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Articles

Accessible, evidence-based analysis on growth and inclusive development in South Africa.

The Social Relief of Distress Grant: how it stimulated local economies

The Social Relief of Distress (SRD) grant was a key policy mechanism introduced to mitigate the effects on vulnerable groups of the COVID pandemic and government measures to contain its spread. While there is substantial research on the social impacts of the COVID-19 social relief package, little is known about its economic impacts. This article is based on a study that sought to understand, from the perspectives of local traders, the perceived economic effects of the grant. Evidence gathered in the study showed that the SRD led to an increase in customer demand within local economies. It was a crucial mechanism that helped informal trader businesses survive and, in some cases, enabled new business formation. By stimulating both supply and demand, the SRD supported the circulation of people, goods, and money and promoted higher transaction intensity in food and non-food sectors. Although the SRD could not reverse the negative impacts of COVID-19, and cannot be considered a standalone intervention, it nonetheless functioned as an effective shock-response mechanism for households and informal traders. The detection of some economic multipliers in a time of emergency signals the potential for a long-term intervention that could be beneficial to local economies.

08 JUN 2023

The COVID-19 TERS policy saved at least 2 million jobs - but not without some unintended results

About three years have passed since the South African government introduced the COVID-19 Temporary Employer-Employee Relief Scheme (TERS) in response to the pandemic and associated lockdown regulations. Given the extent of unemployment in South Africa even prior to the pandemic, the policy’s primary aim of mitigating job losses arguably made it one of the country’s most important labour-market interventions at the time. What effect did it have on job retention, and who did it benefit most?

26 MAY 2023

Special Covid-19 grants not only provided income relief: they also improved labour-market outcomes

The Social Relief of Distress grant was the first in South Africa to target unemployed adults. Its main aim was to provide income support in a time of the crisis precipitated by the Covid-19 pandemic and lockdown. But for the first time, new research has shown that it also played a key role in improving labour-market outcomes for recipients.

29 MAR 2023

How South Africa may leverage the BRICS chair for agribusiness

Despite BRICS not being a trade bloc, its economic cooperation arrangement offers South Africa a strategic platform to advance its trade interests. The agricultural sector is interested in this grouping, mainly in advancing exports into China and India. These countries already import a sizable volume and value of agricultural products from the world market, and South African businesses want to join these suppliers. The main products that South Africa should promote within this grouping are fruits, wine, wool, and beef. Importantly, the increasing interest in BRICS should continue, while South Africa also maintains its focus on other core markets, such as the EU and the African continent.

15 MAR 2023

Education is improving but the message is hard to convey

South Africa’s improvements in international standardised tests have been exceptionally steep, albeit off a low base, for some 15 years. Six reasons make this difficult to communicate: examinations distract from reliable measurement; small gains are incorrectly considered insignificant; the social benefits of gains are long-term; the psychometrics behind rigorous testing is foreign to many; this testing has on occasion been poorly done; and teachers often express ideological concerns about standardised testing.

02 MAR 2023

The creative spark of a public employment programme

The Presidential Employment Stimulus has created more than one million jobs and livelihood opportunities since its inception two years ago. In the arts and culture sector, particularly badly affected by the pandemic, the intervention has been an important catalyst for creative new work.

16 FEB 2023

Integrated urban services can boost regional development in Africa: this is how

Urbanization provides a unique opportunity to accelerate economic and social development across Africa. South Africa has some of the technical capabilities to support the process through systematic planning, institution building and investment in essential infrastructure. This requires a proactive approach from government working with the private sector to marshal their collective resources and know-how.

02 FEB 2023

How trade restrictions affect consumers: the case of frozen chicken

Trade protection in South Africa has increased overall since 2014. This has manifested in a rising incidence of tariffs covering intermediate (e.g., steel) and consumer goods, including poultry, pasta, and frozen chips, of which poultry is by far the most important for South African consumers. The South African Poultry Association has contested the view that anti-dumping duties on chicken raise domestic prices. However, an econometric study shows that although there is a complex relationship between trade policies and consumer prices, the net effect on these products, including frozen chicken, has been to raise them.

18 JAN 2023

Time to make cigarette taxes more effective in Mozambique

Taxes on cigarettes and tobacco in Mozambique are the among the lowest in the southern African region. This not only deprives the fiscus of potential revenue but also makes cigarettes more affordable. Affordability of cigarettes is a key measure of the effectiveness of tobacco taxes. If taxes - and retail prices - were significantly raised it would have beneficial effects not only in terms of revenue but also for health.

14 DEC 2022

Budget pressures erode capacity of the criminal justice system

The criminal justice system faces severe challenges: as organised crime has risen, the capacity of the system has diminished. A close look at Budget expenditure shows that, in the past decade, the number of police officials has declined, as has police spending per citizen. This, while employee compensation has risen in the same period. Similar trends are evident in the courts. In correctional services, although the number of officials has remained stable, capital budgets are severely constrained. This shrinking resource base may well exacerbate the threat that crime and disorder pose to the economy and society.

01 DEC 2022

Has the Employment Tax Incentive created jobs?

The Employment Tax Incentive was introduced in 2014 in response to South Africa’s chronic structural youth unemployment crisis. Its aim was to encourage employers to hire young people by subsidizing their wages. ‘High youth unemployment,’ said SARS, ‘means young people are not gaining the skills or experience needed to drive the economy forward. This lack of skills can have long-term adverse effects on the economy.’ But how effective is it? This is a critical question as the fiscus must bear the cost of foregone revenue. An analysis of firms that claim the incentive compared with those that do not, runs into methodological challenges and casts doubt on the efficacy of the policy.

03 NOV 2022

How to create jobs and combat climate change

South Africa has the dubious distinction of having one of the highest rates of unemployment and inequality in the world. It is also one of the world’s most emissions-intensive economies, measured in greenhouse gas (GHG) emissions per unit of economic output. Historically, both during and after apartheid, state subsidies have favoured capital- and energy-intensive industries. What policies are necessary to change the development path to be both more climate- and labour-friendly?

26 OCT 2022

Gender, care, and climate change: Why they are connected

Why does our society place so little value on care? The pandemic showed the centrality of health and care workers to daily life. But unpaid work – mainly done by women – does not figure as part of the calculations of the GDP of a country. Closely related to this is the scant value we place on the environment and preserving it for coming generations. Our economic models do not factor in essential, but unpaid work done by women, nor the critical task of protecting our fragile environment.

28 SEPT 2022

How agro-processing can boost regional integration – and development

Regional integration in Africa is underway but progress requires that the gains are widely spread. South Africa’s huge regional trade surplus in manufactured goods is leading to protectionist pressures in neighbouring countries. Agro-processing is a large sector that has significant potential, but the export performance of the region has been poor if South Africa is excluded. Regional value chains are failing to include the small economies of southern Africa. Constraints include tariff and non-tariff barriers, weak infrastructure, as well as poorly developed local suppliers. Some retail chains, supported by governments and NGOs, are now taking the lead in developing small-scale suppliers in the region. But other policies to improve the regulatory and investment environment are also necessary.

21 SEPT 2022