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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.


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 growth

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

UPDATES:

17 April, 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.


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:

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.

Nothing to see here.


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.

No update yet.


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.