Business Day - 11 September 2018 by Neva Makgetla (TIPS Senior Economist)

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Main Bulletin: The Real Economy Bulletin - Second Quarter 2018  

In this edition

GDP growth: South Africa’s GDP shrank by an estimated 0.17% in the second quarter of 2018. Excluding agriculture, however, the economy essentially stagnated over the quarter. Mining expanded by 1.2%, while manufacturing and the rest of the economy excluding agriculture remained essentially unchanged. The second quarter of reported decline in the GDP means that the economy officially entered a recession. More important, however, is that growth has been slow and uneven since 2014. Read more.

Employment: Despite the slowdown in the GDP, employment in both the real economy and the economy as a whole reportedly increased by around 1% from the second quarter of 2017 to the second quarter 2018. Manufacturing, however, lost some 55 000 jobs, or 3% of its total employment, over this period. Manufacturing typically sheds jobs in the second quarter, in a marked seasonal pattern, but at 110 000 the fall in the second quarter of 2018 was far larger than the norm. Read more.

International trade: The trade balance shows an improvement from the deficit seen in the first quarter of 2018. In the second quarter, the trade balance rose to a surplus of R17 billion. However, this is R9 billion (or 35%) less than the trade surplus in the second quarter of 2017. Read more.  

Investment and profitability: Overall, investment declined, entirely due to a fall in investment by government and state-owned corporations. In contrast, in the year to the second quarter of 2018, private investment increased by 0.9%. Read more.

Foreign direct investment projects: Three new projects were reported in the TIPS Foreign Direct Investment (FDI) Tracker in the second quarter of 2018, with a total value of R11 billion. Read more.  

Briefing note: Responding to the slowdown: The figures for general government consumption and for public investment point to the pro-cyclical impact of the current fiscal policy, combined with consolidation at the state-owned corporations over the past year. The challenge is to return to a counter-cyclical stance given the limited fiscal space left by the relatively high deficit. Ideally, a stimulus package should be funded through off-budget sources. Read the briefing note online: Responding to the slowdown.

Briefing note: The President's investment drive: As part of the renewed push towards industrialisation, job creation and faster levels of economic growth, President Cyril Ramaphosa set an ambitious target of attracting US$100 billion in new investment within five years. Read the briefing note online: The President's investment drive.

Briefing note: Farming 4.0 - Implications for South Africa? Agribots, aquaponics, smart collared cows, fenceless farming and e-shepherds, and aero/vertical farming are some of the emerging technologies that fuse the digital, physical, automated and scientific systems in the new agricultural revolution, sometimes called “Farming 4.0”. The challenge is to achieve sustainable food security systems that incorporate scale production with affordable and cost-effective farming methods and environmental protection. Read the briefing note online: Farming 4.0 - Implications for South Africa.

Briefing note: Water and sanitation markets - An opportunity for industrial development? The evolution of the water and sanitation market in South Africa and globally opens opportunities for industrialisation. For this reason, the sector has been identified by the Industrial Policy Action Plan as a potential driver, notably through the establishment and growth of locally-designed and manufactured products and services. Read the breifing note online: Water and sanitation markets: An opportunity for industrial development?

UNLOCKING GREEN JOBS IN SOUTH AFRICA

The Unlocking Green Jobs: A Catalytic Intervention was a two-year initiative and collaboration between the World Wide Fund for Nature, South Africa (WWF-SA) and Trade & Industrial Policy Strategies (TIPS). Published reports include a synthesis report, Unlocking green jobs in South Africa: A catalytic intervention, which summarises the findings and three three case studies.

The reports were produced with the financial assistance of the WWF Nedbank Green Trust and Agence Française de Développement (AFD).

Main report

Unlocking green jobs in South Africa: A catalytic intervention - synthesis report

Case studies

Essential Amathole: A case study of unlocking green jobs in the bioprospecting sector

Protecting and unlocking jobs through water stewardship: A case study Linked to the Umbogintwini Industrial Complex, Ethekwini

Unlocking and retaining jobs in the alien vegetation added value chain through industrial symbiosis: Case study on wood pellets

Topic: Observations from the Coalface: Five challenges and a Lacuna

Speaker: Adeyemi Dipeolu

About the Speaker

Ambassador Adeyemi Dipeolu is Special Adviser to the President on Economic Matters in the Office of the Vice President of Nigeria. His work and interests have evolved around economic development, trade, industrial policy and economic integration. As Director of the Capacity Development Division of the Economic Commission for Africa (ECA), he led ECA’s innovative work on Transformative Industrial Policy and also on Conflict and Development in Africa. He was also Member of the Technical Committee and Head of Secretariat of the High Level Panel on Illicit Financial Flows from Africa. Dr. Dipeolu also served in earlier roles at ECA including as Chief of Staff and also as Coordinator of the African Trade Policy Centre. Prior to this, he was a Nigerian diplomat and served in Geneva, Pretoria, Addis Ababa and Caracas. Dr. Dipeolu studied at the Universities of Ife, Oxford, Cambridge and South Africa.

About Alice Amsden

Alice Amsden was a leading thinker on industrial policy and an expert in economic development. She served as the Barton L. Weller Professor of Political Economy in MIT's Department of Urban Studies and Planning. Amsden wrote extensively about the process of industrialisation in emerging economies, particularly in Asia. Her work has shaped thinking in how developing countries approach industrialisation and she was influential in understanding the importance of the state as a creator of economic growth. Her work challenged the idea that globalisation had produced generally uniform conditions in which emerging economies could find a one-size-fits-all path to prosperity.

Please RSVP to Rozale@tips.org.za

Finger food will be served

TIPS and the Green Economy Coalition (GEC) hosted a Development Dialogue on the Circular Economy and Industrial Development on  September 7. For copies of the presentations go to Development Dialogue. 

RSVP by email: natasha@tips.org.za

Business Day - 14 August 2018 by Neva Makgetla (TIPS Senior Economist)

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TIPS has one internship available for a recently or about to graduate Master's student. The aim of the internship is to give young researchers the opportunity to acquire work experience, improve their research skills and enhance their understanding of the South African economy. The internship is for 12 months. Applications close on November 18. For more information go to internships. 

These three reports are part of a tri-partite initiative of the Department of Trade and Industry (the dti), the Water Research Commission and TIPS on the development and growth of the water and sanitation industry in South Africa.

Forward-looking approach to next generation sanitation and industrial development in South Africa

Conventional sanitation technologies have not really solved the challenges in the sanitation sector. As a result non-sewered, off-grid sanitation systems, commonly referred to as NGS, which differ greatly from conventional technologies, have been proposed as potentially better. NGS can be defined as an integrated system in which the frontend collects and conveys the specific input to the backend which fully treats the waste within the non-sewered sanitation system, to allow for safe reuse or disposal of the generated solid, liquid and gaseous output. South Africa is considering positioning itself as a leading manufacturer of NGS technologies. The country’s Industrial Policy Action Plan seeks to establish an NGS Cluster Development Programme. In line with this goal, this paper assesses the opportunities and constraints for NGS in the context of industrial development in South Africa.

Link to Policy Brief 

Forward-looking approach to next generation sanitation and industrial development in South Africa - A briefing

Links to other reports

Global water and sanitation market dynamics: Implications for South Africa’s industrial development

Desalination in South Africa: panacea or peril for industrial development?

These three reports are part of a tri-partite initiative of the Department of Trade and Industry (the dti), the Water Research Commission and TIPS on the development and growth of the water and sanitation industry in South Africa.

Desalination in South Africa: panacea or peril for industrial development?

This paper examines two fundamental issues related to desalination. First, it examines whether desalination is appropriate for the South African context. This involves looking at how the technology is implemented, what the principal cost drivers are and the key trends in the technology. Then, it investigates the potential business model considerations that have to be borne in mind when thinking about adopting the technology for the country. Second, it investigates whether South Africa could play an active role in providing desalination solutions to global markets. This is congruent with supporting the local industry and identifying a role for industrial policy to play a part in advancing the industry. To see what policy measures are appropriate, both the local and foreign markets for desalination are analysed.

Links to other reports

Global water and sanitation market dynamics: Implications for South Africa’s industrial development

Forward-looking approach to next generation sanitation and industrial development in South Africa