South Africa, a carbon-intensive economy, has initiated a transition to a more sustainable development pathway. While this is centred on the energy sector, the transition is an economy-wide transformation. In a highly unequal society like South Africa, the need for a just transition which would empower vulnerable stakeholders has emerged as an imperative. Yet tensions remain, which hinder an inclusive process and outcomes. Part of the early process is forming a unified understanding and pathway that is inclusive and just. What do stakeholders mean when they talk about a just transition? How can South Africa achieve a just transition? This dialogue explores stakeholder perspectives from government, the private sector, the labour movement and civil society. It builds on a first dialogue hosted on 7 July (see recording below).

About the Speakers

Tracey Davies is the Executive Director of Just Share, a non-profit shareholder activism organisation. She is admitted as an attorney in South Africa, and is a renowned expert on responsible investment, shareholder activism, and corporate governance and transparency in South Africa.

Ashraf Kariem is Chief Expert Economy in the National Planning Commission (NPC) secretariat, within the Department of Planning, Monitoring and Evaluation (DPME). He was part of the team overseeing the NPC's just transition dialogue process.

Jacklyn Cock is a professor emeritus in the Department of Sociology at the University of the Witwatersrand and an Honorary Research Professor in the Society, Work and Development Research Unit (SWOP). She has written extensively on environment, gender and militarisation issues.

Sherman Indhul is the Executive Manager: Corporate Sustainability at Transnet. His experience over the past 15 years in the public and private sectors has led to a focus on sustainability, and specifically on climate change. He notably sits on the Steering Committee of the National Business Initiative's (NBI) Just Transition Pathways Project.

Muhammed Patel is an Economist at TIPS. He has experience in the coal and petrochemical value chains. He is the lead author of the National Employment Vulnerability Assessment (NEVA) and Sector Jobs Resilience Plan (SJRP) for the coal value chain in South Africa.

About the Facilitator

Gaylor Montmasson-Clair is a Senior Economist at TIPS, where he leads work on Sustainable Growth. He has carried out extensive research on the transition to an inclusive green economy from a developing country perspective, with a focus on policy frameworks, industrial development, just transition and resource security.

Please register: https://zoom.us/webinar/register/WN_wgNwl1ZwTpmlou9Vpl3JEQ

This webinar builds on a first dialogue hosted on 7 July. 

Radio France International (RFI) - 10 September 2020 by Claire Bargelès

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Bizcommunity - 9 September 2020

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ESI Africa - 7 September 2020 by Babalwa Bungane

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Press release 9 November 2023: Just transition labour centre for South African trade unions

Press release 17 April 2023: Industry stakeholders gather in South Africa to map decabonisation challenges and opportunities in the iron and steel value chain

Press release 28 November 2022: Green Economy Bulletin 2002: South Africa has some way to go to meet its sustainability commitments

Press release 15 August 2022: Designing climate-compatible industrial strategies for South Africa: The textiles value chain

Press release 26 July 2022: Towards a Just Transition: the role of Industrial policy

Press release: 21 June 2022: TIPS marks 25 years of supporting policy development through research and dialogue

Press release: 8 June 2022: Some tough conversations needed to address the transition in the liquid fuel value chain

Press release: 24 April 2022: Documentary Launch: Voices from under a dark cloud – towards a just transition in the coalfields of South Africa 

Press release: 7 April 2022: We need to throw our green hat in the ring - call to South African exporters

Press release 28 March 2020: Unpacking the Just Transition in practice

Press release 16 March 2022: Industrial policy in practice: Central to driving structural transformation in Africa 

Press release 11 March 2022: Trade and industrial policy experts give their voice to the launch of the APORDE Alumni Network

Press release 18 February 2022: Is South Africa on track in terms of its Green Economy Recovery objectives

Press release 1 December 2021: Effective structures required for engagement and public participation to achieve a Just Transition

Press release 27 November 2021: Financing the Just Transition puts a spotlight on financial institutions

Press release 11 November 2021: The European Union’s Green Deal (EGD): A call to action for South African exporters

Press release 4 August 2021: Dealing with the crisis before the crisis requires economic reconstruction

For more information on the TIPS Forum 2021 go to http://forum.tips.org.za/forum-2021

Press release 31 July 2021: Rethinking industrialisation in response to COVID-19

For more information on the TIPS Forum 2021 go to http://forum.tips.org.za/forum-2021

Press release 23 July 2021: The transition away from coal is inevitable – a delay could cause more damage

A copy of the research report The coal value chain in South Africa is available here

Press release 24 June 2021: Real SME support critical to an economic recovery plan

More about the TIPS webinar: Post DOVID-19 recovery and small business available here

Press reslease 13 June 2021: Freeing up electricity could boost economic growth

A copy of The Real Economy Bulletin Q1 2021 is available here

Press release 7 June 2021: Tangible plans for economic diversification critical to a just transition in Mpumalanga

More about the TIPS webinar: People's Voices: Key priorities and challenges for a Just Transition in Emalahleni and Steve Tshwete available here

Press release 24 May 2021: South Africa’s manufacturing sector gets a boost of foreign direct investment

A copy of the TIPS FDI Tracker Q3 and Q4 is available here

Press release 19 May 2021: COVID-19 leaves SADC poor worse off

More about the TIPS Webinar: The economic impact of COVID-10 on SADC available here

Press release 3 March 2021: Lithium-ion batteries offer an electrifying opportunity for South Africa

Copies of the research report and policy brief on Opportunities to develop the lithium-ion battery value chain in South Africa available here

Press release 24 February 2021: We need a different approach - TIPS response to the 2021 budget

Press release 23 February 2021: Green hydrogen - potential new export for South Africa

A copy of the research report Green hydrogen: A potential export commodity in a new global marketplace is available here

Press release 17 February 2021: Building blocks for a just transition in place

More about the TIPS Webinar: Unravelling South Africa's Just Transition: Unpacking cross-cutting interventions is available here

Press release 15 February 2021: Promoting green entrepreneurship - what are the stumbling blocks?

For more information about the Green Entrepreneur Research Survey go to online survey

Press release 8 February 2021: SA exports on the up

A copy of the TIPS Export Tracker Q3 2020 is available here

Press release 10 December 2020: Second wave and cuts to COVID-19 relief are main threats to economic recovery

A copy of The Real Economy Bulletin Q3 2020 is available here

Press release 3 December: Financing a just transition requires a rethink of financing mechanisms

More about the TIPS Webinar: Unravelling South Africa's Just Transition: Unpacking financial options is available here

Press release 17 November 2020: A long road to transition to a green economy

More about the TIPS Webinar: Unravelling South Africa's Just Transition: Unpacking the energy-level impacts is available here 

Press release 3 November 2020:  Exploring measures to reduce the impact of climate change on the SA economy

More about the TIPS Webinar: Unravelling South Africa's Just Transition: Unpacking the ground-level impacts in the coal value chain is available here

Press release 27 October 2020: Government moves to strengthen its industrial capacity by boosting the ferrochrome industry 

A copy of the policy brief A chrome export tax: An important intervention to support industrial development in South Africa is available here.

Press release 6 October 2020: Growth in SA exports to China. 

A copy of the TIPS Export Tracker Q2 2020 is available here.

Press release 10 September 2020: Data shows significant recovery from April downturn in GDP. 

A copy of The Real Economy Bulletin Q2 2020 is available here.

Main Bulletin: The Real Economy Bulletin - Second Quarter 2020

In this edition

The GDP: As expected, the GDP dropped sharply, by 16% in seasonally adjusted terms, in the quarter ending in June 2020 as a result of the COVID-19 pandemic. Economic activity crashed in April, during the strict Level 5 of the lockdown. The gradual relaxation in restrictions since then have seen a bounce back to near pre-pandemic levels. Still, COVID-19 continues to pose a threat, limiting recovery especially in tourism and recreational services even in the absence of regulations. Moreover, long-standing structural challenges and declines in major trading partners will slow recovery. Read more.

Employment: Because it is difficult to undertake household surveys during a pandemic, the Quarterly Labour Force Survey has been delayed until late October. As a result, there are no official figures for second quarter employment. Read more.

International trade: The pandemic brought a sharp slowdown in global trade as a result of blockages to transport as well as falling international demand. For South Africa, the second quarter of 2020 saw a strong decline in goods exports, combined with an even stronger slump in goods imports. Only agricultural exports performed well, increasing by 14.2% in dollars and, thanks to depreciation, by 38% in constant rand terms. Read more.

Investment: Investment tumbled in the second quarter. Monthly data are not available, however, so it is not clear if there was any recovery over the quarter. Private investment fell by a fifth, investment by state-owned companies by a third, and general government investment remained almost unchanged. As a result, in the second quarter of 2020 investment fell to 16% of the GDP from 17% in the first quarter. That is the lowest investment rate since 2010. Read more.

Foreign direct investment projects: The TIPS FDI Tracker tracks foreign direct investment projects on a quarterly basis, using published information. Eight projects were recorded this quarter, and two projects were updated in status. The total quantum of new investments recorded was approximately R2.6 billion, from six projects. Read more.

Briefing note: Stimulating consumer spending post COVID-19 lockdowns: Consumption spending by households is an important driving force of an economy. In 2019, household consumption spending accounted for 61% of the R5.1 trillion expenditure on gross domestic product. Spending on essential goods and services such as food, transport, health and education accounted for 62.3% (or R1.9 trillion) of final household consumption. Spending on non-essentials like recreation and culture as well as restaurants and hotels accounted for 7.2% (or R219.6 billion) of final household consumption. However, in 2020, the COVID-19 lockdown has and will continue to negatively impact consumer spending in the absence of alternative incomes or financial resources for those consumers. Read the briefing note online: Stimulating consumer spending post COVID-19 lockdowns.

Briefing note: Unblocking the potential of South African green hydrogen in trade: Globally, countries are mobilising sizeable resources towards dealing with the climate crisis, and with the COVID-19 pandemic many countries and regions have attached sustainability criterion to their recovery packages. EU Member States, for example, have attached strict mitigation regulations to COVID-19 rescue packages and state recovery support in sectors with limited options for decarbonisation, such as aviation. Further, as part of the transition to sustainable production, trade barriers against high-carbon exporters through policy tools such as border carbon adjustments are expected from large trading blocs such as the EU from as early as 2023. The climate policy responses by countries to changing trade policies differ, however, what is certain is that the nature of trade, production and investment will change in this transformation. Read the briefing note online: Unblocking the potential of South African green hydrogen in trade.

A global transition to sustainable development is under way and strengthening as a response to multiple socio-environmental crises, including the global impacts of climate change. From a trade and industrial perspective, this transition has implications on the composition and dynamics of entire value chains. This concerns what inputs are accessed, the processes that underlie production, what goods and services are produced, as well as what happens to these products post-consumption. The transition materialises through two complementary streams: the development of new, green industries and the greening of existing, traditional industries. This report aims to shed light on the trade-related risks faced by South Africa as a result of the global transition to a low-carbon economy by delving further these underlying factors and unpacking South Africa’s trade patterns from a carbon perspective

A quarter of a century after apartheid ended, South Africa remained one of the most unequal countries in the world, by class, race and gender. Inequality emerged in unusually stark differences in household incomes; asset ownership, including both concentrated business ownership and household resources; access to quality education, which still largely reflected family wealth and race; and municipal infrastructure. In general, the historic labour-sending regions continued to lag far behind the rest of the country.

The core question becomes why inequality persisted in these different areas long after overtly racial laws were eliminated. This paper first reviews the extent of inequality along each dimension. It then analyses how and why these persisted, including the effects of government policies. On this basis, it proposes strategic responses that, if carried out rigorously and on a large enough scale, could go further towards overcoming the deep inequalities that have effectively blocked both social development and economic growth in South Africa. 

This TIPS tracker highlights important trends in the COVID-19 pandemic in South Africa, and how they affect the economy. It analyses publically available data, research and media reports to identify current developments and reflect on the prognosis for the contagion, the economy, and policy responses.

Over the next few months, the Tracker will explore the challenges facing different industries, starting in this issue with steel and tourism.

KEY FINDINGS FOR THE WEEK

On the pandemic

• The number of new diagnoses of COVID-19, which started to decline rapidly in mid-July, levelled out at an average of just over 2 000 a day in the week to 6 September. In contrast to the move to Levels 4
  and 3, however, three weeks after Level 2 started on 18 August reported infections had not risen sharply.
• A review of international data shows that countries with higher reported death rates from COVID-19 can also expect a sharper economic decline. Countries with lower death rates, in contrast, generally also had better economic results. The lowest reported death rates emerged in two kinds of countries: in states that controlled the spread of the pandemic through strong public health measures; and in low-income economies characterised by limited international air links, largely rural populations, and low testing rates

On the economy

• The move to Level 2 brought an initial increase in economic activity. Overall, the available indicators suggest that economic activity has returned to around 10% below pre-pandemic levels. The Western Cape, however, continues to lag behind.
• The recovery has run up against loadshedding by Eskom. Yet government expects to finalise its emergency acquisition of 2 000 MW of new power from private suppliers only in mid-2022.
• Case studies of steel and tourism underscore that economic recovery will require more than broad government measures to control the pandemic, stimulate demand and fix the electricity supply. In many industries, new business models are required to survive, and that imposes touch choices around write-offs of assets and employment. The particularly stark challenges facing tourism help explain the relatively slow recovery of the Western Cape economy.

Download the Tracker or read online

Business Day - 31 August 2020 by Neva Makgetla (TIPS Senior Economist)

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