South Africa’s finance minister tabled a Budget on 21 May with the support of the Government of National Unity partners. VAT will remain at 15 per cent and Cabinet is agreed that reviews of expenditure should be intensified. The revised budget protects frontline services though several provisional spending proposals have been withdrawn. But the problems of sluggish growth and high debt levels remain. Substantial spending cuts will be needed if the Treasury’s fiscal consolidation goals are to be achieved. More rapid growth will require far-reaching structural and fiscal reforms.
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Pippa Green
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Nyemwererai Matshaka, Mphatso Elias Ackim
Hannah MacGinty, Emma Whitelaw
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Mthokozisi Tshuma
Nearly half the working-age population and nearly two-thirds of the unemployed live in areas designated as townships under apartheid spatial laws. Originally developed as “labour dormitories”, they have been challenging to develop as more vibrant local economies and residential areas. What can the government – and the private sector – do to stimulate growth, entrepreneurship, and employment in these peri-urban areas?
Walter Shiba
South Africa is due to host the BRICS+ Agricultural Investment and Trade Summit this year, which may be a significant step towards fostering sustainable agricultural development and enhancing trade relations among BRICS and allied nations. The summit will bring together policymakers, industry leaders, and investors, and specialists to discuss innovative solutions for food security, climate-resilient farming, and the future of agribusiness. By strengthening intra-BRICS cooperation and integrating new partners, the event aims to develop a more collaborative, sustainable, and technologically advanced agricultural sector that can drive economic growth and improve livelihoods in participating countries.
Andrew Kerr
Adcorp’s estimated unemployment rate is so low that it disposes of the unemployment crisis. But Adcorp uses a crude currency-demand method to estimate the size of the unrecorded economy, despite researchers’ strong criticism of this method. To estimate informal sector employment, Adcorp mixes up definitions of informal employment and the unrecorded economy and guesses at the labour intensity of the unrecorded economy. They also guess at the number of illegal immigrants. Moreover, Adcorp’s estimates have no statistical precision. Its figures are neither reliable nor credible.
Neil Rankin
The Employment Incentive Tax Bill offers tax subsidies to firms to employ new young workers. An evaluation of the impact of a wage subsidy voucher indicates that employment incentives increase the likelihood of young job-seekers being employed; they also increase the time young people remain employed. There is no evidence of older or existing workers being replaced. Such incentives are a relatively cheap and effective way to create employment, but are unlikely to create large numbers of jobs for young people.
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Editor's Corner
François Steenkamp, Haroon Bhorat
Climatic stabilisation, as mandated by the Paris Agreement, necessitates a transition away from fossil-fuel based economic production and processes. In particular, the call to shift away from coal is crucial, given South Africa's substantial reliance on this energy source. The nation stands out as a larger CO2 emitter than the global average, with 86% of its primary energy supply and 85% of its CO2 emissions attributed to coal.[1]South Africa finds itself at the early stages of transitioning away from coal, but this is not devoid of socio-economic costs, as coal has a direct and indirect economic footprint.[2] Coal is a relatively cheap energy source, accounting for USD 3.8 billion and 3.97% of total merchandise exports, and is a source of employment and livelihood for many South Africans. Despite these socio-economic costs, delaying the transition could also prove costly, especially in light of evolving trade protocols that increasingly demand environmentally friendly alternatives such as electric vehicles or green steel.
In this article, extracted from a longer paper,[3] we provide a robust quantitative estimate of jobs – both direct and indirect – associated with the coal sector in South Africa. We also explore the labour market profile and characteristics of the individuals and households linked to the coal sector. In particular, we are interested in the size and shape of the coal labour market. Understanding the labour market implications associated with a transition is pivotal in shaping policy decisions linked to the just transition.