Jacob Zuma, who is tipped to be South Africa’s next president, has assured the US that the country was safe despite recent political uncertainly.
Zuma, who is currently the African National Congress’ president, which is the ruling party in South Africa, met with Secretary of State Condoleezza Rice and President George W. Bush at the White House, rather than country president Kgalema Motlanthe.
Zuma said that the trip was aimed at increasing commercial ties between the largest economies of two continents, adding that not enough had been done in the past to secure trade flows from the US to South Africa.
The United States was assured business would continue as usual and that no policy changes would happen after the country’s former president, Thabo Mbeki, was recalled last month.
Investors in Africa’s largest economy were seeking commitments from Zuma that he would not bow to pressure from his communist and trade union allies to steer South Africa away from the pro-business policies of Mbeki.
In his speech to the Council on Foreign Relations in Washington, the president-in-waiting confirmed that country policy would not change.
“There should be no worry. The situation is going to continue normally. In a sense I am saying: ‘no panic, everything is fine in South Africa’,” said Zuma.
He added that the ANC, as a democratic organisation, took decisions collectively and that the country’s liberal and progressive constitution’s checks and balances would remain in place.
“I have absolutely continued to say that I would change no policies if I became president. I have no authority to do so. That is in the hands of the ANC.”
Zuma said that he was in the USA to push for increased investment and commercial ties with one of South Africa’s key trade partners.
“We believe America, up to now, has not taken advantage of the open economy that we have,” he said.
According to the US Census Bureau, the United States between January and August this year exported US$4.2-billion worth of goods to South Africa and imported goods worth US$7.2-billion.
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Wednesday, October 22, 2008
South Africa's growth projections 'enviable'
South Africa’s projected 3.7 percent GDP growth for 2008 was “like gold” in the current economic environment.
Lesetja Kganyago, Director General in the Treasury, said that in a climate where the world’s seven richest nations may record zero or negative growth for 2009, South Africa’s growth, while slower than initially predicted, was still enviable.
“A projection from 4 percent to 3.7 percent is like gold,” said Kganyago.
In his budget speech, the country’s finance minister Trevor Manuel had cut growth forecasts, but emphasised that South Africa was still in a relatively comfortable position when compared to other economies.
The medium-term budget policy statement dropped South Africa’s GDP projections in 2009 to just 3 percent from the 4.2 percent expected in February as slower global conditions bite.
GDP was projected to grow by about 3.7 percent for 2008, but to rise to 4.0 percent for 2010 and 4.3 percent for 2011.
Kganyago added: “The prophets of recession [in South Africa] have lost their congregation.”
Kganyago noted that for investors in South Africa that the effect of the current global crises would only be felt next year, but added that “we think we have built the anchors and in the outer two years will be back to 4% and more.”
Lesetja Kganyago, Director General in the Treasury, said that in a climate where the world’s seven richest nations may record zero or negative growth for 2009, South Africa’s growth, while slower than initially predicted, was still enviable.
“A projection from 4 percent to 3.7 percent is like gold,” said Kganyago.
In his budget speech, the country’s finance minister Trevor Manuel had cut growth forecasts, but emphasised that South Africa was still in a relatively comfortable position when compared to other economies.
The medium-term budget policy statement dropped South Africa’s GDP projections in 2009 to just 3 percent from the 4.2 percent expected in February as slower global conditions bite.
GDP was projected to grow by about 3.7 percent for 2008, but to rise to 4.0 percent for 2010 and 4.3 percent for 2011.
Kganyago added: “The prophets of recession [in South Africa] have lost their congregation.”
Kganyago noted that for investors in South Africa that the effect of the current global crises would only be felt next year, but added that “we think we have built the anchors and in the outer two years will be back to 4% and more.”
Wednesday, October 15, 2008
Rich black people still, well, rich
While the world is struggling to get to grips with one of the worst financial crises since the Great Depression, South Africa’s growing black middle class was weathering the storm well according to a recent survey.
A TNS Research Surveys report showed that the black middle class of about three million people colloquially known as the “Black Diamonds” was proving resilient to the global financial crisis on the back of spending power that grew by more than a third in 2007.
The survey also found that the spending power of this black class now matched that of the white population, which is of similar size, in South Africa for the first time.
According to Rudo Maponga of TNS Research Surveys, “The most impressive finding is that they have shown resilience to the global and domestic financial decline, increasing their spending power from R180-billion (about $20-billion) in 2007 to R250-billion this year.”
A previous TNS survey had shown that only 10 percent of the black diamonds were affected by the global credit crunch and higher interest rates, which could lead to asset repossessions.
“The black diamonds’ earning power has increased and the majority of them are becoming more financial savvy, which minimises the risk of getting caught up in debt,” said Maponga.
According to the survey, black women in this class accounted for 40 percent of the R120-billion spent annually but South African women.
“Almost half of the women interviewed said they earned over 50 percent of the household income, whilst over 80 percent said they were the main household decision makers when it came to the majority of purchases,” said Maponga.
The survey, which polled 1500 black people in major urban areas, took place in August.
Since 1994 South Africa, the black middle class has expanded at one of the fastest rates in the world, mainly as a result of pro-black policies aimed at expediting black business interests to deal with apartheid imbalances that advantaged the white population and left the black population mostly in poverty.
However, critics believe these black empowerment policies are making business in South Africa inefficient and expensive while not reaching the majority of poor black households. Elitism is also a problem, as many of the now rich businesspeople were not necessarily poor to start with, coming from positions of advantage in the former homelands.
A TNS Research Surveys report showed that the black middle class of about three million people colloquially known as the “Black Diamonds” was proving resilient to the global financial crisis on the back of spending power that grew by more than a third in 2007.
The survey also found that the spending power of this black class now matched that of the white population, which is of similar size, in South Africa for the first time.
According to Rudo Maponga of TNS Research Surveys, “The most impressive finding is that they have shown resilience to the global and domestic financial decline, increasing their spending power from R180-billion (about $20-billion) in 2007 to R250-billion this year.”
A previous TNS survey had shown that only 10 percent of the black diamonds were affected by the global credit crunch and higher interest rates, which could lead to asset repossessions.
“The black diamonds’ earning power has increased and the majority of them are becoming more financial savvy, which minimises the risk of getting caught up in debt,” said Maponga.
According to the survey, black women in this class accounted for 40 percent of the R120-billion spent annually but South African women.
“Almost half of the women interviewed said they earned over 50 percent of the household income, whilst over 80 percent said they were the main household decision makers when it came to the majority of purchases,” said Maponga.
The survey, which polled 1500 black people in major urban areas, took place in August.
Since 1994 South Africa, the black middle class has expanded at one of the fastest rates in the world, mainly as a result of pro-black policies aimed at expediting black business interests to deal with apartheid imbalances that advantaged the white population and left the black population mostly in poverty.
However, critics believe these black empowerment policies are making business in South Africa inefficient and expensive while not reaching the majority of poor black households. Elitism is also a problem, as many of the now rich businesspeople were not necessarily poor to start with, coming from positions of advantage in the former homelands.
'What global credit crisis?' - South African banks
South African banks were not coming under significant pressure in the face of the global credit crunch and a worsening local climate, according to a recent survey.
While the Ernst & Young financial sector confidence index slipped to a six-year low of 61 points in the third quarter of 2008, down from 70 in the previous period, eight out of 10 investment banks continued to regard prevailing business conditions as “satisfactory” and four out of 10 retail bankers felt the same.
Despite a more challenging environment, which has seen more consumers become indebted as a result of higher interest rates, South African banks have not suffered the same liquidity difficulties as has been the case for banks in the Unites States and Europe.
The report argues that South African banks had escaped much market turmoil as exchange controls had limited the country’s exposure to risk and because an act limiting irresponsible lending had come into effect in the middle of last year.
The report said investment banks were confident despite weaker business volumes and an expected deterioration in the fourth quarter as economic growth slows. The rand and Africa’s biggest stock exchange were also under pressure.
Africa’s largest economy’s central bank raised its repo rate by 5 percentage points to 12 percent between June 2006 and June 2008 to beat inflation, but also slowing economic activity as spending power dropped.
“After the boom of overall business activity of the second half of 2007, growth halved during the first half of 2008, During Q3, growth slackened further,” the report said.
Tighter monetary policy has slowed consumer spending, and put household budgets under severe strain, as highlighted by contracting retail and new vehicle sales. Credit growth has eased this year and household debt levels dropped in the second quarter from a record high.
A government minister has also come out in support of local banks.
"Were South African banks to come under pressure, the government would intervene strongly to protect them," said ANC Treasurer General Mathews Phosa
While the Ernst & Young financial sector confidence index slipped to a six-year low of 61 points in the third quarter of 2008, down from 70 in the previous period, eight out of 10 investment banks continued to regard prevailing business conditions as “satisfactory” and four out of 10 retail bankers felt the same.
Despite a more challenging environment, which has seen more consumers become indebted as a result of higher interest rates, South African banks have not suffered the same liquidity difficulties as has been the case for banks in the Unites States and Europe.
The report argues that South African banks had escaped much market turmoil as exchange controls had limited the country’s exposure to risk and because an act limiting irresponsible lending had come into effect in the middle of last year.
The report said investment banks were confident despite weaker business volumes and an expected deterioration in the fourth quarter as economic growth slows. The rand and Africa’s biggest stock exchange were also under pressure.
Africa’s largest economy’s central bank raised its repo rate by 5 percentage points to 12 percent between June 2006 and June 2008 to beat inflation, but also slowing economic activity as spending power dropped.
“After the boom of overall business activity of the second half of 2007, growth halved during the first half of 2008, During Q3, growth slackened further,” the report said.
Tighter monetary policy has slowed consumer spending, and put household budgets under severe strain, as highlighted by contracting retail and new vehicle sales. Credit growth has eased this year and household debt levels dropped in the second quarter from a record high.
A government minister has also come out in support of local banks.
"Were South African banks to come under pressure, the government would intervene strongly to protect them," said ANC Treasurer General Mathews Phosa
Wednesday, October 01, 2008
South African government to boycott hotels not wanting Fifa to manage them
South Africa’s government could boycott business with hotels that refuse to give Fifa’s accommodation agency access to their rooms.
Match, Fifa’s accommodation agent, has so far only contracted half of the 60000 rooms it estimated it would need.
The move by government, which could severely hurt hotels as the government sector is a significant revenue spinner, could encourage hoteliers refusing to sign deals to make their rooms available to Match during the 2010 Soccer World Cup.
Otto Stehlik, Protea Hotels group executive chairperson, issued the warning at an investment conference for the hospitality industry presented by the Tourism Business Council of South Africa. Stehlik is also a member of the ministerial advisory Council for the 2010 Soccer World Cup.
Many of South Africa’s largest hotel groups, including Protea Hotels, City Lodge, Southern Sun and Legacy, have met with Fifa over the last two years to negotiate a fair contract.
Stehlik says, “We’ll be making a lot of money”, but believes the country’s image of being able to host such events could be hurt by a small part of the hotel industry that refuses to make their beds available to Match.
The executive attributes this to “ignorance or greed”, however many hotels feel that although the world cup is the world’s biggest sporting event, that there is no reason why Fifa should get a cut of bed revenue.
Hotels have until the end of October to sign a contract with Match, after which government is apparently prepared to impose boycotts against them. This boycott could, according to Federated Hospitality Association of South Africa’s (FEDASA) executive chairperson Brett Dungan, be extended to private enterprises doing business with government.
Stehlik says that those not willing to sign contracts believed they could be more profitable alone, and that this belief could place the World Cup in danger.
Match’s Adam Brown said that the agency did not have enough rooms at reasonable tariffs, and that this would result in spectators choosing not to come to South Africa.
Contingency plans have already included adding guesthouses and lodges to Match’s inventory, and the possibility of including school and university accommodation too. A last resort would be to berth luxury cruise ships in Cape Town, Port Elizabeth, East London and Durban as additional rooms to let.
Stehlik believes there are enough ships available to make up the shortfall if hotel groups don’t come on board, however, this would be unfortunate as it would mean South Africa’s tourism industry would lose potential revenue.
Brown says the deadline for hotels is at the end of October as inventory must be issued between the 162 tour operators making group reservations in various countries.
Match, Fifa’s accommodation agent, has so far only contracted half of the 60000 rooms it estimated it would need.
The move by government, which could severely hurt hotels as the government sector is a significant revenue spinner, could encourage hoteliers refusing to sign deals to make their rooms available to Match during the 2010 Soccer World Cup.
Otto Stehlik, Protea Hotels group executive chairperson, issued the warning at an investment conference for the hospitality industry presented by the Tourism Business Council of South Africa. Stehlik is also a member of the ministerial advisory Council for the 2010 Soccer World Cup.
Many of South Africa’s largest hotel groups, including Protea Hotels, City Lodge, Southern Sun and Legacy, have met with Fifa over the last two years to negotiate a fair contract.
Stehlik says, “We’ll be making a lot of money”, but believes the country’s image of being able to host such events could be hurt by a small part of the hotel industry that refuses to make their beds available to Match.
The executive attributes this to “ignorance or greed”, however many hotels feel that although the world cup is the world’s biggest sporting event, that there is no reason why Fifa should get a cut of bed revenue.
Hotels have until the end of October to sign a contract with Match, after which government is apparently prepared to impose boycotts against them. This boycott could, according to Federated Hospitality Association of South Africa’s (FEDASA) executive chairperson Brett Dungan, be extended to private enterprises doing business with government.
Stehlik says that those not willing to sign contracts believed they could be more profitable alone, and that this belief could place the World Cup in danger.
Match’s Adam Brown said that the agency did not have enough rooms at reasonable tariffs, and that this would result in spectators choosing not to come to South Africa.
Contingency plans have already included adding guesthouses and lodges to Match’s inventory, and the possibility of including school and university accommodation too. A last resort would be to berth luxury cruise ships in Cape Town, Port Elizabeth, East London and Durban as additional rooms to let.
Stehlik believes there are enough ships available to make up the shortfall if hotel groups don’t come on board, however, this would be unfortunate as it would mean South Africa’s tourism industry would lose potential revenue.
Brown says the deadline for hotels is at the end of October as inventory must be issued between the 162 tour operators making group reservations in various countries.
'We won't pay to stop climate change' - SA consumers
While South Africans were becoming more concerned about climate change, this wasn’t translating into action given that consumers are reluctant to carry the costs of initiatives to curb greenhouse emissions, a survey from the Human Sciences Research Council (HSRC) highlights.
The 2007 South African Social Attitudes Survey sampled 3164 people, finding that of the 72 percent of respondents who knew what global warming was were all well educated in the causes of climate change. Almost half (44%) were more concerned about the effects of climate change than they were a year ago.
Yet, only 71 percent of participants believed the problem was “very serious” or “somewhat serious”, significantly lower than in other nations.
Compared to other nations, South Africans’ perceptions of the dangers of climate change was significantly lower than the almost 95 percent of Brazilians and about 90 percent of Britons, Canadians and Indians rated global climate change as a “very serious” or “somewhat serious” threat in the 2006 GlobalScan Poll, which included 30 countries.
However, according to HSRC researcher John Seager, there are many other more salient problems pressing South Africans, who see climate change as “a distant threat”.
“When we asked people what the most important challenges facing SA were, the list started with unemployment, HIV/Aids, economic issues and poverty,” said Seager
In the list of challenges, environment was placed at 10.
“If you’re not sure where your next meal is coming from, it’s more pressing than something that will affect future generations,” he added.
The respondents were supportive of government expenditure on developing wind farms (73%) or reducing the cost of energy saving devices (72%). However, they did not believe that the costs of consuming, through increased levies on fuel and electricity, should be increased to encourage reduced consumption. Taxes and levies to fund improved public transport were also out of favour.
Seagre added that although the participants are more aware of the pitfalls of climate change, “greater efforts will be required to increase general awareness and to ‘catch up’ with public opinion in other countries”.
Years of dirt cheap, yet dirty coal electricity may also have made South Africans complacent in the usage of power.
The 2007 South African Social Attitudes Survey sampled 3164 people, finding that of the 72 percent of respondents who knew what global warming was were all well educated in the causes of climate change. Almost half (44%) were more concerned about the effects of climate change than they were a year ago.
Yet, only 71 percent of participants believed the problem was “very serious” or “somewhat serious”, significantly lower than in other nations.
Compared to other nations, South Africans’ perceptions of the dangers of climate change was significantly lower than the almost 95 percent of Brazilians and about 90 percent of Britons, Canadians and Indians rated global climate change as a “very serious” or “somewhat serious” threat in the 2006 GlobalScan Poll, which included 30 countries.
However, according to HSRC researcher John Seager, there are many other more salient problems pressing South Africans, who see climate change as “a distant threat”.
“When we asked people what the most important challenges facing SA were, the list started with unemployment, HIV/Aids, economic issues and poverty,” said Seager
In the list of challenges, environment was placed at 10.
“If you’re not sure where your next meal is coming from, it’s more pressing than something that will affect future generations,” he added.
The respondents were supportive of government expenditure on developing wind farms (73%) or reducing the cost of energy saving devices (72%). However, they did not believe that the costs of consuming, through increased levies on fuel and electricity, should be increased to encourage reduced consumption. Taxes and levies to fund improved public transport were also out of favour.
Seagre added that although the participants are more aware of the pitfalls of climate change, “greater efforts will be required to increase general awareness and to ‘catch up’ with public opinion in other countries”.
Years of dirt cheap, yet dirty coal electricity may also have made South Africans complacent in the usage of power.
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