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- ItemAddressing Constraints to South Africa’s Agriculture Inclusiveness(2021-09) Sihlobo, Wandile; Qobo, MzukisiSouth Africa’s agriculture remains dualistic, with large scale commercial farmers who are predominately white and small-scale and subsistence farmers that are mainly black. These disparities in fortunes result from the long history of segregation policies and apartheid. The efforts to build an inclusive agricultural sector through the upliftment of black farmers by the new democratic government since 1994 have failed. As such, black farmers in South Africa still constitute between 5 and 10 per cent of the overall commercial production. We explore the constraints to inclusive growth drive in the agricultural and agribusiness sector and offer recommendations for improvement. These include a need for increased efficiency at the local government for ensuring service delivery to farming towns, blended finance instruments for funding farmer development, and the prioritization of private-public-partnership approaches for farmer development and land reform projects. We frame the interventions for the post-COVID-19 dispensation, focusing on the potential role of agriculture in fostering inclusion and supporting rural economies and employment.
- ItemIndustrial Policy, the Manufacturing Sector and Black Empowerment in South Africa(2021-09) Goga, Sumayya; Avenyo, Elvis KorkuBlack economic empowerment (BEE) in South Africa has undoubtedly been ambitious in seeking to transform ownership, control, and management of the economy’s productive assets and resources. It is ambitious because the changes that are needed to reverse decades of entrenchment of economic power in the hands of a few are far-reaching. Extensive transformation means challenging the position of incumbents in the economic system and the interests that work together to maintain those positions, in the context of a decidedly liberal economic policy context. While BEE policy has been applied as the African National Congress government’s primary strategy for bringing about transformation in the ownership and control of productive assets in the economy, the outcomes in key sectors of the economy have been poor in terms of inclusion. This paper considers the interrelations between the black empowerment programme and industrial policies in South Africa, with specific reference to transformation in the manufacturing sector. The paper examines the extent of transformation in the manufacturing sector in South Africa. The paper seeks to understand why South Africa has not seen the emergence of a large, economically significant black industrialist class that owns and controls economic assets and resources that are competitive at different levels in the manufacturing sector. The paper further explores the extent to which South Africa’s industrial policy strategies have contributed to or undermined deep transformation in the manufacturing sector. The paper identifies key limitations of BEE and South Africa’s industrial policy framework, and the gaps between these policies in terms of addressing the factors that restrict the inclusion of black-owned firms in manufacturing. It further considers how industrial transformation could be accelerated in South Africa
- ItemThe Alignment of Black Economic Empowerment and Skills Policies in South Africa(2021-04) Kgalema, Victor; Marock, Carmel; Stephanie AllaisThis paper explores the relationship between the goals of broad-based black economic empowerment (BBBEE) and those of the skills development policy in South Africa. We review the relationship between the policy tools that have been developed for each of these policies. The paper finds that while the high-level goals of the two sets of strategy seem to be well-aligned, there are many challenges in practice. The first relates to National Skills Development Strategy (NSDS), whose key purpose is improving the effectiveness and efficiency of the country’s skills development system. The strategy represents an explicit commitment by government to encourage the linking of skills development to career paths and career development as well as to promote sustainable employment and in-work progression. However, the strategy lacks a tightly defined set of priorities, making it open to manipulation in terms of the achievement of targets. The second challenge relates to a host of implementation problems with skills policy in South Africa. At the same time, the monitoring mechanisms of the BBBEE code focus on whether skills training takes place, the numbers of people who access workplace experience and levels of expenditure, rather than on the extent to which the skills development activities result in the intended outcomes of the policies (either the BBBEE policy or the NSDS). This reinforces the first problem – a focus on measurable targets, rather than fundamental policy goals in both policies.
- ItemThe Critical Role of State-owned Enterprises and Development Finance Institutions in Black Economic Empowerment :The case of Eskom, IDC and the DBSA(2021-09) Mondi, LumkileThe underlying motivation for the establishment of state-owned entities and development of finance institutions was to provide the state with instruments to enable the building of a diversified industrial economy. Under the colonial and apartheid government, these were to play a key role in racially based job segregation and Afrikaner empowerment. This paper explores the role of Eskom, the IDC and DBSA during the democratic period in deracialising the economy through black economic empowerment. It explains the political and economic forces underlying the often failed efforts to reform Eskom in the face of power shortages, financial difficulties, questionable investment in capacity and economic empowerment. The paper shows how the IDC and the DBSA have contributed to black economic empowerment. Finally, the paper provides a window into understanding the policy trajectory and decision-making of the South African government as it deals with the competing challenges of business interests and black entrepreneurs long denied economic participation because of the injustice of apartheid.
- ItemCompetition Policy and Black Empowerment: South Africa’s Path to Inclusion(2021-09) Mncube, Liberty; Ratshisusu, HardinCompetition law is not just about the efficiency goal. Placing value on opportunities for black owned businesses to enter, expand, and participate in markets is likely to be a key element in South Africa’s route to become an efficient, competitive economic environment focused on development and ultimately benefiting all South Africans. The first democratic government of South Africa prioritised the transformation of society on a non-racial, democratic and local foundation. The expectation was that all law in South Africa would contribute to, amongst other things, economic transformation and redress the imbalances created by past racial divisions, and more important foster the participation of the previously marginalised people to participate in the mainstream economy. In South Africa, equity is a recognized goal and a permissible consideration of competition law and a key driver of inclusive markets, economic development and, ultimately, empowerment of black people.