News in South Africa 12th August:
1. Economic recovery will be slow:
Most people around the world don’t think their country’s economy will recover from the pandemic in the next year.
A recent global survey from Ipsos for the World Economic Forum surveyed around 21,500 adults spanning 29 different countries, including the US, India, and Japan, to learn about when people think recovery will happen and how to know when it has.
Taken as an average for the 29 countries surveyed, only a small percentage, 7%, believe their country’s economy have recovered from the pandemic. More respondents said it will take two to three years for their economies to recover (35% on average globally) and even more think it will take more than three years (39%).
China had the largest share of respondents who thought recovery had already happened, at 56%. On the other hand, only 7% of Americans said there has already been economic recovery, while 62% said it will take at least two years.
Although the consensus among respondents seems to be that recovery will take at least two years, just who should be handling the recovery varies. On average for the 29 countries, over half “trust” either the government or big businesses with this responsibility; Americans think it falls in the hands of consumers. Respondents could choose more than one answer.
“The three countries where consumers are most trusted to drive an economic rebound are the same three where big business is least trusted to do so: the Netherlands, the United States, and Belgium,” Ipsos wrote about the results. Among Americans, 60% said consumers and 35% said big businesses.
“The world is at a global turning point where leaders must cooperate, innovate and secure a robust recovery,” Sarita Nayyar, the managing director at the World Economic Forum, wrote in a press release about the survey. “Covid-19 has been a litmus test for stakeholder capitalism.”
2. Medupi repairs could cost R2bn:
It could cost between R1.5 billion and R2 billion and take 2 years to repair the damage done to the Medupi unit that exploded at the weekend, CEO Andre de Ruyter says.
He said the power utility is currently assessing the damage and investigating events that led to the explosion. At this stage, he said there is no evidence pointing to the explosion being a result of sabotage or any nefarious actions.
It has led to a loss of 700MW of power, putting further strain on the national grid, which is barely avoiding load shedding as it is.
Eskom celebrated the completion of all Medupi units just last week.
3. No improvement in job market:
South Africa’s job market is unlikely to see a significant improvement this year, with over 1.4 million jobs being lost in 2020, and only a fraction expected to be recovered in 2021, a new report by professional services company PwC shows.
The group’s annual chief executive survey, released earlier this year, found that 95% of South African CEOs are concerned about the impact of unemployment on society and their businesses.
The lack of jobs was the top-ranked concern ahead of pandemics or other health crises and inadequate basic infrastructure.
“In the first quarter of this year, South Africa had 11.4 million unemployed adults after a net 1.4 million jobs were lost in 2020,” PwC said. “We expect only 315,000 of these lost jobs to be recovered in 2021 as economic growth is held back by lockdowns, unrest and load-shedding.”
PwC said that this expected growth in employment will be insufficient to make a meaningful impact on the unemployment rate.
“After closing last year at 32.5%, the narrowly defined unemployment rate is expected to moderate only marginally in 2021 to 32.3%. A forecast of 32.4% for end-2022 signals the start to a slow upward trend over the long term as local job creation continues to lag behind the needs of a growing labour force.”
According to Trading Economics, South Africa’s narrowly defined unemployment rate – most recently measured at 32.6% in the first quarter – is the third-highest globally after Bosnia and Herzegovina (32.7% in May) and Nigeria (33.3%).
4. Rebates for riot damaged properties:
An announcement by the eThekwini Municipality that property owners worst affected by riots and vandalism that gripped greater Durban in July stand to get a rates rebate of up to 75% has been welcomed by the South African Property Owners Association (Sapoa).
Reacting to the news this week, Sapoa CEO Neil Gopal said it is a positive step, but he took the opportunity to raise a warning that the ‘construction mafia’ in KwaZulu-Natal may take advantage of the rebuilding efforts in the province.
eThekwini Mayor Mxolisi Kaunda announced business support measures last week that include rates relief to assist companies and property owners affected by the unrest in greater Durban.
The rioting and sabotage has reportedly resulted in around R20 billion worth of damage and looting-related losses in the city of Durban alone.
Durban and Pietermaritzburg in KwaZulu-Natal were the worst-affected cities by the recent unrest, however parts of Gauteng (largely in Soweto and Vosloorus) and Mpumalanga were also hit.
“In terms of rates relief to property owners where the building is non-functional completely, a 75% rebate will be awarded for a period of six to 12 months,” eThekwini Municipality said in a statement.
“A multi-disciplinary team will assess applications based on individual merits. Criteria for rebates are stipulated on the application forms. Reconnection fees will also be waivered and there will be special provisions for building plan submissions in respect of properties damaged during the unrest.”
It said this plan “will drive the support for businesses to re-start” – in both the formal and informal sectors. “Several interventions will be to be prioritised in response to the devastation caused.”
5. Exposure of shadow state by Cyril:
President Cyril Ramaphosa’s testimony at the state capture commission has exposed deep tranches of the ANC’s ‘shadow state’ – a set of parallel party practices that are often obscured from public view.
The questioning of President Cyril Ramaphosa by four evidence leaders in a marathon day of testimony at the Commission of Inquiry into State Capture has exposed how the ANC’s shadow state has come to dominate how South Africa works through a set of parallel party practices mostly obscure to ordinary citizens.
This was most evident in the ANC’s deployment committee, which the commission’s evidence leader described as having ultimate decision-making power over who serves in government, effectively overriding the public processes.
Whoever the ANC picks behind closed doors, gets the job -and according to minutes from these meetings, party loyalty wins out.
Pretorius said that some of the minutes revealed that the ANC even took it upon itself to deploy judges, who are supposed to be appointed in a transparent process of nomination, interview, and shortlisting by the Judicial Service Commission (JSC) before being appointed by the president on the recommendation of the JSC. Pretorius said the minutes showed that the practice continued.
“To 2021, final and binding commitments are made by the Deployment Committee and imposed on the appointing authority (government departments, state-owned enterprises, or state agencies and other public entities),” he said.
The Deployment Committee is now headed by Deputy President David Mabuza, who has complained when key positions do not go through his committee. Ramaphosa said in his testimony in April that the committee had called him to account to it when he made appointments without getting them checked by Mabuza and its other members.
It is likely that the appointment of axed defence minister Nosiviwe Mapisa-Ngqakula as Speaker of the National Assembly this week came through the Deployment Committee even though Ramaphosa has taken heat for the face-saving cadre swop-out with Thandi Modise, who is now defence minister.
Ramaphosa defended deployment, but repeatedly insisted that, “for government positions, in the end, the legally mandated process must be followed”, adding: “it’s not an appointing committee, it’s a recommending committee”. He said deployment was important to achieve social ends like gender equality and that the ANC could not appoint judges.
“The party is where the power resides, [but] it is only one of the actors in our democracy,” he said. On the appointment of judges, Ramaphosa sought to downplay the party’s power, especially over judicial appointments, telling acting Chief Justice Raymond Zondo that, “The Deployment Committee notes there is a vacancy or two. Having done that, it knows that it is not the appointing structure.”
Until now, the Deployment Committee’s methods, power, and processes have been opaque, leading to the notion of a shadow state operating out of the field of public scrutiny or accountability.
“To remove this shroud of secrecy, the party should show its hand. Political parties do have their preferences. Maybe we need to grow up and see if the political process has matured,” said Ramaphosa, referring to the partisan US model of judicial selection. He said that the appointment of Shamila Batohi as the national director of public prosecutions was done by a public process, which he said should govern senior state appointments.