Localisation has been highlighted by the government as a key policy aim during the recovery of the economy from the Covid-19 crisis. Organised business in Nedlac has been asked to substitute 20% of non-petroleum goods imports for domestically produced goods as soon as possible.
This study assesses whether such a target is realistic through three parts. First, a literature review was conducted, placing such a policy aim within the context of South Africa's own history of industrial policy and with evidence from other countries. Second, a quantitative study looks at how the import, manufacturing, and capacity data can give us insights on such a target and whether it is possible to
reach it. Third, 125 firms were surveyed across sectors to understand views on localisation and how fast they believe they can localise, what the constraints are, and a range of related matters.
This second annual digest reflects on the trade partnership between South Africa and the
European Union (EU) largely within the context of the Coronavirus 2019 (COVID-19) pandemic.
During the 2020 year, the global economy experienced a record-level contraction, with South
Africa’s economy shrinking by a historic 7% in 2020.
However, despite this record decline in economic activity, South Africa’s nominal trade with both the
EU and the rest of the world has shown remarkable resilience. The SADC-EU Economic Partnership
Agreement (EPA) has continued to support bilateral trade between South Africa and the EU.
Foreign direct investment projects
The TIPS FDI Tracker monitors foreign direct investment projects on a quarterly basis, using published information. The total investment value from projects captured this quarter was R68.9 billion. Projects captured in the fourth quarter are a mix of those announced at the 2020 Investment Conference and others identified outside the conference.
The third South African Investment Conference took place in November 2020 against the backdrop of the COVID-19 depression. It picked up 50 pledges from foreign and local companies, totalling approximately R109 billion. Of these, 21 pledges totalling R36.1 billion came from foreign companies. As with previous conference pledges, some of the investments are already in the pipeline, rather than entirely new projects. The FDI Tracker for quarters three and four 2020 will provide a detailed analysis.
Powerfuels are synthetic gaseous or liquid fuels based on renewable hydrogen, which is hydrogen obtained by the electrolysis of water using renewable electricity. Powerfuels are therefore a renewable alternative to fossil fuels (as their use avoids net emissions of CO2), to be used in sectors which may be difficult to decarbonise and may not be easily driven directly by renewables-based electricity.