The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) is expected to hold the rate at the 23-25 March meeting, according to a unanimous vote by 25 panellists on Finder’s SARB repo rate forecast report.
While the majority (88%) of the panel is in favour of a rate hold, 12% think that the rate should be cut. On average, they say the rate should be cut by around 42 basis points.
IQbusiness chief economist Sifiso Skenjana believes a rate cut will help bring relief to current economic pressure points.
“While we are reporting a better than expected revenue shortfall, the contribution was largely on the back of a mining earnings growth and not a stabilising economic growth context. The declining corporate income tax base is a clear sign of the economic pressure points and relief through an interest rate decrease is needed at this point in time,” he said.
University of Cape Town associate professor Sean Gossel also says the rate should be cut but notes this will result in less capital inflows.
“Unfortunately, SA is reliant on international capital so even though a further reduction in the repo rate would be a welcomed relief and assist SA recover, a decrease will lead to less capital inflows as a result of a tighter interest rate differential.
“There’s no free lunch (or capital flows), so SA will have to absorb the burden of higher interest rates so as to attract capital flows but at the cost of the domestic economy,” he said.
On the other hand, panellists such as Nedbank chief economist Nicola Weimar and Absa Group senior economist Peter Worthington say that the Bank should and will hold the rate because, at the moment, it’s a matter of waiting for previous policies and rate moves to take effect.
“Hiking now would not make sense, since inflation is well contained and the economy is still operating well below potential. Cutting would also not be wise, as the SARB has already done enough, the actual rate is below the neutral rate. So Monetary Policy is stimulatory enough.
“It is now just a case of waiting for the policy to impact on the economy and become a stimulus rather than a cushion against tough times,” said Weimar.
Alexander Forbes chief economist Isaah Mhlanga says the bank should and will hold the rate, despite inflationary pressures, as these trends are likely to be short-lived and that growth is starting to recover.
“At its January 2021 MPC meeting, the SARB kept rates unchanged and said inflation risks appear balanced over the short term and on the upside over the medium term.
“Growth is recovering and global inflationary pressure is rising, which will rule out any potential rate cuts. The economic recovery still remains modest and requires support, especially with fiscal policy that is expected to continue to consolidate in the medium term,” Mhlanga said.
When will the rate first increase?
The MPC will increase the repo rate sometime next year, according to over half (56%) of Finder’s panel. On the other hand, over a quarter (28%) of panellists believe that a rate increase is expected within the year.
Both DRM Group RSA economist Christopher Masunda and BNP Paribas chief economist Jeff Schultz, who believe the rate will first increase in the first and second half of 2022 respectively, say the Bank likely won’t consider an increase while CPI inflation stays within its 4.5% bound.
“A SARB that is likely to look through temporary exogenous shocks to CPI (for example, oil prices) and the persistence of a larger negative output gap than what the SARB currently estimates underpins our expectation that the SARB will not have to raise interest rates until H2 2022.
“An earlier-than-expected US Fed tapering (QE reduction), however, does run the risk of placing more pressure on the ZAR and capital outflows to high beta EMs like SA. This could force the SARB to act earlier, though we still maintain that even in this worst-case scenario, the SARB is unlikely to have to raise interest rates at all this year, with CPI inflation in 2021 and 2022 likely to remain below its 4.5% midpoint target by our estimates,” said Schultz.
University of the Free State senior researcher Dr Johan Coetzee also says the rate won’t increase until 2023, but that ultimately, the timings lie in the success of vaccination rollouts.
The success of the vaccination rollout is the major factor that will ultimately inform the interest rate decision going forward. We need to get the economy back at work in full force, and only once this has happened, can we make any informed assessment of what the likely interest rate trajectory will be.
I see the SARB erring on the side of caution for, at the very least, the next 12 to 18 months. We should also remember that the status of our local conditions are also a function of the health of the global economic environment and its ability to bounce back from the pandemic. There are just too many uncertainties that are still at play.”
Economists in favour of taxes remaining unchanged
The majority (92%) of Finder’s panel agree with the government’s recent decision for direct taxes to remain unchanged.
EFConsult lead economist Frank Blackmore and Nedbank analyst Reezwana Sumad agree with the government’s decision and say that instead of increasing taxes, the government should look to expand the tax base.
“SARS needs to find a way to begin taxing the informal/cash economy. Including these informal businesses in the formal economy, or conducting more audits of cash-based businesses can unlock some revenue upside,” Reezwana said.
Blackmore furthers this, saying that “taxes need to be reduced for both individuals and corporates, while tax base should be expanded through economic inclusion and business growth so the country can be more internationally competitive.”
Carpe Diem Research Services independent economist Elize Kruger also agrees that taxes should remain unchanged. Instead, the focus should be on improving employment, which in turn will lead to more taxes being paid to SARS.
“The business environment needs to be made attractive, and the ease of doing business (licensing, taxation, red-tape) in SA must improve. Also, the cost of doing business must be reduced, so that private companies can flourish, which will naturally lead to more job opportunities, more taxes to be paid to SARS.”
Mkhabela agrees with Kruger’s stance, saying taxes aren’t key to growing an economy.
South Africa needs to reflect again on these high personal Income Taxes and Corporate Income Taxes. We need to move to a lower attractive tax system for a better economic development and activity, as tax never grew any economy, and we need to attract investors and allow our middle class to invest for the future.
While Peter Worthington also agrees regarding the decision on direct taxes, he believes VAT should be increased.
“South Africa’s VAT rate is very low by international standards. We should lift it and use part of the proceeds to enhance social grants to the poor,” he said.
Unemployment rate to rise, slightly
In the fourth quarter of 2020, South African unemployment rose to 32.5%. By July, the panel anticipates that unemployment will increase, but only slightly, up to 32.8% on average.
Of the 23 panellists who provided a forecast, over half (57%) predict an increase in unemployment, while 30% say it will decrease and the remaining 13% think it’ll stay the same.
Antswisa Transaction Advisory Services CEO and chief economist Miyelani Mkhabela was the least optimistic about South African employment, predicting that a little under 2 in 5 South Africans (38%) will be unemployed come July.
When asked how he thinks employment rates could be improved, he said “South Africa needs Energy security to attract investors in downstream and upstream industrial and strategic investments in the agricultural sector across the country.”
Investec chief economist Annabel Bishop, Frank Blackmore and Jeff Schultz, who all predict that around a third of South Africans will be unemployed by July, say that structural reforms are necessary to curb unemployment.
According to Bishop, the government needs to “rapidly introduce free market structural reforms and reduce the size of the state and the suppressing effect [of] the high regulatory burden (high state control) on the state to increase the ease of doing business.”
Economist at STANLIB Ndivhuho Netshitenzhe meanwhile emphasizes the importance of the COVID-19 vaccine’s role in improving employment rates.
“This will ease the high level of uncertainty in the economy around the constant re-introduction of lockdown measures and give businesses some confidence to start making more permanent investment and hiring decisions.”
However, she said that in the long term, the government needs to focus on reforms that will increase the confidence of both businesses and consumers in economic growth.
“In order to do this, [the] government needs to be less involved in the economy, and instead [the] government should create an environment that encourages businesses to invest, expand and employ, and one that nurtures and promotes entrepreneurship and SME creation,” she said.
Timeline for a budget surplus
The South African economy isn’t expected to reach a budget surplus for around 10 years or more, according to just over half (52%) the panel. Just over a quarter (28%) expect to see budget surplus between 2026-2030, and one in five (20%) expect to see this happen within the next five years.
Economist and lecturer at UNISA, Mzwanele Ntshwanti, who thinks budget surplus won’t be achieved for another 10 years or more, recalled the minister’s words, “we owe too much money to a lot of people,” and added, “we need to achieve some level of stability and self sufficiency.”
Elize Kruger says the debt burden will continue to rise if South Africa continues on the current trajectory.
“If the country needs to borrow money to fund non-interest expenditure (as is currently the case, i.e. the country runs a primary deficit), the debt burden will just continue to rise and an ever bigger portion of tax revenue will be eaten up by interest payments.”
Several panellists, including Annabel Bishop and Nicola Weimar noted that a budget surplus isn’t as important as a primary surplus (i.e. the budget balance less interest rates).
“I don’t think they necessarily need to run a budget surplus. They should aim for a primary surplus to slow the rate of debt accumulation. However, if they can run a consolidated deficit of around 3% of GDP, it would probably be more appropriate for a developing country like SA, with high unemployment, high inequality and poor growth prospects,” Weimar said.
Professor of economics at the University of the Western Cape Matthew Kofi Ocran noted that deficits aren’t bad per se, and it’s more a question of sustainability.
Sean Gossel shared a similar sentiment, noting that it’s important to demonstrate debt management.
“Because of SA’s downgrades, it’s more important to show consistent debt management than a (likely) temporary budget surplus.”
Professor at the North-West University School of Economics Waldo Krugell highlighted that a primary surplus is the only way to avoid a future debt crisis.
Is South Africa on the verge of a sovereign debt crisis?
South Africa is at some level of risk of a sovereign debt crisis, according to the overwhelming majority of panellists (92%).
Over a third (36%) say the risk is high and 40% say the risk is moderate, while 16% say there’s only a slight risk of this happening. Just 8% (2 panellists) say South Africa is not at risk of a sovereign debt crisis.
Mzwanele Ntshwanti says the crisis is already here.
“In the last 10 years, the debt has exponentially increased from around 23% to around 80%. This is a crisis.”
Miyelani Mkhabela agrees that there’s a high risk, noting that the situation will only worsen as the COVID-19 pandemic continues.
“By the end of 2021/22, gross loan debt is expected to be at a range of 84% and 90% of GDP, which is highly riskier as the COVID-19 crisis continues, and in the future, we forecast environmental consequences. The situation is bad for a developing economy.”
Stellenbosch University COO Stan du Plessis noted that with an interest burden of almost 5% of GDP, South Africa is well within the likely zone of a fiscal crisis.
“The sovereign rating already reflects the precarious state of the government’s finances. When the bond market wakes up to this situation, the asset markets can accelerate the fiscal crisis rapidly,” he said.
However, Nicola Weimar says the risk is moderate given the bulk of South African debt is rand-denominated.
“Ultimately, the debt burden is unsustainable. If foreign lenders lose interest, SA will have to fund the deficit through access to IMF, World Bank or more destructive means. The risk is, however, reduced by the fact that the bulk of SA sovereign debt is rand-denominated,” she said.
Meanwhile, chief economist at Efficient Group Dawie Roodt says there’s no risk given that South Africa will likely deflate most of the ZAR debt away, highlighting that there are sufficient reserves to cover non-ZAR debt.
Will mortgage approvals continue at this volume?
The trend of a high volume of mortgage approvals we saw in 2020 will likely come to an end this year, according to just under half the panel (45%). However, over a third of the panel (36%) say the trend will continue, and 18% say they’re not sure.
Peter Worthington, who doesn’t think the trend will continue, says the volume we saw last year can be attributed to a stock adjustment.
“The problem is that incomes are not there to keep this going on a long term basis,” he added.
Reezwana Sumad agrees mortgage approvals won’t continue in the same volume and noted 2020 set a high base.
“[It] will be difficult to meet or beat this volume because we do not expect interest rates to decline in 2021 as they did in 2020. The sharp reduction in the repo rate resulted in an increased demand for mortgages as opposed to rentals,” she said.
Ndivhuho Netshitenzhe thinks the trend will reverse as interest rates have likely bottomed out.
“[It’s] most likely that people were taking full advantage of the historic low interest rates and this trend should start to reverse as interest rates are likely to have bottomed out,” she said.
However, on the flip side, many of those who expect to see the trend continue say the low interest rate regime and changing lifestyles due to COVID-19 will continue to bolster the sector.
Property price forecasts
Property prices in South Africa’s 10 biggest cities are set to increase by an average of 2.2% over the next 6 months, according to 14 of the panellists who provided property forecasts.
Several economists noted that the current low interest rates will prop up the market.
Matthew Kofi Ocran put it simply: “The continued low-interest-rate regime will provide an incentive to increased market activity.”
Professor at the University of Johannesburg Ilse Botha, who gave property forecasts ranging from 2-3% across all cities, noted that the lower interest rate environment means that owning property is more affordable than renting.
However, global head of operational risk at Fitch Solutions Chiedza Madzima says that while the low interest will support the sector, prices will remain subdued when accounting for inflation.
“A low interest rate environment will support the sector, and prices will likely move slightly higher in nominal terms (year on year). However, in real terms, housing prices will remain subdued when accounting for inflation. Larger cities/areas will see higher demand compared to smaller/high density areas. In lower income brackets, the recovery will be slower,” she said.
On average, Cape Town is expected to increase the most (4.5%), followed by Johannesburg, (3.07%) and Durban (2.79%). Meanwhile, cities like East London (0.64%) and Port Elizabeth (0.93%) are expected to increase only marginally by less than 1%.
Dr Johan Coetzee, who provided the highest price increase forecast for Cape Town at 15%, says the Western Cape will be seen as an investment opportunity as the economy starts to pick up.
Frank Blackmore expects to see moderate growth inland while coastal cities could see a reduction in prices.
He forecasts cities like Port Elizabeth and Pietermaritzburg will see slight drops of 3% and 2% respectively, while cities like Johannusburg and Durban will increase by 3% or 4%.
Mzwanele Ntshwanti says any increases will be marginal due to the ongoing economic consequences of COVID-19.
“The market is generally struggling due to COVID-19 and loss of income for many people. Inequality is showing itself greatly as well in this industry since high earners are the winners and low earners are the losers. Thus, increases will be marginal.”
South African President Cyril Ramaphosa reimposed a ban on alcohol sales and ordered the closure of all bars Monday as part of new restrictions to help the country battle a resurgence of the coronavirus, including a new variant.
Ramaphosa also announced the closure of all beaches and public swimming pools in the country’s infection hotspots, which include Cape Town, Johannesburg, Durban and several coastal areas. In addition, South Africa is extending its nighttime curfew by four hours, requiring all residents must be at home from 9 p.m. until 6 a.m., the president said.
“Reckless behavior due to alcohol intoxication has contributed to increased transmission. Alcohol-related accidents and violence are putting pressure on our hospital emergency units,” Ramaphosa said in a nationwide address.
“As we had to in the early days of the lockdown, we now have to flatten the curve to protect the capacity of our healthcare system to enable it to respond effectively to this new wave of infections,” he said.
Ramaphosa said the ban on selling alcohol and other new restrictions would take effect at midnight. They include the mandatory wearing of masks in public, and anyone found not wearing a mask in a public place will be subject to a fine or a criminal charge punishable by a possible jail sentence, the president said.
Ramaphosa said the increased restrictions are necessary because of a surge in COVID-19 infections which has pushed South Africa’s total confirmed virus cases past 1 million.
“Nearly 27,000 South Africans are known to have died from COVID-19. The number of new coronavirus infections is climbing at an unprecedented rate,” he said. “More than 50,000 new cases have been reported since Christmas Eve.”
Ramaphosa announced the new measures after a Cabinet meeting and an emergency meeting of the National Coronavirus Command Council. He said the new restrictions would be reviewed in a few weeks and a relaxation would only be considered when the numbers of new cases and hospitalizations decrease.
The country surpassed the 1 million mark in confirmed virus cases on Sunday night, when authorities reported that the country’s total cases during the pandemic had reached 1,004,413, including 26,735 deaths.
Like Britain, South Africa is battling a variant of COVID-19 that medical experts think is more infectious than the original. The variant has become dominant in many parts of the country, according to experts.
The South African Medical Association, which represents nurses and other health workers as well as doctors, warned Monday that the health system was on the verge of being overwhelmed by the combination of higher numbers of COVID-19 patients and people needing urgent care from alcohol-related incidents. Many holiday gatherings involve high levels of alcohol consumption, which in turn often lead to increased trauma cases.
“To alleviate the pressure on the system during this time of the year, where we only have skeleton staff working, especially in the public sector, as well as in the private sector, we are asking for stricter restrictions regarding social gatherings,” Angelique Coetzee, chairwoman of the medical association told The Associated Press.
“South Africa has got a history of very high alcohol abuse and binge drinking, especially over the weekends. In certain areas that leads to a lot of trauma cases, assaults, motor vehicle accidents and domestic violence,” she said.
The medical association has called on the government to impose stricter restrictions on the sale of alcohol, especially where large gatherings are concerned.
When South Africa previously had a total ban on liquor sales, trauma cases in hospitals dropped by as much as 60%, according to government statistics. When the ban on alcohol sales was lifted, trauma cases went back up to previous levels.
Amid a resurgence of COVID-19 in early December, South Africa limited sales of alcohol to Monday through Thursday between the hours of 10 a.m. to 6 p.m. The country also has a nightly 11 p.m.-4 a.m. curfew.
Various alcohol traders had pleaded with the government to avoid a total ban on alcohol sales, citing the economic damage it would cause. South Africa’s alcohol industry was among those hardest hit when the country imposed a hard lockdown during April and May that also banned all liquor sales.
South Africa’s 7-day rolling average of confirmed daily cases has risen over the past two weeks from 11.18 new cases per 100,000 people on Dec. 13 to 19.87 new cases per 100,000 people on Dec. 27.
The 7-day rolling average of daily deaths in the country has risen over the past two weeks from 0.26 deaths per 100,000 people on Dec. 13 to 0.49 deaths per 100,000 people on Dec. 27.
Ramaphosa urged people to avoid gatherings for New Year’s Eve. Instead, he asked all South Africans to light candles.
“I will light a candle in Cape Town at exactly midnight on New Year’s Eve in memory of those who have lost their lives and in tribute to those who are on the frontline working to save our lives and protect us from harm,” he said. “I ask that you join me wherever you are in this very important symbolic gesture.”
Credit: Associated Press
Court proceedings at the Senekal Magistrate’s Court in the Free State were disrupted by angry farmers today, who overturned and burned a police vehicle. The farmers were baying for the blood of two suspects who appeared in court in connection with the murder of farm manager Brandon Horner.
Farmers have called for the return of the death penalty. Twenty one year old Roux was allegedly murdered in Paul Roux last Friday. Two suspects charged with his murder made a brief appearance in the Senekal Magistrate’s Court.
Horner was found with a rope around his neck, and tied to a pole on the farm. Farmer Piet van der Merwe has called for the return of a death penalty.
“I think the death penalty must be introduced, we can’t go on like this. President Cyril] Ramaphosa is just as guilty for all these farm murders, blood is on his hands and Minister Bheki Cele must fall, he is the biggest criminal. Law and order must be restored immediately. We must get protection.”
Another farmer, Hardi Odendaal says they are disturbed by the latest killing.
“Everybody is really feeling bad about the whole thing and it must stop. It’s the only thing, it must stop now. Not over a month but now, today, and stop all over the country the murdering of farmers.”
AfriForum Deputy Chief Executive Officer Ernst Roets says the anger from the farming community is justified.
“People are very angry but people are also very sad. People have expressed their sympathy with the family. Having said that, I think there are two important messages that came out today. The one is, people regard what happened to Brandon Horner as something that happened to them as well. They regard this as a bigger body and if you mutilate the hand then you mutilate the body. If you cut the ear, you cut the body and if you amputate the foot then the body. And I think that’s how our people feel, they take it personally, they see it as an attack on the community. They want to express their condolences.”
The case has been postponed to next week Friday to allow the 32-year old Sekwetje Mahlamba and his co-accused 44-year old Sekola Matlaletsa to apply for bail.
The South African government has asked the International Monetary Fund (IMF) for $4.2 billion. The money would come from a facility that provides financing to countries
facing an urgent balance of payments need, without the need to have a full-fledged program in place.
According to the IMF managing director this means that the recipient can spend the money freely but should keep the receipts. Nevertheless, reports that South Africa has been negotiating a letter of intent with the IMF suggests that at least part of the financing will be linked to tougher IMF conditionalities.
The letter of intent is a letter from the government to the IMF in which it sets out the policies that it intends to implement to correct the macro-economic problems that caused it to seek IMF support. The IMF board decides to provide a country with financing on the basis of this letter. Its contents are the core of the conditionalities attached to IMF financing.
South Africans will learn the actual terms of the IMF financing at the end of July when its board of directors considers the country’s request for financial assistance.
But many have already made up their minds about this transaction. Some see it as a humiliating defeat in which the country will be forced to surrender its sovereignty and accept demeaning and immiserating economic policies. Others see it as the first step back from the abyss. They expect the IMF to force the country to take its medicine, as bitter as it may be, and regain economic health.
Both these views are overwrought and ultimately misleading. South Africa has more bargaining power in its relationship with the IMF than either view suggests. In the end, the terms of the IMF arrangement will depend on how effective the government was in its negotiations with the IMF.
To understand this, we need to answer three questions: Will South Africa have to surrender part of its sovereignty to the IMF? Is the IMF a particularly unreasonable negotiating partner? What responsibilities does the IMF have in negotiating the conditions?
The three questions
Will South Africa have to surrender part of its sovereignty to the IMF?
Sovereignty is a complicated and sensitive issue. It raises concerns about a state’s autonomy and ability to control its own destiny. One manifestation of sovereignty is a state’s decision to sign an international agreement. It shows that it is an actor on the international stage capable of reaching binding agreements with other subjects of international law – states and international organisations like the IMF.
Nevertheless, most international agreements restrict the sovereign’s freedom of action.
Consider, for example, the African Continental Free Trade Agreement. This agreement obliges South Africa to open – and keep open – its economy to trade with the rest of Africa. Before agreeing to this limitation on its freedom of action, South Africa negotiated with its co-signatories to minimise the cost of its commitments and maximise the benefits it expects from the arrangement.
South Africa’s arrangement with the IMF is similar. It is exercising its sovereign prerogatives when it decides to enter into an arrangement with the IMF. Before doing so, the country should negotiate for the best possible deal with the IMF.
Is the IMF a particularly unreasonable negotiating partner?
No bank, charitable foundation or international financial institution provides large amounts of financing without attaching conditions designed to ensure that the recipient uses the funds responsibly and pays them back as agreed. These conditions can range from demanding collateral to requiring promises that restrict the recipient’s future conduct in some way, such as limiting the ways in which it can use the funds.
The IMF conditions its financing on policy measures rather than on collateral or promises about the use of the funds. Historically, these conditions were ideologically driven and controversial. They included reducing the economic role of the state, making economies more market friendly and more globalised.
More recently the IMF leadership has incorporated issues such as inclusiveness, sustainability, social safety nets and gender parity.
It is not easy to predict what the exact mix of conditions will be in any particular case. The experience of other countries suggests that the actual mix is a negotiated outcome. Consequently, the conditions’ content and wording will depend on the country’s economic situation, its willingness to engage in tough negotiations with the IMF and on how effective it is in convincing the IMF of the validity of its positions.
What responsibilities does the IMF have in negotiating the conditions?
The IMF’s Articles of Agreement states that it should help countries
correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.
Thus, the IMF should demonstrate that whatever conditions it attaches to its funding are consistent with the recipient’s prosperity over the medium term. It must also show that it is not helping one IMF member state at the expense of its responsibilities to other member states.
In addition, the IMF, like any international organisation, should comply with applicable customary international law principles.
First, it must respect the sovereignty of its member states, including their laws. Second, it must respect their international legal obligations and not undermine their ability to meet these obligations. Third, the IMF, which is a specialised UN agency, should, pursuant to the Universal Declaration of Human Rights, [contribute to securing the
universal and effective recognition and observance" of human rights.
Based on these principles, the IMF has three responsibilities in regard to its arrangement with South Africa. First, it must ensure that the conditions attached to its financing are consistent with the South African constitution. In particular this means that the IMF must ensure that its conditionalities are consistent with the bill of rights in the constitution.
Second, the IMF must make sure that it does not require anything that is inconsistent with South Africa’s treaty commitments. These includes the state’s international human rights and environmental obligations. Out of respect for South African sovereignty, the IMF must defer to South Africa’s interpretation of these commitments, provided they are not inconsistent with international law.
Third, the IMF should explain how it has determined that the effect of its conditionalities is consistent with the applicable international legal principles. It is important to note that this requirement does not mean the IMF cannot require the state to take such actions as cutting its budget. But it does mean that the IMF has a responsibility to show that these cuts are the least cost way of achieving its objectives.
South Africans should not view the IMF either as the protagonist in its nightmares, or as its saviour. Instead the country should treat it as it would any other financial institution. It should demand that it live up to its own international responsibilities and demonstrate why it thinks its agreement with the government will benefit all South Africans.
When it comes to public transport, there is a responsibility both on operators and on commuters to make the required changes to their travel and commuting behaviour. This is the only way in which we can hope to keep coronavirus infection rates under control.
The comment comes from a manufacturer and distributor of cleaning products INDUSTROCLEAN, following an announcement made by President Ramaphosa on Sunday night on the regulations and limitations for long and short distance taxi journeys.
Emma Corder, Managing Director of INDUSTROCLEAN, says the reality is that public transport is a high-risk environment because of the number of people in a confined space with limited ventilation. There is also little if any access control to identify potentially sick commuters as well as a variety of common surfaces to touch such as handrails and doorknobs.
“All parties involved in public transport – taxi operators, bus companies, train operators and commuters – have to take the necessary precautions,” she says.
It starts with the wearing of a mask, explains Corder.
“This is a critical way to protect yourself and others, and it is equally important to wear it correctly. Masks block droplets from your sneezes and coughs and minimizes the likelihood of you touching your face and either spreading or coming into contact with the virus from other people.”
Eating requires removing the mask in a high-risk situation, so change habits and eat and drink before or after the ride. It will benefit others just as much as it helps you stay safe and virus free, she adds.
Secondly, it’s important that commuters sanitize their hands before and after each trip. Most transport operators provide hand sanitizers but having your own on hand is always advised.
“Carrying your own hand sanitizer will not only keep you safe but also provide peace of mind during your commute,” commented Corder. It is important that the sanitizers contain 70% alcohol.
Other tips include:
“We all have to remain vigilant as the number of coronavirus infections continue to rise. By following these simple daily guidelines we can all work together to keep the infection number as low as possible,” says Corder.
It has become common to point out that COVID-19 has highlighted South Africa’s inequalities. It is less common, but just as important, to recognise that inequality shapes how the country is governed, ensuring that, while South Africa is located in Africa, those who govern it may be closer to their counterparts in Latin America.
The first reason South Africa has been unable to stem the tide of infections is that its strategy always assumed a severe epidemic was inevitable. It is hard to fight anything if you assume you are bound to lose. This followed advice from South Africa’s medical scientists, almost all of whom embrace this view despite the fact that scientists in other parts of the world have helped to prevent great damage.
Why is this? Possibly because their points of comparison on the pandemic were not Asia and parts of Africa where infections were curbed, but the rich countries of the global North, many of which were overwhelmed. They also probably assumed that while some countries might be able to prevent a severe outbreak, South Africa could not.
If so, this would reveal a common way of thinking in South Africa: the belief that the country must compare itself to the rich countries of the North – but that it will never match up.
This pessimism is born of the view that South Africa’s government has very limited capacity. The failure to curb COVID-19 does show glaring capacity gaps. But the problem is not, as critics usually assume, a lack of technical know-how. It is, rather, a particular view of the world and the difficult relationship between those who govern and the governed.
Despite appearing to give up before the fight began, South Africa could have contained COVID-19 had it done what its government said it would do: create an effective testing and tracing programme which would identify people with the virus, trace their contacts and isolate them if they were infected.
The government likes to boast about the large number of tests its many community health workers have conducted. It talks much less about why testing has not stemmed the virus: a bottleneck at the National Health Laboratory Service, which supports provincial and national government health departments.
In May, doctors complained that it took on average a week to receive COVID-19 test results for outpatients and three to four days for patients in hospitals. Other doctors reported cases in which it took weeks to receive results. At the end of May, Gauteng, the country’s economic hub, was waiting for test results for over 20,000 people.
Testing can contain COVID-19 only if results are received speedily so that the contacts of infected people can be traced. The laboratory backlog meant that testing and tracing could not work no matter how many tests were conducted and how many health workers were hired.
This seems to be an obvious technical failure. Some test results were, according to doctors, lost, which seems to show that the lab was simply not up to the task. But the real problem may be that the government put far too much faith in a high-tech laboratory which was, because too much was expected of it, simply overwhelmed (hence the lost results).
By contrast, Senegal, a far poorer country, knowing that it had no laboratory service that could have coped, developed a test which cost only $1 and produced results very quickly.
So, South Africa believed it had capacity which it lacked. It also assumed that a laboratory which operated like those in rich countries was the most effective way to test for COVID-19. And so, unlike Senegal, it failed to come up with a solution fitted to its needs. Again, the desire to be like the North made it impossible to contain the virus.
The second problem is that the behaviours which are needed to stem COVID-19 are very difficult for most South Africans – those who live in the formerly blacks-only urban townships and in shack settlements. Overcrowding makes physical distancing very hard, clean water may not be available for hand washing and people are forced to travel in full minibus taxis.
The government could have overcome these problems if it had chosen to work with people in these areas to find ways to protect themselves. But it did not try – it relied on instructing people to do things they clearly could not do.
To South Africa’s elite, of which the government is now a part, people in low-income townships lack sophistication and maturity: poverty is confused with inability. And so there is no point in working with them.
The problem here is the government’s lack of political capacity, its inability to form a relationship with voters which would enable them to work together against a common threat.
Why is South Africa governed this way? Unlike other sub-Saharan African countries and like several Latin American countries, South Africa is both “First World” and “Third World”. A significant section of its people lives like, and measure themselves by the standards of, the affluent in North America and Western Europe.
This is why it has facilities other African countries lack and why it insists on relying on them.
People who live in “First World” conditions also find it much easier to lobby politicians. That is why the government’s claim that it would be guided only by the science of COVID-19 collapsed as lobby groups persuaded it to open activities which allowed the virus to spread.
But most people live in the same conditions as the poor of the “Third World”. Facilities designed for the “First World” one-third of the population cannot meet the needs of the other two-thirds. The elite’s deep admiration for the “First World” ensures that the government always wants to rely on what works only for the one-third because only this is “respectable”.
The issue is not that many South Africans are wealthy and live well – so do elites in other African countries. It is that the country is divided into two worlds. An entire economy and social system serves one-third of the people and excludes the rest from its benefits. This shapes attitudes as well as who gets what. The government may be elected by people outside the charmed circle but it is a product of it, hence its response to COVID-19.
Another consequence, common to South Africa and much of Latin America, is that those who live in “First World” conditions tend to see those who don’t as people who have not attained their exalted standards: they must be told what to do and controlled if they do not listen. Working with the majority to fight the virus isn’t possible when they are seen as “backward” embarrassments.
Many South Africans like to think the country is unique in sub-Saharan Africa. Its contrasts of wealth and poverty certainly are one of a kind. Its response to COVID-19 shows how much this prevents the government from doing what it needs to do.
President Muhammadu Buhari has urged African leaders to ensure the immediate actualization of the Common African Position on Assets Recovery (CAPAR), as the continent celebrates Anti-Corruption Day, July 11, 2020.
In a letter to South Africa’s President, Cyril Ramaphosa, Chairman of African Union, the Nigerian leader asked for a re-commitment to the anti-corruption war by leaders on the continent to engender an “integrated, prosperous and peaceful Africa, driven by its own citizens, representing a dynamic force in the international arena.”
The President laments that “the massive corruption being perpetrated across Africa’s national governments has created a huge governance deficit that has in turn created negative consequences that worsen the socioeconomic and political situation in Africa.”
The letter by President Buhari reads in part:
“As Your Excellency is aware, the continental fight against corruption has been premised on an irreducible minimum that can pave the way for Africa’s transformation. In this effort, the emphasis has been on the continent’s collective determination to forge resilient partnerships among our national governments, civil society organizations and other interest groups, such as women, youth and the physically challenged, to ensure improved socio-economic, political and security development and ultimately, the improvement of our continent.
“The concern of the African Union is that the massive corruption being perpetuated across our national governments has created a huge governance deficit that has in turn created negative consequences that have worsened the socio-economic and political situation in Africa.
“Your Excellency may recall that these continental concerns led our colleagues at the African Union, to appoint my humble self as the African Union Anti-Corruption Champion. I believe that the efforts and focus of the Nigerian Government at home, partly informed this decision as well as the need for Africa, as a continent, to recommit herself to the fight against corruption and the imperative to free resources for meaningful development.
“I am, therefore, in full support of the call for the issuance of a continental message to commemorate this day, on July 11, 2020, to re-commit the African Union to the continental fight against corruption, including through a robust approach to assets recovery, hence the need for a strategic framework on a Common African Position on Assets Recovery (CAPAR).
“Happily, in February 2020, at the 33rd Ordinary Session of the Assembly of the African Union in Addis Ababa, CAPAR was adopted. In my view, the African Union must go beyond the mere annual celebration of the Africa Anti-Corruption Day by moving swiftly to operationalize the African Common Position on Assets Recovery by all member states. This is an excellent way to drive Africa’s Agenda 2063, for an ‘integrated, prosperous and peaceful Africa, driven by its own citizens, representing a dynamic force in the international arena.’
“As current Chair of our Union, I sincerely commend to you, this suggestion that seeks to call our leaders in Africa to recommit ourselves to this very important task of reclaiming our continent from the vice of systemic corruption.
“Please accept, Your Excellency and Dear Brother, the assurances of my highest consideration.”]
Credit: Daily Post
Despite a statement from the the Botswana government that President Cyril Ramaphosa had sent Intelligence Minister Ayanda Dlodlo as his envoy to Gaborone, News24 has learnt that the trip has been called off.
The Botswana government said in a statement on Monday that President Mokgweetsi Masisi would meet with Dlodlo on Tuesday afternoon. The statement was further posted on Masisi's official Twitter page.
However, prior to the confirmation by the Botswana government, Ramaphosa's spokesperson Khusela Diko denied that an envoy had been appointed.
"The president has not and has no intention of appointing an envoy to Botswana in relation to the cases involving Bridgette Radebe," she said.
Diko said no minister had been tasked to deal with the matter.
News24 understands the trip was called off after we posed questions to the presidency.
The now cancelled meeting comes as the Botswana government had approached AfriForum to assist it in tracing millions of Pula allegedly laundered from the country.
Botswana's Director of Public Prosecutions (DPP), advocate Stephen Tiroyakgosi, last Tuesday bemoaned the lack of response from South Africa's Department of International Relations and Cooperation (Dirco) after its request for mutual legal assistance in the matter.
Motsepe-Radebe is implicated in allegations of money laundering.
Last week the Botswana government announced it had enlisted the services of AfriForum's Gerrie Nel to get the Department of International Relations and Cooperation to respond to its request made last September.
The move by Gabarone is expected to cause diplomatic tensions between it and Pretoria.
Speaking to City Press, Motsepe-Radebe had challenged the Botswana government to "produce evidence that such a large amount of money left the country in the first place and how and if the Reserve Bank of Botswana has no records of that".
She also bemoaned the fact that the names of her relatives – Ramaphosa is her brother-in-law and Patrice Motsepe is her brother – come up whenever the case is mentioned.
Motsepe-Radebe has denied the accusations.
She further stated that she would "welcome the South African government assisting the Botswana government with its request for mutual legal assistance … These allegations are harmful to my reputation and to all the other citizens that have been referenced in the affidavit".
Late last year, she was named as a co-signatory in two South African bank accounts holding more than $10 billion (R170 billion) allegedly stolen from the Botswana government.
Nel further told the media that: "Money originating from the Bank of Botswana was illegally laundered through various international accounts and pertinent to this particular account, $48 billion found its way to bank accounts in South Africa."
Leaders of Sudan, Ethiopia and Egypt said they were hopeful that the African Union could help them broker a deal to end a decade-long dispute over water supplies within two or three weeks.
Ethiopia, which is building the Grand Ethiopian Renaissance Dam (GERD) which worries its downstream neighbours Egypt and Sudan, said it would fill the reservoir in a few weeks, as planned, providing enough time for talks to be concluded.
Tortuous negotiations over the years have left the two nations and their neighbour Sudan short of an agreement to regulate how Ethiopia will operate the dam and fill its reservoir, while protecting Egypt’s scarce water supplies from the Nile river.
Ethiopia’s water minister, Seleshi Bekele, said that consensus had been reached to finalise a deal within two to three weeks, a day after leaders from the three countries and South African President Cyril Ramaphosa, who chairs the African Union, held an online summit.
Billene Seyoum, a spokeswoman for Ethiopia’s prime minister, said that in Friday’s agreement there was “no divergence from Ethiopia’s original position of filling the dam.”
The Egyptian presidency said in a statement after the summit that Ethiopia will not fill the dam unilaterally.
The Grand Ethiopian Renaissance Dam (GERD) is being built about 15 km (9 miles) from the border with Sudan on the Blue Nile, the source of most of the Nile’s waters.
Ethiopia says the $4 billion hydropower project, which will have an installed capacity of 6,450 megawatts, is essential to its economic development.
Ethiopia’s Prime Minister’s Office said that the three countries agreed that the Nile and the Grand Renaissance Dam “are African issues that must be given African solutions.”
Friday’s round of talks brokered by the African Union, is the latest attempt to move forward negotiations which have repeatedly stalled due to technical and political disagreements. They also signal an intention to solve the issue without foreign intervention.
Ethiopia’s statement said the African Union, and not the U.N. Security Council, will assist the countries in the negotiations and provide technical support.
Cairo had appealed to the Council in a last-ditch diplomatic move aimed at stopping Ethiopia from filling the dam. The Council was expected to hold a public meeting on Monday to discuss the issue.
South African banks and the government are looking for ways to boost take up of an up to 200 billion rand ($11.58 billion) loan scheme to help coronavirus-hit businesses, two bank executives and a source close to the discussions told Reuters.
Possible amendments being discussed include encouraging banks to ease their lending conditions, the source close to the discussions said.
"There are minor issues around the design," the source continued, including wording in the terms that has led to banks applying their standard credit procedures and rejecting more applications than anticipated.
The scheme, launched in May, was meant to encourage banks to lend more, on more favourable terms, to small businesses struggling with the effects of the pandemic.
But concerns arose that the money -- 40% of President Cyril Ramaphosa's 500 billion rand economic stimulus package -- was not being fully used after big banks approved only a few billion rand of loans in the first few weeks.
Lenders, the treasury and the central bank are in regular talks on the issue, the source said, with finance minister Tito Mboweni keen to announce changes to the scheme in his emergency budget on June 24.
Goolam Kader, business banking managing executive at Nedbank (NEDJ.J), said the lender is working closely with the Banking Association South Africa (BASA) to identify potential improvements.
He added that Nedbank did not apply credit criteria that are different from usual when assessing loan requests made under the scheme, but that various factors affected take up, including its other efforts to help customers.
Standard Bank referred Reuters to BASA, which declined to comment. FirstRand and South Africa's treasury did not provide comment by a deadline.
Jaco le Roux, chief risk officer of relationship banking at Absa's retail and business bank, said it did apply different criteria as well as imposing requirements like a bond over property less often.
Other features being discussed include raising the turnover threshold for eligible companies from 300 million rand, expanding the list of things businesses can spend the money on and the type of loans banks can extend, and lengthening the term of payment holidays, le Roux and the source said.
Take up has already accelerated to around 7 billion rand and could double within days, the source continued. There may have been a lag as businesses considered their options.
Stuart Theobald, chairman of Intellidex, which presented to government on how to design a scheme, said it did not seem to be working as intended, citing issues like the banks often requiring personal guarantees for the loans, as is standard in South Africa.
"This is not meant to be banking as usual," he said. "You want banks to behave as if they are in the best of times ... but the design of it is such that they can't actually do that."