News in South Africa 12th October:

1. Warning over high meat prices:

South Africa’s real gross domestic product (GDP) decreased by 0.7% in the second quarter of 2022. The biggest contributors to this contraction were agriculture, forestry & fisheries, down 7.7%, and pulled lower by a decrease in the production of animal products.

Warning over high meat prices
Image taken by: Federico Arnaboldi

Compared to the second quarter of 2021, however, the sector contracted by 20.9%, noted the Bureau for Food and Agricultural Policy (BFAP). This follows a slower summer crop harvest, and a sharp rise in input costs, which more than offset revenue gains.

The largest contributor to agricultural revenue in the second quarter is the animal products sub-sector, where revenue expanded by 19% compared to Q2 of 2021. Field crops showed a decline of 14% compared to the same period of analysis in 2021, while the horticulture subsector 11% in Q2 of 2022 compared to the same period in 2021, the bureau said.

During the same period of analysis, sheep slaughter continued to drop showing a 6% decline while that of cattle rose slightly by 2%. Although the price of pork dropped by 7%, the rise in slaughters offset the price drop resulting in the industry revenue growing by 15% y-o-y, it said.

BFAP said that in a period of high red meat prices, poultry remains an affordable source of animal protein.

The BFAP’s recent food inflation brief highlights the food items that have recorded the most significant price hikes in the country. In terms of meat prices the following changes were recorded:

Above 10% in July:

  • Beef: offal, T-bone, brisket, corned beef, chuck;
  • Pork: ham;

Over 6% in July:

  • Pork: bacon;
  • Chicken: chicken portions;
  • Mutton/lamb: neck;
  • Beef: mince, stewing beef, fillet;

Although chicken reported a 6% increase, it is still much cheaper than many beef derivatives and ham.

2. Transnet strike causes business action:

In an effort to alleviate the effects of the Transnet wage strike on the economy, business has offered to pay increased fees for the rail utility’s services and an additional strike-avoidance levy until an agreement is reached.

According to the proposals contained in the latest industry publication, Cargo Movement Report, an additional levy of R148 per container was offered to Transnet’s terminal handling charges. If accepted, the levy will help fill the gap left between Transnet’s offer and what the unions are demanding.

Global shopping company Maersk said that the levy would act as an operations stabilizer as a result of the strike at Transnet. It said that a further proposal had been made to include an additional fee which would be allocated to labour in order to incentivize and contribute to their wage increase during negotiations.

If accepted, businesses would need to fork out an additional R110 operations stabilization fee alongside an R38 fuel neutrality fee for all container imports; exports handled at Transnet.

Transnet declared force majeure across all its harbours as employees began to strike, demanding higher wages on 7 October. The protesting unions, namely the South African Transport and Allied Workers Union (Satawu) and the United National Transport Union (Untu) have subsequently been unwavering on a wage increase above the current inflation rate of 7.6%.

Over 40,000 employees have downed tools. The company itself offered an across-the-board increase of between 4.25% and 5%. The unions have, however, rejected the revised offer by the employer, noting that it is insulting and insufficient in light of the rising cost of living.

3. Rich failing to pay rent:

Most South Africans are back to pre-pandemic levels of good standing in paying rent in full and on time or are at least heading in the right direction. But not those renting for more than R25,000 a month, new data shows.

The pandemic-induced economic downturn, typified by massive job losses and salary reductions, left tenants and landlords in the lurch, with levels of good standing plummeting to new lows in the first half of 2020.

Some rental brackets were affected worse than others, shows data from TPN Residential Rental Monitor.

While the national average of good standing dropped to below 75% – meaning more than a quarter of tenants defaulted on their rental agreements in the months immediately following the onset of the pandemic – those paying between R7,000 and R25,000 were more resilient. Those paying more than R25,000 a month abruptly fell out of good standing, dropping from nearly 80% before the pandemic to 60%, the lowest of all price brackets, in the second quarter of 2020.

Tenants across all rental price segments have improved their standings since the worst of lockdown, with some even bettering their pre-pandemic levels.

“The rental bracket R12,000 to R25,000 has recorded its best ever good standing to date with a healthy 87% in good standing,” noted the TPN Residential Rental Monitor report for the second quarter of 2022.

Tenants renting for between R7,000 and R12,000 a month are even more committed to paying on time and in full, with more than 88% in good standing, compared to nearly 87% before the pandemic.

Those paying between R3,000 and R7,000 – accounting for more than half of the country’s rental market – increased their good standing to almost 83%, which is above the national average but slightly below the bracket’s pre-pandemic levels.

Tenants paying less than R3,000 a month – a bracket which has historically held one of the lowest collection rates – has been much slower to recover. Prior to the pandemic, the level of good standing in this segment was little more than 72%. By the second quarter of 2022, good standing remained subdued at less than 69%, although collections are heading in the right direction.

Almost all segments – those already beyond pre-pandemic levels and those slightly behind – have shown increased levels of good standing in the second quarter of 2022. All except those paying more than R25,000 a month, which dropped in good standing from more than 80% the period prior to 77% more recently.

4. Controversial cyber terrorism bill:

Amendments to a counter-terrorism bill have been criticised for using imprecise language that could see legitimate political protests being redefined as ‘terrorism’ – opening the door for the state to seize assets, including cryptos.

The Protection of Constitutional Democracy against Terrorist and Related Activities Act of 2004 is being updated to align with international counter-terrorism legal standards.

The amendment bill is currently before parliament and the public is being asked to comment before it is passed into law.

One of the key objections to the bill is that the definition of terrorist activity remains as imprecise as its predecessor, but has been broadened to include acts “calculated to overthrow the government of (SA) or any other government”, or cause damage or interference to information infrastructure.

Excessively ‘broad’

The bill becomes even more problematic when it comes to sharing or distributing publications deemed terrorist-related. Under the expanded definition of terrorism, this could include material critical of government or calling for its replacement.

That’s a definition so broad it covers investigative journalism, legitimate political opposition, or secessionist movements – and could have non-governmental organisations (NGOs) or certain religious groups critical of government deemed terrorist organisations, says Rob Hutchinson, head of public participation group Dear South Africa.


Terrorist activity as presently defined includes serious interference or disruption of essential services such as banking, electricity or telecoms. This would mean acts of sabotage against Eskom infrastructure could be charged under this counter-terrorism law and the assets of the culprits seized.

The definition of ‘property’ in the bill has been amended to include cryptocurrencies, allowing law enforcement to intercept and seize cryptos being used to fund activities labelled as terrorism.

“One problem with this bill is that anyone speaking out against government could be designated as a terrorist,” he adds.

“It encroaches on personal freedoms and human rights by curbing freedom of expression and association, and is a problem for investigative journalism, non-profit organisations conducting their day-to-day work, religious organisations, or individuals sending in petitions or participating in public participation campaigns such as we run.”

Dear South Africa has received more than 15 000 comments to the bill, the vast majority of them rejecting the bill in its entirety for infringing on free speech and rights of association.

5. Post Office in distress:

The Auditor-General (AG) says it cannot confirm whether the embattled South African Post Office will remain a going concern for the foreseeable future.

The state-owned entity failed to receive a clean audit in the 2021/22 financial year, as the AG flagged a R2.1 billion net loss in 2022 and liabilities that exceeded assets by R4 billion, among others.

This adds another year to the Post Office’s history of losses with no sustainable income.

All information sourced from articles posted by: BusinessTech, BusinessLive, Business Insider, Moneyweb, and Fin24.

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