South Africa’s new central bank governor took centre stage on Thursday, but the story was a familiar tale of caution and bleak growth for Africa’s most developed nation.
After heading his first monetary policy committee meeting, Lesetja Kganyago said the decision was taken to keep the bank’s repo rate on hold at 5.75 per cent.
Kganyago took up his post earlier this month, replacing Gill Marcus, who announced in September that she would not be seeking a second five year term. But little changed in the language and detailed delivery of the last MPC statement of the year. Read more
The undisputed headline grabber at the end of South Africa’s monetary policy committee meeting on Thursday was the surprise announcement that Gill Marcus would not be seeking to renew her five-year term as central bank governor when it expires on November.
There is little doubt she will be missed by the financial community and all eyes will be on the appointment of her successor, with the hope that the South African Reserve Bank’s credibility and integrity are maintained. Read more
The backdrop to South Africa’s monetary policy committee’s (MPC) meeting this week seems all too familiar.
One protracted strike has ended, but another larger one has started. The bleak growth outlook appears only to be weaker, and Moody’s, the rating agency, has issued a grim warning about the impact of industrial unrest and the potential risks to the country’s credit rating.
Yet for the first time in a while there does not appear to be a clear consensus on whether the MPC will keep rates on hold or raise them. Read more
If anybody had any lingering illusions about the worrying state of South Africa’s economy, Gill Marcus, the central bank governor, should have put them firmly to bed in a speech on Tuesday.
Candidly outlining the economic malaise engulfing Africa’s most developed nation, Marcus told a business breakfast that “the domestic economy is facing enormous headwinds, many of which are of our own making.” Read more
After a deal-making spree in Africa in 2013 that included investments in Ghana, Cote d’Ivoire and Kenya, private equity group Abraaj is on track for an equally active 2014.
Abraaj, which has $7.5bn in assets under management and is based in Dubai, expects to complete four transactions in the region by the end of the year, including in South Africa, Nigeria and Kenya, partner Sev Vettivetpillai told beyondbrics. Read more
After much speculation and hours of waiting Jacob Zuma, South Africa’s president, finally announced his new cabinet on Sunday evening with a raft of changes and a few surprises.
Some ministries were merged – for example, the National Planning Commission, previously led by the retiring Trevor Manuel, was joined with the Performance Monitoring and Evaluation ministry. New ones were born, including telecommunications and a separate communications ministry (watch for that to be dubbed the propaganda ministry by the South African press). Read more
With South Africa’s May 7 election done and dusted and the African National Congress set to extend its 20-year dominance of the political landscape, all eyes are now on President Jacob Zuma’s appointments to his next cabinet.
All should be revealed a day or two after Zuma’s inauguration on Saturday, at the start of a second term at the helm of Africa’s most developed economy. Read more
There were no shocks or surprises from Pretoria today. Rather, South Africa’s Monetary Policy Committee agreed with the consensus among economists and kept interests rates on hold.
Its reasoning was clear – even if the committee was split 5/2 on whether to raise the repurchase rate above 5.5 per cent. The volatile rand – which had slumped dramatically against the dollar at the beginning of the year – has appreciated and been holding firm in recent weeks. The central bank’s forecast for headline inflation has also dipped slightly to 6.2 per cent in 2014 compared to its previous forecast of 6.3 per cent. Read more
Not everything in life is always completely and irredeemably bad, even if you happen to be running an emerging economy. In the case of currency devaluations handed to the big emerging markets over the past year, however, the silver lining has not made up for the cloud.
It was a year ago this week that the “taper tantrum” shook emerging markets, after comments from then Fed chairman Ben Bernanke raised fears of the US central bank tightening monetary policy. Exchange rates dropped sharply in the fragile fraternity of emerging markets with flexible currencies – Brazil, India, Indonesia, South Africa and Turkey. However, bad though the turbulence was – and the panic returned for a short while earlier this year – the currency movements should at least have had the benefit of handing those economies’ exports a competitive advantage through a lower exchange rate.
As South Africa’s monetary policy committee debates whether to raise interest rates or keep them on hold this week, its members’ eyes would have been drawn to the latest inflation figures showing a slight uptick in prices.
Data released by Statistic SA on Wednesday revealed that the Consumer Purchase Index inflation rate in April hit 6.1 per cent – 0.1 per cent higher than in the previous month. It means inflation crept slightly above the 6 per cent ceiling the monetary authorities traditionally like to keep it. Read more
South Africa’s three major platinum producers hit by a 17-week strike look set to resume talks with union leaders after a Labour Court said on Tuesday it would mediate between the parties.
The court’s surprise decision comes as tensions have been rising in South Africa’s platinum belt, with the Association of Mineworkers and Construction Union (Amcu) and the companies – Anglo American Platinum, Impala and Lonmin – poles apart in the wage dispute. Read more
When South Africa’s GDP growth numbers for the first quarter are announced at the end of the month, the destructive impact of the country’s longest-running mining strike on the national economy is set to become emphatically clear, analysts said.
Capital Economics, a London-based research firm, predicted on Thursday that South Africa’s first quarter GDP grew at only 0.2 per cent, down from 3.8 per cent in Q4 (see chart). The forecast is based on a proprietary GDP tracker, which aggregates data on retail sales, manufacturing and mining output to create a proxy for GDP. South Africa announces GDP on May 27th. Read more
The convincing nature of the African National Congress’ (ANC) victory in South Africa’s general election is likely to ease pressure for difficult yet necessary reforms to the country’s economy and labour markets, analysts said on Friday.
With 98 per cent of the vote counted, the ANC had garnered 62 per cent, while the Democratic Alliance took 22 per cent and a new radical party, the Economic Freedom Fighters (EFF), took 6 per cent. Read more
If you have ever sat mute on a plane trying, but failing, to think of a way to start a conversation with the person next to you – then South Africa Airways (SAA) is here to help.
In recent days it launched “social check-in”, through which you share personal details with strangers on Facebook before checking in and choose to sit next to someone you’d like to get to know better. Read more
The African National Congress, like other political parties, has a penchant for numbers.
With South Africans preparing to vote tomorrow in the fifth general election since the dawn of democracy 20 years ago, the ruling party’s manifesto is full of them.
Since 1994 – the most historic of all South African numbers – 3.3m houses have been built; 7m households have been added to the electricity grid; nearly 5,000 (white) farms have been transferred to black farmers; 5m more people are working and GDP has grown to more than R3.5tn, the manifesto tells us. Read more