Statistics South Africa (Stats SA) recently released the Income & Expenditure Survey (IES) 2022/2023, which provides detailed insights into household income, consumption, and spending across national, provincial, and metropolitan levels.

Conducting an analysis of the IES 2022/2023 is worthwhile in terms of industrial policy as the survey offers critical data directly aligned with the TIPS Income and Expenditure Survey Analysis Project. This analysis explores trends in income and asset inequality across income and expenditure classes, and by gender of household head. This includes examining income from employment, business, financial assets, and imputed rent. The goal is to understand how inequality in both income and assets shapes household economic security and influences consumption capacity. Together, these components will contribute to our understanding of how household-level trends affect industrial development opportunities and constraints in South Africa.

This policy brief examines the Southern African Customs Union (SACU), its member states, its objectives and trade between the member states. It also looks at the trade relationship between SACU and the United States (US), focusing on the US reciprocal tariffs and SACU’s exports to the US. Lastly, the policy brief examines SACU’s member states exports to the US through the African Growth and Opportunity Act (AGOA).

This brief policy is an analysis of South Africa’ imports between 1995 and 2023. The aim is to provide an understanding of changes in the extent and composition of imports over this period. The analysis classifies imports based on the industry in which they fall, and whether they are intermediate goods for value addition, capital goods for industry, or consumer goods with no value addition.

This policy brief examines the funding gaps for small to medium enterprises in South Africa: the sustainability of SMEs requires better access to formal financial services. It first provides an overview of SMEs in South Africa, comprising information about the size of both the formal and informal small business sectors, their production structure, income contribution to various economic sectors, and employment contribution. This is followed by a look at access to funding for formal small businesses, particularly loans obtained by SMEs. It then examines government-backed financial support options available to SMEs, including credit and loan guarantee schemes. In conclusion, the policy brief outlines findings and recommendations.

For more about small business see: The Real Economy Bulletin – The State of Small Business in South Africa 2024

This policy brief opens the door for a deeper understanding of South Africa’s tale of three transitions. First, the electricity transition, characterised by a shift to more decentralised, modular and renewable energy-based systems, is discussed with a focus on the necessary steps to transition the power system sustainability and inclusively. Second, the connected but broader coal transition is unpacked, bringing forward the importance of dedicated interventions in support of a just transition in the value chain, especially in the coalfields of Mpumalanga. Third, the need to pursue an all-of-society and all-of-economy transformation towards climate-resilient and low-carbon models of development is put forward, emphasising the multi-scalar, multi-context, multi-geography nature of climate and transition impacts. Last, the conclusion formulates the necessity of concurrent and mutually-reinforcing but dedicated responses for each of the ‘three transitions’. 

The draft Medium Term Development Plan for 2024 to 2029 sets increased beneficiation as an outcome. Specifically, it argues that government policy on the mining value chain should “Focus on processing our minerals so that we export finished products rather than raw commodities.” This policy brief analyses progress to date in promoting beneficiation and indicates key issues in evaluating specific proposals going forward. Critical elements include whether it is possible to build on South Africa’s comparative advantage in mining; consideration of the opportunity costs in terms of job creation opportunities and electricity use; and the scope for minimising carbon emissions.

A global transition to low-carbon development pathways, enabled by rapid technological evolution is underway. This transition was initially fostered by policy and the urgency of climate action, primarily to mitigate greenhouse gas emissions. The transition is increasingly driven by market forces, as greentech becomes more and more competitive. Global dynamics require that South Africa adapts and responds to the transition, while proactively seeking opportunities in the transition. On the one hand, South Africa ought to protect domestic interests, particularly to ensure a just transition for local vulnerable stakeholders, and enhance the resilience of its economy and population to (climate) shocks. On the other hand, the country must secure its role in the global economy by materially increasing its green competitiveness. This requires thinking differently about industrial policy to progressively shift to green industrial policy and ensure a just transition. 

South Africa has not fully realised the benefits of localisation as a tool for reindustrialisation. A number of issues contribute to this: a) failure to consolidate demand across the state due to fragmentation of procurement plans; b) the influx of cheaper imports which threatened industries such as steel and the clothing, textiles, leather and footwear sector; and c) disagreement on the economic logic of localisation as a tool to support economic growth and reindustrialisation, resulting in fragmented implementation.

This brief aims to provide an analysis of localisation and procurement in South Africa. This includes an analysis of the import intensity in major industries and a review of existing policies and resource allocation for localisation, and proposes options for improving outcomes and implementation. 

This policy brief provides a summary of nine Industrial Policy Action Plans (IPAPs) published from 2007 to 2018. The National Industrial Policy Framework (NIPF) set out the strategic direction for South Africa’s industrialisation. The NIPF was a framework for  IPAPs, aiming to support labour-absorbing and value-adding industries while shifting from commodities reliance and promoting inclusivity of historically disadvantaged people. IPAPs were annual strategies that set out specific actions for priority industries, particularly in the manufacturing sector.

The Department of Trade, Industry and Competition replaced IPAPs with Master Plans in 2019 to drive the country’s industrialisation, highlighting three reasons for the shift towards Master Plans: to create platforms to engage with industry stakeholders to implement industry support measures; to pivot resources and capacity by scaling a few priority industries that would have a positive socioeconomic impact; and to co-ordinate government across departments and entities to implement industrial policy.

Multiple manufacturing industries were prioritised in the nine IPAPs, with eight industries consistently prioritised over IPAP iterations. Prioritising multiple industries in IPAPs limited the focus on labour-intensive and scalable industries envisioned by the NIPF. This brief looks at the performance of priority industries, noting that the outcomes of the different industries varied significantly. In most cases, they did not reach key targets for growth and localisation, although arguably the results would have been worse in the absence of industrial policy measures.

Rules of origin (ROO) could have an impact on investment in Africa. In the highly contested textile and apparel sector the African Continental Free Trade Area (AfCFTA) negotiations on the rules have not been concluded. The choice of what type of ROO to adopt will have far-reaching implications. African countries cannot rely on ROO alone, and need a range of supply-side policies and strategic alliances to ensure they are not stuck at the lower end of the value chain.

This policy brief introduces the textile and apparel value chain, as well as the ROO being discussed within the AfCFTA. It then looks at the capabilities and capacities in the textile and apparel regional value chain, and investigates the impact of foreign direct investment in some of the African countries and the issues to consider in the textiles and apparel sector. Recommendations are made based on complementary areas for consideration in attracting investment in the continent. Finally, a conclusion is made on the potential impact of the ROO on investment on the textiles and apparel sector in the AfCFTA.