Presentation and Panel Discussion

Rod Crompton and Judith Fessehaie (CCRED)
Simon Roberts (CCRED)
Neva Makgetla and Asanda Fotoyi

Discussant: Edwin Ritchkin

Background 

The presentation by Rod Crompton will discuss the impact of public procurement policy on Transnet's procurement of 1064 railway locomotives as an instrument to develop local rail rolling stock manufacturing capacity in South Africa. The research forms part of a broader research programme under the Industrial Development Research Programme (IDRP) of the Department of Trade and Industry.

Neva Makgetla and Asanda Fotoyi will present findings on the factors that tend to exclude small business from government procurement.

Presenters 

Rod Crompton: Dr Rod Crompton is an independent consultant specialising in industrial policy, energy and economic regulation and a part-time research associate at TIPS. He has a PhD in industrial policy from the University of Natal. He was previously a full-time board member of the National Energy Regulator (Nersa) for 11 years and was senior manager at the Department of Minerals and Energy responsible for energy, hydrocarbons and energy planning for nine years. He has also worked at the Department of Trade and Industry and was managing director of the Minerals and Energy Policy Centre.

Simon Roberts: Professor Simon Roberts is the Director of the Centre of Competition, Regulation and Economic Development (CCRED). He is a professor at the University of Johannesburg, in the Economics and Econometrics Department. He held the position of Chief Economist and Manager of the Policy & Research Division at the Competition Commission from November 2006 to December 2012. Prior to joining the Competition Commission he was Associate Professor of Economics at the University of the Witwatersrand, where he established and directed the Corporate Strategy and Industrial Development research programme examining firm decision-making and economic outcomes.

Neva Makgetla and Asanda Fotoyi are economists at TIPS. Makgetla has published widely on the South African economy and worked for many years in government, most recently as Deputy Director General for Policy in the Economics Development Department, as well as in COSATU. Asanda Fotoyi worked at Statistics South Africa before joining TIPS in 2016.

This policy brief provides an overview of South Africa’s Department of Trade and Industry’s industrial park revitalisation programme (IPRP). It then highlights some key success factors for implementing successful spatially-targeted industrial development interventions such as industrial parks. Although infrastructure provision is a crucial (and necessary) investment facilitator, other key factors are essential to ensure that such industrial parks fulfil the employment and firm expansion requirements for inclusive growth. These include ensuring that the right implementation partners are selected, ensuring that local and national government play their roles in investment facilitation, and identifying (and supporting) sector-focused growth opportunities.

Business Day - 14 March 2017 by Neva Makgetla (TIPS Senior Economist)

Read online at Business Day 

Or read here as a PDF.

Main Bulletin: The Real Economy Bulletin - Fourth Quarter 2016

In this edition:

Quarterly GDP growth: South Africa’s GDP fell by 0.08% over the past quarter, driven mostly by a decline in the real economy, above all mining. Mining contracted by 3,0%, manufacturing by 0,8%, and agriculture by 0,1%. These trends contributed to the continued slowdown in growth, which came to just 0,3% for 2016 as a whole. Read more.

Employment: Employment showed the typical seasonal bump from the third to the fourth quarter, growing 250 000 overall. Year-on-year figures, which compensate for seasonal fluctuations, show more modest growth, at 50 000. That indicates that employment growth is slowing with the GDP, although it has levelled out in mining after substantial declines. Manufacturing employment has remained virtually unchanged since 2013, although the rest of the economy has seen significant jobs growth. Read more.

Trade: The strengthening of the rand over 2016 reduced export revenues and made imports more competitive with local producers. As a result, despite growing manufactured exports in dollar terms, in rand revenues exports dropped. Still, overall South Africa ended the year with a surplus on the balance of payments, after running trade deficits from the end of the commodity boom through 2012. Read more.

Investment and profitability: Manufacturing saw a sharp rise in reported profits in the year to the third quarter 2016, but it largely results from a once-off restructuring in beverages. In contrast, the return to profitability in mining appears to represent a turnaround from the end of the commodity boom. Nonetheless, the first three quarters of 2016 saw falling investment in both the public and private sector. Read more.

Major new projects: This section summarises major new FDI projects, drawing on a new TIPS database, as well as domestic initiatives in the real economy. Read more.

Briefing note - Scenarios for US protection: The election of the first explicitly protectionist American president in decades has injected a deep sense of uncertainty into a global trading system already mired by paralysis in the World Trade Organization (WTO) and fractures in the EU. Read the briefing note online: Scenarios for US protection.

Briefing note - The 2017/8 budget and industrialisation: The 2017/8 budget, announced in March, reflects the commitment to fiscal consolidation, which in turn seems likely to slow overall growth. In this context, it imposes real cuts on the budget of the Department of Trade and Industry (the dti) in the coming three years, especially on incentive programmes. Read the briefing note online: The 2017/8 budget and industrialisation.

Business Day - 28 February 2017 by Neva Makgetla (TIPS Senior Economist)

Read online at Business Day

Or read here as a PDF

This policy brief provides context for technical regulation in the region. It then offers some cross-cutting solutions for developing monitoring mechanisms that can allow policymakers to identify problem areas, and some specific interventions for the Standards, Accreditation and Metrology functions that can build capacity at low cost. It provides some recommendations for a practical agenda on reducing Technical Barriers to Trade in the Southern African Development Community – ones that can be executed with minimal cost, and that improve the institutional capacity of regional organisations to grapple with the complexity inherent to the field. Above all, these regulations will need to be carefully attuned to assure that they provide the maximum protection for the region from dangerous substandard imports, while still allowing for a dynamic, mutually beneficial trading relationship.

Mail & Guardian - 3 February 2017 by Lisa Steyn

Read more

Business Day - 14 February 2017 by Neva Makgetla (TIPS Senior Economist)

Read online at Business Day

Or read here as a PDF

The African Growth and Opportunity Act (AGOA) is a non-reciprocal preferential trade programme that the US offers to 49 sub-Saharan African countries. President Obama's decision to extend AGOA, which was set to expire at the end of September 2015, for another 10 years (2015 to 2025), was highly controversial. The Extension and Enhancement of AGOA Act, signed into law by President Obama on the 29 June 2015, had thus included many new provisions to incorporate the views of the US Congress on the implementation of the 10-year extension and the future trajectory of AGOA.

In this paper, the Extension and Enhancement of AGOA Act is analysed to elucidate the new and additional powers that the new AGOA Act provides the US Congress, the US Administration, and US business lobbies, and the implications of these changes for sub-Saharan African countries. At least three new trends in the 2015 AGOA Act can be identified: payment for preferences, institutional attrition, and a shift to reciprocity. These trends, it is argued in this paper, are potentially contrary to a more mutually beneficial relationship between the US and Africa. The paper offers some reflections on the future of AGOA.

Read online: AGOA Extension and Enhancement Act of 2015, the SA–US AGOA negotiations and the Future of AGOA

Numerous discussions are being held throughout the country on the alignment of the global Sustainable Development Goals (SDGs) with the National Development Plan (NDP), and how this alignment could be reinforced through the domestication of the SDGs and associated indicators.

To foster further multi-stakeholder discussions, the South Africa-European Union (SA-EU) Sustainability Transition Dialogue is supporting the organisation of five multi-stakeholder workshops to be hosted in different locations in the first half of 2017.

The SA-EU Sustainability Transition Dialogue is organised in partnership with the The SA-EU Dialogue Facility, the Departments of Environmental Affairs, Planning, Monitoring and Evaluation, and Science and Technology, and in collaboration with Trade & Industrial Policy Strategies (TIPS), the Mapungubwe Institute for Strategic Reflection (MISTRA), the University of South Africa (UNISA), the Overseas Development Institute (ODI), and the Human Sciences Research Council (HSRC).

The discussions will focus on the implementation of both the NDP and the SDGs and, specifically, on the most appropriate metrics and indicators that could be used to track the progress of South Africa’s transition to sustainability.                                                                                                     

The workshops are as follows:

Workshop 1: 23-24 February 2017 (Mannah Guest Lodge, 39 Pomona Rd. Pomona, OR Tambo Int, Gauteng – closing date for expression of interest is 17 February 2017)

Workshop 2: 16-17 March 2017 (Limpopo – venue to be decided)

Workshop 3: 18-19 April 2017, alongside the SEED Symposium (Diep in die Berg, Pretoria, Gauteng)

Workshop 4: 4-5 May 2017, alongside World Economic Forum (KZN, Ethekwini – venue to be decided)

Workshop 5: 3rd or 4th week June 2017 (Western Cape ­– venue to be decided)

The workshops aim to facilitate an exchange of information between the South African and EU stakeholders.

You are invited to express your interest in participating in the workshops. Expressions of interest should be sent to the logistics team: ron@majorproductions.co.za

For any technical queries, please contact:

Mapula Tshangela: MTshangela@environment.gov.za or

Anna Mampye: AMampye@environment.gov.za.