Category: political economy

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beneficiation competition industrial inputs Investment political economy

ARCELORMITTAL TO PAY R1.5 BILLION FINE FOR CARTEL BEHAVIOUR, COMMITS TO PRICING REMEDY

Media release from the Competition Commission: 

The Competition Commission (Commission) has reached a settlement agreement with ArcelorMittal South Africa Limited (AMSA), finalising all pending investigations and prosecutions against AMSA. In terms of the agreement, AMSA admits having been involved in the long steel and scrap metal cartels, and agrees to pay an administrative penalty of R1.5 billion (one billion five hundred million rand). Furthermore, AMSA has agreed to remedies relating to complaints against its pricing conduct without admitting that its pricing conduct constituted a contravention of the Competition Act. In this regard, AMSA has undertaken that for a period of five years it will limit its EBIT (earnings before interest and tax) margin to a cap of 10% for flat steel products sold in South Africa. In addition, AMSA has committed to a R4.6 capital expenditure over the next five years. The Commission has, in turn, agreed that the settlement will cover all pending cases against AMSA including those that are still under investigation.

Today, 22 August 2016, the Commission filed an application with the Competition Tribunal (Tribunal) for confirmation of this settlement agreement as an order of the Tribunal. The agreement relates to various cases that the Commission has investigated against AMSA, some of which were subsequently referred to the Tribunal for adjudication. The following is a summary of the cases and the Commission’s findings.

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political economy politics public policy

Reclaiming Africa’s history of economic dynamism

Trudi Makhaya’s Business Day column of 12 April 2016

DURING my undergraduate years in the late ’90s, unlike many commerce students majoring in economics, I took a few economic history courses. African economic history did not feature much in the curriculum. Some of what was there, such as the characterisation of lobolo as a fundamentally economic exchange for reproductive labour, I disagreed with. But there was enough in it to appreciate the economic dynamism inherent in precolonial African societies.

Last month, I had a heated encounter with student leaders from about six universities. It was a small workshop with student representative council members, 20 young men and one young woman. I was invited to share my views about student financing, as an economist. I have no firm solutions. I placed a few ideas for funding free or heavily subsidised higher education within the context of a tight budget and low rates of economic growth. I highlighted some trade-offs. But I also quarrelled with the notion of free higher education for all, especially wealthy students.

Accusations of neoliberalism, of Western-centric thought, of being the messenger for my “bosses” were flung at me. The more we argued past each other, a picture emerged of what many, although not all, of the students regarded as African.

Any economic concept or calculation was dismissed as thoroughly un-African. I tried to argue that every society, African or not, thinks about trade-offs and resource allocation and strategies for prosperity.

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fiscal policy political economy public policy

Column: Striving forward, looking backward

FEBRUARY has come and gone. The state of the nation and the budget, major policy statements on the economy, have been laid before an anxious public. What now? They say autumn is the most honest season. Leaves and flowers fall away to reveal what lies beneath. Summer’s hotheadedness gives way to an ominous chill. Already, the united front presented by President Jacob Zuma and Finance Minister Pravin Gordhan through the two major policy statements is fraying.

UPDATE: Hear Gordhan’s interview with Bloomberg on 10 March 2016 on measures South Africa will take to raise growth and maintain fiscal stability

In a recent column, I described the president’s state of the nation address as a dose of reluctant realism. His performance reminds one of the Roman mythical figure Janus, who is depicted with two faces — one facing forward, the other backward. In the state of the nation, we were presented with one of Zuma’s faces, looking forward to the future, preaching pro-growth and pro-reform sentiments. At other times, though, we are presented with another unrepentant face, one that looks back to the past few weeks (or years) and tries to justify poor decisions and lapses of leadership.

It is from Zuma’s other face that we receive disconcerting statements that undermine the work being done to restore the country’s economic policy credibility. He argued that markets overreacted to former finance minister Nhlanhla Nene’s removal in December. In an ironic display of credentialism, he lauded Desmond van Rooyen as the most qualified finance minister he has appointed. If anyone disdains the idea that a clutch of certificates trump determined self-education and a track record, it should be our president.

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economic policy fiscal policy political economy

In case you missed it…Pre-budget analysis at CNBC Africa

See what we got right and wrong…

CNBC Africa’s Tumisho Grater spoke to Trudi Makhaya, consulting economist at Mercantile Bank, Professor Christopher Malikane, Associate Professor of Economics at the University of Witwatersrand and Deborah Tickle, the Director of International and Corporate Tax at KPMG for their views.

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credit rating economic policy political economy public policy

State of the Nation 2016 – a note on President Zuma’s address

South African Flag/Media Club South Africa

‘A dose of reluctant realism’ is the title of a short note we prepared on the President’s State of the Nation address.

In a State of the Nation address focused on the economy, President Zuma stated that a ‘resilient and fast-growing economy’ is at the centre of government’s policy. A clear pro-growth statement was made, dispelling notions of ideological drift within the ANC. Though global economic conditions and the analogous experiences of other commodity-exporting economies got some airtime, Thursday’s speech also highlighted the domestic constraints that have stifled growth, such as energy shortages and labour unrest.

You can download and read the rest of the note here: State of Nation 2016 – A dose of reluctant realism