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Policy Briefs
- Janet Wilhelm
SA’s commodity dependency contributes to inequalities
Business Day - 27 June 2023 by Neva Makgetla (TIPS Senior Economist)
How Eskom has left ‘smart cities’ in the dark
The employment shift since the pandemic — and what to do about it
Business Day - 13 June 2023 by Neva Makgetla (TIPS Senior Economist)
The implications of Carbon Border Adjustment Mechanism (CBAM) - Global South Perspectives
PRESENTATION
CBAM in Africa: A challenge and an opportunity - Seutame Maimele, TIPS Economist: Sustainable Growth
RESEARCH
TIPS Policy Brief: The European Union’s Carbon Border Adjustment Mechanism and implications for South African exports - by Lerato Monaisa and Seutame Maimele
MEDIA
Media article: SA's low carbon taxes will send money to EU coffers - Denene Erasmus, Business Day 27 July 2023
Background
The Development Dialogue provides a chance to explore the latest evidence in Carbon Border Adjustment Mechanism (CBAM) from the global south. CBAM is a carbon border tax on embedded GHGs of carbon-intensive products imported into the European Union (EU). In 2019, the (EU) introduced the Fit for 55 policy package. The policy package aims to reduce the EU’s net greenhouse gas emissions by 55% by 2030 compared to 1990 levels and achieve carbon neutrality by 2050. Included in the policy package is the CBAM.
As of the 16th of May 2023, the regulation on CBAM was finally published in the official journal of the European Union, after it was finally adopted as law on the 10th of May 2023. The adoption of CBAM and CBAM like measures will have an impact on the global south countries. These measures will not only disrupt global trade flows, but they will also divert climate change responsibilities to the global south, and impact welfare of these economies.
This dialogue will focus on issues that arise from the introduction of these green trade (climate change) policies, specifically looking into CBAM, and how global south countries (including BRICS) can respond to these issues.
About the Speakers
Moderator
Gaylor Montmasson-Clair is a Senior Economist at Trade & Industrial Policy Strategies (TIPS). He leads TIPS's work on sustainability and just transition. He is the Facilitator for the South African Renewable Energy Masterplan (SAREM), the industrialisation plan for South Africa’s renewable energy value chain.
Presenters
Seutame Maimele is a Sustainable Growth Economist and a Research lead on Climate Change and Trade at Trade and Industrial Policy Strategies (TIPS).
Max Gruenig is a Senior Policy Advisor at the E3G Washington Office, focusing on US-EU climate diplomacy in a global context.
Panellists
Prof. David Luke is a professor in practice and strategic director at the Firoz Lalji Institute for Africa. Specialising in African trade policy and trade negotiations.
Kekeletso Mashigo is an admitted attorney of the High Court of South Africa. She is currently Counsellor Economic and Legal at the Permanent Mission of South Africa to the WTO in Geneva, Switzerland, representing South Africa in various WTO Committees. Prior to that she was Head of Legal in the South African Department of Trade, Industry and Competition’s (the dtic) Trade Policy Division, responsible for legal opinions and disputes on international trade and investment issues. She has occupied various roles and was also previously Director: Multilateral Organisations at the dtic; seconded by the dtic as an Investment Expert to the Organisation of Economic Cooperation and Development’s (OECD) Investment Division; responsible for SA-EU Trade relations; and has also worked at South Africa’s National Treasury in the Legal Tax Design Unit focused on international and business tax policy.
For enquiries please contact Natasha@tips.org.za
TIPS Dialogues bring together academics, policymakers, civil society organisations, workers, and practitioners to
discuss important issues and share ideas on industrial policy.
TIPS is partnering with the Department of Trade Industry and Competition (the dtic).
Various South African sectors keeping close eye on future of Agoa agreement
Mercury - 21 June 2023 by Kuben Chetty (KwaZulu-Natal Politics and Opinions Editor)
Read online at IOL
South Africa could be 'graduated' out of Agoa
Business Times (Sunday Times) - 18 June by Khulekani Magubane (Financial reporter)
Development Dialogue: Video and presentations
If you missed the TIPS Development Dialogue: Small business in the economy, held June 1, you can find the presentations and watch the video here.
Import Tracker - Q4 2022
South Africa’s trade surplus declined to R7.4 billion in the year to the fourth quarter of 2022, from R100.6 billion in the fourth quarter of 2021. For the first time since the start of the COVID-19 pandemic exports declined, falling by 3% to R495 billion year-on-year. Over the same period, imports continued to rise, growing by 19% to R487 billion. In addition, exports have continued to grow at a slower pace compared to imports. Exports for the fourth quarter of 2022 were 6% higher compared to the fourth quarter of 2020. In contrast, imports were 39% higher.
AfCFTA holds promise for SA exports, but implementation roadblocks remain
The Real Economy Bulletin - First Quarter 2023
Main Bulletin: The Real Economy Bulletin - First Quarter 2023
In this edition
GDP growth: The economy grew by 0.4% in the first quarter of 2023, reversing the decline in the previous quarter. Still, the growth is slow, so the economy grew only 0.2% in the year to March 2023. Lower export prices and pro-cyclical fiscal and monetary stances were compounded by loadshedding. National electricity generation is now around 25% below 2007 levels. That said, Eskom increased generation by 7% in March and April, and auto sales were up by 29% for the quarter. Read more.
Employment: Total employment remains lower than in the first quarter of 2020, before the pandemic, mostly because of extraordinary shrinkage in domestic work as well as a very slow recovery in formal employment, primarily for skilled production workers. That said, in the year to the first quarter of 2023, formal employment grew faster than informal employment for the first time since the pandemic lockdown in 2020. The loss of domestic work means that women have suffered disproportionately from the loss of jobs during the pandemic. In the year to the first quarter of 2023, within manufacturing, metals, transport equipment and clothing saw significant employment gains, but food processing faced job losses. Read more.
International trade: In the first quarter of 2023, South Africa saw its first trade deficit since the pandemic, as falling commodity prices, especially for coal, and economic growth gradually ate away at historically high recent surpluses. The shift to a deficit mostly reflected falling export revenues as global mining prices dropped while imports rose, in large part to develop new electricity capacity. Read more.
Investment and profitability: Investment increased by 1.4% in the first quarter of 2023, driven primarily by an extraordinary 7% jump in government investment for the quarter. The private sector was far more cautious, with investment climbing just 0.2% for the quarter, compared to 1.8% in the fourth quarter of 2022. The investment rate stabilised at 14.8% of the GDP, down from a high of 22% in 2008 and unchanged from the previous quarter. Read more.
Foreign direct investment projects: The TIPS Foreign Direct Investment Tracker monitors FDI projects quarterly, using published investment information. Seventeen projects. Eleven projects were captured at different stages of development in the first quarter of 2023, with most as greenfield investments. The published investment value for the quarter amounted to about R47.8 billion from three projects across manufacturing, utilities, services, transport, mining and agriculture. There were further changes to the status of 18 projects previously captured in the Tracker. Read more.
Briefing Note: Why inflation targeting does not work in a highly unequal country - by Saul Levin. The inflation targeting approach by the South African Reserve Bank and its recent increase of 0.5% has seen interest rates more than double when compared to the first quarter of 2022. The interest rate is now 8.25% and it was at 4% in March 2022. In a highly unequal country these increases disproportionately affect two groups: homeowners who are in the top 10% of income earners who owe over R1 trillion in home loans, and the working poor who often get by on payroll based loans. Read the Briefing Note online: Why inflation targeting does not work in a highly unequal country.
Briefing Note: Carbon Border Adjustment Mechanism (CBAM) - A challenge and an opportunity for developing countries - by Seutame Maimele. The European Union’s Carbon Border Adjustment Mechanism, a border tax on embedded green-house gas emissions, was finalised in May 2023 and will begin implementation in October. The CBAM aims to equalise the price of carbon between EU products and imports by ensuring importers face similar carbon costs as EU manufacturers. Read the Briefing Note online: CBAM - A challenge and an opportunity for developing countries.