2. Academic Wits University Research Outputs (All submissions)
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Item Addressing Constraints to South Africa’s Agriculture Inclusiveness(Southern Centre for Inequality Studies (SCIS), 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.Item Industrial Policy, the Manufacturing Sector and Black Empowerment in South Africa(Southern Centre for Inequality Studies (SCIS), 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 AfricaItem The Critical Role of State-owned Enterprises and Development Finance Institutions in Black Economic Empowerment :The case of Eskom, IDC and the DBSA(Southern Centre for Inequality Studies (SCIS), 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.Item Competition Policy and Black Empowerment: South Africa’s Path to Inclusion(Southern Centre for Inequality Studies (SCIS), 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.Item The Alignment of Black Economic Empowerment and Skills Policies in South Africa(2021-04-16) Kgalema, Victor; Marock, Carmel; Allais, StephanieThis 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. We start from the premise that South Africa has developed a complex set of policies, many of which have not been aligned well with each other. In some instances, policies duplicate or contradict one another. The policies require multiple company reports that have tightly specified targets. Reporting requirements do not consistently support the achievement of the broader goals of the policy interventions and do not always work together. A second starting assumption is that empowerment is not just a matter of income and wealth – it is also about access to skills, resources and knowledge.Item Devil’s in the Detail: How to assess transformation of ownership of the South African private sector(Southern Centre for Inequality Studies (SCIS), 2021) Joubert, MichelleThis paper explores listed and unlisted equity ownership in the context of the distribution of South Africa’s national wealth. It is intended to contribute to a shared understanding of private sector ownership: how South Africans hold equity, how equity wealth is distributed among South African households, and transformation of ownership of equity ownership. This includes the listed segment, a crucial part of the bigger picture, as well as unlisted business. It also explores where ownership information is found and could be accessed in future. The hope is that this assessment will contribute to a broader discussion on accelerating transformation.Item Black Economic Empowerment Transactions in South Africa after 1994(Southern Centre for Inequality Studies (SCIS), 2021-04) Gqubule, DumaThis paper reviews the implementation of policies to deracialise ownership within the Top 50 JSE listed companies with a focus on mining and finance which accounted for 75% of black ownership within these companies at the end of December 2020. It looks at the context in which the policies were implemented – the performance of the economy and the restructuring of apartheid era conglomerates since 1994 that created opportunities for BEE companies. The paper then evaluates the three waves of BEE transactions over the past 27 years and the failures of the Broad-Based Black Economic Empowerment (B-BBEE) policy framework, which included the BEE Codes of Good Practice and sector charters in mining and finance. The paper discusses the confusing maze of statistics on black ownership and presents its own findings. The paper argues that prospects for further transformation of apartheid ownership structures are not good, with the economy likely to experience a second lost decade in terms of economic development until 2030, and due to policy design failures that have provided weak incentives for companies to enter into replacement BEE transactions.Item Black Economic Empowerment in the Automotive Manufacturing Industry: A Case for Productive Capacity Development Transformation(Southern Centre for Inequality Studies (SCIS), 2021-09) Mashilo, Alex Mohubetswane; Moothilal, RenaiThe automotive manufacturing industry has received little, if any, sustained academic attention on Black Economic Empowerment (BEE) or Broad-Based Black Economic Empowerment (BBBEE). Most of the work is in the form of news capturing the reactions of industry role players, especially the lead firms in the automotive value chains, to BEE or BBBEE regulatory changes, and individual lead firms’ transformation initiatives. This working paper represents a modest attempt at laying the basis for a sustained focus on BBBEE in the automotive manufacturing industry, the mainstay of South Africa’s manufacturing base. We argue for a production development and industrial transformation approach, with the objectives of deepening and widening domestic value addition as part of localisation, and increasing employment with greater attention on expanding, diversifying and growing the lower tiers of the supplier base – the second and third-tiers.