News in South Africa 15th October:
1. Economic recovery plan today:
President Cyril Ramaphosa will today outline his economic recovery plan to pull South Africa out of the pits of the Covid-19 lockdown.
The plan is the result of extensive deliberation between government and its social partners, including business and labour.
He will present the plan virtually to parliament today at 14h00. The plan has leaked to several media outlets, detailing recommendations for tax hikes and other economic reforms.
2. Gourmet Burger Kitchen saved:
Restaurant chain Gourmet Burger Kitchen has been bought out of administration by Boparan Restaurant Group.
The deal includes 35 sites and 669 jobs. However, 26 restaurants and 362 jobs will be lost.
Boparan owns the Giraffe chain and is owned by Ranjit Boparan, who founded 2 Sisters chicken processing company.
GBK, which has had several owners, was most recently owned by South Africa-based Famous Brands.
It was sold out of administration by accountancy firm Deloitte.
“As with a number of dining businesses, the broader challenges facing ‘bricks and mortar’ operators, combined with the effect of the lockdown, resulted in a deterioration in financial performance and a material funding requirement,” Gavin Maher, Joint Administrator at Deloitte, said.
3. Record jump in GDP:
South Africa is heading for a record quarter on quarter jump in GDP in Q3 of 2020, as consumer spending picks up from the worst of lockdown and economic activity starts getting back to normal.
However, economists warn that this recovery will be misleading, as it is part of the balance in the economy, following a record decline in GDP in the second quarter.
“The BankservAfrica Economic Transactions Index or BETI, released for September, showed a monthly increase of 2.7%. However, the monthly increase in transactions has slowed quite substantially from the 6.5% increase noted in the month of July. On an annualised basis, however, transactions were up 0.4%, considerably improved on the minus 4.3% level registered in August 2020 when compared to the same month last year.” stated, Nompu Siziba
“The third-quarter GDP is likely to be an all-time-record upward movement, seasonally adjusted annualised around the 40% or so mark. It could even be a bit higher.” says, Mike Schüssler.
South Africa’s economy is still without tourism, and currently being supported by financial aid and additional social grants, which skews the data.
4. R6b in Eskom contracts:
It’s also uncovered R44 million in kickbacks paid to four Eskom officials by contractors involved in building the Kusile Power Station.
The extent of wrongdoing by Eskom employees was laid bare by the SIU when it updated Parliament’s standing committee on public accounts yesterday on its long-running investigations into wrongdoing at the state-owned entity.
More than 5,500 Eskom employees have been referred to the utility for disciplinary proceedings for, among other things, not declaring their financial interests or doing business with the entity.
Mothibi says the unit wants to recover more than R8 billion through civil litigation into fraud, corruption and other wrongdoing. Thirty-nine cases have been referred to the national prosecuting authority for criminal investigation, while 32 have been referred to the asset forfeiture unit.
5. Delay in budget statement of no concern:
The unusual circumstances caused by the Covid-19 pandemic and saw the government scrambling for money to mitigate its effects has resulted in the treasury postponing the medium term budget policy statement (MTBPS).
The budget was to have taken place next week, on 21 October. Mboweni has asked the speaker of the National Assembly, Thandi Modise, for a postponement to 28 October. Parliament sent a statement last night saying the National Assembly programme committee will consider and finalise the request.
Isaac Matshegho, an economist at Nedbank, said speeches are postponed for different reasons and there would be a concern if the postponement was for a longer period.
Last year the MTBPS was postponed by a week to accommodate Finance Minister Tito Mboweni’s and President Cyril Ramaphosa’s international commitments.