News in South Africa 12th January:

1. Upcoming risks for South Africa:

The World Economic Forum (WEF) has published its global risks report, detailing some of the key risks facing South Africa over the coming years.

Upcoming risks for South Africa
Image taken by: Magda Ehlers

The forum said that Covid-19 and its economic and societal consequences continue to pose a critical threat to the world at the start of 2022.

“Vaccine inequality and a resultant uneven economic recovery risk compounding social fractures and geopolitical tensions. In the poorest 52 countries – home to 20% of the world’s people – only 6% of the population had been vaccinated at the time of writing.

“By 2024, developing economies (excluding China) will have fallen 5.5% below their pre-pandemic expected GDP growth, while advanced economies will have surpassed it by 0.9%—widening the global income gap.”

The WEF said this resulting global divergence will create tensions— within and across borders—that risk worsening the pandemic’s cascading impacts and complicating the coordination needed to tackle common challenges including strengthening climate action, enhancing digital safety, restoring livelihoods and societal cohesion and managing competition in space.

South Africa:

As part of its report, the forum detailed the top five risks for each of the 124 economies surveyed by the World Economic Forum’s Executive Opinion Survey (EOS) between May and September 2021.

Over 12,000 leaders answered the following question: ‘What five risks will pose a critical threat to your country in the next two years?’ and were asked to select these from a list of 35 risks, with no particular order.

According to the findings, the five biggest risks facing South Africa include:

  • Prolonged economic stagnation;
  • Employment and livelihood crises;
  • State collapse;
  • Failure of public infrastructure;
  • The proliferation of illicit economic activity.

2. State of disaster needs to end:

With the end of the fourth wave of Covid-19 on the horizon in SA and the end of the current national state of disaster due in a few days, scientists and politicians have made calls for President Cyril Ramaphosa to allow it to lapse as it is no longer considered necessary and undermines democracy.

The national state of disaster is declared under the Disaster Management Act and allows co-operative governance & traditional affairs minister Nkosazana Dlamini-Zuma to make regulations such as imposing lockdowns, curfews and other restrictions without parliamentary oversight. This was ostensibly to slow down the rate of infection and lessen the burden on the health system.

Dean of the University of Witwatersrand’s faculty of health sciences and professor of vaccinology, Shabir Madhi says there is no reason to renew the state of disaster. He says that the country has effectively lifted all restrictions and that it now needs to work on rebuilding the economy.

The National Coronavirus Command Council also needs greater oversight, he said. Acting deputy director-general of the health department, Nicholas Crisp said that the national state of disaster is still needed to give effect to standing lockdown restrictions like the public mask mandate.

3. Relief for informal traders affected by unrest:

The informal economy has received R4.5 million in grant funding from the South African Informal Traders Alliance (Saita) and the Industrial Development Corporation (IDC) to support businesses impacted by the July unrest and looting that occurred in parts of Gauteng and KwaZulu-Natal.

According to the two organisations, the grant initiative saw 180 informal traders each receiving R25 000 to help give their businesses a second chance – an opportunity to renew themselves and make a meaningful contribution to the local economy.

“For us as the IDC, we are happy that this collaboration will not only help to restore the businesses to pre-unrest levels, but it will also serve as a platform to reinforce the sustainability and resilience of the businesses supported,” says IDC head of partnership programmes David McGluwa.

According to Saita president Rosheda Muller, an estimated 50 000 traders were affected, with monthly income of R6 500 lost on average.

The unrest brought trade to a standstill for most informal traders, particularly those who traded outside looted malls, as customer numbers dropped due to store closures. Others had to close their stalls as it was unsafe to trade.

The unrest also meant that informal traders had to find means to travel to other stores to stock up, as the stores they usually bought from were looted.

According to Statistics SA’s Q3 2021 Quarterly Labour Force Survey, 2.7 million people earn a living in the informal economy, with the sector accounting for 18.9% of total employment.

The National Development Plan notes that the informal sector “provides a cushion for those who lose formal sector jobs or need to supplement their formal incomes during crises”.

Millions of people rely on informal traders not only to provide them with basic essentials but also to sustain the township economy and create jobs.

“As much as 40% of total food bought by consumers each year is from informal traders, who serve 77% of the population,” says Muller.

4. Taxi industry subsidy:

Transport Minister Fikile Mbalula said that the government was forging ahead with plans to subsidise the taxi industry, despite criticism.

Mbalula said that the multi-billion rand sector was the backbone of the country’s transport system and should be treated as such.

He was speaking during the launch of the R1.1 billion taxi relief programme, which will see individual operators pocketing R5,000 each.

Despite struggling to raise the COVID-19 relief funds for the industry that saw the process drag on since the onset of the pandemic, Minister Mbalula said that government would subsidise taxis.

The Competition Commission’s land-based public passenger transport market inquiry from last year flagged the skewed relationship between ridership levels and subsidy funding.

It said that commuters still preferred the unsubsidised taxis for several reasons despite the government’s investment in buses.

5. Tomato industry loses R100 mil:

While many farmers generally welcome rain, it has cost South Africa’s tomato industry at least R100 million during December alone.

This summer, South Africa has been experiencing heavy rainfall, wreaking havoc on harvests of essential staple fruit and vegetables. For the tomato industry, the losses have reached R94 million in December, Clive Garret, marketing head of ZZ2, South Africa’s largest tomato producers, told Business Insider South Africa on Tuesday.

The recent rains have resulted in South Africa’s five main fresh produce markets receiving between 500 to 700 tons fewer tomatoes daily in December, Garret said.

“If one takes a conservative price of R7/kg and a shortage of 500 tons per day, then the loss for December would be in the region of R94 million,” he said.

As a result of decreased tomato volumes delivered to markets, prices moved shot up from R7 per kilogram to R12 per kilogram between the start of December to the end, an increase of 71%.

However, volumes have already started to improve and no significant impact on the volumes is expected this year, he said.

The agricultural sector has not only experienced excessive rains, but it has also had to contend with hail damage in areas such as the North West, Free State, and Mpumalanga, Agri SA’s executive director, Christo van der Rheede said.


All information sourced from articles posted by: BusinessTech, BusinessLive, Moneyweb, EWN, and Business Insider.

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