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ECONOMY

At the centre of the economy is job creation and poverty reduction.

To this end, President Cyril Ramaphosa spoke about the need to grow and reinvigorate the economy, during his State of the Nation Address and on several other occasions.


Economic growth

Ramaphosa has said he wants to deliver 3% GDP growth in 2018.

UPDATES:

May 17, 2018: Rand stays steady, despite foreign investment exodus ✅

While foreign investors dumps South African bonds and equities at a rate last seen in 2016, the rand doesn’t seem to notice.

As outflows mounted, reaching $2.2bn in 10 days, the rand gained 1.2% against the dollar.

The last time South Africa saw a similar scale of outflows in a two-week period, in October 2016, the rand weakened 5%. What’s different this time? The political outlook under new President Cyril Ramaphosa, experts say.

April 25, 2018: Consumer confidence hits record high on change in SA leadership ✅

The FNB/Bureau of Economic Research (BER) Consumer Confidence Index (CCI) for the first quarter of 2018 rises to a record high of +26 index points, the highest level since a decade ago.

“The extraordinary improvement in consumer sentiment during the first quarter of 2018 can largely be ascribed to the change in the country’s leadership, which triggered many positive economic developments,” says Mamello Matikinca, chief economist at FNB.

April 17, 2018: IMF raises SA’s growth forecast to 1.5% in 2018 ✅

The International Monetary Fund (IMF) is upbeat about South Africa’s Gross Domestic Product (GDP) growth in 2018, raising its forecast to 1.5% after cutting its prediction to 0.9% in January.

After experiencing 1.3% economic growth in 2017, amid a difficult economic climate, the IMF pencils in 1.5% growth in 2018 and 1.7% in 2019. It slashes its forecast in January citing rising political uncertainty affecting investment and business confidence.

February 26, 2018: New finance minister 

Former finance minister Nhlanhla Nene is reappointed to the position, bringing with him years of experience in government and also recently, the private financial sector.

February 21, 2018: VAT is increased ❌

Then finance minister Malusi Gigaba announces an increase in value-added tax (VAT) – by one percentage point to 15% as part of the “tough but hopeful” budget. It’s the first time VAT is raised since 1993.


Investment

Ramaphosa committed to an Investment Conference in the first three months, targeting domestic and international investors, to market investment opportunities in the country.

UPDATES:

April 17, 2018: Ramaphosa scores R857m UK funding from Prime Minister May ✅

President Cyril Ramaphosa and British Prime Minister Theresa May agree on a deal worth millions to help South Africa improve its business environment.

“They agreed £50m (R857m) new UK funding across the next four years to help South Africa improve its business environment to make it more attractive to investors including in the UK, and ultimately lift some of the poorest people in South Africa out of poverty by creating jobs and opportunities. The funding will be used to help identify and dismantle barriers to trade within Africa and beyond, creating a wealth of opportunities for UK business over the coming years,” reads a statement from 10 Downing Street.

April 16, 2018: Ramaphosa announces R1.2trn investment drive ✅

President Cyril Ramaphosa announces that South Africa will host a major investment conference in August or September 2018, which will aim to raise over R1trn in new investments over five years.

Ramaphosa says government hopes that the conference would generate at least $100bn – or about R1.2trn -in new investments over the next five years.

March 23, 2018: Moody’s keeps SA at investment grade 

Ratings agency Moody’s announces that it will keep South Africa’s sovereign debt at above investment grade. It also changes South Africa’s investment outlook to stable.

March 13, 2018: Nene woos investors in London 

Finance Minister Nhlanhla Nene is in London together with labour and business as part of a three-leg international roadshow to woo investors and ratings agencies.

He will also meet investors and bondholders in New York and Boston later in the week.

March 8, 2018: Ramaphosa meets with Moody’s 

Ramaphosa tells ratings agency Moody’s that a drive to expropriate land without compensation would be done in a way that would not harm the economy or food security, the presidency says. Moody’s is due to give an assessment of South Africa’s investment status on March 23.


Economic Advisory Council

To ensure greater coherence and consistency in the implementation of economic policy, and to equip the Presidency to respond to changing economic circumstances, Ramaphosa said he will appoint a Presidential Economic Advisory Council.

April 16, 2018: Ramaphosa appoints economic advisors ✅

Ramaphosa announces the names of five people tasked with seeking out and meeting with investors before an investment conference to drum up R1,2trn kicks off in August. Four are special economic envoys, while one – economist Trudi Makhaya – is appointed as Ramaphosa’s economic adviser.

The envoys are former minister of finance Trevor Manuel, former deputy minister of finance Mcebisi Jonas, executive chair of the Afropulse Group Phumzile Langeni, and chair of the Liberty Group and former Standard Bank head Jacko Maree.


Rand

April 12, 2018: Rand becomes unlikely haven as bears turn on lira, peso, ruble

The rand may have been the world’s most volatile major currency over the last year, but traders think that’s going to change as price swings surge in Mexico, Russia and Turkey.

The South African currency’s implied, or expected, volatility over the following three months is below that of the peso, ruble and lira for the first time since at least 2005, according to data compiled by Bloomberg. It’s a turnaround from just two weeks ago, when investors priced the rand’s future volatility higher than any of its peers.

February 21, 2018: Rand cheers Gigaba’s ‘tough but hopeful budget’

The rand firms almost 1% after Finance Minister Malusi Gigaba delivers what he called “a tough but hopeful budget”.

Currency traders earlier said the rand exchange rate would be volatile throughout the almost two-hour delivery of the Budget Speech.

By 15:53 the local unit was trading 0.77% firmer at R11.63 to the dollar from an intra-day low of R11.78 against the greenback in the run-up to the Budget Speech.


Youth

Ramaphosa committed to launch the Youth Employment Service initiative in March, which will place unemployed youth in paid internship in companies across the economy. The aim is to create a million such internships in 3 years.

A Youth Working Group representative of all young South Africans will be established where they can give input into government policies and programmes.

UPDATES:

March 27, 2018: Ramaphosa launches YES initiative 

President Cyril Ramaphosa launches the Youth Employment Service (YES) at the Riverside Incubation Hub in Fourways, Johannesburg.

The initiative takes the form of a partnership – led by Ramaphosa – between government, business, labour and civil society.


Minimum Wage

Ramaphosa said on May 1, 2018 a national minimum wage will be introduced.

UPDATES:

May 21, 2018: Ramaphosa negotiates minimum wage with unions

TimesLive reports that Ramaphosa had a three-hour meeting with the union to discuss issues regarding the Minimum Wage Bill, a meeting which the president deemed productive.

“On the implementation of national minimum wage‚ where there are issues that still need to be tweaked and crossed‚ Cosatu is going to be able to do that. But the process is moving ahead with the full participation and support of all of us‚”  Ramaphosa tells journalists.

Cosatu national spokesperson Sizwe Pamla says the federation is pleased with Ramaphosa’s confidence in and recognition of the new bill.

May 18, 2018: Saftu threatens to take minimum wage war to court

The South African Federation of Trade Unions (Saftu) threatens to challenge the National Minimum Wage Bill in court if it is passed without input from a wide range of the working class. Government is currently considering the bill, which will set the minimum pay for workers at  R20 an hour or R3 500 a month.

Saftu is fiercely opposed to the proposal, saying it would entrench the “apartheid wage structure”. The federation demands a “living wage” of R12 000 a month.

May 16, 2018: Fight breaks out in Parliament over minimum wage

A physical fight breaks out in Parliament during a labour portfolio committee meeting to discuss the National Minimum Wage Bill in detail.

Committee chairwoman Sharome van Schalkwyk describes the incident as “unfortunate” and says it was not an indication of how South Africans resolve differences of opinion.

Van Schalkwyk says a handful of activists “donning Saftu regalia” disrupted the meeting. Saftu says that 15 of its leaders were “forcefully evicted” from the meeting.

May 15, 2018: Oliphant slams ‘propaganda’ against minimum wage

Labour Minister Mildred Oliphant condemns what she calls “propaganda” against the National Minimum Wage Bill during her budget vote speech.

April 25, 2018: Thousands march against minimum wage

Around 6 000 workers and community organisers from Johannesburg and the surrounding areas march against the new amendments to the Labour Relations Act and the national minimum wage.

The march, championed by Zwelinzima Vavi’s South African Federation of Trade Unions (Saftu), is attended mostly by cadres from the National Union of Metalworkers South Africa (Numsa) — by far the largest union in the federation — and other smaller Saftu affiliates.

March 22, 2018: Deadline for minimum wage postponed 

Acting chairwoman of the portfolio committee on labour, Sharome van Schalkwyk, agrees that the May 1 deadline set for the minimum wage implementation be pushed back to allow MPs more time to consider more than 40 public submissions received on the draft legislation.


Trade and Industry

As BRICS chair, the government will prioritise the promotion of value-added trade and intra-BRICS investment into productive sectors.

The Continental Free Trade Agreement must be concluded soon.

UPDATES:

March 21, 2018: Ramaphosa signs declaration on African free trade region 

President Cyril Ramaphosa signs the Kigali Declaration on the establishment of the African Continental Free Trade Area (AfCFTA) at the 10th Extraordinary Summit of the Assembly of the African Union in Kigali, Rwanda.

The Presidency tweets that the signing of the declaration by Ramaphosa is subject to the conclusion of all outstanding issues that form an integral part of the agreement. South Africa is one of 44 African countries to sign the declaration.

March 2, 2018: Ramaphosa visits Angola, Namibia and Botswana ✅

Ramaphosa, in his capacity as chair of the Southern African Development Community (SADC), visits Luanda in Angola and Windhoek in Namibia to hold consultative meetings with President João Lourenço and President Hage Geingob.


Rand

April 12, 2018: Rand becomes unlikely haven as bears turn on lira, peso, ruble

The rand may have been the world’s most volatile major currency over the last year, but traders think that’s going to change as price swings surge in Mexico, Russia and Turkey.

The South African currency’s implied, or expected, volatility over the following three months is below that of the peso, ruble and lira for the first time since at least 2005, according to data compiled by Bloomberg. It’s a turnaround from just two weeks ago, when investors priced the rand’s future volatility higher than any of its peers.

February 21, 2018: Rand cheers Gigaba’s ‘tough but hopeful budget’

The rand firms almost 1% after Finance Minister Malusi Gigaba delivers what he called “a tough but hopeful budget”.

Currency traders earlier said the rand exchange rate would be volatile throughout the almost two-hour delivery of the Budget Speech.

By 15:53 the local unit was trading 0.77% firmer at R11.63 to the dollar from an intra-day low of R11.78 against the greenback in the run-up to the Budget Speech.


Jobs

Ramaphosa announced in his SONA that a jobs summit would be held within the next few months to harness the energies of business, labour and government behind a major job creation initiative.

The summit will look at what is needed to ensure that the economy grows and becomes more productive, and to ensure greater investment.

Any update?

Not sure. A Jobs Summit for 2018 was launched in November last year, and it seems this might be what Ramaphosa was referring to in his SONA. ❔


Infrastructure

The president said he will assemble a team to speed up implementation of new projects, particularly water projects, health facilities and road maintenance.

Nothing to report 😥


Small businesses

The government will continue to set aside at least 30% of public procurement to small, medium and micro-sized enterprise (SMMEs), cooperatives and township and rural enterprise, and reduce regulatory barriers for small businesses. It also plans a small business and innovation fund, targeted at start-ups.

Economic opportunities for people with disabilities will be expanded. The Small Enterprise Finance Agency (SEFA) has already launched a scheme called the Amavulandlela Funding Scheme to develop and fund entrepreneurs with disabilities.

UPDATES:

May 23, 2018: Portfolio committee expresses disappointment at lack of support for agriculture cooperatives ❌

The Portfolio Committee on Small Business Development expresses disappointment at the lack of adequate support by department to the 12 Abalimi Agricultural Cooperatives which are the cooperatives’ pilot project in KwaZulu-Natal.

The committee says in a statement that it understands that although the Abalimi cooperatives were initially funded R350 000 each by the department through its Cooperatives Incentive Scheme (CIS), the funds were insufficient to get them off the ground.

Subsequently, the committee has been briefed that Minister Lindiwe Zulu intervened in the interest of the cooperatives, but officials within the department defied her executive order.


Tourism

Ramaphosa undertook to enhance support for destination marketing in key tourism markets and take further measures to reduce regulatory barriers and develop emerging tourism businesses.

May 13, 2018: Visa request process simplified ✅

The introduction of online visa applications for foreigners wishing to visit South Africa holds great promise for the tourism industry, Tourism Minister Derek Hanekom says at Africa’s Travel Indaba in Durban. this week.

The phased introduction of e-visas is expected to begin with a pilot project before the end of the financial year.

May 2, 2018: Process started to ease visa regulations to boost tourism ✅

Home Affairs Minister Malusi Gigaba and Tourism Minister Derek Hanekom announce that the Departments of Home Affairs and Tourism are setting up a dedicated team of officials to fast-track progress in easing visa requirements for visitors in order to boost the number of tourists to South Africa.

The pair meet to discuss efforts to simplify travel by minors, easing visa requirements for residents of Brazil Russia India China South Africa (Brics) countries and the introduction of electronic visas for incoming tourists.


Science and Technology

A Digital Revolution Commission, which will include the private sector and civil society, will be established to position South Africa to seize opportunities and manage the challenges of rapid ICT advances.

Digital revolution still on hold.