This paper documents the construction of a South African Social Accounting Matrix (SAM) for the year 2012. The SAM is built using a Statistics South Africa Supply Table and Use Table, National Accounts, and various household and labour market surveys. It provides a detailed representation of the South African economy and identifies 62 activities and 104 commodities; labour is disaggregated by education attainment level; and households by per capita expenditure deciles. Information on labour is drawn from the 2012 Labour Market Dynamics Survey of the Quarterly Labour Force Survey. Data on households is taken from the 2008/9 Living Conditions Survey. The SAM identifies government, investment, and foreign accounts. It is a useful database for conducting economy-wide impact assessments, including SAM-based multiplier analysis and computable general equilibrium modelling.
Prior to the onset of the COVID-19 pandemic, South Africa confronted an unfolding economic crisis. Today, the economic situation has worsened in essentially every dimension. If there is a silver lining to this terrible pandemic from the perspective of the South African economy, it could be found in an enhanced willingness to implement reform measures designed to rekindle growth, improve equity, and drive sustainable development whilst recognizing significant fiscal constraints. To this end, this paper focuses on three areas: skills; food systems, nutrition, and health; and urban structure. In each area, we first briefly consider long run perspectives and then turn attention to high return positive steps that can be implemented in the very near term and are consistent with the realization of a positive long run vision. We find that much greater openness to immigration of highly skilled and experienced workers (and their families) stands out as a rapidly implementable policy that offers strong potential to stimulate growth, create jobs, and reduce inequality at low costs to government and with low risk. With respect to food systems, nutrition, and health, we point to a solid basis for optimism about growth and employment prospects in the long term. We also highlight the potential benefits of holistic perspectives that include implications for nutrition and health. Turning to the very near term, we underline the need to reduce the policy uncertainty associated with land reform. In this optic, we recommend consideration of a focus of reform in the near term on favorable dryland areas that can be equipped with supplemental irrigation, with the goal of permitting these areas to specialize in higher value products. Judicious water resource use planning must accompany this policy. Turning to urban structure, we note the persistence of the spatial inequities entrenched by the apartheid era. With tight fiscal constraints on government investment that are likely to extend to the medium term, we seek to refocus policy on measures designed to increase efficiency and equity outcomes derived from existing infrastructure. The analyses of these three areas complement the growth agenda released by the National Treasury in August 2019 and the policy discussions contained in a series of policy papers published by Economic Research South Africa (ERSA) over 2021. ; Non-PR ; IFPRI1; CRP2; 1 Fostering Climate-Resilient and Sustainable Food Supply; DCA ; EPTD; PIM ; CGIAR Research Program on Policies, Institutions, and Markets (PIM)
We link a bottom-up energy sector model to a recursive dynamic computable general equilibrium model of South Africa in order to examine two of the country's main energy policy considerations: (i) the introduction of a carbon tax and (ii) liberalization of import supply restrictions in order to exploit regional hydropower potential. Our results suggest substantial reductions in the country's greenhouse gas emissions when these two policy changes are jointly implemented (relative to business-as-usual baseline scenario). Moreover, the two policies impose essentially no cost to economic growth, although there is a 1 per cent reduction in employment. From our analysis we conclude that a regional energy strategy, anchored in hydropower, represents a potentially inexpensive approach to reducing emissions in South Africa. Moreover, combining carbon taxes with a removal of import restrictions lessens the burden of adjustment on politically sensitive and economically important sectors.
Absent vaccines and pharmaceutical interventions, the only tool available to mitigate its demographic effects is some measure of physical distancing, to reduce contagion by breaking social and economic contacts. Policy makers must balance the positive health effects of strong distancing measures, such as lockdowns, against their economic costs, especially the burdens imposed on low income and food insecure households. The distancing measures deployed by South Africa impose large economic costs and have negative implications for the factor distribution of income. Labor with low education levels are much more strongly affected than labor with secondary or tertiary education. As a result, households with low levels of educational attainment and high dependence on labor income would experience an enormous real income shock that would clearly jeopardize the food security of these households. However, in South Africa, total incomes for low income households are significantly insulated by government transfer payments. From public health, income distribution and food security perspectives, the remarkably rapid and severe shocks imposed because of Covid-19 illustrate the value of having in place transfer policies that support vulnerable households in the event of 'black swan' type shocks. ; PR ; IFPRI3; ISI; DCA; CRP2; SA-TIED; 1 Fostering Climate-Resilient and Sustainable Food Supply; IFPRIOA; COVID-19 Measuring Impacts and Prioritizing Policies for Recovery ; EPTD; PIM ; CGIAR Research Program on Policies, Institutions, and Markets (PIM)
Absent vaccines and pharmaceutical interventions, the only tool available to mitigate its demographic effects is some measure of physical distancing, to reduce contagion by breaking social and economic contacts. Policy makers must balance the positive health effects of strong distancing measures, such as lockdowns, against their economic costs, especially the burdens imposed on low income and food insecure households. The distancing measures deployed by South Africa impose large economic costs and have negative implications for the factor distribution of income. Labor with low education levels are much more strongly affected than labor with secondary or tertiary education. As a result, households with low levels of educational attainment and high dependence on labor income would experience an enormous real income shock that would clearly jeopardize the food security of these households. However, in South Africa, total incomes for low income households are significantly insulated by government transfer payments. From public health, income distribution and food security perspectives, the remarkably rapid and severe shocks imposed because of Covid-19 illustrate the value of having in place transfer policies that support vulnerable households in the event of 'black swan' type shocks.
This paper reports 'first pass' estimates of the costs of the lock-down implemented by the South African government beginning on 27 March 2020. It also presents a series of recovery scenarios. Four channels by which a lockdown and other efforts are expected to influence economic activity are distinguished. In total, these lockdown measures have profound economic implications. The implications of the pandemic in the rest of the world, and hence on demand for South Africa's export, are not as large as the effects of the domestic lockdown but are still very large by any normal measure. In terms of recovery, the 'Quick' recovery scenario results in a GDP decline of about 5 per cent by the end of 2020—an economic outcome that would have been considered catastrophically bad a little more than one month ago. Persistent effects of the Covid-19 would bring even worse outcomes for GDP in line with the 'Slow' and 'Long' recovery scenarios. ; Non-PR ; IFPRI5; CRP2; 1 Fostering Climate-Resilient and Sustainable Food Supply; 5 Strengthening Institutions and Governance; SA-TIED; COVID-19 Measuring Impacts and Prioritizing Policies for Recovery ; EPTD; DGO; PIM ; 37 pages ; CGIAR Research Programs on Policies, Institutions, and Markets (PIM)
