South Africa President Zuma’s New Year message

 

President Jacob Zuma has called for renewed efforts to boost inclusive economic growth and improve the lives of poor and working-class South Africans.
In a statement released on Sunday, he touched on the country’s economic woes in 2017 and said improving the quality of life of the South African people, especially the poor and the working class, remained a key priority of the government.
“Significant strides” were made in 2017 in fighting poverty, inequality and unemployment, Zuma said, without addressing rising unemployment further.
“Despite serious challenges on the economic front, together we made substantial progress in providing basic services such as electricity, housing, roads, water and sanitation, healthcare, social grants, as well as accessible education.
He touched on free tertiary higher education for low- and middle-income families, but again failed to discuss how it would be funded.

South Africa – Economic forecast summary

Economic growth is projected to pick up moderately in 2018-19, as stronger activity in trading partners boosts exports. Investment will support growth in 2019 on the assumption that business confidence increases and policy uncertainty fades. Despite persistently high unemployment, private consumption will expand as wages increase moderately and food prices stabilise.
Falling inflation leaves room for a moderately expansionary monetary policy to support activity. Unexpected slippage of the budget deficit is contributing to growth in the short term, but is also creating more pressure to contain rising public debt and is raising the risk of a further credit downgrade. Improving the efficiency of public spending and better controlling the deficits of state-owned enterprises are necessary to raise fiscal credibility and create room for public investment to foster growth and reduce social inequality.
The high dependence on external financing is the main source of financial vulnerability. Low investor confidence and credit rating downgrades in 2017 have contributed to a net outflow of foreign investment. To cushion the transmission of external shocks to the financial system, implementation of the financial sector regulatory reform should be accelerated and foreign-currency-denominated debt issued by private entities further monitored.

South African Economy Submersion into Slowness

 

The SA economy has gone into recession, at the same time that it tries to absorb continued political shockwaves in the wake of GuptaLeaks and the recent cabinet reshuffle.
Statistics South Africa (StatsSA) announced on Wednesday, that the economy shrank by 0.7% in the first quarter of 2017.
This is the second consecutive quarter that the country’s gross domestic product (GDP) declined following a 0.3% contraction in the fourth quarter of 2016.
Two consecutive quarters of negative growth is the most widely accepted definition of a recession, according to StatsSA and the last one experienced by the country followed on from the global financial crisis during 2008 and 2009.
Despite hopes that a recovery in the agriculture and mining sectors would save South Africa from a contraction – steep declines in a host of other sectors outweighed the potential gains.
The trade and manufacturing sectors “were the major heavyweights that stifled production, with trade falling by 5,9% and manufacturing by 3.7%” StatsSA said.
Meanwhile the electricity, gas and water industry contracted by 4.8%, according to the agency, due largely due to a decreases in electricity produced in the first quarter.
The amount of water distributed also decreased driven by continued restrictions in some parts of the country still recovering from the drought, is said.
The news comes after a late night cabinet reshuffle by Jacob Zuma, prompted ratings agencies to downgrade South Africa’s credit rating. Although agencies S&P Global and Fitch held off from further downgrades last week, the recession is unlikely to boost the country’s prospects of a ratings improvement any time soon.  In its decision S&P retained its negative outlook for the country.

World Bank slashes South Africa’s economic growth outlook

 

The world Bank on Tuesday slashed the country’s economic growth outlook for this year to 0.6%, from 1.1% it forecast earlier in the year, and said that South Africa’s second quarter growth of 2.5 percent would be insufficient to restore positive per capita gross domestic product (GDP) growth for the year.
However, the bank said it expected South Africa’s economic growth for next year to be 1.1 percent, with a growth of 1.7 percent expected in 2019 supported by an improvement in commodity prices and strengthening balance sheets of households.
Paul Noumba Um, World Bank country director, said in an environment, where the national budget was constricted, South Africa could turn to encouraging private innovation as one of the several ways in which to improve the lives of the poor.
“South Africa’s productivity growth is diverging from global growth and the country risks falling further behind its peers. This would be to the detriment of the poor, for whom a growing economy is necessary for jobs, and a sustainable system of social grants,” Noumba Um said.
Last month Statistics South Africa (StatsSA) said South Africa’s weak economic growth, high unemployment, and greater household dependency on credit and policy uncertainty condemned 30.4 million into poverty between 2011 and 2015.
The World Bank report also found that productivity in South Africa fell by 6 percent between 2007 to 2016 and attributed this to insufficient private sector investment in innovation. The report further revealed that the country’s private research and development (R&D) expenditures decreased by about 40 percent since 2009 with lower productivity growth having cost the country 0.7 percent of foregone annual GDP growth since 2008.
Sebastien Dessus, the World Bank program leader, on Tuesday said that South Africa had produced less overtime with the same amount of labour and capital since the global financial crisis.
“Given South Africa’s untapped potential for absorbing and adapting foreign technologies, private R&D can be turned into a more powerful driver of corporate profitability and economic growth.”
“Innovation can help improve the lives of the poor through the provision of better and cheaper goods and services, and expand economic opportunities through the introduction of disruptive technologies that can lower barriers to competition,” Dessus said. In July, the SA  Reserve Bank halved its forecast for 2017 growth to 0.5 percent from a previous forecast of 1.0 percent and the 2018 forecast to 1.2 percent from 1.5 percent. In 2019 the reserve bank said it saw growth of 1.5 percent, down from 1.7 percent it had initially pencilled in.

What to expect in 2018 in SA

 

What to expect in 2018

Nel told MyBroadband there have been a few consolidations in 2017 that will come to fruition next year, and consumers will reap the benefits.
“South Africa is still a tumultuous market for any businesses to operate in, but uncertainty only fuels classifieds from the ground up,” he said.
“A weaker economic outlook and high unemployment creates greater consumer interest and participation in the space, because of the ease of entry and associated cost savings.”
This should see new players enter the market, coupled with increased marketing spend and investment from established businesses.
Nel said Gumtree will also remain true to its goal of helping South Africans trade successfully.
“We’ve been the number one classifieds platform in terms of our size and popularity for a number of years now, but we’ve never taken that for granted.”
“2018 will see a renewed focus on the quality of the user experience, their needs, concerns, and goals.”
The platform will also offer its clients improved advertising services through Gumtree Media.
“South Africa is on the cusp of a new, smarter era of online advertising and Gumtree will lead the charge,” said Nel.

Bumper harvest helps keep economy afloat

 

The South African economy grew by 2,0% in the third quarter of 2017 (seasonally adjusted and annualised), down from a revised 2,8% in the second quarter. Agriculture, mining and manufacturing were the main drivers of the expansion, while there was a contraction in general government services resulting from low employment numbers in the public sector.
After recording an increase of 38,7% in the second quarter, the agriculture industry continued to power ahead, expanding by 44,2% in the third quarter.
This is the largest quarterly jump in agriculture production since the second quarter of 1996. Increased production of field crops and horticultural products were the main contributors to growth, with notable increases in the production of maize and vegetable products.
This season’s maize crop is expected to be the largest on record. The Crop Estimates Committee  have pegged commercial maize production for this season at 16,74 million tonnes, more than double the 7,78 million tonnes produced last year (2015/16), and higher than the current record of 14,66 million tonnes harvested in 1980/81.²
Mining and manufacturing were the other major contributors to economic growth in the third quarter. Increased gold and platinum production saw the mining industry grow by 6,6%, while the 4,3% rise in manufacturing was spurred on by increased production of both petroleum and metal products.
Finance and business grew by 1,2%, helped along by increased activity in financial mediation, insurance and auxiliary services. There was also positive growth in personal services (0,9%) and transport and communication (0,6%).
Four industries, however, saw a decline in economic activity in the third quarter. Falling employment numbers in the public sector saw general government services posting its third consecutive quarter of negative growth, contracting by 0,7%. Other notable industries that saw a decline were trade and electricity, water and gas. Despite a rebound in retail trade sales, falling wholesale trade sales pulled the trade industry down by 0,4%. The electricity, water and gas industry experienced a 5,5% contraction, a result of falling electricity generation and demand.
Other highlights from the third quarter 2017 GDP release:

• Unadjusted real GDP was up by 0,8% year-on-year in the third quarter of 2017.
• The South African economy grew by 1,0% in the first nine months of 2017 compared with the first nine months of 2016.
• Nominal GDP in the third quarter was estimated at R1,17 trillion.
• Expenditure on GDP grew by 2,1% in the third quarter, spurred on by a rise in household consumption spending and fixed investment. There was, however, a fall in government consumption spending. Exports were down, but imports were down more, resulting in an improvement in net exports (i.e. exports less imports) and, consequently, a positive contribution to total growth from the external sector.

Why Do People Choose To Live In South Africa?

Johannesburg, 23 November 2017 – Globally mobile individuals, also known as expatriates or ‘expats’, who choose to live and work in South Africa, cite the adventure (74%), a better quality of life (72%), or to gain international experience (67%) as their reasons for accepting assignments in the country. These reasons are likely to be similar for expats living and working throughout Africa, given the continent’s rapidly evolving markets and abundant natural beauty.

This is according to the 2017 Cigna 360° Well-being Survey, which looks at the health, well-being, and sense of security among 2 000 expats living in 20 markets across five continents.
Expats around the world, including those working in South Africa, share a high level of concern about the quality of medical care available in the countries they are in. With this in mind, more than half of these individuals consider medical insurance coverage to be a very important factor when considering a move overseas.
Perceptions of physical, financial, social, family and work health among expats were also examined and compared with all working people in the 2017 survey.
“Our 360° Well-being Survey captures the sentiments of an expat environment that is rapidly evolving. Overseas assignments are becoming shorter – a decade ago, going overseas typically meant a three or four-year relocation, but assignments today can be for less than 12 months,” explains Gilles Nyssens, Business Development Director Africa at Cigna.

“Some expats do not relocate at all—instead working on project-based assignments and even commuting via extended business trips has become common, allowing organisations to access global talent when relocation is not possible.”
South Africa-based expats mostly feel that the change has been worth it, with 68% reported being satisfied or completely satisfied with their move, and 67% satisfied or completely satisfied with their career prospects.
Given the variety of working conditions, state of infrastructure and access to resources in the rest of Africa, employers are likely to face tough challenges to satisfy expats operating in other African jurisdictions.
The survey also revealed that while 89% of South African-based expats have excellent or very good relationships with co-workers, 77% experience the same with supervisors. While these percentages are higher in South Africa than in other countries, this will probably be the case throughout Africa, considering the warmth, engagement and hospitality of most of Africa’s peoples.
However, only 37% of expats in South Africa are satisfied with the country’s economic outlook, compared to the 63% worldwide, and they too are concerned about the country’s economic woes. This leads to higher levels of insecurity, concerns about financial health and lower perceptions about their ability to take care of their family’s health and well-being.

While the economic outlook varies from country to country in Africa, levels of insecurity and concerns about financial health may well be at similar levels for expats across the continent. This could be one of the most significant human capital challenges for organisations that depend on expat talent and that believe in nurturing this talent.
Expats generally have a lower perception of the state of their personal health and wellness than the overall working population, remaining concerned about the financial implications of falling ill.
With the significant healthcare infrastructure and delivery challenges faced in the rest of Africa, it would be understandable if this concern was acute for expats deployed in such countries.
These findings come as no surprise at a time where there is increasing pressure on corporations and NGOs around the world to demonstrate adequate “duty of care” when it comes to employees, including expats. More than a quarter (27%) of global expats, and 38% of expats in South Africa, feel subject to an insufficient duty of care, which places an onus on employers to take all reasonable possible steps to ensure the health, well-being and safety of their employees.
This percentage is expected to be higher for other African countries, where access to medical care is much more limited than in South Africa.
“The message is clear among expats – health and well-being are as much a priority as job opportunities, security and salary,” says Nyssens. “For organisations employing expats anywhere in sub-Saharan Africa, an extrapolation of the survey’s results may provide a roadmap for increasing the retention of this increasingly important employee segment.”
“For organisations that understand that expat talent deployed into African markets is more than a commodity, engaging the hopes and fears of this globally mobile employee segment is important. However, providing solutions to dilemmas faced by those building careers on this vast-continent, is equally important. Having a great health plan represents a fine start,” says Nyssens.
Hollard Cigna Health believes that the message will be similar, if not stronger and louder, within the rest of sub-Saharan Africa. Its product suite provides a fully compliant health insurance solution for the region, providing local management, regional expatriates and globally mobile staff easy access to the finest quality health care available in modern Africa and beyond.