EO102 South Africa

South Africa – Economic forecast summary

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

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

The world Bank on Tuesday slashed the country’s economic growth outlook for this year to 0.6%, from 1.1% it forecast earlier in the year, and said that South Africa’s second quarter growth of 2.5 percent would be insufficient to restore positive per capita gross domestic product (GDP) growth for the year. However, the bank said it expected South Africa’s economic growth for next year to be 1.1 percent, with a growth of 1.7 percent expected in 2019 supported by an improvement in commodity prices and strengthening balance sheets of households. Paul Noumba Um, World Bank country director, said in an environment, where the national budget was constricted, South Africa could turn to encouraging private innovation as one of the several ways in which to improve the lives of the poor. “South Africa’s productivity growth is diverging from global growth and the country risks falling further behind its peers. This would be to the detriment of the poor, for whom a growing economy is necessary for jobs, and a sustainable system of social grants,” Noumba Um said. Last month Statistics South Africa (StatsSA) said South Africa’s weak economic growth, high unemployment, and greater household dependency on credit and policy uncertainty condemned 30.4 million into poverty between 2011 and 2015. The World Bank report also found that productivity in South Africa fell by 6 percent between 2007 to 2016 and attributed this to insufficient private sector investment in inn
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What to expect in 2018 in SA

What to expect in 2018

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

Bumper harvest helps keep economy afloat

The South African economy grew by 2,0% in the third quarter of 2017 (seasonally adjusted and annualised), down from a revised 2,8% in the second quarter. Agriculture, mining and manufacturing were the main drivers of the expansion, while there was a contraction in general government services resulting from low employment numbers in the public sector. After recording an increase of 38,7% in the second quarter, the agriculture industry continued to power ahead, expanding by 44,2% in the third quarter. This is the largest quarterly jump in agriculture production since the second quarter of 1996. Increased production of field crops and horticultural products were the main contributors to growth, with notable increases in the production of maize and vegetable products. This season’s maize crop is expected to be the largest on record. The Crop Estimates Committee  have pegged commercial maize production for this season at 16,74 million tonnes, more than double the 7,78 million tonnes produced last year (2015/16), and higher than the current record of 14,66 million tonnes harvested in 1980/81.2 Mining and manufacturing were the other major contributors to economic growth in the third quarter. Increased gold and platinum production saw the mining industry grow by 6,6%, while the 4,3% rise in manufacturing was spurred on by increased production of both petroleum and metal products. Fi
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Why Do People Choose To Live In South Africa?

Johannesburg, 23 November 2017 – Globally mobile individuals, also known as expatriates or ‘expats’, who choose to live and work in South Africa, cite the adventure (74%), a better quality of life (72%), or to gain international experience (67%) as their reasons for accepting assignments in the country. These reasons are likely to be similar for expats living and working throughout Africa, given the continent’s rapidly evolving markets and abundant natural beauty. sa-good-news-expats This is according to the 2017 Cigna 360° Well-being Survey, which looks at the health, well-being, and sense of security among 2 000 expats living in 20 markets across five continents. Expats around the world, including those working in South Africa, share a high level of concern about the quality of medical care available in the countries they are in. With this in mind, more than half of these individuals consider medical insurance coverage to be a very important factor when considering a move overseas. Perceptions of physical, financial, social, family and work health among expats were also examined and compared with all working people in the 2017 survey. “Our 360° Well-being Survey captures the sentiments of an expat environment that is rapidly evolving. Overseas assign
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South Africa’s GDP grew by 2% due to agriculture

JOHANNESBURG - South Africa’s economy expanded 2% in the third quarter of the year down from an upwardly revised 2.8% recorded in the second quarter – but still beat market expectations of a 1.5% rise. The agricultural sector showed the biggest growth in the quarter under review surging 14.9% quarter on quarter- its biggest quarterly growth in 21 years. Higher production of field crops and horticultural products did most of the heavy lifting in the agricultural sector. Statistics South Africa said the nominal gross domestic product (GDP) grew R1.2 trillion in the third quarter, R22bn more than in the second quarter. Mining was up R7bn to R83bn, while manufacturing was up R9bn in the quarter to R140bn.  However, electricity was down R6bn to R39bn in the period.  Mining production in petroleum and basic metals divisions resulted in the secondary sector recording 2.1 percent in the third quarter. Macroeconomics statistics website Trading Economics said GDP Growth Rate in South Africa averaged 2.83 percent from 1993 until 2017, reaching an all-time high of 7.60 percent in the fourth quarter of 1994 and a record low of -6.10 percent in the first quarter of 2009.
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South Africa: Finance Minister Congratulates New FIC Director

Finance Minister Malusi Gigaba has congratulated Advocate Xolisile Jennifer Khanyile on her appointment as the Director of the Financial Intelligence Centre.

"The Financial Intelligence Centre (FIC) plays a key role in ensuring that the financial system has integrity. We also believe that Advocate Khanyile will work with other industry stakeholders to ensure that transparency is improved in South Africa's financial system in order to support higher economic growth. We wish her well in her new role," said Minister Gigaba on Thursday.

Advocate Khanyile's appointment will be effective from 1 January 2018.

She holds a B Juris Degree from the University of Zululand, an LLB from the University of Zululand, and a Management Development Programme (MDP) from the University of the Free State Business School.

Positions Advocate Khanyile has held include that of Director of Public Prosecutions in the Free State; acting Director of Public Prosecutions in South Gauteng and Deputy Director of Public Prosecutions in the Asset Forfeiture Unit, among others.

The FIC collects information and analyses suspicious transactions

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8 ways Ramaphosa plans to fix South Africa’s economy

After winning a bruising battle for control of South Africa’s ruling party, Deputy President Cyril Ramaphosa now faces an even more daunting task: rebuilding an economy battered by years of misrule, corruption and the appointment of incompetent officials. Ramaphosa has pledged to reignite growth, rebuild investor confidence and tackle a 28 percent unemployment rate. He’ll be the African National Congress’s presidential candidate in 2019 elections but could take over running the country even sooner should President Jacob Zuma make an early exit. Here’s what he plans to do:
Create at least 1 million jobs within five years Jobs will become the centerpiece of government policy. Special economic zones will be established and tax reforms and other incentives introduced to encourage manufacturers to hire. The government will also repair its relationship with the mining industry and provide it with greater policy certainty in a bid to persuade them to take on more workers. A youth-employment program will be scaled up to provide 1 million paid internships to unemployed people within three years.
Prioritize growth and investment The government will target 3 percent economic growth next year, up from about 0.7 percent this year, and 5 percent by 2023. It will take urgent measures to repair investor confidence, including improving institutional stability, restoring the credibility of the criminal-justice s
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South Africa to take tough decisions to grow economy: Gigaba

  JOHANNESBURG (Reuters) - South Africa’s government will take “necessary tough decisions” to stabilize public debt and grow the economy, Finance Minister Malusi Gigaba said on Saturday. “We will take the necessary tough decisions to continue fiscal consolidation and stabilization as we move towards the 2018 budget in February,” Gigaba told a breakfast briefing before the start of the ruling African National Congress conference to pick a new party leader.