Browsing by Author "Black, Anthony"
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- ItemOpen AccessAn investigation of employment outcomes in South African manufacturing(2020) Mercer, Sean; Black, AnthonyThe aim of this research paper is to investigate the employment outcomes in South African manufacturing between 1972 and 2016. The research employs a combination of qualitative and quantitative analysis in demonstrating how South Africa's manufacturing sector has become increasingly capital-intensive, with aggregate manufacturing employment falling by approximately 600 thousand jobs between 1982 – 2016. The investigation highlights the influence of industrial policy decisions in this outcome, creating a bias towards investment in capital-intensive manufacturing industries. This trend has continued post-1994, despite government's repeated commitment to job creation and strategic policy support for more labour-intensive industries. A further investigation of the manufacturing sector at a sub-industry level indicates that while capital-intensity has increased in capital and labour-intensive industries alike, the increase in aggregate manufacturing capital-intensity is due primarily to capital-intensive industries expanding their share of aggregate capital stock and output relative to labour-intensive industries. Consequently, South Africa's revealed comparative advantage lies, somewhat paradoxically, in capital-intensive production, contrasting the manufacturing sectors in similar comparator countries. To ensure a rigorous investigation of the aforementioned outcomes, the paper examines the common notion that South African real wages are too high to be competitive in labour-intensive production. The findings indicate that poor labour productivity is an equally important contributor to uncompetitive unit labour costs relative to competitor countries. As a means of addressing these challenges, utilizing a practical example, the paper proposes the use of special economic zones to create an environment from which labour-intensive production can thrive. It highlights the potential of targeted industrial policies, in a controlled environment to reduce the cost of labour whilst simultaneously improving productivity over time. Utilizing various instruments, for example wage subsidies, the example illustrates how such an approach is a cost-effective way of encouraging investment in labour-intensive industries, simultaneously offering a solution to more meaningful employment creation in South African manufacturing.
- ItemOpen AccessApplying fuzzy-set theoretic poverty measures within a developmental local government context : the Khayelitsha - Mitchell's Plain case study(2004) Dawood, Ghalieb; Horner, Dudley; Black, AnthonyThis paper attempts to demonstrate the importance of the linkage between the presence of poverty and the nature of governance, something largely omitted from poverty studies in South Africa. The context of this investigation was the establishment of the new local government model (i.e. Developmental Local Government), which puts governance at the forefront of addressing poverty effectively. The new governance model adopts a multidimensional poverty paradigm in its Integrated Development Planning (IDP). However, in this study we have examined whether the approach adopted (i.e. Basic Needs) is necessarily the best multidimensional approach available. We have given preference to the capabilities approach with its emphasis on well-being where people are the beneficiaries of development rather than the basic needs approach where the emphasis is on goods and services as a means to good life. Sen's Capabilities Approach was operationalised by adopting a relatively new methodology (Le. fuzzy-set theoretic poverty measures) for measuring multidimensional poverty in the Khayelitsha Mitchell's Plain (KMP) magisterial district using the Census 2001 dataset. Our results show that unemployment, housing and low incomes need the most attention in KMP. Furthermore, the fuzzy-set measures, which view poverty as opaque and vague, yield more detailed policy information, thus preventing the single-policy response dominating many IDPs at present. As a medium term policy response, it is suggested that the implementation of the extended public works programme in KMP has the potential to significantly address both the material and non-material capability failure existing in KMP.
- ItemOpen AccessAutomative policy and the Restructuring of the South African Industry, 1990-2005(2007) Black, Anthony
- ItemOpen AccessAutomotive policy and the restructuring of the south african industry, 1990 - 2005.(2007) Black, Anthony; Kaplan, DavidSince 1990 the South African automotive industry has been through the most dramatic phase of its long history as reduced protection has led to much greater international integration. This thesis analyses the restructuring of the sector in response to these developments. The first major section provides a detailed assessment of the international environment and its impact on the prospects for growth of the automotive industry in developing countries and South Africa in particular. In many developing countries, the sector has been subject to extensive state support and intervention. While traditional production locations in advanced countries remain dominant, there has been a significant shift of production to developing countries. This expansion has, however, been focused on a relatively small number of locations. For countries which do not have very large existing or potential domestic markets, policy needs to define an 'automotive space' and provide some protection to anchor the domestic industry if local capacity is to be retained and developed. In South Africa, a gradual but sustained period of tariff liberalisation has been coupled with import-export complementation measures aimed at increasing exports and achieving a higher degree of specialisation. With its unfavourable geographical location and history of heavy protection, the prognosis for the South African industry in the early 1990s was not good. To date the costs of liberalisation have been quite low. The export response to the realignment of the incentive structure has been strong and the industry has become much more efficient and competitive. However, other objectives have not been achieved. Recently, the share of vehicle imports has grown sharply. Local content levels remain low partly because of lower protection. There have also been serious distortions. The system of export credits used to offset import duties has led to rapid expansion of 'peripheral' component exports, driven more by the objective of rebating import duties than any real economic justification. Investment levels have been modest compared to the investments flowing into some of the world's more dynamic emerging automotive industries. Historically, the development of small-scale, multi-model plants has been the central structural problem in the South African automotive industry. It exacerbated the lack of competitiveness associated with high levels of protection and limited the prospects for expanding local content. One of the key objectives of policy has been to encourage industry rationalisation. But while a theoretical case for industrial policies can easily be made, implementation is much more complex. There has been progress in achieving higher model volumes, but it has not been sufficient to justify investments in high levels of local content. A number of case studies of firm level restructuring were conducted. These illustrate that the major reason for the lack of competitiveness in the initial stages was not necessarily inefficiency or a lack of dynamism on the part of firms but rather an inefficient industry structure consisting of too many low volume producers. Component firms have in fact proved quite dynamic in adapting to this environment. Restructuring has taken a number of forms and firms have proved remarkably resourceful. But internal or plant level changes, while necessary have seldom proved sufficient. In many cases firms have been forced to seek out a foreign partner. Foreign ownership or control in turn has had a number of effects on firm performance and prospects in areas such as exports, R&D and the use of domestic suppliers. The industry has made substantial progress towards developing a more efficient and competitive structure. But difficulties remain as it attempts to attract investment in an increasingly competitive international environment. The scale of domestic production is still not sufficient to encourage high levels of localisation of components. That in turn means that assembly sector costs remain high because of the logistics costs associated with high import levels. The challenge for policy currently is to encourage investment in high volume, sustainable automotive production while at the same time gradually moving to more neutral and lower levels of support.
- ItemOpen AccessAutos for Africa? : possibilities and pitfalls for an automotive industry in Africa(2016) McLennan, Thomas; Black, AnthonySub-Saharan Africa (SSA) has grown very rapidly over the last decade. Demand for light vehicles has rapidly increased in this period, albeit from a very low base. Growing demand is almost entirely supplied by the import of used vehicles from the developed world. This has led to an enormous automotive trade deficit in the region where, apart from South Africa, there is almost no domestic production. The dissertation establishes the trends and scale of automotive demand in SSA and then considers the question of whether and how the region can begin to meet this booming demand by developing its own industry. Despite limited industrialisation levels and relatively small domestic markets, some larger countries, such as Nigeria and Kenya, are putting policies in place to encourage domestic production. However, if countries follow individual national strategies it is unlikely that any will have sufficient market scale or investment levels to become sustainable automotive producers. A regional automotive strategy needs to be adopted in SSA in order to attract large scale productive investment.
- ItemOpen AccessBenchmarking and productivity analysis in South Africa's automotive industry(2020) Moshikaro, Lesego; Black, Anthony; Conradie, BeatriceDespite being the biggest beneficiary of industrial policy, South Africa's automotive industry has struggled to remain competitive relative to its peers. This is partly a result of increasing global competition, structural shifts and changing demand. At the same time, the local industry remains constrained by a slowdown in economic growth, increasing labour costs and insufficient economies of scale. By analysing the role of policy in improving competitiveness and export performance in South Africa's automotive industry, this paper provides an overview of driving forces, challenges and trends in the local industry. The study uses benchmarking data to analyse productivity improvements in the industry. It finds that South African component firms have implemented lean and world class production techniques, improving their operational competitiveness with significant improvements in quality, inventory reduction and delivery reliability to customers. Although South Africa appears to be catching-up to its competitors, it still ranks poorly among auto-producers in emerging markets. Its competitors in the Far East, South America and Eastern Europe enjoy low production costs, rising FDI inflows and proximity to end markets. Policy interventions influence competitive advantages. This therefore highlights the important role of government in developing a policy mix that aims to increase firm-level competitiveness through minimising operational costs, improving production flexibility and encouraging higher local content to foster industrial development.
- ItemOpen Access"Beyond the Sparkle" : diversification of mineral-rich economies: The case of Botswana(2018) Modungwa, Bame; Black, AnthonyBotswana is known as Africa's growth miracle, having transformed from one of the poorest countries in the world at independence, into a middle-income economy in a short period of time. The country's success has been reliant on high revenues accrued from its diamond mining industry, however, government expects diamond production to decline rapidly in the next 10 - 15 years. Diamond depletion presents a threat to Botswana's economic growth, development and macroeconomic stability, which has created the urgent need for economic diversification to be realised in the near future. This dissertation explores the concept and theory behind economic diversification for resource abundant countries. Country cases are reviewed alongside the literature on economic diversification, in order to build an analytical framework on economic diversification for mineral-rich economies. The drivers of diversification are classified under three themes: the enabling environment approach, the interventionist approach and the sector-driven approach. Botswana's efforts to diversify are evaluated against these themes, highlighting the prospects and barriers to success. The dissertation concludes that the quest for economic diversification is not an easy one, particularly in countries such as Botswana with single-resource dependence. Moreover, in order for Botswana to succeed, it will require a policy mix incorporating aspects of the three themes. The government of Botswana (GoB) must ensure that they develop an enabling environment to incentivise increased export development; they should invest in physical and human capital in order to facilitate private sector growth, and they should set policies and targets to support sectors that show potential to become internationally competitive.
- ItemOpen AccessContributions of a minerals industry cluster to sustainable development: A case study on human and social capital in Richards Bay, South Africa(2017) Kato, Shuhei; Von Blottnitz, Harro; Black, AnthonyThe South African economy has developed with its strong connection to the minerals extraction and processing industries. Rich endowments of coal and a well-established mining sector in the country enabled the generation and supply of competitively priced electricity to energy and capital intensive processing and chemical industries. Although the minerals industry cluster remains globally competitive at the present time, whether it can be a catalyst for sustainable development, economically, socially and environmentally is in question. Field work was carried out in Richards Bay to analyse the development contributions of the local aluminium industry cluster in terms of two of the five capitals essential for sustainable development, viz. human and social capital. This town is the host of world class aluminium smelters as well as mineral sands mining and smelting, amongst other energy intensive industries such as paper pulp and phosphate production. The analysis interrogates the importance of skills development and of collective action between various stakeholders centred on the Hillside smelter of South 32, and including interviews with representatives of ten further stakeholders. Evidence found shows that the minerals industry cluster has contributed to human capital development, and continues to do so, through well-established in-house training and mentorship programmes as well as their corporate social investment into enterprise and supplier development, education and primary health care. However, a more competitive and environmentally responsible industrial cluster would require continuous improvement through institutional and individual capabilities. Research and training institutions and government intervention have important roles to play in this regard. One of the major challenges is rooted in the lack of social capital development in the past. Although no single accepted definition nor standard for measuring exists, social capital can be defined as the norms and networks that enable people to act collectively. The racially segregated development pattern in the region had left residents with huge disparities and a trust deficit. This mitigated against collective actions within the community except in the few cases of natural disaster responses and crime prevention. This is evidenced in the free-riding of skilled labourers by some companies in the region and the failure of socio-economic development programmes in the past due to the low level of community buy-in. The research highlights that the significance of the local minerals industry cluster remains undoubtedly high; however, a facilitative process of social capital development is necessary to promote collective actions. The process requires accountable formal institutions who can mitigate social distrust, create dialogue and a cooperative environment between different interest groups. This is particularly important as the government resource-based industrialisation policy is centralised in developing linkages from extractive sector (downstream, upstream, and side-stream) but little attention has been paid to the aspect of social capital development. It is expected that the study itself contributes to social capital development and works as a communication platform to further promote studies in applying multidisciplinary learning-by-doing process across academia, policymakers, and practitioners.
- ItemOpen AccessEssays on telecommunications demand and regulatory policies(2017) Mothobi, Onkokame; Grzybowski, Lukasz; Black, AnthonyThis thesis employs models of homogenous and differentiated products to empirically investigate the demand for mobile phone services in Sub-Saharan African countries. The thesis consists of a short introductory chapter, three self-contained empirical chapters, and a summary chapter. In Chapter 2, we use survey data conducted in 2011 in eleven countries in Sub-Saharan African to analyze how the availability of physical infrastructure influences the adoption of mobile phones and usage of mobile services. The availability of physical service infrastructure is approximated by data on night-time light intensity in the areas in which survey respondents reside. After controlling for a number of individual and household characteristics including disposable income, we find that adoption of mobile phones is higher in areas with better physical infrastructure. However, in the group of mobile phone adopters, the use of mobile phones for mobile financial transactions is negatively influenced by the level of infrastructure. Mobile phone users who live in areas with poor infrastructure are more likely to rely on mobile phones to make financial transactions than individuals living in areas with better infrastructure. On the other hand, the use of mobile phones to access services such as email, skype, social media networks and Internet browsing is not dependent on the availability of physical infrastructure. Our results support the notion that mobile phones improve the livelihoods of individuals residing in remote areas by providing them with access to financial services which are otherwise not available physically. Chapter 3 examines the effect of mobile number portability (MNP) on own- and cross-price elasticities. Using quarterly data for 28 mobile operators in seven Sub-Saharan Africa countries between 2010Q4 to 2014Q4 to estimate a differentiated products demand model, we find that MNP increased own-price elasticities of demand in countries that have implemented the facility. This increase in price elasticities may be a result of a reduction in switching costs between operators. On average, the introduction of MNP increases own-price elasticities by 0.47 in absolute value. We compare the level of price elasticities before and after the implementation of MNP in Ghana and Kenya, which implemented this policy in the time period of our study. Our results suggest that in Ghana, MNP increased own-price elasticities by an average of 0.35 in absolute terms from an average value across firms and over time of -0.74. In Kenya, the introduction of MNP increased own-price elasticities by an average of 0.21 in absolute terms from a lower average value across firms and over time of -0.39. However, we find that in Kenya and Ghana the average own-price elasticities remained small even after the implementation of MNP relative to other countries without MNP in place. Thus, our results suggest that MNP is not the ultimate solution for increasing competitiveness within the mobile industry. While in Chapter 3 we use a product differentiated model of demand, in Chapter 4 we make assumptions that allow us to use a homogenous model of demand to examine the effect of regulatory policies on mobile retail prices. Using aggregated quarterly data for eight African countries for the period 2010:Q4 to 2014:Q4, we estimate structural demand and supply equations. We find that mobile termination rates (MTR) have a significant positive impact on mobile retail prices. A decline in average MTR of 10% decreases average mobile retail prices by 2.5%. On the other hand, MNP has an insignificant effect on price and subscriptions in selected African countries. This may be due to inadequate implementation of MNP, which subsequently lead to low demand for porting numbers. The average market conduct in the mobile telecommunications industry for selected African countries can be approximated by Cournot Nash equilibrium. In Chapter 4 we find price elasticities that are closer to 1 in absolute terms. The price elasticity, however, is estimated at an average of -0.27 for Sub-Saharan Africa countries in Chapter 4. We attribute this inconsistency to the different assumptions made in each chapter.
- ItemOpen AccessFirm growth, survival and productivity in South Africa(2017) Masenyetse, Rethabile Francis; Dunne, John Paul; Black, AnthonyIn developing economies, the existence of a healthy industrial structure is vital to the pursuit of long term policy objectives of employment and sustainable economic growth. This makes it important to understand the dynamics of firm survival and growth. There has been little attention on the topic in developing countries because of data limitations, which prevalent in most developing countries except for few countries with established stock exchanges such as South Africa. This thesis studies the relationship between firm growth, survival and productivity using South Africa as the case study and fills the gap in industrial organisation literature by providing new empirical evidence on developing countries. The first paper analyses the changing size distribution, concentration rates and reasons for non-survival. The data on companies listed in the Johannesburg Stock Exchange (JSE) during the period 2000-2010 is used. Firm sales is adopted as the main measure of firm size while assets are used for comparison purposes. Following the Law of Proportionate Effects (LPE) framework, it evaluates of the relative growth rates of large and small companies in general and at sectoral and industrial levels. The result indicates that smaller firms are growing faster than larger ones, and more interestingly it is the smallest of the small and medium firms that are growing the fastest indicating that the industrial structure in South Africa is quite healthy. This finding is robust to correction of potential econometric problems of sample selection bias, growth persistence and heteroscedasticity. The second paper considers the patterns of growth and survival and specifies a simple logit binary survival model that allows for firm and industry specific characteristics as determinants of survival. The model is improved upon using the non-parametric Kaplan-Meier product limit method and estimating Cox proportional hazard model. The results indicate that large firms, high leverage and profitability operating in the primary sector have higher probability of survival in South Africa. This is robust after taking into account the global financial crisis of 2008-2009. The last paper tests the validity of the link between firm finance and total factor productivity. Using leverage and liquidity are the indicators of finance, the results from panel data estimation indicates that low leverage firms are more productive compared to the high leverage, while the low liquid firms are less productive compared to high liquid firms. The results were subjected to a number of robustness tests to address potential econometric issues that may invalidate the findings.
- ItemOpen AccessForeign direct investment in South Africa : a comparative study of strategies and key determinants(2005) Danstile, Monwabisi Dominic; Black, Anthony; Smith, LeonardThis dissertation considers the question of foreign direct investment (FDI) into South Africa. It examines constraints on investment, entry strategies by foreign films, firm performance and the impact of FDI on the South African economy.
- ItemOpen AccessForeign direct investment in the manufacturing sector in Botswana : key determinants and deterrents(2003) Maduo, Pinkie Gertrude; Black, AnthonyThere is considerable controversy on the role and impact of foreign direct investment (FDI) on economic growth in developing countries. Empirical studies show inconclusive results. For countries that rely heavily on a single commodity for the bulk of their export revenue, foreign investment is seen as a means by which export diversification can be promoted. Botswana relies heavily on diamond exports and the government has long realised the need for economic diversification. Measures which have been put into place to diversify the economy include a range of policies aimed at promoting sectors such as manufacturing, agriculture, financial services, tourism and construction. An investigation of whether the government's initiatives to diversify the economy are bearing fruit is thus necessary. This study attempts such an analysis by focusing on developments in the manufacturing sector. It examines the role and impact of FDI in Botswana's economy by investigating the pattern of investment and export behaviour of the country's foreign-owned manufacturing firms. More specifically, the factors that hinder or encourage FDI in the country are also investigated. The study uses survey and secondary data to examine these research problems. The findings from the survey data reveal that there is hope for the manufacturing sector in Botswana. The sector can become more export-oriented if problems like low labour productivity, the shortage of skilled labour and high interest rates charged by financial institutions can be attended to. In addition, foreign investors interviewed also felt that government incentives, particularly financial ones, primarily benefit citizen or domestic firms. The major policy recommendations that emerge are that the government should continue to encourage foreign direct investment as foreign firms are employment generating. Also, government should continue to promote the manufacturing sector and other non-mining sectors to diversify the country's production base. Moreover, incentives geared towards foreign investors, particularly exporters should be introduced.
- ItemOpen AccessGhana 'rising'?: A socioeconomic snapshot of Ghana's place in the 'Africa rising' narrative(2016) Baker, Emma; Trollip, Hilton; Black, AnthonyThe 'Africa Rising' narrative, which has gained popularity since the late 2000s, refers to the considerable economic and social gains that have been made across the continent since the start of the new millennium. Heralded as more than just GDP growth and poverty reduction, supporters of the 'Africa Rising' narrative also make reference to structural change, macroeconomic improvements and a growing middle class among sub-Saharan African countries. However, there are many who dispute these claims, arguing instead that recent economic growth has not been inclusive and sustainable, and many challenges still exist. This dissertation takes the case study of Ghana as a lens through which to explore the arguments in more detail and determine whether robust, reliable evidence exists to support the claims that Ghana is 'rising', both economically and socially. Using the headings of poverty, economic growth, and employment and equality, socioeconomic data collected from Ghana from the year 2000 onwards was analysed to assess the evidence behind the claims and counter-claims made. Despite significant data limitations, the findings present a mixed picture of Ghana's recent economic growth and development, with substantial progress made in poverty reduction, economic growth and income per capita, but considerable challenges remaining in terms of the current macroeconomic crisis, high youth unemployment and rising income inequality. Ghana's current development pathway, based primarily on commodities and oil revenues, is likely to be unsustainable in the long-term, and the slow rate of structural change, especially in manufacturing, means that growth so far has not been sufficiently inclusive or equitable to benefit the majority of the population. Within the broader context of the 'Africa Rising' narrative, the study also brought to light two important considerations: firstly, that significant data limitations exist within national statistics, making it necessary for claims to be investigated thoroughly; and secondly, that it is important to examine the case of individual countries such as Ghana before painting a whole continent with the same brush.
- ItemOpen AccessThe growth implications of Agglomeration in South Africa, 1996-2010(2012) Msulwa, Rehema; Black, Anthony; Turok, Ivan; Dunne, PaulThe paper investigates whether the spatial distribution of economic activity in South Africa is static or evolving. Testing Gibrat’s Law to determine this, results suggest growth patterns in South Africa have been divergent over the period 1996-2010. The share of population, employment and GVA in the largest municipalities has been increasing relative to the shares in smaller municipalities.
- ItemOpen AccessHeat as medicine - a study of the ceiling retrofit programme in South African low cost housing(2015) Kirsten, Sean Louis; Black, AnthonyExploring the energy saving and efficient intervention options available to governments, Winkler et al (2002) measured the energy cost-benefits of different interventions in low cost housing across South Africa. These interventions included installing insulated ceilings (retrofitting), roof insulation, partitions, wall insulation, window insulation, solar water heaters (SWH) and compact fluorescent lights (CFL's). Of these interventions, wall insulations and ceiling installations were the most cost-effective interventions. This approach was coined "Heat as medicine" by Howden‐Chapman (2011) and a CBA conducted by his team concluded a 2:1 benefit to cost ratio (B:C) from the insulation process (IEA, 2011). Mathews and van Wyk (1996) found that by installing a ceiling in a low cost house, a 74% saving in energy consumption can be made during winter and Spalding-Fecher et al (2002) found a R781 saving in energy per year per household from ceiling installations. With ceilings having such a substantial cost-effective impact on energy efficiency, this paper will be focusing on the ceiling retrofitting intervention in addressing energy poverty. Surprisingly, solar water heater interventions offer a much smaller net benefit, as a result of high installation costs and increased usage of water. Having attended conferences on this topic and engaged with low-cost house residents in the Western Cape, the SWH intervention is often seen by the households as a luxury item, which they would happily exchange for more direct benefits such as ceilings and affordable and energy-saving cooking stoves.
- ItemOpen AccessIncentives, investment and economic diversification : the case of manufacturing development in Botswana(2003) Mogapi, Sydney; Black, AnthonyBotswana, which is widely known for its remarkable economic growth and prudent macro-economic management, was one of the poorest countries in the world prior to independence in 1966. The country was primarily a subsistence economy largely founded on agriculture, with a modicum of tourism. However, Botswana has since experienced rapid economic growth. This growth has been propelled by the mining sector, particularly the diamond industry. The reliance of Botswana on a single commodity has prompted the government to engage in efforts to diversify the economy. This objective has been an important thread in the country's economic policy since the 1980's and forms the key theme of recent national development plans. Due to a small domestic market, Botswana has embarked on a strategy to promote export orientated companies and the facilitation of Foreign Direct Investment, (FDI). Manufacturing, which is our primary focus, has been identified as a possible vehicle for economic growth and diversification, due to the fact that certain subsectors are labour intensive and could alleviate the country's pressing employment problem. We conducted a survey of fifteen manufacturing firms with the research objective of capturing their views on Botswana as an investment environment, the level of incentives, economic diversification and other related issues. The field research was based on individual interviews using a questionnaire. We argue that factors, which previous studies identified as impediments to investment in the manufacturing sector, have largely been addressed. However, we concur that investment into this sector has not been as high as expected. Although incentive programmes have been established to promote investment, particularly into the manufacturing sector, research on the effectiveness of incentives is inconclusive. We argue that these incentives have to be retained in their current form. In neighbouring countries the development of the manufacturing sector has frequently necessitated the establishment of Export Processing Zones (EPZs). EPZs have found support from institutions such as the World Bank. which regards them as a powerful signal of a country's departure from import substitution to being an export-orientated economy. It is this paper's contention that the establishment of an EPZ is not the best policy option for Botswana. We argue that the objectives of diversification can best be achieved through a multi-tiered investment promotion strategy that will raise awareness of Botswana as an investment destination, facilitate the entry of foreign firms into the country, and identify valuable projects. The investment promotion strategy should seek to raise awareness of Botswana as a preferred investment destination.
- ItemOpen AccessKeeping up with the Khumalo's: An analysis of the indebted African middle class in South Africa between 2008-2017(University of Cape Town, 2020) Scott, Thabo; Black, AnthonyThe demise of apartheid has accelerated the emergence of the African middle class. This group's expenditure pattern has recently received public scrutiny, leading to empirical research on their consumption patterns leaning on the theory of conspicuous consumption. It has also been reported that African middle-class households are becoming more reliant on the use of credit and are becoming overindebted. This study explores the composition of the middle class and the factors that lead African middle-class households to becoming over indebted. The methodology is both quantitative and qualitative. Drawing on the National Income Dynamics Study (NIDS) data, the study examines varying definitions of the middle class in developing country contexts, through comparisons of alternative approaches. This research paper ultimately makes use of the vulnerability approach to define the South African middle class. The empirical results show that the middle class as a whole has grown at a slow rate between 2008 and 2017. However, the African middle class has experienced the most rapid growth, outpacing its white counterpart by a significant margin. The dissertation then uses two waves of (NIDS) data, relating to the periods 2008 and 2017 to present a descriptive analysis of household overindebtedness, which is driven by life-cycle consumption needs. The results show that middle-class households hold a proportionately large amount of debt. Within the middle class, Africans hold the most debt, when compared to other races. To adequately understand the nuances of the indebted African middle class, in-depth interviews were conducted. The results indicate that pertinent issues for this group, such as black tax, contribute to households becoming over-indebted, as this mostly affects the African population group.
- ItemOpen AccessLearning, Technical Change and the Trade Regime in the South African Automotive Component Sector(1996-12) Black, AnthonyIn an article published in the Harvard Business Review in 1989, Magaziner et al give a compelling description of the entry of the Korean conglomerate, Samsung, into microwave oven production in the early 1970's.
- ItemRestrictedLocation, Automotive Policy, and Multinational Strategy: The Position of South Africa in the Global Industry since 1995(Wiley, 2009) Black, AnthonyThe South African automotive sector has become much more integrated into the global industry since 1995. Rapid export expansion has shifted its orientation fundamentally away from its focus on the small domestic market and the industry is widely regarded as a success story of South Africa's democratic transition. However, important vulnerabilities remain, and it is by no means clear that the mode of integration has been particularly favorable to the long-term development of the industry. The relatively small size of South Africa's domestic market and its regional location pose clear disadvantages in terms of attracting international investment. Integration into the global industry has therefore been partial and continues to reflect a degree of hesitancy by multinational firms to make really major commitments to the South African industry. The warning signs include recent import expansion and low local content in domestically assembled vehicles. Automotive policy has also produced distortions, encouraged uneconomic investments, and led to unforeseen side effects. These impacts limit the gains that have been made and are likely to cause complications in the future.
- ItemOpen AccessMade in South Africa? An Assessment of Local Content within the Automotive Value Chain(2022) Bowden, Guy; Black, AnthonyDespite rising vehicle production, the South African automotive industry has experienced declining levels of local content in locally produced vehicles. This is partly a result of increasing international competition, worsening factor and overhead costs, and insufficient economies of scale. Prior to the global and national lockdowns prompted by the COVID-19 pandemic, the automotive supply chain had already been under strain for several years. This study examines the evolution of the South African automotive value chain and discusses the key challenges and opportunities facing localisation efforts. The study uses a combination of existing literature, industry reports, time series data and benchmarking data to analyse the development of the industry. The study reaffirms the underdevelopment of the local supply chain and points to its continued decline. The introduction of an amended national automotive industrial programme (the APDP 2) promises to address some of the shortcomings of its predecessor. However, several challenges remain, namely: limited domestic market protection for automotive components; high tax rates on locally produced vehicles; an ineffective transformation policy (BBBEE) that harms small businesses; a managerial leadership and skills shortage among 2nd and 3rd tier firms as well as the broader manufacturing community; and an expensive and dysfunctional national ports system. Without serious structural redress, this study finds that the automotive industry is not poised to meet the target of 60% local content by 2035 as laid out in the South African Automotive Masterplan. Finally, five internal combustion engine vehicle models are identified as having significant potential around which to grow the local supply chain. However, global pressures are driving the transition to electric vehicles at an unprecedented rate. The industry must urgently localise the sourcing and production of new electric vehicle technologies if it is to maintain its role as a leader for industrialisation in South Africa and the Sub-Saharan region.