Sectors and structural change

New opportunities for South African agriculture: the African Continental Free Trade Area

Tshepo Morokong, Western Cape Department of Agriculture on 16 February 2021
Reads 9,696

The new African Free Continental Trade Area phases out 90% of tariffs on all goods traded between African Union member states over a 5 to 10 year period. This seeks to boost intra-African trade and investment in regional value chains. The current 41% share of SA agricultural exports that goes to Africa is concentrated in SADC. The opening of other markets presents an opportunity for further expansion in goods such as oranges, apples and wine.

African governments should have a fresh look at agriculture as part of the economic recovery plan after Covid-19

Wandile Sihlobo, Agricultural Business Chamber of SA on 2 December 2020
Reads 5,207

The Covid-19 pandemic presents an opportunity for African governments to relook agriculture as part of the economic recovery plan. A new approach should embrace technology (information technology, mechanical and biotechnology) and private-sector partnerships, as well as the improvement in land governance through the extension of title deeds or long-term, tradeable leases. South Africa presents some examples, particularly on technological advancement, which African countries can emulate.

Covid-19’s economic effects: tourism’s supply-chain impacts

Kate Rivett-Carnac, Independent researcher on 13 August 2020
Reads 6,242

While the impact of the Covid-19 lock-down on the tourism sector may seem clear, the potential impact on its supply chain has not been investigated. StatsSA data is analysed to establish which goods and services receive the most expenditure from three key tourism industries, but also which goods and services rely most heavily on tourism expenditure. Surprisingly it is soft drinks, tobacco, and transport-related goods that are likely most affected, not construction or agriculture.

Hiding in plain sight: high-value agriculture’s large-scale potential to grow jobs and exports

Nimrod Zalk, Nelson Mandela School of Public Governance, University of Cape Town on 17 September 2019
Reads 17,527

South Africa has a major but overlooked opportunity to expand the production of high-value agricultural products that are both labour-intensive and export-oriented. There is an extensive and growing global demand for these products. Various supply side constraints must be addressed, such as how land is used; public investment in irrigation, agricultural inputs and R&D; development finance; and logistical costs and quality. Around 300 000 jobs could be created directly and indirectly, primarily benefitting the poorest: rural women in former homelands

Why has manufacturing employment declined so rapidly?

Anthony Black, University of Cape Town on 3 October 2018
Reads 18,249

The manufacturing sector has performed poorly and employment has fallen sharply. Policy has tended to push manufacturing onto a more capital-intensive trajectory. Paradoxically, South Africa’s actual (or ‘revealed’) comparative advantage has come to be in relatively capital-intensive products. In contrast, labour-intensive sub-sectors have performed poorly. In a context of high structural unemployment, industrial policy should focus more on supporting employment-intensive growth by subsidising labour and training rather than capital investment, electricity and infrastructure for capital-intensive firms.

Innovative joint ventures can boost agricultural production and promote agrarian transformation

Andre Steenkamp, National Treasury on 18 April 2017
Reads 13,196

Growing agriculture can reduce poverty, create economic opportunities in rural and peri-urban areas, and boost employment, particularly for semi- and unskilled workers. We review several successful joint ventures across South Africa which comprise a range of partnerships between smallholders, commercial farmers, agribusinesses, industry associations and government. Many of these partnerships have generated significant returns and transformational benefits. Well-designed joint ventures can complement existing government initiatives to drive more rapid agrarian transformation and increase production.

Unpacking labour’s declining income share: manufacturing, mining and growing inequality

Philippe Burger, University of the Free State on 3 February 2015
Reads 13,055

While the share of capital increased, labour’s share of total income earned in South Africa fell significantly during the first two decades after 1994. These trends could contribute to a deterioration of income inequality, given that the ownership of capital – and thus the income from capital – is concentrated in fewer individuals than is the case with salaries and wages. This article explores labour’s falling share, with particular reference to the manufacturing and mining sectors.

Should agriculture receive greater support as part of an inclusive growth strategy?

Anthony Black, University of Cape Town on 26 November 2014
Reads 13,712

In developing countries, agricultural growth is generally employment intensive and pro-poor but this sector in South Africa has been subject to a drastic decline in tariffs, pricing, infrastructure and other forms of support. This has not been compensated for by alternative measures such as expenditure aimed at facilitating small-scale agriculture and effective land reform. The result has been poor economic performance and rapidly declining employment in commercial agriculture with little sign of revival in the small-scale sector.

What is the role of manufacturing in boosting economic growth and employment in South Africa?

Nimrod Zalk, Nelson Mandela School of Public Governance, University of Cape Town on 11 February 2014
Reads 112,662

There is a widespread view that countries no longer need to industrialise in order to develop. However, in South Africa manufacturing remains the core driver of GDP growth and direct employment while other sectors – particularly many services sectors – are likely to increase employment on the basis of growing demand flowing from a growing GDP. A nuanced understanding of the direct and indirect linkages through which diversified manufacturing growth can boost economy-wide employment is essential.

Minimum wages and compliance in South African agriculture

Ben Stanwix, University of Cape Town on 22 January 2013
Reads 37,092

Average wages in agriculture have risen substantially in all provinces since the introduction of minimum wages in 2003 - the gap between the actual and the minimum wage has declined significantly. Compliance has been highest in the Western Cape and Gauteng, where average agricultural wages were close to or above the minimum wage even before it was introduced and wages have continued to rise thereafter. Although enforcement appears to have had a limited impact due in part to limited penalties, more effective inspection would be an important way to improve compliance.