Category Archives: Business and Economics

South Africa – Pretoria brought to a halt by anti-immigrant march

News24

2017-02-24 17:40

Foreign nationals standing in a line facing the SA group and shouting inaudible slurs. (Mpho Raborife, News24)

Foreign nationals standing in a line facing the SA group and shouting inaudible slurs. (Mpho Raborife, News24)

Pretoria – Certain parts of Pretoria came to a standstill on Friday during an anti-immigrant march.

About 136 people were arrested in Pretoria West over the past 24 hours, including during the march on Friday morning, acting national police commissioner Lieutenant General Kgomotso Phahlane said.

However, Phahlane said the situation in Pretoria was “under control”.

“Although people from Mamelodi marched peacefully, a group from Atteridgeville threw stones and bricks. Confrontation with non-South Africans ensued,” he told reporters.

The police said they would update the figure of the arrested individuals on Saturday.

President Jacob Zuma said the march in Pretoria was evidence that citizens were fed up with crime.

Zuma was speaking after the launch of Operation Phakisa, which is aimed at boosting various sectors of the South African economy.

He said the march included foreign nationals, was well organised, and was not xenophobic.

“We do have a big problem. This time around this has been provoked by crime.”

He said the media should be careful about labelling the protests as xenophobic and that political leaders should also be cautious with their messages.

Mamelodi marchers accuse foreigners of destroying local business

2017-02-24 16:30

Atteridgeville. (CICA)

Atteridgeville. (CICA)

2017-02-24 15:06

Johannesburg – President Jacob Zuma says the march against immigrants in Pretoria on Friday is evidence that citizens are fed up with crime

Johannesburg – A memorandum that Mamelodi residents handed to the Department of Home Affairs in Pretoria on Friday strongly criticised how they perceived foreign nationals to be conducting themselves in SA.

The memorandum, with a “Concern community for service delivery in Mamelodi” stamp, said government should not allow African immigrants in the area to operate businesses freely and without regulation.

They also criticised authorities for “failing” to clamp down on those without the proper licences and papers.

“We are driven into slavery, both black and white South Africans,” they stated.

This message seemed to contradict the assertion by President Jacob Zuma on Friday that the march in Pretoria was by residents who were fed up by crime.

Speaking after the launch of Operation Phakisa, Zuma said the march included foreign nationals, was well organised, and was not xenophobic.

The three-page memo bemoaned foreign nationals’ involvement in industries like retail, transport, and hospitality.

“Our local hair industry was not protected by Competitions [sic] commission against foreign people charging unfair prices now our industry is destroyed,” it stated.

“Our tuck-shops were destroyed because government did not protect local industries when they know people lack confidence.”

‘Must be deported’

They said African immigrants brought vehicles in from Zimbabwe to run delivery businesses locally, “not paying taxes, not having international drivers’ licences”.

They were opposed to immigrants operating transport businesses with tuk tuks and other methods.

They also felt it was unfair that people, including foreign nationals, were registering to become Uber drivers.

“Local industries are not supported and respected… Stop those businesses. Support the local meter [taxi industry].”

The residents felt that foreign nationals were “destroying” the country’s image.

They accused Zimbabwean churchgoers of messing in public parks and having a hand in attacks at the Groenkloef Nature Reserve.

“They must be deported; immigration must be involved and deport them we are working backwards as a country.”

On living conditions, they said residents had to pay a lot of money toward rent, water and electricity, yet people who invaded land and RDP houses did not have to pay anything.

Zuma said the media should be careful to label protests as xenophobic and that political leaders should also be cautious with their messages.

Crime affected everyone and people were fed up, he said.

“If there are people who occupy houses and use them for crime, this will make people angry. How do we fight crime?

“We must focus on drug lords and deal with them. Those are the gaps we need to close.”

Zuma urges understanding

Whether South African or foreign, criminals should be properly dealt with, Zuma said.

He said it would be a sad day when crime and drugs caused chaos in the country.

He also urged South Africans to be understanding toward foreign nationals.

He questioned how xenophobic South Africans were, saying, if they were, “this country wouldn’t have this many immigrants”.

He said only 5% of immigrants were refugees.

“The number of foreigners in South Africa is far more than in Europe. They don’t want immigrants.”

Zuma said he had met with ministers to discuss what they could do to fight crime.

He would also be talking to police.

South Africa – protests in Atteridgeville stops people getting to work

News24

2017-02-24 10:00

Johannesburg – Protesters blocked several streets in Atteridgeville on Friday morning, preventing residents from going to work, Gauteng police said.

– Are you there? Send us your eyewitness accounts and photos.

They also threw rocks and burned tyres, said spokesperson Lieutenant Colonel Lungelo Dlamini.

“We are not yet sure why they are protesting. We are not sure whether it’s about the [anti-immigrant] march,” he said.

He could also not give an estimate of how many people were taking part in the protest at this stage but said police were monitoring the situation.

The police were also investigating reports of a newspaper truck that was looted.

Protest action in Atteridgeville
Protest action in Atteridgeville. (Supplied: CICA)

Tshwane metro police spokesperson Superintendent Isaac Mahamba said they had received reports of several shops being looted, but had yet to confirm the incidents.

Morning Live anchor Leanne Manas on Friday tweeted that a news camera and other equipment had been “confiscated” by protesters in Atteridgeville.

She later tweeted that the news crew managed to negotiate with protesters to get the equipment back.

“#Atteridgeville protestors say media portray them in a negative light & call it #xenophobia when all they want is to get rid of criminals,” she tweeted.

South Africa ANC Women’s League slams Gordhan budget as out of step with Zuma

News24

2017-02-23 18:22

(File)

(File)

Johannesburg – The ANC Women’s League has slammed Finance Minister Pravin Gordhan’s Budget Speech as being “incoherent” with President Jacob Zuma’s State of the Nation Address.

It has also accused Gordhan of treating banks implicated in rand hedging with soft gloves.

League spokesperson Meokgo Matuba has warned that if the “incoherence” trickles down to other departments, it will amount to sabotage of Zuma’s plans for radical socio-economic transformation.

“Regrettably, there are incoherences between the SONA by the President and the Budget Speech by the minister and we are hoping that this incoherence will not trickle down to various departments who are responsible for implementation of government programmes.”

In a statement, Matuba accused Gordhan of treating banks implicated in rand manipulation by the Competition Commission with soft gloves and said this must stop with immediate effect.

“The speech was delivered a few days after the Competition Commission reported on massive corruption done by some of the banks. Very disappointing that the minister did not delve deeper into the corruption of the banking cartels and this will fit the narrative that the ANC-led government is lenient on fraud and corruption by corporates,” Matuba said.

The ANCWL has called for harsher punishment against the banks, including criminal charges to be laid against the boards and executives, that they be fined 100% of commission earned from the rand manipulation, and for government to stop doing business with the banks.

SARS praised

On Gordhan’s statement that three new banks, including Postbank, had been given provisional licences, Matuba said they wanted to know if any of the new entrants had 50% women ownership to address their call for economic emancipation of black women.

Despite Gordhan raising the alarm that the South African Revenue Services had failed to reach revenue collection targets for 2016-17 by R30.4bn, the league praised SARS commissioner Tom Moyane.

Matuba said, under his leadership, SARS has perfomed exceptionally well and should be applauded.

“The ANCWL applauds the ANC-led government with its good tax administration system implemented by (SARS).The appointment of capable leadership at SARS is yielding positive results,” Matuba said.

However, Matuba said they were also disappointed that there was no substantial increase on corporate tax.

On higher education, the league has called for the fees commission, looking into the feasibility of providing free higher education, to conclude its work and provide government with proposals to implement free higher education in 2018.

On other social issues it wants sanitary towels to be supplied to all girl learners from poor households that cannot afford them.

The league also decried what it called the “snail” implementation of the National Health Insurance and said it hoped there would be progress in 2017.

South Sudan – EU pledges $82m in emergency famine aid

Sudan Tribuneseparation


February 22, 2017 (JUBA) – The European Commission has announced an emergency aid worth €82 million in the wake of the declaration of famine outbreak in South Sudan.

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European flags are seen outside the European Commission headquarters in Brussels (Reuters Photo)

At least 100,000 people, aid agencies said, are facing starvation in parts of the country while 4.9 million of them need urgent humanitarian assistance.

“The humanitarian tragedy in South Sudan is entirely man made. Urgent action is needed to prevent more people from dying of hunger. I have seen for myself the impact of this crisis when visiting South Sudan and neighbouring countries such as Uganda, and I’m ready to return to the region,” the EU Commissioner for Humanitarian Aid and Crisis Management, Christos Stylianides said in a statement.

“Crucially what matters is that all parties allow humanitarian organisations to have immediate and full access to do their job and deliver aid. Ultimately it is only by laying down arms that the country can be rebuilt and that the hopes that came with independence can be fulfilled,” it adds.

The new EU humanitarian aid package will be used for the most urgent needs in the country and help neighbouring countries cope with the massive influx of refugees.

To date, the European Commission has reportedly made more than €381 million available to respond to the worsening humanitarian crisis in South Sudan since fighting erupted in December 2013 in areas such as health and nutrition, water, sanitation and hygiene interventions, education as well as shelter and protection.

The EU is one of the biggest donors of humanitarian aid in South Sudan, having provided over 40% of all humanitarian financing to support life-saving programmes in 2016.

(ST)

South African economy – Gordhan budget should keep ratings agency at bay for now

News24

2017-02-23 05:00 – Liesl Peyper

Finance Minister Pravin Gordhan ahead of his 2017 Budget. (Photo: Matthew le Cordeur)

Cape Town – Ratings agencies are likely to view Finance Minister Pravin Gordhan’s 2017 Budget Speech in a relatively neutral light, said Jeffrey Schultz, economist at BNP Paribas.

Although the Treasury managed to avoid further GDP growth downgrades (for the first time in six years) and stuck to its lowered expenditure ceilings announced in the medium-term budget policy statement last October, ratings agencies may be disappointed by the fact that South Africa will only have a budget surplus by the 2018/19 – a year later than what was promised in October.

“Undesirably, Treasury only now anticipates achieving a primary budget surplus of 0.2% of GDP by 2018/19 from an estimated deficit of -0.1% of GDP in 2017/18. Although the achievement of a primary surplus is still ultimately obtained over the medium-term, we believe ratings agencies will be disappointed that the finance ministry is kicking the can down the road in much the same way as its debt-to-GDP profile has evolved,” Schultz said.

Ratings agencies may also be underwhelmed by the lack of meaningful breakthroughs on much needed economic growth reform initiatives.

READ: Budget in a nutshell: Tough times ahead

“Instead the finance minister rather provided progress updates on the labour market (national minimum wage), mineral and land policy, the funding of higher education, the on-going review of business incentive programmes and the need to cut red tape to improve the ease of doing business – nothing new.”

Herman van Papendorp and Sanisha Packirisamy from Momentum Investments said rating agencies are likely to take comfort from the fact that government remains committed to fiscal consolidation.

“Nevertheless, unfavourable economic conditions and the absence of bolder reform efforts could still, in our view, lead to a downgrade by the end of the year as downtrodden business and investor confidence continues to hinder SA’s longer-term growth prospects, leaving South Africa’s fiscal and debt metrics susceptible to adverse shocks.”

They also believe that disparaging political developments could tarnish the rating agencies’ view of SA’s institutional framework.

Not so radical 

Christie Viljoen, economist at KPMG, said Gordhan’s address eased some concerns about how “radical” the “radical socio-economic transformation” would be.

In his speech, Gordhan said he agrees with President Jacob Zuma that a new perspective on economic transformation is needed. He emphasised though that sound public finances, the health of South Africa’s financial institutions and investment-grade credit ratings are also valued elements in the sustainability and integrity of the country’s transformation path.

“The minister’s speech showed that the National Treasury is still steering the fiscal ship towards consolidation,” Viljoen said, “and the only comment that could maybe seen as somewhat radical (in a local political context) is the commitment by the minister to not only increase competition in monopolised private industries, but to also endeavour for ‘greater private sector participation’ in sectors dominated by public enterprises.”

READ: Economic transformation more than just a slogan – Gordhan

The ruling party’s often referenced “developmental state” philosophy includes strong state intervention in and control over the economy, so Minister Gordhan’s statement on greater private participation is surprising. It would be good to see more detail or something more tangible about this potential change in policy, Viljoen said.

Gordhan has, with his 2017 Budget Speech, yet again demonstrated that there is a depth of fiscal management skills available within our Treasury department, which is able to respond to the challenges of the day, said Tandisizwe Mahlutshana, Executive of Marketing at PPS Investments.

Levelheaded Gordhan’s honest analysis 

“Although the bold pronouncements in this year’s budget may have a few panicking, the majority of South Africans stand to be net winners.”

This Budget Speech comes amid heightened political tensions and infighting within the ruling party, which appear to have a direct impact on the future of National Treasury, and ultimately on the finance minister himself Mahlutshana said.

“However, Gordhan’s levelheadedness ensured that the country is not deprived of its right to hear an honest analysis of where we are economically and our government’s strategies to move the country forward.”

* Visit our Budget Special for all the budget news and in-depth analysis.

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South Africa – dysfunctional state’s day of reckon ing coming, says US expert

News24

Feb 23 2017 08:24

Matthew le Cordeur

President Jacob Zuma in the National Assembly on Thursday night. (Screen grab from SABC)

Cape Town – South Africa’s day of reckoning with international rating agencies is coming as a result of President Jacob Zuma, who “ushered in a kleptocracy that’s now reached deep into his entire administration, barring the Treasury”.

That’s the view of Eurasia Group president Ian Bremmer and author of Time magazine’s list of the world’s top geopolitical risks, who visited South Africa in February on a fact-finding mission.

Bremmer placed South Africa in 10th place on the Times risk list, an alarming position to be in considering the various tensions rising around the world.

An influential Wall Street adviser based in New York, Bremmer is a leading political scientist specialising in US foreign policy, states in transition and global political risk.

In an email to investors, analysts and economists around the world, Bremmer said he “encountered one of the most dysfunctional governments in the emerging market space right now”.

Zuma is ‘functionally illiterate on economics’

“President Jacob Zuma is an exceptionally savvy political tactician but functionally illiterate on economics,” said Bremmer.

“And he’s ushered in a kleptocracy that’s now reached deep into his entire administration, barring the Treasury.

“That they’ve managed to forestall credit downgrades is surprising, but the day of reckoning is coming, especially as the political pressures around Zuma mount.”

He pointed to hope in the form of Deputy President Cyril Ramaphosa, but said it seems he doesn’t have enough votes within the African National Congress (ANC) to make his rise to the presidency a reality.

“There’s an eclectic but significant alliance forming around … Ramaphosa to take over the leadership of the … ANC party in December, with big business, the country’s trade unions, and the communists all hoping for an alternative to Zuma’s corruption.

“Ramaphosa certainly holds the moral high ground among party members, but that doesn’t count for much in the party’s internal elections, which will see some violence and is likely to be about brown envelopes rather than policy positions.

“At least for now, it doesn’t look like Ramaphosa has the votes inside the ANC.”

Glimmer of hope

However, Bremmer offered a sense of hope.

“Still, that doesn’t mean the wheels are about to fall off South Africa,” he said.

“There’s a rich talent base in the country – only about 20% of South Africa’s whites left the country post-apartheid, and the elite labour pool is now reasonably well mixed between black and white.

“Further, South Africa’s economy is no longer dominated by commodities, but instead has diversified towards infrastructure, services and information technology, all of which bodes well for a comparatively inexpensive and high quality-of-life destination.

“Education remains poor and immigration is limited (mostly because of spotty execution on visas rather than the policies themselves), which limits the upside, but you already see South Africa, on Europe’s time zone, becoming a more attractive back office destination for European firms.”

Africa’s rise is also good news for South Africa.

“As Africa itself continues to grow, the base for diversified firms continues to be South Africa,” said Bremmer.

“Especially because the larger African markets – Egypt and Nigeria – are otherwise unattractive as destinations for regional hubs.

“For increased consumption and infrastructure, Africa overall will still see moderate to high growth. Companies that plan on expanding investments accordingly will mostly situate themselves in South Africa.”

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South Africa – tax increase in budget for those earning over R1.5m

BD Live

Budget in a nutshell: tax hikes hit South Africans’ pockets hard.  South Africans earning more than R1.5m a year will pay an extra R4.4bn to the fiscus

22 February 2017 – 14:05 PM Linda Ensor
Finance Minister Pravin Gordhan during a media briefing ahead of the budget on Wednesday. Picture: ESA ALEXANDER
Finance Minister Pravin Gordhan during a media briefing ahead of the budget on Wednesday. Picture: ESA ALEXANDER

Finance Minister Pravin Gordhan has announced hard-hitting increases in personal income tax of R16.5bn for 2017-18, as economic growth stutters and revenue collection falls short of expectations.

These increases are part of a total R28bn package of tax hikes.

Tax revenue has deteriorated by a further R7bn since the medium-term budget policy statement in October and is now forecast to be R30.4bn lower than the 2016-17 budget estimate, indicating a deterioration in economic growth and tax buoyancy.

This is the largest underperformance since the 2009 recession and Gordhan told journalists at a media briefing ahead of his budget speech in the National Assembly on Wednesday that he was concerned about the state of revenue collection in the country and had been engaging with senior management of the South African Revenue Service (SARS) about this.

In his speech the minister warned SA was “at a crossroads” and “tough choices” had had to be made.

Treasury officials warn there are “significant risks” to revenue collection and economic growth in the period ahead and that these remain high.

The tax increases announced by the minister include a new top personal income tax rate of 45% for the estimated 100,000 individuals with taxable incomes above R1.5m, which will raise R4.4bn. The previous top bracket of 41% was set at R701,301.

 

Limited relief is provided for fiscal drag; the withholding tax on dividends will increase from 15% to 20% and the general fuel levy, the Road Accident Fund levy and excise duties for alcohol and tobacco will also rise.

Total tax increases of R28bn are required to fill the gaping hole in government finances and are necessary for government to maintain what Treasury described as a “measured, prudent course of fiscal consolidation”. This aims to narrow the budget deficit and stabilise debt.

A further R15bn in tax increases will be announced in next year’s budget.

“The budget reflects a balance between maintaining our spending commitments and ensuring long-term health of the public finances,” Gordhan said.

He said during the media briefing that the global context was “extremely uncertain” but there were promising “green shoots” of hope in the local economy.

Economic growth

There has been no change to the economic growth forecasts the Treasury provided in the medium-term budget policy statement in October: 0.5% for 2016, 1.3% for 2017, 2% for 2018 and 2.2% for 2019.

As is always the case, these forecasts are more optimistic than the forecasts of economists and the Reserve Bank, and are critical for Treasury’s construction of the budget.

The consensus of economists surveyed by Reuters is 1% growth in 2017, 1.6% in 2018 and 2% for 2018, while the Reserve Bank forecasts 1.1% for 2017 and 1.6% for 2018.

Treasury concedes in its budget review that “lower economic growth remains a significant risk to the budget”. It expects inflation to remain outside the inflation targeting band at 6.4% this year, falling to 5.7% next year.

Budget deficit and government debt

The consolidated budget deficit as a percentage of gross domestic product (GDP) is unchanged from the October forecasts except for the outer years. It remains at 3.4% for 2016-17 and 3.1% for 2017-18 but slips to 2.8% in 2018-19 and 2.6% in 2019-20, from the previous forecasts of 2.7% and 2.5% respectively.

Government will have to raise R149bn to meet the deficit and will pay R169bn in debt service costs on R2.2-trillion (50.7% of GDP) of debt this year. Gross debt to GDP is expected to rise from 50.7% in 2016-17 to 52.3% in 2017-18 and again to 52.9% the following year.

A public sector borrowing requirement of R251.7bn or 5.3% of GDP is forecast for 2017-18, sliding to R237bn or 4.6% in 2018-19.

Revenue

Revenue of R1.44-trillion is forecast, a 7% rise over last year but R30bn lower than previously anticipated.

The revenue shortfall is mainly in personal income tax (R15.2bn), value-added tax (VAT, R11.3bn) and customs duties (R6.5bn), reflecting lower growth in wages, employment and bonus payouts.

Treasury has warned of the “heightened risk” of further deterioration in revenue collection if economic growth continues to lag behind forecasts. Tax buoyancy — the relationship between gross tax revenue collections and economic growth — has deteriorated over the year.

Gordhan noted that applications under the special voluntary disclosure programme, which allows taxpayers to declare their hidden assets abroad, had begun, concluding at end-August. SARS had already received disclosures of R3.8bn in foreign assets, which would yield revenue of about R600m, according to the budget review.

Tax proposals

The proposed new top personal income tax rate of 45% for the estimated 100,000 individuals with taxable incomes above R1.5m will raise R4.4bn. The previous top bracket of 41% was set at R701,301.

Limited relief of R2.5bn for fiscal drag of R14.6bn will raise R12.1bn more in tax. An increase in the withholding tax on dividends from 15% to 20% will raise R6.8bn.

A further R5.1bn will be raised by an increases of 30c/litre in the general fuel levy (R3bn), 9c/litre in the road accident fund levy, and in excise duties for alcohol and tobacco of between 6% and 10%, which will raise R1.9bn more.

Tax breaks: higher threshold for transfer duties on house purchases; higher threshold for tax-free savings; higher medical scheme tax credits

The primary, secondary and tertiary rebates and the levels of all the taxable income brackets will increase by 1%, and the tax-free threshold rises slightly from R75,000 to R75,750.

The tax proposals also include an increase in the threshold for the payment of transfer duty on house purchases from R750,000 to R900,000. This will cost the fiscus R448m in tax forgone.

The annual allowance for tax-free saving accounts will be increased to R33,000 while the medical tax credit will be increased for the first two beneficiaries from R286 to R303 a month, and for remaining beneficiaries from R192 to R204 per month. Government guarantees to public institutions now amount to R478bn.

Expenditure

Government expenditure remains within the envelope projected in the 2016-17 budget. However, the main budget noninterest expenditure ceiling has been lowered by R26bn over the next two years, as was outlined in the medium-term policy statement.

This will mean trimming noncore goods and service budgets as well as the compensation for government employees.

Gordhan noted that expenditure limits were “tight”. Real growth in noninterest expenditure will average 1.9% over the next three years, down from the 2.3% real annual average growth between 2013-14 and 2016-17.

Total noninterest government expenditure is projected to remain stable at 26.2% of GDP over the medium term. There has been little change in expenditure plans from the medium-term statement.

Expenditure amounts to R1.56-trillion with R30bn being reprioritised to protect social expenditure. Of this R16bn is allocated to higher education over the next three years. An additional R5bn is allocated to higher education in 2019-20, in addition to the total of R32bn over three years which was announced in both last year’s budget and the medium-term statement.

Apart from debt service costs (R162.4bn), post-school education (R160bn over the next three years for universities and student funding) is the fastest-growing part of the budget, followed by health (R606bn) and social grants (R490.4bn).

Student funding: spending on post-school education is the second fastest-growing item in the budget

Basic education is allocated R752bn over the next three years while compensation for government employees will cost R550bn in 2017-18 and Treasury is looking at how it can reduce employee numbers.

Public sector infrastructure spending will amount to R947bn over the next three years — with R307bn budgeted for 2017-18 — but will be trimmed in the outer years on projects where there has been underspending.

SAA: A ‘deficit-neutral’ cash injection for the ailing airline is on the cards

A cash injection for SAA is also in the offing but Treasury director-general Lungisa Fuzile stressed at the media briefing that this would be extended in a deficit-neutral way.

Of the total national budget, 47.5% is allocated to national government, 43.4% to provinces and 9.1% to local government.

Economic affairs and agriculture gets R241.6bn, defence and public safety R198.7bn, education R320,5bn, health R187.5bn, local development and infrastructure R195.8bn and social protection R180bn.

The provision for a contingency reserve of R6bn in 2017-18, R10bn in 2018-19 and R20bn for 2019-20 remains unchanged from the medium-term policy statement.

Sugary beverage and carbon taxes

Gordhan said further consultations were taking place on the tax on sugary beverages and the proposed design was being revised to include both intrinsic and added sugars.

“The tax will be implemented later this year once details are finalised and the legislation is passed,” Gordhan said.

Sugar tax: this is definitely coming, but 100% fruit juices and milk products will be exempt, and there will be further consultation

Treasury deputy director-general Ismail Momoniat told journalists that Treasury proposed to introduce a threshold that would make the first 4g of sugar per 100ml beverage exempt from the sugar tax. He said 100% fruit juices and milk products would be exempt.

The proposed carbon tax and its date of implementation would be considered further in Parliament this year, the minister said.