This study provides an overview and analysis of the structure, key functions and characteristics of the forestry value chain operating in and among South Africa, Mozambique and Tanzania in order to identify market opportunities and the interventions required to support the growth of the regional value chain. The research focuses on three value chains – forestry to timber; forestry to pulp and paper; and forestry to furniture.

It focuses on three countries – South Africa, Mozambique and Tanzania. The latter two were selected on the basis of their current level of forestry output, together with their contiguous location. An evidence-based approach has been adopted for this study, based on the compilation of industry data from existing and new sources. The value chain analysis is focused on answering the following questions: how is the value chain organised? How does it function? Who are the main actors? What are the key institutions and forms of coordination? How well is the chain performing in coordination, competitiveness and intra-regional trade? Where are the opportunities to (1) relocate parts of the chain among the countries, and (2) to enhance existing intra-regional activities?

This report makes nine key recommendations, all of which aim to strengthen the capacity of the Southern African Development Community (SADC) Technical Infrastructure to achieve its core mandates, while promoting regional value chain development. 

The first TIPS Development Dialogue seminar of the year on Urbanisation and Industrialisation was held on Thursday 18 January. For more information and copies of the presentations go to Development Dialogue. Presenters: Shirley Robinson and Roland Hunter (Cities Support Programme), Christopher Wood and Asanda Fotoyi (TIPS), Rob Davies (representing IFPRI) and  Neva Makgetla and Mbongeni Ndlovu (TIPS).

Agenda

9:30 -   9:45: Opening and Welcome
9:45 - 12:00: Presentation and discussion of research findings

Spatial industrial policy, SEZs and cities in SA: Shirley Robinson and Roland Hunter (Cities Support Programme) 

Spatial Dimensions of SEZs and secondary cities: Christopher Wood and Asanda Fotoyi (TIPS)

Tea break

Urbanization, structural transformation and rural-urban linkages in South Africa: Rob Davies (representing IFPRI) 

Industrial Development and spatial planning - lessons from eThekweni Municipality: Neva Makgetla and Mbongeni Ndlovu (TIPS)

12:00 - 13:00 Panel Discussion with presenters: Urbanisation and industrialisation

Lunch: 13:00

Background

South Africa's high rate of poverty and unemployment are significantly worse in the rural areas of the country, in particular the former homelands. There has as a result been an ongoing migration out of rural areas into cities and towns. What happens to people when they arrive in urban areas? Are there jobs and economic opportunities; or does the poverty persist but in a new setting? How are cities managing the influx of people and how does the changing urban / rural dynamic impact on structural transformation in the economy?

The Development Dialogue will share research undertaken on some of these issues and consider support programmes for spatial industrial development as well as the linkages between the spatial dimension and industrial development in urban areas.

The paper begins with a broad contextual overview of the Southern African Development Community’s (SADC’s) transport and logistics performance in terms of the Logistics Performance Index and tracks the performance of individual member states in the decade from 2007. Two interesting findings emerge. First that the better performing SADC member states have been improving their logistics performance over time while the worst performing states have seen their performance decrease and deteriorate since 2007. The second interesting (and controversial) finding is that improved logistics service and operations is viewed as more important than additional investments in infrastructure in the region.

The paper then identifies the cross-cutting logistics issues collated from a literature review, a small sample of interviews with logistics firms operating in the region, completed value chain reports from the Regional Value Chain Project (see www.competition.org.za/regional-value-chains), SADC documentation, and finally the tradebarriers.org website, a Tripartite Community – comprising Common Market for Eastern and Southern Africa (COMESA), the East African Community (ECA) and SADC and Member States – initiative to report, monitor and eliminate NTB complaints.

A key finding of the paper is that from an economic perspective it is the standing time of trucks stationary at border posts which is the most powerful explanatory variable of SADC’s high transport costs and low logistics competitiveness. The research suggests that standing time is largely due to border post management issues rather than the commonly assumes infrastructure constraints.

AllAfrica - 13 December 2017 by Malebo Ralehlaka

Read online at AllAfrica

Business Day - 5 December 2017 by Neva Makgetla (TIPS Senior Economist)

Read online at Business Day

Or read here as a PDF

Business Day - 16 November 2017 by Michael Nassen Smith, Institute for African Alternatives.

Read online at Business Day

Main Bulletin: The Real Economy Bulletin - Third Quarter 2017

In this edition

GDP growth: The past six months have seen the GDP recover from the contraction that marked the previous six months. Still, growth remains more variable, and generally slower, than it was before 2014. Increased variability in the GDP results in part from the end of the commodity boom and in part from fluctuations in agriculture as a result of the 2015 drought. While mining and manufacturing have seen fairly stable growth, construction slowed markedly in the year to September 2017. Private investment has continued to fall, and was a significant drag on GDP growth in this period. Read more.

Employment: While total employment climbed in the third quarter of 2017, in figures that are not seasonally adjusted, employment in the real economy fell. The main factor behind job losses in the real economy was a sharp fall in construction employment, followed by manufacturing. In contrast, mining employment appears to have stabilised after significant job losses from the end of the commodity boom in 2011/12. Read more.

International trade: In dollar terms, exports have recovered rapidly over the past two quarters, mostly due to a sharp uptick in mining exports. Imports also increased, but at a slower rate, over this period. Manufacturing exports, however, declined from the third quarter of 2016 to the third quarter of 2017. Read more.  

Investment and profitability: Investment levelled out in constant terms from mid-2016, and remained under 20% of the GDP. Mining and construction profits dropped sharply in the second quarter of 2017, the latest available data, while the returns in manufacturing remained fairly stable. Read more.

Foreign direct investment projects: The TIPS Foreign Direct Investment Monitor tracks FDI projects, analysing new and updated projects on a quarterly basis. Read more.  

Briefing note: Slowdown in the construction industry: The construction industry saw a sharp slowdown in the past year, after being a key driver of growth in the South African economy for most of the last 15 years. The main factor behind its slowing expansion appears to be the flattening out of investment in buildings and construction works as part of the overall downturn in investment over the past two years. Read the briefing note online: Slowdown in the construction industry.

Briefing note: The unbalanced economy - A cause for concern: Since the first quarter of 2015, the South African economy has experienced its worst period of growth since the transition to democracy (aside from the global financial crisis in 2009). The economy has been dipping in and out of negative growth on a fairly consistent basis over the past three years. Read the briefing note online: The unbalanced economy - A cause for concern.

Briefing note: The transition to a green economy - A manufacturing and trade opportunity for South Africa: South Africa’s green economy strategy has traditionally rested on the Renewable Energy Independent Power Producer Procurement Programme, and has attempted to leverage off government procurement to promote the development of local manufacturing capacity for the likes of solar panels or wind towers. But with the programme in a state of paralysis, now is an opportune moment to reassess the opportunities available to South Africa, and expand the strategy to best position the country to take advantage of the industrial opportunities offered by the global transition to sustainable development. Read the briefing note online: The transition to a green economy - A manufacturing and trade opportunity for South Africa.

Business Day - 24 November 2017 by  André de Ruyter, chairman of the Manufacturing Circle.

Read online at Business Day