Business Day - 22 February 2021 by Neva Makgetla (TIPS Senior Economist)

Read online at Business Day.

Or read as a PDF.

Fin 24 - 18 February 2021 by Lameez Omarjee

Read online at Fin 24.

Engineering News - 15 February 2021 by Schalk Burger

Read online at Engineering News.

News 24 - 13 February 2021 by James de Villiers

Read online at News 24.

Business Day - 8 February 2021 by Neva Makgetla (TIPS Senior Economist)

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Or read as a PDF.

The Import Tracker is a quarterly analysis of import trends. It provides an overview of import patterns and look at the causes of surges in manufacturing imports, and their likely impact on industry. Quarter 4, 2020 is now available. Import Tracker Q4 2020.

Although declining slightly compared to the third quarter of 2020, South Africa maintained a high trade surplus in the fourth quarter of 2020, at R103 billion. Year-on-year, this marks a more than 300% increase in the trade surplus compared to the fourth quarter of 2019. The surplus is the result of low imports and high exports (Graph 1). This has been the case over the last three quarters in particular as South Africa and its trade partners continue to respond to the COVID-19 pandemic that began in January 2020.

Industry Master Plans have emerged as an important industrial policy intervention and approach to strengthening and growing South African industrial capacity. The approach to and process of developing these plans has brought about a comprehensive understanding of specific industry dynamics, engagements between key stakeholders in an industry, and the actions required to strengthen and grow that industry. Developing the Master Plans involved research, engagement and collaboration between stakeholders to identify and support the actions required. The Master Plans aim to collectively reposition the economy rather than solve a specific crisis faced by an industry. This policy brief explores some of the tensions that have surfaced in the Master Plan process.

China’s Belt and Road Initiative (BRI) and its role in Africa is controversial. This paper argues that African countries should work through regional organisations, such as the African Union (AU) and the African Continental Free Trade Area (AfCFTA) to use their agency and negotiate with China to advance their own interests. The experiences of China in building regional corridors and supporting regional value chains and connectivity in Southeast Asia can provide valuable lessons for both Africa and China on how the BRI can contribute positively to developmental regionalism* in Africa.

* Developmental regionalism is defined as “cooperation among countries in a broader range of areas than just trade and trade facilitation, to include – for example – investment, research and development, as well as policies aimed at accelerating regional industrial development and regional infrastructure provision, such as the building of better networks of roads and railway” – UNCTAD.

Main Bulletin: The Real Economy Bulletin - Fourth Quarter 2020

In this edition

Gross domestic product: As forecast since the middle of 2020, the South African GDP in 2020 was 7% lower than in 2019. After the very sharp downturn during the lockdown in the second quarter, most of the real economy has largely recovered on the back of higher metals prices and more targeted measures to prevent COVID-19 from spreading. Still, economic growth was affected by the continued risk of contagion, which suppressed recovery particularly for in-door hospitality and entertainment. The factors that slowed growth before the COVID-19 pandemic also remain a challenge, although government has announced measures to address unnecessary red tape and infrastructure shortfalls more consistently through its Operation Vulindlela. Read more.

Employment: As usual with downturns, but on an unusually devastating scale, the recovery in jobs lagged the resurgence in the GDP. Total employment grew by 330 000 or 2.2% in the fourth quarter of 2020. But employment remained 1.4 million below 2019 levels because the economy shed some 2.2 million jobs in the second quarter. The decline over 2020 was greatest for lower-level workers in general and informal workers in particular, aggravating South Africa’s already sharp income inequalities. Read more.

International trade: The trade balance remained strong in the fourth quarter, largely because exports benefited from higher mining prices and auto exports. Manufactured imports also rebounded sharply. Read more.

Investment: Private investment flattened out in the fourth quarter of 2020 while public investment showed strong growth. The investment rate (investment as a percentage of the GDP) improved marginally from 15.1% of the GDP in the third quarter to 15.4% in the fourth quarter – still far below pre-pandemic levels. Returns on assets improved for mining and manufacturing in the third quarter, but fell for construction. Read more.

Foreign direct investment projects: The TIPS FDI Tracker tracks foreign direct investment projects on a quarterly basis, using published information.The total investment value from projects captured this quarter was R68.9 billion. Projects captured in the fourth quarter are a mix of those announced at the 2020 Investment Conference and others identified outside the conference. Read more

Briefing note: South Africa's emerging recovery strategy: From the day the lockdown started, government has contended that South Africa cannot simply go back to pre-pandemic days, when growth was already slow and inequality persistently high. Instead of a narrow recovery, then, it called for reconstruction, addressing the structural constraints on inclusive growth. There is, however, a huge gap in how different groups define and prioritise the structural constraints to growth. Read the briefing note online: South Africa's emerging recovery strategy.