Position: Researcher

Institution: Department of Economics, Stellenbosch University

Expertise: Higher Education, Labour Econometrics

Hendrik van Broekhuizen is a PhD student in the Department of Economics at Stellenbosch University and works as a full-time researcher for the Research on Socio-Economics Policy (ReSEP) group (http://resep.sun.ac.za). As a ReSEP member, he has been involved in various projects relating to poverty, inequality, labour markets, and education. His research interests include behavioural economics, applied microeconometrics, labour economics, and the economics of education and his current research focusses on the linkages between tertiary education, skill-formation, and labour market outcomes in South Africa.

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Editor's Corner

The limits of African markets

In this edition we publish a follow-up to last week’s piece by two prominent agricultural economists, Wandile Sihlobo and Tinashe Kapuya on how trade policy affects the agricultural sector in South Africa. Last week they examined the trade-offs government must make between retaining trade policy space world-wide, pursuing more Free Trade Agreements, and making concessions to liberalize agricultural markets.

This week, Sihlobo and Kapuya examine agricultural exports to Africa and the limitations to expansion.

The African continent accounts for over 40% of agricultural exports from South Africa. But hopes that the African Continental Free Trade Area (AfCFTA) may propel the country’s market presence beyond the South African Development Community (SADC) region may be misplaced, argue the authors.

This is because of structural limitations to expansion in various regions of Africa outside of the SADC area: North Africa is far more closely tied into the EU than it is to sub-Saharan Africa, and in the east and west of the continent, there are a range of non-tariff barriers that could hinder trade, notwithstanding the AfCTA.

Sihlobo is the chief economist of the Agricultural Business Chamber of South Africa (Agbiz) and an academic at the Department of Agricultural Economics at Stellenbosch University. Kapuya is a senior program officer at the Alliance for a Green Revolution for Africa in Nairobi and a research associate at the Bureau for Food and Agricultural Policy in Pretoria. They both bring rich experience and careful research to the Econ3x3 table, underscoring the critical role that evidence can play in crafting policies to promote inclusive economic growth.

Policymakers, they argue, may need to revise their Africa Strategy and pinpoint specific agri-products for specific markets in the continent.

Pension coverage

We have also updated the three-part series on old-age pension coverage by Andrew Donaldson with two spreadsheets that enable readers to calculate the impact of alternative subsidy or tax reform parameters.

The first spreadsheet, which can be downloaded in Part 2 of the series, shows earnings distributions by sector and allows alternative subsidy parameters to be costed. The second, attached to Part 3 of the series, estimates the revenue impact of alternative parameters for the retirement contribution tax reforms.

Old-age pension coverage is an issue of policy urgency. Over half the employed population in South Africa do not have adequate pension coverage, and most of those earn below the tax threshold. Donaldson explores the possibility of adjusting tax benefits on retirement funding in such a way that would both reduce inequality and make finance available for contributing to pensions for those not covered.

Donaldson, a former deputy director-general at National Treasury, brings a depth of skill and experience to this series to assess the size of the pension gap, calculate the cost of extended coverage, and offer innovative solutions on how to cost it.

Pippa Green

October 13, 2021

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Working Papers from the REDI3x3 project are available HERE

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Econ3x3 provides a platform to promote robust economic policy discourse in South Africa. The complexity, but also sterility of public debate on many policy issues, demands that knowledgeable individuals engage in robust debate. This can inform other individuals and policymakers on issues that they deal with in day-to-day policy making or policy analysis.

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Articles

The limits of African markets

Pension coverage

Working Papers from the REDI3x3 project are available HERE

READ, WRITE & REASON

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