Macroeconomic Impact Analysis
Macroeconomic Impact Studies are typically undertaken for large companies who want a better understanding of the overall contribution that the company makes to the economy. This can be purely for public relations purposes or it can be to help engage with stakeholders. Macroeconomic analysis quantifies the direct, indirect and induced expenditure taking the interrelated links of government, business and households into account and is usually quantified as contribution to Gross Domestic Product (GDP), direct and indirect jobs, contribution to taxes and household income.
Microeconomic Analysis examines the impact of a project on specific sectors of society. While a project might generally be beneficial to society there would invariably be parties that stand to gain or lose more than others. The objective of a microeconomic analysis is to identify these parties and to suggest appropriate mitigation measures if necessary.
Cost Benefit Analysis
Cost Benefit Analysis (CBA) is the primary analysis that is used to decide whether a project is beneficial to society and whether it should be implemented. As its name suggests, CBA compares the benefits of a project with its costs and is performed from the perspective of society as a whole. If the aggregated discounted benefits over a defined period of time outweigh the aggregated discounted costs over the same time period then the project is deemed to be economically efficient and therefore beneficial to general society.
The essential requirement for a country to grow and prosper is that it becomes more productive and, as a result, more competitive. Stratecon has been involved in numerous projects that have attempted to make companies, sectors, provinces and government departments more competitive. This could be through reduced travel times, improved communication, access to the internet, a healthier workforce or the clustering of businesses to create synergies within industries.
Gambling Market Assessments
Entering a gambling market, particularly for casino operators, is a high risk business. The up-front capital expenditure can be very high and the casino needs to be configured to the correct size for the market. Too small and there would be overcrowding. Worse from an operator perspective is for the casino to be too large. This poses both the threat of bankruptcy, on the one hand, and reduces the casino experience of the punter. Casino operators need to ensure that a proposed casino is the right size for the market while Gaming Authorities need to ensure that additional casinos do not lead to oversaturation.
Environmental Impact Assessments
In many cases environmental impact assessments (EIAs) require an economic specialist study. Members of Stratecon have undertaken a number of such specialist studies. The approach is dictated by both international best practise based on Equator Principles, International Finance Corporation (IFC) standards and the European Investment Bank guidelines. The approach also follows the South African guide on specialist economic studies.
Analysis of an industry/ project may require an assessment of applicable law, legal requirements, licensing, permits, court cases, company status, contracts and contractual relationships. Either as a stand-alone assessment or as part of a wider economic and other analysis, we conduct legal research and assessment based on investigation of the law/legal aspects relating to the project.
In most cases, our legal research adds particular value to risk and compliance as well as contributing to an overall understanding of industry or role player conditions. We answer questions such as: what is being done, what is allowed, what needs to be done, where is non-compliance, what is required to enter an industry and where are the pitfalls?