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South Africa is embarking on a journey of a centralised border authority. See what Siwapiwe Madubela and Lauralyn Kaziboni think this could mean for trade in South Africa
The temporary alcohol bans in South Africa has resulted in great controversy. The country has undergone three bans on the sale, dispensing, distribution and transportation of liquor since March 2020, equivalent to 15 weeks of zero sales. This article explores the costs and benefits associated with the alcohol sales bans, specifically looking at the health and economic aspects. Such a discussion is critical given the known social and health harms associated with alcohol consumption and the industry’s significant contribution towards revenue, jobs, and gross domestic product.
There has been a significant effort among financial institutions to drive consumer financial education (CFE) programmes in line with the GN500 requirements. This blog undertakes an analysis across 14 banks and insurers and identifies four key trends in CFE programmes across target audience, delivery modes, monitoring and evaluation, and novel approaches. Financial institutions need to continue refining their CFE programmes to deliver the highest impact to improve financial literacy among South Africans.
Home ownership is a goal that most citizens strive for. However, the currently constrained economic environment means that most South Africans will have to wait to own a home. The government can play a role in facilitating this endeavor through a range of fiscal and monetary policy tools. For example, recent amendments to the rate of transfer duties on residential properties may impact on the ability to purchase/finance a home. The evidence, to date, is not particularly promising.
Well-functioning financial systems support the functioning of all components of the economy, by facilitating transactions and the flow of resources between deficit and surplus economic units (Mishkin, 2007). A key asset of the South African economy is its well-developed financial systems. However, the regulation of such systems is a complex task, and regulatory failures in financial systems pose large risks for the wider economy. Given these concerns, it is interesting to examine some of the characteristics of the South African financial system, especially as regards consumer indebtedness.
The advent of new technologies continues to disrupt competition in a number of traditional markets, many of which have operated in the same manner for decades. Examples of this include the metered taxi industry (Uber is quickly becoming both a noun and verb in South African conversation) and the television industry (hello Netflix!). From a telecommunication point of view, so-called Over-The-Top (OTT) communication providers such as Whatsapp, Wechat, and even Facebook Messenger, have revolutionised the way in which we communicate.
Anyone who has recently spent time in Kenya, Zimbabwe or Tanzania could not help but notice the pervasive influence of mobile money on everyday life. Mobile money has changed the nature of payments in these countries, lowering transaction costs, driving financial inclusion and providing consumers and small businesses with easy, cheap and safe ways to transact. Even a cursory comparison reveals that South Africa is lagging far behind in terms of both uptake and innovation. A number of attempts to launch similar solutions in South Africa have failed, although more recent efforts such as MTN’s mobile money offering appear to be more successful. Is South Africa’s divergent experience a result of its sophisticated banking system and different customer demographics? Or is a highly restrictive regulatory environment to blame? This blog, based on research done with the Centre for Competition, Regulation and Economic Development at the University of Johannesburg, attempts to unpack this complex market and analyse some of the reasons we are so far behind our regional peers.
Transfer pricing is a business practice that, when abused, can result in substantial lost tax revenue for any country. In South Africa, tens of billions of Rands are lost due to abuse of this practice. Given the cost to the country (relative to the cost of enforcement, SARS cannot afford to under-enforce firms who might be engaging in this abuse.
Agriculture is critical to achieving a number of government priorities including food security, rural development, employment creation, and poverty alleviation. The land reform programme is central to the long-term success of the agricultural sector. Two main policies proposals by the government are currently in the spotlight: the final proposal on Strengthening the Relative Rights of People Working the Land; and the Regulation of Land Holding Bill. These bills seem to be a departure from the land reform model outlined in the NDP, which had significant buy-in from stakeholders. The current proposals have therefore contributed to significant policy uncertainty. There is a need for rigorous and robust evaluation of these policies to ensure sustainable regulatory outcomes.
Policymaking is difficult. It involves opportunity costs, trade-offs, and unintended consequences. Ideally the process should be open and transparent, and should include a vigorous debate on all aspects of the policy being developed: its purpose, cost, mechanics, alternative designs, the likelihood of success, and the like.