Articles for Industrial Policy

Did inequality contribute to the recent political unrest in KZN?

Posted: 24-Aug-2021

Several factors were behind the recent violence and looting in KwaZulu-Natal. This blog investigates whether inequality, after accounting for other factors, was a likely contributor to the unrest. Overall, we find a positive relationship between inequality and the prevalence of unrest at the municipal level.Read Article

Land Reform: The case for RIA?

Posted: 28-May-2015

Agriculture is critical to achieving a number of government priorities including food security, rural development, employment creation, and poverty alleviation. The land reform programme is central to the long-term success of the agricultural sector. Two main policies proposals by the government are currently in the spotlight: the final proposal on Strengthening the Relative Rights of People Working the Land; and the Regulation of Land Holding Bill. These bills seem to be a departure from the land reform model outlined in the NDP, which had significant buy-in from stakeholders. The current proposals have therefore contributed to significant policy uncertainty. There is a need for rigorous and robust evaluation of these policies to ensure sustainable regulatory outcomes.Read Article

Export diversification in South Africa

Posted: April 23, 2013

The National Industrial Policy Action Plans (IPAP) released in 2007, 2011, 2012 and 2013 serve to identify and develop the sectors that South Africa should focus on in achieving faster growth and employment. The choice of these sectors in the various IPAP reports is not based on any substantive analysis as to where South Africa’s export potential lies. The ‘product space’ is an easy to use and comprehend analytical instrument which could be used to fill this gap.This blog serves to illustrate how this technique works and what it reveals.
Read Article

Grappling with the revised BBBEE Codes of Good Practice

Posted: December 06, 2012

On 5 October 2012 the Minister of Trade and Industry issued revised Broad-Based Black Economic Empowerment Codes of Good Practice for public comment. Much has been written on the impact of these codes for charities and the DTI has already responded on this specific issue. But these revisions could have much wider economic effects and these too need to be understood before these changes are implemented. DNA Economics has identified some potential challenges with the revised codes and has written to the Minister in this regard. Our main concerns are three-fold:

1. The complexity of the revised Codes and the likely costs of compliance for SMMEs are extreme.

2. There are likely to be severe and unintended consequences arising from the implementation of some aspects of the Codes.

3. The Codes as they have been Gazetted are incomplete and it is therefore impossible for citizens to consider or respond to them in full.

Each of these concerns is dealt with separately and briefly below.

Lights out!

Posted: June 25, 2008

(and previously published as part of their Geekonomics column in the Business Day)
Rolling blackouts and electricity rationing have had a widespread and serious impact. The media are not immune. As part of Business Days's commitment to cut energy usage by 20 percent, one in every five columnists is to be cut. The Geeks, as major emitters of hot air, have voluntarily agreed to withdraw this column and this will be out last regular contribution to 'The Exporter' supplement. As the crisis eases and our own energy levels return, we hope to provide further occasional commentary. We are betting that there will be no shortage of good material.Read Article

Some more New Year's wishes

Posted: February 19, 2008

(and previously published as part of their Geekonomics column in the Business Day)
The Geeks begin this year as they did the last two, with some economic policy wishes for the next 12 months. We hope that the new ANC leadership is listening because the last lot paid us scant attention. Despite our monthly commentary and advice there has been virtually no progress on any of the issues raised in our previous two wish lists. To aid the reader and make our own task that much easier, let's recap.Read Article

The use and abuse of investment incentives

Posted: October 04, 2007

(and previously published as part of their Geekonomics column in the Business Day)

On a recent visit to Australia, one of us Geeks sat next to a small business owner, about to relocate to Brisbane. This businessman is a proud beneficiary of the DTI's SMEDP programme, which provides cash subsidies against new investment in machinery and land. He was approached and convinced by an investment incentive consultant to reorganise his business in a way that he could maximise his returns from the state. This included selling and then repurchasing his equipment; and moving his factory from his preferred premises, which he rented, to set-up a 'new' factory on land which he then purchased. The consultant pocketed 15% of the resulting grant and the small business owner is currently looking for ways to invest the rest in Australia.Read Article

Making (non)sense of South Africa's Industrial Policy

Posted: August 30, 2007

(and previously published as part of their Geekonomics column in the Business Day)

It's been a long time coming; but the government has finally unveiled its new National Industrial Policy Framework (NIPF), an accompanying Industrial Policy Action Plan (IPAP) and a whole lot of other acronyms.

Unfortunately it's all rather a damp squib, literally, a firework that has no bang.

The NIPF is deliberately vague, providing a broad review of past experience, some basic principles underlying the new strategy, and a general outline of the kinds of policies to expect. It talks of identifying constraints and opportunities facing SA's industrial development and of using a process of mutual "self-discovery" between government and business to prioritize policy actions and develop cross-cutting and sectoral initiatives (called "Key Action Plans" or KAPs).Read Article

What can South Africa learn from South East Asia?

Posted: July 17, 2007

(and previously published as part of their Geekonomics column in the Business Day)

South Africa has come a long way in integrating itself with the global economy since 1994. Almost all sectors of the economy have become more open and more productive, and experienced simultaneous increases in export orientation and import penetration. Nevertheless, South Africa's growth performance has been less than might have been expected and certainly less than necessary to meet the country's ambitious social and economic development goals.Read Article