Pro-poor microcredit in South Africa: cost-efficiency and productivity of South African pro-poor microfinance institutions

This article compares the performance of selected South African microcredit non-governmental organisations (NGOs) that have a poverty-alleviation focus against various benchmarks drawn from the MicroBanking Bulletin. Donors, governments and many analysts regard sustainability as the benchmark of microfinance institutions' (MFIs) performance. However, the most relevant question is whether microcredit NGOs are doing as well as they can in their context. Of particular contextual importance is income inequality in a society. South Africa has the world's second worst income inequality, after neighbouring Botswana. This creates a situation in which microcredit NGOs must recover ‘First World’ costs, particularly salaries, from revenues based on clients who can only afford loans on a par with Third World countries. Compounding this situation are structural obstacles to microenterprise in South Africa, as well as obstacles to productivity in microcredit NGOs. Taken together, this creates a ‘salary burden’ for South African microcredit NGOs, which is the highest in the world according to relevant benchmarks. South African MFI managers face significant obstacles to improving productivity to compensate for the divergence between staff and client living levels. These include an inadequate skills base, the small scale of the market, rapid labour turnover, and limited resources for capacity development. South African MFIs face the options of moving upmarket (which many have done), adopting methodological innovation or new product development, or closure. Of these, there is a strong argument to be made for supported savings and credit approaches as an alternative to NGO-based microcredit. Such an approach has the advantages of greater voluntary input and social capital formation.     

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.     

THE IMPLICATIONS OF SOUTH AFRICAN ECONOMIC GROWTH FOR THE REST OF AFRICA

This paper measures the extent to which South African economic growth is an engine of growth in sub‐Saharan Africa. Results based on panel data estimation for 47 African countries over four decades suggest that South African growth has a substantial positive impact on growth in the rest of Africa, even after controlling for other growth determinants. The estimates are robust to the effects of global and regional shocks, changes in model specification, and sample period.     

Poverty,human rights law and socio-economic realities in South Africa†

South Africa is a nation of immense variety. It has rich cultural diversity, an enviable climate and an abundance of natural resources. However, it is also a nation with vast economic disparities and a highly unequal distribution of income. Hence, in spite of abundant resources and a seemingly vibrant economy, South Africa still faces an enormous poverty problem that is fundamentally no different from that of other African countries. As in many other African countries this problem of poverty is compounded by the HIV/AIDS pandemic; by high levels of unemployment; by low levels of education; and by a number of other factors. Today, South Africa has one of the best constitutions in the world and a Bill of Rights that contains an array of justiciable socio-economic rights. The South African government has also attempted to alleviate poverty and mitigate its effects through progressively developing and expanding a social welfare system and other programmes such as the Reconstruction and Development Programme (RDP) and the Growth, Employment and Redistribution (GEAR) strategy. The purpose of this article is to analyse the role of human rights (specifically the Bill of Rights in the Constitution) and government efforts to alleviate poverty (through certain programmes and service delivery) in the face of adverse socio-economic realities in South Africa.     

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.     

Policy and trade issues for a future regional biofuels market in Southern Africa

ABSTRACT

This paper reviews the domestic political and legislative context surround biofuels initiatives to highlight what opportunities exist for establishing a biofuels trade network between South Africa (as an anchor market) and its neighbours, specifically in Zambia and Mozambique. By analysing global developments in major biofuel importers, reasons for policy inertia in South Africa, and recent experiences with biofuels investments, we suggest that the likelihood for a regional biofuels market developing is slender without addressing land-related challenges in producer countries and revising South Africa’s domestic legislation.     

Supply‐leading versus Demand‐following Hypothesis: Empirical Evidence from Three SSA Countries

Abstract: This study investigates empirically the direction of causality between financial development and economic growth in three sub‐Saharan African countries — Kenya, South Africa and Tanzania. The study seeks to answer one critical question: Does financial development in sub‐Saharan African countries exhibit a supply‐leading or demand‐following response? Using three proxies of financial development against real GDP per capita (a proxy for economic growth), the study finds that the direction of causality between financial development and economic growth is sensitive to the choice of measurement for financial development. In addition, the strength and clarity of the causality evidence is found to vary from country to country and over time. On balance, a demand‐following response is found to be stronger in Kenya and South Africa, whilst in Tanzania a supply‐leading response is found to be dominant. The study therefore recommends that for Kenya and South Africa the real sector of the economy should be developed further in order to sustain the development of the financial sector. However, for Tanzania, there is need for further development of the financial sector in order to make the economy more monetized.     

South Africa's integrated environmental management policy at the crossroads of conservation and development

Sustainable development, as formulated in the 1980 World Conservation Strategy and subsequent elaborations, is being advocated in South Africa by the state through development of an integrated environmental management policy. This policy, however, does not adequately reflect the principles of sustainable development and therefore it cannot provide appropriate guidelines for the practice of integrated environmental management Accordingly, it may be said that South Africa has reached a crossroads in its quest for sustainable development.     

Market-based incentives in South Africa and Zambia: A comparative analysis of the clean development mechanism

The clean development mechanism (CDM) is intended to serve as a market-based incentive that is both efficient and cost-effective for eligible developing countries. The analysis contained in this article explores why, in theory, such an attractive incentive opportunity has been so under-utilised in sub-Saharan Africa. The paper compares the experience of the CDM in South Africa and Zambia. These two Southern African countries were selected because of their varying levels of statehood, South Africa being an emerging, middle-income economy while Zambia is classified as a least developed country. General challenges affecting the CDM were identified in the literature to be awareness, capacity, eligibility and access to finance. The paper then compares how these overarching issues specifically impact the CDM experience in South Africa and Zambia. The paper finds that common complexities relating to the CDM have varying implications for eligible host countries at different levels of statehood.     

Child-headed households in South Africa: What we know and what we don't

Household structures in many countries in Africa have been drastically changed by the HIV/AIDS epidemic. Traditionally, orphans were absorbed by members of the extended family but today this safety net no longer works so well and many children are left to fend for themselves. The South African Government recognises the problem, but views differ on the effectiveness of the programmes for assisting these children. This article looks at what is known and what needs further research. It is known that child-headed households do exist in South Africa and that children living in these households are vulnerable. What is not known is the prevalence of these households and how to deal with the children's psycho-social problems. The article argues that the definition of child-headed households needs to be refined if we are to understand the extent of the problem. This will facilitate assessment of the programmes established for these children.     

The Future of African Trade with China under Alternative Trade Liberalization Schemes

Abstract: Evidence is gradually being built up in Africa on the full extent and rapidly growing role and interest of China in Africa. The global trade integration under the Doha Round, which is considered as the channel for fostering outward‐oriented development and generates economic and social benefits, is expected to effect more African trade with China. Our results show that with an agreement for the Doha Round, China will achieve its dominance on global trade faster than in the baseline scenario where no agreement is expected to be signed. In the long term, this impressive growth in Chinese exports to Africa is not a real value added, as China is already taking the place of the other major trade players both in African markets as well as in the markets of other regions and countries. In other words, China is expected to achieve in 10 years (2010–2020) what initially was expected to be achieved in 20 years in case of no agreement under the Doha Round, where a simple linear estimation on the evolution of Chinese exports is carried out. Our results also show that even in the case where China will offer more market access for African countries, the situation will not improve much for most of them. The reason is that Africa is still suffering from small productive capacities and a low level of diversification of its economy.     

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.     

Contribution of external aid agencies to the social sector: Lessons for South Africa

The contribution of a major aid agency, UNICEF, to the social sector in three African countries is reviewed and important lessons are drawn for developing the social sector in South Africa. UNICEF's commitment to children and women and its substantial development expertise bestow many advantages on developing bilateral relations with UNICEF. It is equally important to develop sound social policies and adequate community‐based programmes in which UNICEF's expertise and resources can be incorporated. Guidelines are formulated for reducing dependence and vulnerability to donor assistance in the social sector.     

The South African brain drain: An empirical assessment

There is no reliable data on the extent of South African skilled emigration and return migration. Statistics South Africa stopped collecting emigration data more than a decade ago. This paper provides data from the turn of the century collected in the countries to which South Africans emigrate. It first provides detailed data on emigration to the United Kingdom, Australia, New Zealand, Canada and the United States – the main destinations for emigrants from South Africa. It then provides estimates for the United Arab Emirates. Finally, it presents data for twenty-five other OECD countries. By contrast with widespread claims that there has been a very large brain gain as South Africans have returned following the global financial crisis, it shows that there was still a net brain drain, albeit at a slower pace. The most recent data suggest that the rate of emigration may be accelerating again.

Abbreviations: OECD: Organisation for Economic Co-operation and Development     

Reviewing South Africa's marketing and trade policies for genetically modified products

South Africa is unique in that it has commercialised genetically modified (GM) crops and has a functional biosafety system, which allows for trade in both GM and non-GM crops, despite being surrounded by countries banning the use of GM products. This paper analyses the past achievements and evolving changes in marketing and trade policies for GM products in South Africa. A quantitative analysis of South Africa's GM imports and exports demonstrates the success of South Africa's flexible regulatory system. Yet a review of recent reforms indicates a trend towards more rigid trade and marketing regulations of GM products. This paper suggests five policy recommendations to improve rather than rigidify regulations and allow South Africa to adapt to global changes, manage risks and take advantage of potentially promising new GM technologies.     

The political economy of the United States policy in Southern Africa

Conclusion Former Secretary of State Kissinger’s policies towards and maneuvers in southern Africa must be examined within the context of America’s global strategy and imperialist objectives. As in Southeast Asia, the Middle East, and Latin America, the United States aims at giving South Africa sufficient support so that she can play a policing role in southern Africa, if not in sub-Sahara Africa as a whole. This is what the Nixon-Kissinger Doctrine called for. It argued that the Western countries must now establish a decentralized, global system of defense. This article was originally published inRBPE, Spring 1977 (vol. 7, no. 3).     

The Maputo Development Corridor: A case study of the SDI process in Mpumalanga

The Maputo Development Corridor (MDC) was officially launched in May 1996 in Maputo by the presidents of South Africa and Mozambique. Within two years it has become known as the ‘most advanced international development corridor in Africa’ (Department of Transport, 1997). As the flagship of the Spacial Development Initiative (SDI) process, the methodology utilised in the MDC is now being applied to the other eight SDIs in South Africa and increasingly is being considered by other African countries. The objective of this article is to examine the lessons learned in implementing the MDC in the Mpumalanga province, South Africa. Having provided a brief orientation and having outlined the short history of the MDC and its institutional context, the article will focus on the progress made by the project in attaining the key objectives set at its launch.     

The Mystery of Missing Real Spillovers in Southern Africa: Some Facts and Possible Explanations

Anecdotal evidence suggests that the economies of South Africa and its neighbours (Botswana, Lesotho, Mozambique, Namibia, Swaziland and Zimbabwe) are tightly integrated with each other. The multiple interconnections suggest that South Africa's GDP growth rate should affect positively its neighbours'. However, our review of the available econometric evidence and our panel growth regressions suggest that there is no strong evidence of real spillovers in the region after 1994, once global shocks are controlled for. More generally, we find no evidence of real spillovers from South Africa to the rest of the continent post‐1994. We investigate the possible reasons for this lack of spillovers. Most importantly, the economies of South Africa and the rest of Sub‐Saharan Africa might have decoupled in the mid‐1990s. That is when international sanctions on South Africa ended and the country re‐integrated with the global economy, while growth in the rest of the continent accelerated due to a combination of domestic and external factors.     

SOUTH AFRICA AND THE NEW PARTNERSHIP FOR AFRICA'S DEVELOPMENT: ECONOMIC SPIN-OFFS AND LINKAGES

The New Partnership for Africa's Development (NEPAD) is a concerted effort by Africa's political leaders to develop a comprehensive and integrated strategic policy framework to raise current levels of socio‐economic development and reduce high levels of poverty across the African continent. The NEPAD framework recognises the need for African countries to pool their resources together in order to enhance regional development and economic integration. To this end, NEPAD emphasises capacity building and also seeks to solicit and disburse funds towards infrastructural development programmes and poverty alleviation projects, among others. South Africa's involvement with the rest of Africa has increased significantly since 1994. Trade exports, foreign direct investment (both market and resource‐seeking in nature) and public‐private partnerships have mushroomed in many parts of the continent. Many South African firms are providing the financial impetus for the infrastructural development and rehabilitation of African economies. This paper discusses salient economic linkages between South Africa and the rest of Africa within the framework of NEPAD. South Africa is the economic hub of sub‐Saharan Africa (and indeed of the African continent), with significant agricultural, manufacturing and services capacity. South African firms have invested in the development of a number of sectors in the rest of Africa, taking advantage of the new investment incentives offered by the NEPAD framework. The target sectors range from mining, the hospitality industry, engineering and construction, finance to telecommunications. These investments and economic involvements are crucial to the development of African countries and the relevant sectors that are important for the realisation of some of the objectives of NEPAD.