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27 June 2024 | Story Michelle Nöthling | Photo iStock
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The UFS Centre for Gender and Africa Studies, in conjunction with the South African Institute of Race Relations (IRR), recently hosted the fifth instalment of the Africa Dialogue Series. The webinar series – established by Prof Hussein Solomon – has rapidly grown in stature. The latest discussion on the SA Election Aftermath: Economic, Security and Political Considerations drew high-profile international attendance that included several ambassadors, military attachés, and representatives of security communities.

“Part of the success of the Africa Dialogue Series,” Prof Solomon says, “is that we include a variety of speakers in each discussion. This ensures that the conversation remains relevant.” 

Economic challenges amid coalition governments

Prof Philippe Burger, Dean of the UFS Faculty of Economic and Management Sciences, opened the discussion by highlighting the complexities of coalition governments in South Africa – especially given the country’s lack of experience with such political arrangements. Prof Burger further pointed out the difficulty of managing coalitions amid economic stagnation, high unemployment, poverty, and mounting debt. At the time, Prof Burger forecast that a coalition with the Democratic Alliance (DA) might push for pro-market reforms, but that such an agreement could still suffer from instability due to ideological differences. Prof Burger predicted a ‘rocky five years’ ahead for any coalition government.

A shift in security strategy

Transitioning to security matters, Eeben Barlow, Chairman and CEO of Executive Outcomes, stressed the paramount importance of a robust national security strategy for the new government's stability and South Africa's interests. He advocated for a comprehensive reassessment of the current strategy, urging a shift from reactive policies to a proactive, pre-emptive approach. Barlow underscored the need to align intelligence, law enforcement, and military efforts within this revamped strategy through proper structuring, training, and resourcing. He warned that without comprehensive security planning and decisive implementation, South Africa risks further instability, economic decline, and international reputational damage.

Political fragmentation

Next, Terence Corrigan, Project and Publication Manager at the IRR, offered a sobering analysis of the election results. He noted the severe weakening of the previously dominant ANC, which no longer serves as the nation's ‘moral voice’. Despite this, the opposition failed to capitalise decisively, with the DA potentially reaching its voter ceiling. Corrigan expressed concern over the rise of anti-constitutional parties such as the EFF and MK, which exploit public grievances and pose a ‘populist challenge’ to democratic institutions. He predicted increased political fragmentation and ‘fractious politics’ as South Africa navigates this political landscape.

Legislative gridlock and electoral reform

Adding to the discussion of political challenges, Marius Roodt, Deputy Editor of Daily Friend, noted the worrying decline in voter turnout, and reiterated the concerns regarding South Africa’s fragmented politics. Roodt warned that this fragmentation could lead to legislative gridlocks from minority governments or unstable coalitions unable to pass laws. To address these issues, he proposed electoral reforms, including minimum vote share thresholds, extended time frames for forming governments, binding coalition agreements, and restrictions on motions of no confidence. While some view gridlock as a check against radical policies, Roodt acknowledged that an inability to pass the necessary laws could hamper investment.

Broader political implications

Concluding the presentations, Sanet Solomon, a political analyst and lecturer at UNISA, provided an overarching analysis of South Africa's political landscape post-elections. She called attention to the historic significance of three decades of democracy and fluctuating voter turnout influenced by various challenges and achievements. Solomon emphasised the critical nature of policy alignment in coalitions, particularly the ANC's collaboration with the DA. She also discussed the complexities of maintaining macroeconomic stability, the urgent need for rule of law and anti-corruption measures, and the importance of strategic, cohesive policy making in the nation's future.

The webinar underscored the multifaceted challenges facing South Africa's new coalition government, highlighting the need for strategic economic, security, and political planning to navigate the uncertain road ahead.

Click to view documentClick here to watch the full dialogue.

News Archive

Producers to save thousands with routine marketing strategies, says UFS researcher
2014-09-01

 

Photo: en.wikipedia.org

Using derivative markets as a marketing strategy can be complicated for farmers. The producers tend to use high risk strategies which include the selling of the crop on the cash market after harvest; whilst the high market risks require innovative strategies including the use of futures and options as traded on the South African Futures Exchange (SAFEX).

Using these innovative strategies are mostly due to a lack of interest and knowledge of the market. The purpose of the research conducted by Dr Dirk Strydom and Manfred Venter from the Department of Agricultural Economics at the University of the Free State (UFS) is to examine whether the adoption of a basic routine strategy is better than adopting no strategy at all.

The research illustrates that by using a Stochastic Efficiency with Respect to a Function (SERF) and Cumulative Distribution Function (CDF) that the use of five basic routine marketing strategies can be more rewarding. These basic strategies are:
• Put (plant time)
• Twelve-segment pricing
• Three-segment pricing
• Put (pollination)(Critical Moment in production/marketing process), and
• Pricing during pollination phase.

These strategies can be adopted by farmers without an in-depth understanding of the market and market-signals. Farmers can save as much as R1.6 million per year on a 2000ha farm with an average yield.

The results obtained from the research illustrate that each strategy is different for each crop. Very important is that the hedging strategies are better than no hedging strategy at all.

This research can also be applicable to the procurement side of the supply chain.

Maize milling firms use complex procurement strategies to procure their raw materials, or sometimes no strategy at all. In this research, basic routine price hedging strategies were analysed as part of the procurement of white maize over a ten-year period ranging from 2002–2012. Part of the pricing strategies used to procure white maize over the period of ten years were a call and min/max strategy. These strategies were compared to the baseline spot market. The data was obtained from the Johannesburg Stock Exchange’s Agricultural Products Division better known as SAFEX.

The results obtained from the research prove that by using basic routine price-hedging strategies to procure white maize, it is more beneficial to do so than by procuring from the spot market (a difference of more than R100 mil).

Thus, it can be concluded that it is not always necessary to use a complex method of sourcing white maize through SAFEX, to be efficient. By implementing a basic routine price hedging strategy year on year it can be better than procuring from the spot market.

Understanding the Maize Maze by Dr Dirk Strydom and Manfred Venter (pdf) - The Dairy Mail


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