Nationwide Banking Strike on Friday
As it is not enough that economy and businesses are battling, the unions live and breathe the smog of fear of anyone, who is threatened to lose their job. Hence the union for the banking sector have motivated and instigated once again a strike of epic proportion, designed to cripple the ruling banking mafia. More than 50 000 bank employees will be protesting against retrenchments on Friday 27 September, making it difficult for consumers to transact, according to the finance union SASBO. This protest action has been planned since June and there is no way the union will back out now, even if banks change their minds about retrenchments ahead of the protest scheduled for Friday. “As SASBO we are adamant there is nothing they (banks) can do,…
SARB misses Opportunity to stimulate Economy by leaving Rates unchanged
As feared by most, the SA Reserve Bank’s monetary policy committee left the repo rate unchanged at 6.5%. The prime rate will remain 10.25%. The announcement was made by the central bank’s governor Lesetja Kganyago at a media briefing in Pretoria on Thursday afternoon. The decision was unanimous, Kganyago said. The repo rate is the benchmark interest rate at which the Reserve Bank lends money to other banks. Changes in the repo rate affect the prime lending rate, which is the lowest rate at which banks start lending to clients.
In July, the Reserve Bank cut the repo rate by 25 basis points rate cut to 6.5%. That was the first rate cut in more than a year, Kganyago noted that while growth rebounded in the second quarter of the GDP rebo…
Economic Freedom Ranking dropped until now 54 Places
In the Economic Freedom of the World (EFW) 2019 Report, South Africa ranks 101 out of 162 countries. This is a fall of two places from last year but is a massive fall of 54 places since 2000 when the country achieved an enviable ranking of 47 and was in the top 30% of economically free countries. With such an upward trend SA was on track to be one of the world’s most prosperous countries, but instead, in 2019, South Africans have less economic freedom than do residents in 60% of the democratic world. Far from building on its post-apartheid achievement, SA citizens now have less economic freedom than they gained in the six years since 1994 and democracy.
This was the solemn message given by Neil Emerick at the 12 September EFW 2019 lau…
World in Shock over violent Outbreaks against Foreigners
A wave of xenophobic attacks in South Africa has left migrants living in fear of their lives and soured the government’s relationship with its regional counterparts.
Moussa Faki Mahamat, the chairman of the African Union, and officials from Nigeria and Zambia expressed outrage at the attacks, which erupted days before the African edition of the World Economic Forum in Cape Town on Wednesday. Nigerian President Muhammadu Buhari will send a “special envoy” to South Africa for talks with South African President Cyril Ramaphosa.
The violence erupted last week after a South African taxi driver was allegedly shot dead by a suspected Nigerian drug dealer in the capital, Pretoria, and saw scores of foreign-owned shops being looted and torc…
Public Debt now the tightening Noose around the Country's Neck
In a strong rebuke of government’s dogged refusal to rein in public spending, especially on a civil service bill that has ballooned over the years, the Centre for Development Enterprise (CDE) has released a report that details exactly how bad it is. In a document called “Running out of Road, South Africa’s public finances and what is to be done”, the CDE states how public sector debt went from R210 billion in 1992, R900 billion in 2009 to the current R3 trillion – a noose around the country’s neck which sucks up 60% of GDP.
In its assessment of the assessment, the CDE could scarcely be clearer about how public debt weighs on the economy: “South Africa’s fiscal crisis is a result of rapidly rising public spending in an era of slow econ…
Load Shedding looms again
An acceleration in economic growth in South Africa could trigger power cuts, with state utility Eskom Holdings SOC Ltd.’s fragile generation system unable to respond to increased demand for electricity. The energy availability of Eskom’s generation fleet is supposed to be as high as 80%, but is currently as low as 69%, and even a 0.1% rise in gross domestic product could result in outages, Nelisiwe Magubane, an Eskom board member, said at an event organized by Afriforesight in Johannesburg on Wednesday.
The state-owned utility, which supplies about 95% of South Africa’s power, has a mountain of debt and is reliant on government bailouts to remain solvent. It is also contending with operational issues — most of its power stations are n…
Unemployment skyrockets to 29% - Youth Unemployment to 40.3%
South Africa’s unemployment rate has jumped by 1.4% to 29% – the highest it’s been since 2008. This is according to figures released by Statistician-General Risenga Maluleke yesterday. Maluleke said the number of unemployed people increased by 455 000 to 6.7 million in the second quarter of 2019, compared with the previous quarter’s figures and: “… of the 20.4 million young people aged 15-34 years, 40.3% were not in employment, education or training, which is a decrease of 0.3% compared to the first quarter of 2019,” Maluleke said.
Marriam Manzini (45), a hawker, said news like this didn’t bother her because she had been unemployed for 10 years. “I make a few cents on the street so I can support my children,” she said. “My fear is f…
Tech Blunder: Incompetent Communications Minister delays 5G for South Africa
Controversial Communication Minister Stella Ndabeni-Abrahams, whose personal life is more often in the news than her professional achievements, has released the policy on high demand spectrum and policy direction on the licensing of a wireless open-access network (WOAN)without paying any heed towards the highly competitive environment in which South Africa tries to keep its leading place.
The policy document punts the benefits and the need for the open-access wireless network for South Africa to increase competition and benefit consumers. While there is a strong focus on the planned WOAN, it is thin on details regarding the spectrum which will be assigned to mobile operators. It does, however, give the Independent Communications Autho…
Fitch confirms Credit Rating as Junk, corrects Outlook to negative ... will Moody's follow?
Today’s decision by Rating Agency Fitch to keep South Africa’s long-term foreign and local currency debt on BB+, the first notch of sub-investment grade (or junk status) did not come as a surprise given the recent fiscal circumstances. But on top of it, Fitch has downgraded the country’s outlook from stable to negative, citing concerns about the Tito Mboweni’s recently announced financial support of Eskom and a persistent low economic growth scratching the border to a technical recession.
All eyes are on whether Moody’s will take a more decisive view on the country’s deteriorating fiscal and economic performance and will follow suit in not to alienate itself through ill-advised ratings regarding South Africa.
South Africa’s Fi…
Mboweni takes from the People and sinks R 59bn into "Black Fiscal Hole" ESKOM
The boost South Africa’s central bank offered the economy by cutting interest rates last week may be fleeting after Finance Minister Tito Mboweni signaled tax rates may have to climb to help bail out Eskom. The debt-laden state power company, seen as the biggest threat to the nation’s economy, will get an extra R59bn over two years and together with lower-than-expected revenue collections, this “will come at a significant cost” to taxpayers, Mboweni told Parliament on Tuesday.
The Reserve Bank made it clear that its 25 basis-point reduction to the key rate can only have a significant impact on an economy that’s forecast to expand just 0.6% this year if it’s complemented by other structural reforms. While Eskom’s finances and its inabi…