved, appropriate, and sustainable access to water and sanitation services for all.