https://www.youtube.com/embed/IwnhsBi0usY

Background

South Africa has initiated the transition to a more sustainable development pathway that involves moving towards a low-carbon economy. At the same time, South Africa still faces a number of developmental challenges related to poverty, unemployment and inequality, and the climate crisis further threatens vulnerable communities and people. The need for a just transition to a low-carbon economy has emerged as an imperative to ensure the poor and vulnerable are not negatively impacted by the transition and are ideally better off through it.

In Mpumalanga, these challenges are exacerbated by the high reliance on coal-based economic activities, service delivery challenges, and environmental impacts from land, air and water pollution. These challenges have resulted in poor health, death and destruction to people, the communities and the environment. Encouragingly, in the transition process, many solutions are beginning to emerge that can help regions like Mpumalanga pivot towards more sustainable industries.

TIPS, the National Labour and Economic Development Institute (NALEDI), groundWork and Peta Wolpe are engaged as a consortium in a project which aims to facilitate and co-develop a coherent just transition plan for affected communities in Emalahleni and Steve Tshwete in Mpumalanga. In 2021, the consortium produced a documentary to highlight and capture some of the issues, opportunities and challenges that the affected communities in Mpumalanga face as coal is phased out and we enter a new era. The documentary, entitled Voices from under a dark cloud – towards a just transition in the coalfields of South Africa, builds on a series of webinars and local engagements held over the last 18 months to provide a platform for affected communities to have their voices heard.

About the speakers

Joëlle Chesselet has directed, co-directed and produced award-winning documentaries over the past three decades, notably Pluck – a film not just about the chicken, Ochre and Water - Himba chronicles from the Land of Kaoko and This crazy thing called grace: Desmond Tutu and the Truth and Reconciliation Commission. In collaboration with Lloyd Ross, she directed music videos for the SHIFTY record label as well as working on music documentaries, including the award winning The Silver Fez.

André de Ruyter is  the Eskom Holdings Group Chief Executive (GCE). Being a seasoned executive, with a career spanning over 30 years, André has amassed a wealth of experience both locally and internationally in various portfolios in the energy space as well as in other disciplines, including but not limited to: strategic leadership, sales, manufacturing, production, finance, legal and regulation, people management and socio-economic development. He was a member of the Sasol group executive committee from 2009 to 2014, and spent some time in China as President of China Ventures, also leading business turnaround and transformation in Germany. Shortly thereafter, he was appointed as Chief Executive Officer of Nampak in 2014, a position he left when he accepted the Group Chief Executive role at Eskom. André holds a Master of Business Administration (MBA) from the Nyenrode Business University in the Netherlands, a Bachelor of Law (LLB) from the University of South Africa (UNISA) as well as a Bachelor of Civil Law and a Bachelor of Arts from the University of Pretoria.

Duduzile (Dudu) Sibiya is the Provincial Climate Change Coordinator at Mpumalanga Department of Agriculture, Rural Development, Land and Environmental Affairs. She is responsible for coordinating and spearheading climate change and just transition Initiatives and interventions. She promotes their mainstreaming and alignment across all plans. She facilitates capacity building to local municipalities to assist them in their climate change and just transition roles.

Matthews Hlabane is the Co-ordinator of the Southern Africa Green Revolutionary Council (SAGRC) in eMalahlen; he worked for MACUA Mining Affected Communities United in Action; and is the national organiser of the right to say no and Cry of Xcluded, SAMMAC, which is a loose network of mining affected communities. He focuses on environmental justice struggles and this has led him to establish links with a range of communities affected by mining.

Nonkululeko Makua is the Manager for Parks, Cemeteries and Public Open Spaces, in the Environmental and Waste Management Directorate of the municipalities. She is the former Climate Change Champion of the eMalahleni Municipality.

Tlangelani Rita Ndlhovu is a researcher at the National Union of Mineworkers (NUM) and focuses on climate change and just transition debates. Prior to joining the NUM, she worked for the Mineworkers Investment Trust (MIT) focusing on financial literacy. Prior to that she was involved in capacity building of young researchers in her role at the Department of Science and Technology. She is involved in a number of structures linked to Congress of South African Trade Unions (COSATU), tripartite and educational institutions. She has a Master of Business Administration (MBA), a Bachelor of Commerce Honours degree in Industrial and Organisational Psychology and a Bachelor of Arts Honours degree in Gender studies.

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.

For any queiries or further information please contact Rozale Sewduth - Rozale@tips.org.za

The bulletin is a review of quarterly trends, developments and data in the real economy, covering the GDP, employment, international trade, investment, and foreign direct investment.The briefing notes in this edition look at the EU's Carbon Border Adjustment Mechanism and its impact on South African exports; and Understanding localisation. Read here: The Real Economy Bulletin - First Quarter 2022.

Main Bulletin: The Real Economy Bulletin - First Quarter 2022

In this edition

GDP growth: The GDP expanded almost 2% in the first quarter of 2022, bringing the GDP back to pre-pandemic levels. GDP growth has become far more volatile since the pandemic, however. Moreover, significant differences persist between sectors, with agriculture showing the strongest recovery and construction by far the weakest. Read more.

Employment: The available employment data suggest that the jobs recovery has lagged well behind the GDP, especially for lower-level formal employees and domestic workers. The number of employers and self-employed people has also dropped sharply. The employment data became significantly less reliable during the pandemic, however, because public-health concerns affected labour force surveys. Read more.

International trade: In the first quarter of 2022, the balance of trade remained positive but declined by almost half compared to the previous quarter. The fall mostly resulted from the spike in petroleum prices internationally, despite strength in the prices of South Africa’s main mining exports over most of the quarter. Read more.

Investment: Investment remained 6% below pre-pandemic levels, despite some recovery from the middle of 2021. It rose 4.1% in the first quarter of 2022, with a 4.9% increase in government investment and 4.1% in private investment, which is far larger. State-owned corporations cut their investment by 1.1%, however. In mining, profits fell with global prices but were still much higher than in the late 2010s. Manufacturing returns remained strong. Read more.  

Foreign direct investment projects: The TIPS Foreign Direct Investment Tracker monitors FDI projects on a quarterly basis, using published investment information. The total investment value from projects captured this quarter was R96.1 billion. Some of the projects captured in this quarter were announced at the 2022 South African Investment Conference. Read more.

Briefing Note: The European Union's Carbon Border Adjustment Mechanism (CBAM) and its impact on South African exports: The CBAM is a headline policy initiative of the European Green Deal. It levies a tax on greenhouse gases embedded in products imported into the EU to stop industries from shifting production to jurisdictions with weaker carbon pricing and regulation. It will function in parallel with and mirror the EU’s Emission Trading Scheme. The CBAM will gradually replace the current mechanisms used to address carbon leakage, specifically free allocationsmarket. Read the Briefing Note online: The European Union's Carbon Boarder Adjustment Mechanism (CBAM) and its impact on South African exports.

Briefing Note: Understanding localisation: Localisation has become a buzzword in industrial policy in South Africa, appearing in departmental strategies, Parliamentary debates, and National Economic Development and Labour Council (NEDLAC) agreements. For most people, however, it remains poorly defined, although the Department of Trade, Industry and Competition has published some useful guidelines. Read the Briefing Note online: Understanding localisation. 

Engineering News - 8 June 2022 by Schalk Burger 

Read online at Engineering News

Engineering News - 2 June 2022 by Tasneem Bulbulia 

Read online at Engineering News

For more about the Webinar see: Upacking the Green Economy Ecosystem: Business Development Support Services for Local Green Entrepreneurs

Presentations

Contextual financial analysis for driving sustainable finance reforms for micro and small enterprises in South Africa (Elize Hattingh, Researcher TIPS; Kiara Muthusamy, Intern TIPS; Ntombiyesibini Phumelal, Intern TIPS)

Climate finance landscape: Overview of funding activities in South Africa (Jack Radmore, Energy Programme manager and Climate Finance Lead, GreenCape)

Lessons learned from the Green Outcomes Fund (Mandy Jayakody, Project manager, Green Outcomes Fund, Bertha Centre)

Overview of sefa 2022 (Letlatsa Lehana, Head Khula Credit Guarantee and representative for the Small Enterprise Finance Agency

Media

Finance gaps for local green entrepreneurs need to be addressed (Darren Parker, Engineering News - 20 July 2022)

Background

The COVID-19 pandemic and associated policy responses have disrupted economies and societies worldwide, increasing poverty, inequality and unemployment. Governments have responded through (often large) policy packages aimed at cushioning negative impacts on households and businesses, and reigniting the economy. Furthermore, strong calls for a 'better, fairer and greener' recovery have led many governments to commit additional resources towards the transition to a green economy. Green recovery efforts and a just transition to an inclusive green and inclusive economy offer an opportunity to develop and implement a shared vision of resilience and sustainability. Yet questions remain about the inclusivity and green credentials of recovery packages. South Africa is no exception and such debates are vivid in the country.

Small, medium and micro enterprises (SMMEs) are not only viewed as being critical for economic development and job creation but have the potential to be vital economic players to drive inclusive and sustainable development in low- and middle-income countries. Local Green Entrepreneurs (LGEs) are viewed as key adopters of radical environmental innovations (often neglected by established firms) in the production and manufacturing of environmental goods, services and technologies. Given their role as testing grounds for green innovations, which many established firms view as high-risk, LGEs have the agility to accelerate access to new markets and play a catalytic role in the diffusion and uptake of green innovations. Such enterprises can play a substantial role in developing inclusive pathways to sustainability and are at the forefront of climate responses and innovations (both adaptation and mitigation) and environmental sustainability.

Within this context, this webinar aims to unpack issues on access to inclusive finance for LGEs in South Africa. The workshop aims to influence national policymakers and sustainable finance stakeholders, including donors, and discuss crucial issues related to access to finance. Signature policy issues include the following: sectoral challenges; a lack of risk appetite from funders for early-stage finance; limited access to financial services; financial ecosystem challenges; narrow fit for purpose "green industry" financial products; and a draft SMME and Cooperative Finance Policy that is silent on how it plans to support SMEs in green industries.

Agenda

11:00 - 11:10 Welcome and introduction

Muhammed Patel, Senior Economist, Trade & Industrial Policy Strategies (TIPS)

11:10-12:20 Key inputs

Unpacking signature issues on inclusive finance for local green entrepreneurs in South Africa - Elize Hattingh, Researcher, Trade & Industrial Policy Strategies (TIPS)

Climate finance landscape: Overview of funding activities in South Africa - Jack Radmore, Energy Programme manager and Climate Finance Lead, GreenCape

Lessons learned from the Green Outcomes Fund - Mandy Jayakody, Project manager, Green Outcomes Fund, Bertha Centre

Overview of the Innovation Fund - ​Letlatsa Lehana, Head: Khula Credit Guarantee (SOC) Ltd and representative for the Small Enterprise Finance Agency (SOC) Ltd.

12:20 - 12:50 Discussion and Q&A

12:50 - 13:00 Wrap up

About the Speakers

Mandy Jayakody is contracted to the Green Outcomes Fund, a pioneering outcomes-based funding facility, promoting the uptake of SMME development in the Green Economy. Mandy has worked on projects in South Africa, Rwanda, Mozambique, Swaziland, Abu Dhabi, Saudi Arabia and the UK. She was recently appointed to serve on the council of the NHBRC. In 2018 at the African Construction Awards she was awarded "Young Entrepreneur Rising Star". Mandy was also a finalist in the 2018 Standard Bank Top Women Awards (Infrastructure category). She is a doctoral candidate researching Impact Investment in Affordable Housing.

Jack-Vincent Radmore is the Energy Programme Manager and Climate Finance Lead at GreenCape. Jack has a background in business sciences, finance and sustainable development. He specialises in innovation management, informal settlement upgrading and innovative finance. In his current role, Jack is responsible for the strategic direction of GreenCape's energy and climate finance activities in South Africa. Jack joined the Green Economic Development Agency, GreenCape, in 2014, and through his leadership, hard work and dedication to the field, he now manages GreenCape's renewable energy and climate finance work. As Programme Manager, Jack is responsible for managing all related activities in South Africa and has also led GreenCape's previous work in Kenya and Ghana.

Elize Hattingh is a Researcher: Sustainable Growth at TIPS. She has been actively involved in promoting the sustainable development agenda for more than 15 years. She was the Executive Coordinator for Waste to Wing, a Switch Africa Green Project and the Incubation Manager at the South African Renewable Energy Incubator. She also actively supports youth-owned entrepreneurs at Youth Bridge Trust and women-owned entrepreneurs at Future Females Business School with business development support.

Letlatsa Lehana is employed by the Small Enterprise Finance Agency as the Head of Khula Credit Guarantee (SOC) Limited (KCG), a licensed non-life insurer which is a wholly owned subsidiary of sefa.  He has more than 15 years of senior management in finance experience at organisations such as ABSA Bank at Group Finance, Sasol Petroleum Nigeria Limited, Anglo American South Africa Limited, Eurasian Natural Resources Corporation and General Electric. He represents sefa’s interest at the on-going Partial Credit Guarantee study undertaken by the World Bank and National Treasury for the recapitalisation of KCG; he is a member of the European Union Project Steering Committee for the €30 million allocated to sefa under the programme – Employment Promotion through SMME Support Programme for the Republic of South Africa (EPSSP).  He is also a member of sefa SME Lending Committee.

About the facilitators

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.

Muhammed Patel joined TIPS in 2017. He holds a Masters in Economics from the University of KwaZulu-Natal, where his thesis focused on the relationship between income and health in South Africa. Muhammed's background spans work in industrial development, and competition and regulatory economics. While completing his Master's degree, Muhammed worked as a junior researcher at the School of Development Studies conducting research on the manufacturing sector of eThekwini. He also lectured undergraduate economics students over this time. In 2015, Muhammed joined competition and regulatory consultancy Genesis Analytics, where he spent two years working on competition and regulation cases. Notably, his work focused on the telecommunications and energy sectors.

South Africa had a trade surplus of R93.7 billion in the fourth quarter of 2021, down from R101 billion in the third quarter of 2021. Year-on-year, imports increased by about 17% to R381 billion in the fourth quarter of 2021, while exports increased by about 9% to R475 billion in the same period. Trade, and especially imports, saw a recovery following the early negative impact of the COVID-19 pandemic at the start 2020. Imports reached their highest fourth quarter level since peaking at R389 billion in 2014, and exports also continued their growth trajectory, reaching their highest fourth quarter level in 2021.

This Import Tracker has an overview of the year. See Section 2: Summary of Trends from 2021.

Presentations

Refining and logistics sectors (Dave Wright, Independent Researcher and a Director of the South African National Energy Association)

Petrol stations, workers and a just transition in South Africa (Nokwanda Maseko, TIPS Senior Economist)

Employment opportunities in a biomass supply chain (Farai Chineshe, Bioenergy Analyst, WWF South Africa)

Media

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

Just transition holds opportunities, but also risks for South Africa's liquid fuel value chain (Engineering News, 8 June - Schalk Burger)

This webinar is part of the Making Sense of Employment in South Africa's Just Energy Transition project. TIPS and the WWF South Africa, with the support of GIZ, are implementing this initiative to support policymaking for South Africa's just transition. This focuses on employment and the relevant challenges and opportunities in the country's just energy transition.

Related research

Research Report: Exploring alternative options for coal truckers in a biomass supply chain (Farai Chireshe and Tjasa Bole-Rentel (WWF South Africa)

Policy Brief: Employment metrics in South Africa’s electricity value chains (Lauren Hermanus, Adapt)

Programme  

Welcome and introduction: Gaylor Montmasson-Clair, TIPS

Presentation of research findings

• Refining & logistics sectors, Dave Wright, Independent Researcher and a Director of the South African National Energy Association (SANEA)
• Petrol stations, workers and a just transition in South Africa, Nokwanda Maseko, Senior Economist, TIPS
• Exploring employment options in a biomass supply chain, Farai Chireshe, Bioenergy Analyst, WWF-SA

Panel discussion

• Shamini Harrington, Vice-President: Climate Change, Sasol and Presidential Climate Commissioner
• Boitumelo Molete, Social Development Policy Coordinator, Congress of South African Trade Unions
• Rod Crompton, Adjunct Professor & Director, Wits Business School, African Energy Leadership Centre

Background 

While there is consensus that South Africa should decarbonise rapidly to meet its climate commitments, in line with a net zero emission pathway by 2050, the impacts of such a low-carbon transition and how it should be mitigated are hotly debated. In South Africa’s fossil fuel dependent economy, these debates have coalesced around the phase-out of coal and the introduction of renewable energy. Yet, the transition will have economy- and society-wide implications. Particularly, the liquid fuel value chain is set to be impacted as transportation is increasingly electrified and the consumption of petroleum products gradually decreases. The implications of the low-carbon transition on the liquid fuel value chain in South Africa remain largely unexplored.

While not a traditional oil producer, South Africa has an important liquid fuel value chain. It ranges from coal- and gas-to-liquid production, to import terminals and refineries, to transportation and retail services. The drive to reduce greenhouse gas emissions, heightened environmental standards (particularly for fuels), and technological evolutions (especially in transportation) are set to deeply impact the value chain. The impact on the unique circumstances in the South African liquid fuel value chain are unclear. South Africa is a net importer of liquid fuel but does have material production from coal and gas. At the same time, fuel standards lag significantly global standards and local refineries are small in size by international metrics. Global developments are set to lead to the restructuring and closure of facilities, with impacts throughout the value chain. In contrast, the domestic industry could be a major player in the production of so-called "powerfuels" or "green fuels", leveraging strong renewable energy potential, a large sustainable biomass resource base and expertise in the Fischer-Tropsch process. Mostly capital intensive to date, the industry does employ a noteworthy number of people, particularly at the retail stage (i.e. petrol stations). Future development could create meaningful employment in the value chain. Within this context, understanding what a "just transition" of the liquid fuel industry in South Africa could look like remains to be investigated.

About the facilitator 

Gaylor Montmasson-Clair is a Senior Economist at TIPS. He leads TIPS's work on Sustainable Growth. Gaylor is also a Research Associate at the University of Johannesburg’s Centre for Competition, Regulation and Economic Development (CCRED). Gaylor has been working on green economy issues for more than a decade and 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.

About the presenters and panellists 

Nokwanda Maseko is a Senior Economist at TIPS. She was previously a Budget Analyst at National Treasury and an Assistant Director at the Economic Development Department (EDD) focused on industrial policy.

Farai Chireshe is a bioenergy analyst at WWF-SA. He is a seasoned chemical engineer and renewable energy expert with a focus on technology advancement, environmental sustainability, and climate change mitigation and adaptation. He is an expert on sustainable aviation fuels (SAF).

Dave Wright is an independent consultant focusing on energy matters with oil and gas as a particular interest, since he retired from Engen Petroleum after over two decades at the company. He is on the Board of South African National Energy Association (SANEA), as a Director. He was SANEA’s Secretary General from 2012 to 2018. He is also an Adjunct Professor at the University of Cape Town.

Shamini Harrington is a seasoned climate change expert who has a Master’s Degree in Environmental Science with a specialisation in climate change management. She began her career as a researcher at the CSIR, before moving into a corporate environment. At Sasol she is the Vice President for Climate Change where she leads a diverse team focusing on reducing emissions, transforming operations and shifting the company’s portfolio. In December 2020 she was appointed as a Presidential Climate Commissioner. For five years she negotiated international climate change policy, as the first business representative on South Africa’s negotiating team at the United Nations Framework Convention on Climate Change. She was previously Co-Chair of the National Business Institute’s Environment Committee and Chair of the South African Petroleum Industry Association’s Climate Change Committee. She is the current BUSA Environment and Just Transition Committees Chair, representing business at NEDLAC. 

Rod Crompton is a Visiting Professor at the Wits Business School at the University of Witwatersrand, where he established the African Energy Leadership Centre. He was a full-time board member at the National Energy Regulator of South Africa (NERSA) for 11 years and was Deputy Director General at the Department of Minerals and Energy where he was responsible for hydrocarbons and energy planning for eight years. He is also a Non-Executive Director at Eskom.

Boitumelo Molete is the Social Development Policy Coordinator, within the Policy Unit of the Congress of South African Trade Unions (COSATU). Prior to that, she was a Research Project Assistant at the National Labour and Economic Development Institute (NALEDI).

For further information contact Rozale@tips.org.za