As South Africa’s Monetary Policy Committee has been meeting this week it will have been grappling with some familiar themes: a subdued global outlook and sluggish growth at home while juggling with the trade-off between boosting economic activity and countering inflationary pressures.
It’s a balancing act the MPC has battled with for more than a year, but now a new spanner has been thrown into the works: the sharp depreciation of the rand this year (not to mention any fallout from the Cyprus banking saga.) Continue reading »
When Cyril Ramaphosa was elected deputy president of the governing African National Congress last month his re-emergence into the top echelons of South Africa’s politics was widely welcomed.
Yet as Ramaphosa has settled into his new job, the old rifts between public and private sectors have rapidly resurfaced, laced with bellicose language. Have we enetered a new period of ANC/corporate mistrust? Continue reading »
Jacob Zuma, South Africa’s president, is known for his jovial demeanour. At African National Congress events, you can count on him to open and close his appearances by leading a boisterous round of singing, accompanied by hip-swinging dancing that belies his 70 years. When he’s delivering a speech, he’ll often break into a chuckle – even at his own expense as he can sometimes labour his way through prepared statements. Continue reading »
It didn’t take long for the ghosts of the violent labour unrest South Africa endured in 2012 to resurface.
The year is not yet two weeks old, but already pictures of police in riot gear dispersing hundreds of striking workers are being beamed across South African television channels. On Wednesday, more than 1,500 farm workers in the fruit growing Western Cape Province downed their tools to demand their minimum salary – a paltry R69 a day – is raised to R150. Continue reading »
As South Africa’s mining industry reels from weeks of wildcat strikes amid warnings that the unrest could lead to more job losses in an industry that provides employment for around 500,000 people, the last thing the country needed was a rise in unemployment.
But that’s what it got on Thursday when Statistics SA reported that joblessness in Africa’s largest economy had risen to 25.5 per cent in the third quarter, up from 24.9 per cent in the previous three months of the year. Continue reading »
Since a spate of wildcat strikes erupted across South Africa, the headlines have been damning and the image of Africa’s most developed economy has been severely tarnished. But, so far, the country’s equity and bond markets have managed to buck the trend of negativity.
In the weeks since the unrest broke out in the country’s rich platinum belt and spread to gold, the Johannesburg Stock Exchange has hit new highs in rand terms and is up by over 5 per cent since August 1. Continue reading »
To the frustration of the mining houses operating in South Africa – including many of the world’s largest – a debate about the nationalisation of the country’s mines has ebbed and flowed, but never quite died.
This is in spite of the fact that a number of top government officials, from President Jacob Zuma down, previously insisting it was not the policy of either the government or the governing African National Congress. Continue reading »
So, South Africa’s monetary policy makers have finally bitten the bullet and cut interest rates by 50 basis points, surprising the vast majority of analysts and highlighting concerns about the growth prospects in Africa’s largest economy.
For months now economists have been talking about the delicate balance act being performed by the South African Reserve Bank: weighing up inflationary pressures versus against a gloomy growth outlook. Continue reading »
South African pharmaceutical companies are on an expansion drive. In April, it was Aspen Pharmacare announcing that it was acquiring a portfolio of over-the-counter products from GlaxoSmithKline for R2.1bn ($271m), a move intended to help to boost its foray into Latin America.
This week, it was Adcock Ingram’s turn, splashing out 4.8bn rupees ($86m) on a drugs portfolio and a distribution network from India’s Cosme Farma. Continue reading »
Volatility is the name of the game as far as the South African currency goes – and it’s a painful one for the country’s manufacturers.
At the beginning of June the rand hit a three year low of 8.71 against the US dollar and on Friday it gained as much as 2.7 per cent to appreciate to 8.175 against the greenback as the currency swings with global economic concerns and domestic uncertainty. Continue reading »
Good news for the South African consumer, perhaps, and a surprise for analysts: inflation appears to be falling more quickly than expected. Data released on Wednesday show that consumer price inflation fell to 5.7 per cent a year in May from 6.1 per cent in April. Bloomberg’s consensus forecast was 5.9 per cent.
The faster than expected dip will fuel debate about whether the South African Reserve Bank will look to cut interest rates. Continue reading »
South African corporates are feeling the double whammy of policy uncertainty at home as the African National Congress gears up for a key conference this month, and the eurozone crisis weighing heavily on manufacturers and general sentiment.
A report on Thursday from the South African Chamber of Commerce described the situation as “Harsh Economic Realities” as it released data that showed business confidence in Africa’s largest economy had hit a 10-year low. Continue reading »
Rarely, if ever, will a speech by Susan Shabangu, South Africa’s mineral resources minister, be complete without a reference to safety in the country’s mines.
It is a central theme of the ruling African National Congress, in part because of the dire treatment heaped on black mine workers during the decades of apartheid and discrimination. And last week, as she delivered her department’s budget statement to parliament, Shabangu described the sector’s commitment to health and safety as resembling a “curate’s egg – good in parts, which means lacking overall.” Continue reading »
Africa’s huge lack of infrastructure is the inescapable topic when discussing the continent’s growth prospects. And it is easy to see why. Chronic power problems affect 30 African states; less than 5 per cent of African agricultural land is irrigated; only one in three Africans in rural areas has access to an all-season road and transport costs in sub-Saharan Africa are the highest in the world.
One way to tackle the shortfall is a rise in public private partnerships (PPPs) and an increased role from the private sector in building roads, railways and power stations. And Lars Thunell, chief executive of the International Finance Corporation, the investment arm of the World Bank, hopes the tide is beginning to turn. Continue reading »
This week it was the turn of FirstRand, one of South Africa’s “big four” banks, to expand beyond its domestic borders into other parts of Africa.
It is a move that South African entities have been pursuing with increasing vigour in recent years, from banks to retailers such as Shoprite, Woolworths and Massmart, which was taken over by Walmart, the US giant, last year. The trend is reflected in an Ernst & Young report on FDI projects on the continent, which saw a 27 per cent increase in 2011. Continue reading »