Tourism,business linkages and small enterprise development in South Africa

Although considerable attention is given to the prospects for developing small, medium and micro-enterprises (SMMEs) in South Africa's tourism economy, very little relevant research has been undertaken in this regard. In this article, the findings are presented from over 60 detailed interviews conducted with key enterprises and entrepreneurs involved in tourism, outsourcing and small enterprise development in South Africa. The aim is to examine opportunities for outsourcing and business linkage development in South Africa's tourism economy, and to investigate the difficulties that confront the tourism SMME economy through examining the status of business linkages between large tourism enterprises and SMMEs in South Africa. The South African research is located within the context of existing works on tourism and small enterprise development in developing countries.     

The impact of tourism on poverty in South Africa

This paper evaluates the potential impact of tourism on poverty in South Africa on the basis of recent survey data on international tourism spending patterns. It looks at three scenarios, using an applied general equilibrium model. The main finding is that the poor benefit very little in the short term from additional tourism income. A further finding is that domestic and international tourist expenditure affect the economy differently; both markets are therefore important. In essence, the research confirms that tourism receipts can be used as a tool to alleviate poverty, but in South Africa this must be supported by policies that focus on the labour market and human resource development.     

Unpacking tourism SMMEs in South Africa: structure,support needs and policy response

Small enterprise (SMME) support policy in post-apartheid South Africa has traditionally involved support initiatives in the form of ‘generic’ packages that overlook the specificities of particular sectors. In this article the specific issues concerning SMME development in tourism are investigated. Against a backcloth of a review of international scholarship on tourism small firms, the article presents findings from recent empirical investigations into the progress and problems of tourism SMME development in South Africa. Within the international scholarship and policy debates on tourism, it is argued that the South African experience is particularly distinctive in two respects: (1) the support of particular groups of tourism SMMEs linked to objectives of transformation and (2) the introduction of dedicated tourism-specific support programmes for SMME development.     

Job Creation and Destruction in South Africa

Analysts of the South African labour market have mainly used household surveys to analyse the labour market. It has been more difficult to explore the labour demand of firms, as a result of limited data availability. We use the Quarterly Employment Statistics survey, an enterprise survey conducted by Statistics South Africa, to explore how South African firms create and destroy jobs, thereby shedding light on many of the policy questions that are relevant in a high unemployment society like South Africa. We find that job creation and destruction rates are similar to those found in Organisation for Economic Co‐operation and Development countries. There is little evidence that labour legislation creates rigidities that prevent firms from hiring or firing workers. We also find that larger firms are better net creators of jobs than small firms and that net job creation rates are negative in manufacturing. Our research has important policy implications – particularly for the South African National Planning Commission's 2030 plan, in which new jobs are envisaged to come mainly from small‐ and medium‐sized firms. Our research suggests that this scenario is not likely without changes to policy or legislation.     

Unlocking the rural tourism potential of the Limpopo province of South Africa: Some strategic guidelines

Inadequate economic restructuring and a decline in agricultural production in South Africa have reduced the economic opportunities of rural communities. They have limited the economic development options of rural areas, rendering older development strategies less viable and forcing many to look for alternative methods to help them survive and prosper. Rural tourism and its associated businesses have emerged among the most popular non-traditional options for rural development, because of their ability to generate income and jobs. This study examines national and international strategies for developing tourism, and investigates the opinions of participants in the tourism industry of the Limpopo province, with a view to identifying the key strategic issues that can ensure the success of rural tourism. The research consisted of a literature study, field surveys, and interviews with policy-makers and administrators, tourism operators, academics and tourists. The results identify rural tourism as a viable development tool for Limpopo province. Six strategic issues were identified as fundamental for its success. It is believed that these guidelines could also be applied to other rural provinces, thus creating a generic strategy for developing rural tourism.     

Estimating the future health care cost of population aging in South Africa

ABSTRACT

This paper analyses the relationship between health care expenditure and population aging in South Africa using yearly data from 1983 to 2015. Empirical evidence from an Autoregressive Distributed Lag approach to cointegration indicates that old dependency and life expectancy are major drivers of public health expenditure in South Africa besides the income. Particularly, when structural breaks are controlled for, income exhibits a long-term elasticity with respect to health spending greater than unity; suggesting that South African public health care has become a luxury good over time. Interestingly, South African public health spending is found to be responsive to demographic development only in the long run. This is consistent with the micro evidence that health expenditure increases with individual age with significant impacts in the long term. Finally, using economic and demographic projections statistics, we find that public health expenditure could roughly double in the next fifteen years ceteris paribus.     

Combating poverty in South Africa

The successful and peaceful political transition in South Africa is regarded as a great accomplishment for its people. Unfortunately, democracy was not accompanied by economic growth and policies that could lead to a meaningful quality of life and an acceptable standard of living for all the country's citizens. There is a need for South Africa to reconcile the expectations resulting from the achievement of democracy with the realities of both the problems and the potential of the economy. As South Africa attempts to alleviate poverty through development, it is essential to balance the ever-increasing and often competing demands against limited natural resources. This article formulates some policies and programmes designed to combat poverty at its source.     

The Impact of Health on Labour Force Participation in South Africa

This paper estimates the effect of self‐assessed health (SAH) on labour force participation (LFP) in South Africa. This is motivated by a high disease burden and declining LFP in South Africa during the study period. Data is sourced from the four waves of the National Income Dynamics Study. The results indicate a positive and significant effect of self‐reporting excellent, very good or good health on LFP (relative to fair or poor health). The effect is more pronounced for men relative to women. The result indicates that health policy can be a tool for significantly improving LFP in South Africa.     

A Sticky Information Phillips Curve for South Africa

Mankiw and Reis propose the Sticky Information Phillips Curve (SIPC) as an alternative to the standard New Keynesian Phillips Curve to address empirical shortcomings in the latter. A SIPC for South Africa is estimated, and we find estimates of information updating probability between 0.69 and 0.81, somewhat higher than suggested by methods using micro‐evidence. Because the estimation requires data on expectations of current period inflation and output gap conditional on sequences of earlier period information sets, we provide a detailed analysis of the impact on our estimates of alternative proxies available in South Africa.     

The impacts of tourism investment on rural communities: Three case studies in South Africa

Significant research, both locally and internationally, has been undertaken on tourism development and its impacts on the empowerment of rural communities. This article analyses the extent to which three tourism projects in South Africa, namely the Makuleke tourism initiative, Umngazi River Bungalows and the commercialisation of Manyeleti Game Reserve, have improved the livelihoods of rural communities and contributed to rural economic development. The projects are analysed in terms of both their economic and non-economic benefits, as well as their contribution towards the attainment of certain key policy objectives of the South African government.     

Modelling Intercontinental Tourism Consumption in South Africa: A Systems‐of‐Equations Approach

This paper investigates the pattern of inbound tourists' consumption in South Africa, examining four main intercontinental markets and five different tourism goods. The empirical investigation develops an almost ideal demand system (AIDS) model and it extends recent research by allowing tourists to base their spending decision on the real effective price differences between South Africa and their home country. The results show that tourist spending in South Africa is a luxury good, and tourists react normally to a change in the relative price of goods. The cross‐price elasticities suggest that the preferences of different markets influence their view of substitutability and complementary effects between various products in South Africa.     

Poverty in South Africa – a statistical analysis

Poverty is one of the major challenges facing democratic South Africa. This article focuses on poverty in South Africa, using the Income and Expenditure Survey conducted in 1995 by Statistics South Africa (formerly the Central Statistical Service). In the first part, different approaches that can be followed in the measurement of poverty are discussed. In the second part, Sen's approach to the measurement of poverty and the Chi-square Automatic Interaction Detection (CHAID) technique have been used to analyse the above data. CHAID is used to explore the relationship between the poverty status of the household (ie poor or non-poor) and other household characteristics. These variables can then be used as predictors of poverty status.     

Gender,entrepreneurship and socioeconomic reparation in South Africa

Entrepreneurship development has become recognized as a functional means of tackling South Africa’s socioeconomic challenges of slow growth rate, rapidly increasing unemployment, and racially inequitable distribution of income. However, current policies and programs ignore the potential input of the female gender. Yet, females are proven to be capable of using their peculiar gender dispositions effectively as small and micro entrepreneurs. The article examines the socioeconomic outcomes of South Africa’s systemic crisis, gender-specific influences on entrepreneurial supply and alternative women-in-entrepreneurship programs that could be implemented with sensitivity to that country’s sociocultural diversity.     

Testing for Son Preference in South Africa

Evidence from many developing countries suggests that parentshave a preference for sons over daughters. This has been referredto as son preference. This paper uses individual level unitrecord data to test the son preference hypothesis in South Africa.We use an accelerated hazard model to estimate the durationbetween successive births and our results indicate that sonpreference exists only for the Indian community in South Africa.Indian households are observed to have a higher duration betweenchildren following the birth of a son, irrespective of the numberof children they already have. For the rest of the population,there is very little evidence of son preference. Preferencefor sons could be the result of a combination of factors includingreligious beliefs and social customs such as the dowry system,lineage and familial and kinship ties.     

An investigation into food-away-from-home consumption in South Africa

Food policy that ignores food-away-from-home (FAFH) in a developing country like South Africa will be misleading given changes in demand for food over time. This study contributes to our understanding of the factors that influence the demand for FAFH in South Africa. Using panel data from the Income and Expenditure Survey, this study analyses the effects of income and socio-demographic variables on FAFH expenditure using a double-hurdle model. The results show that small-sized households headed by younger white females/males and living in an urban settlement are most likely to purchase FAFH while male-headed households spend more than female-headed households. Furthermore, income of the household head is an important determinant of household FAFH expenditures. The income elasticity of expenditure on FAFH is inelastic and a normal good. The small size of the participation elasticities means that growth in the FAFH sector will be driven by households with existing expenditure.     

Russian Projects and Energy Cooperation in South Africa

The article discusses the problems and prospects for the development of a Russian nuclear power plants in South Africa, as well as other innovative energy projects in this country. Acute energy shortages in South Africa give Russia a unique chance to enter the African market and create a technological link between African countries and Russian innovations. An analysis of the political and economic situation in South Africa, as well as an assessment of the prospects for Russian business participation in the development of the South African energy sector were carried out using research conducted by the authors in South Africa in 2016, and interviews with Russian and South African civil servants and businesmen.     

Beyond GDP in assessing development in South Africa: The Gauteng City-Region Socio-Economic Barometer

Although consensus to move beyond gross domestic product (GDP) for measuring development in Africa exists, efforts to operationalise the idea have been frustrated by institutional barriers and lack of an integrated methodology. This article addresses the methodological problem by introducing an innovative graphic tool – The Gauteng City-Region Socio-Economic Barometer. The tool pulls together a set of 38 indicators across 10 sectors into a single analytical visual. Its efficacy rests in its ability to show each individual indicator, sector, and the overall socio-economy simultaneously. The Barometer not only acts as a tracking and diagnostic tool but as a benchmarking tool as well. Applied to Gauteng province of South Africa, the Barometer shows that high levels of GDP do not necessarily mean good quality of life. Assessment of welfare solely on the basis of GDP can therefore be misleading for government. The Barometer methodology is an invaluable tool for governments committed to evidence-based planning.     

Discounted Agricultural Growth in South Africa

This paper examines impacts of appropriate resource allocation on subsistence level output. This study uses a stylized Coase Bargaining model and data from the South African Reserve bank to support the second welfare theorem. Back of the envelope calculations indicate the opportunity cost of manufacturing output has been the 20% discount in agricultural output in South Africa since 1968. This paper offers an exercise that can be implemented in developing nations having institutions resulting in two-sector economies. Moreover, the methods used here will help policy makers to estimate an appropriate value for wealth transfers.     

Poverty,livelihood and class in rural South Africa

Using data from a national living standards survey undertaken in late 1993, this paper disaggregates and explores the economics of livelihood generation and class in rural South Africa in an effort to contribute to the ongoing and vociferous debate in South Africa about poverty and its alleviation. Pursuant to the suggestion of participants in a recent participatory poverty assessment, this paper analyzes what might be termed the class structure of poverty. After exploring the range of claiming systems and livelihood tactics available in rural South Africa, the paper offers a first look at who the poor are by disaggregating the rural population into discrete livelihood strategy classes. Non-parametric regression methods are used to then estimate and graphically explore the nature of the livelihood mapping between endowments and real incomes. In addition to identifying those endowment combinations that map to consumption levels below the poverty line (the asset basis of poverty), the topography of the estimated livelihood mapping helps identify the constraints that limit household's ability to effectively utilize their assets and endowments. These results suggest that poverty is a matter of not only having few assets, but also of constraints which limit the effectiveness with which those assets are used, and poverty and livelihood policy needs to be designed accordingly.     

The contribution of trout fly fishing to the economy of Rhodes,North Eastern Cape,South Africa

Recent government legislation, which calls for the eradication of trout from ecosystems where they may cause harm, could damage the tourism appeal of many South African catchments. However, no South African studies have tried to quantify the economic impact of removing trout from rivers and streams. This study aimed first to value the Rhodes trout fishery, North Eastern Cape, South Africa, and second to assess whether the trout fly fishing industry in Rhodes could form the foundation for the implementation of a local economic development initiative. Overall, the study found that the trout fishing industry directly generates approximately R5 658 240 per annum, and sustains a minimum of 39 direct job opportunities for the community of Rhodes, and can therefore provide the impetus for the creation of a tourism-based local economic development programme.