Business Day - 21 November 2017 by Neva Makgetla (TIPS Senior Economist)

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Even though data revisions are a normal feature of any statistical compilation process, such revisions are seldom taken into account or understood by users of statistics. This results in an over reliance on initially published preliminary estimates that are subject to change. Gross domestic product (GDP) estimates, for instance, are needed for the Monetary Policy Committee to set interest rates and the National Treasury to set budget limits, but because of the need for timely data, policy decisions are often based on preliminary estimates which are later revised as more comprehensive data become available. At the same time, changes to the initially published estimates may lead to adjustment measures being made to the assessment of the performance of the economy.

This brief focuses on revisions to South Africa’s quarterly GDP estimates for the period 1999 to 2013. Based on the study of revisions to the South African quarterly GDP growth rates the following conclusions are made. First, the initially announced estimates are most likely to be revised upward. This is because initial announcements of the quarterly GDP growth rates are on average underestimated. Second, a bias exists in the estimation of the initially announced quarterly GDP growth rates. This suggests that the estimates contain measurement errors that can be eliminated to become better estimates of the final or true value. The brief looks at why data revisions happen and highlights how the study of revisions can be used to evaluate the reliability of initially published estimates. It then provides an analysis of revisions to the South African quarterly GDP growth rates followed by recommendations.

The current electricity model incorporates a paradox in which continual increases in price contribute to falling demand, which in turn leads to higher unit costs and prices. In this context, high levels of capital expenditure by Eskom have become a critical cost driver.

The contradictory response of raising prices in the midst of declining sales results in part from weaknesses in the regulatory framework for electricity prices, and in part from Eskom’s business model

This working paper reviews the factors behind stagnant Eskom sales. It then analyses why Eskom’s response to these changing conditions has become so paradoxical. It finds that Eskom’s path dependency is generated by the current regulatory framework for electricity prices combined with Eskom’s attachment to an outdated business model.

It then provides a systematic assessment of the costs, benefits and risks of three options for responding to the new conditions.

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South Africa’s economic growth relies strongly on resource and energy-intensive sectors, which worsens the pressure on the environment and exacerbates the threat of climate change (Montmasson-Clair, 2012). The country is also grappling with high income inequality, unemployment and poverty levels. Economic growth has not been inclusive (Mayer et al, 2011). Related to this is the limited inclusion and participation of the youth, in the broader development of the country. Youth is defined in South Africa as people in the age category of 14 to 35 years (NYDA, 2011). The National Youth Development Agency (NYDA, 2011) highlighted the plight of the youth in South Africa as characterised by: low economic participation, low levels of education and skills development, poor health and well-being, and low levels of civic participation and social cohesion. Given this background, how can development be made inclusive? And how can the green economy be used for inclusion of youth and sustainable development, not only in South Africa but also in the rest of the continent.

Business Day - 10 November 2017 by Pippa Green and Murray Leibbrandt

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Trade & Industrial Policy Strategies (TIPS) in partnership the South African Research Chair in Industrial Development based at the University of Johannesburg and the Industrial Development Corporation (IDC), and in association with the Department of Trade and Industry (the dti), will be hosting its 2018 Annual Forum on 6-7 June 2018. The theme is Finance and Industrial Development.

Individuals wishing to contribute papers are invited to submit their title and abstracts of up to 500 words to Rozale Sewduth at TIPS via email to: dialogue@tips.org.za

To be considered, abstracts should be submitted by 31 January 2018; and 20-25 papers will be selected for development of final papers, which will then be presented at the conference in June 2018. Authors will be notified of the decision by early February 2018. Final papers are due for submission by 30 May 2018.

Abstract submissions should include full contact details of the authors.

The flight and accommodation costs of a maximum of 15 presenters will be covered by TIPS (only one presenter per paper will be covered). 

For more information about the Forum go to forum.tips.org.za

TIPS Annual Forum 2018 will be held on June 6-7 in Johannesburg. The theme is Finance and Industrial Development. People wishing to contribute papers are invited to submit their title and abstracts of up to 500 words. The closing date for submissions is 31 January 2018. For details on how to make a submission and the focus of the topics see Tips Forum 2018.

Business Day - 17 October 2017 by Neva Makgetla (TIPS Senior Economist)

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Business Day - 10 October 2017 by Neva Makgetla (TIPS Senior Economist)

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Business Day - 26 September 2017 by Neva Makgetla (TIPS Senior Economist)

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RESPONSE TO COLUMN

Letter in Business Day - 4 October 2017: Help start-up investors

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