News in South Africa 16th October:
1. Economic recovery plan questioned:
President Cyril Ramaphosa addressed a joint sitting of Parliament on Thursday to present the economic recovery plan for South Africa.
He detailed the “fix” for the country exactly seven months after first declaring a national state of disaster.
- The president summarised the objectives of the plan as follows:
- To create jobs, primarily through aggressive infrastructure investment and mass employment programmes;
- To reindustrialise our economy, focusing on growing small businesses;
- To accelerate economic reforms to unlock investment and growth;
- To fight crime and corruption; and,
- To improve the capability of the state.
Short-term measures announced by Ramaphosa include an extension of the special Covid-19 grant (until January) and the proposed creation of 800,000 jobs (in the next few months).
Immediate reaction to the Economic Reconstruction and Recovery Plan was low-key, largely highlighting the lack of freshness.
DA finance spokesperson Geordin Hill-Lewis also emphasised the president’s failure to state what reform had to be done by when, and to assure South Africa that ministers and officials faced consequences when that was not done.
The EFF talked of “the dismal failure to put together a practical and believable economic plan”.
Freedom Front Plus leader Pieter Groenewald said much of the plan had been heard before, on infrastructure, energy and Buy Local.
Much of the domestic business reaction also seemed to focus on the need for implementation.
“The speech was broadly okay on the policy front, though it offered little really new, except the detailed release of the employment programme, which is positive,” said Intellidex analyst Peter Attard Montalto.
2. Gold price declining:
Gold is heading for its first weekly decline in three weeks, and is now down 2% over the past month.
Gold headed for a weekly decline, snapping two weeks of gains, as investors weighed the outlook for fresh US stimulus.
Treasury Secretary Steven Mnuchin told House Speaker Nancy Pelosi Thursday that President Donald Trump will personally lobby to get reluctant Senate Republicans behind any stimulus deal they reach.
Trump said he’s willing to go beyond the $1.8 trillion offer for a virus relief plan that’s already been offered by the administration, but Senate Majority Leader Mitch McConnell rejected that, saying GOP lawmakers won’t go along.
With market sentiment shifting on bits and pieces of news on U.S. stimulus negotiations and elections looming, “any new offers or withdrawals of negotiations may just be window dressing ahead of the elections,” Avtar Sandu, senior manager for commodities at broker Phillip Futures Pte in Singapore, said in a note. “The concern for precious metals traders and other financial market players is the size of the second fiscal stimulus package after the election.”
Spot gold was steady at $1,907.67 an ounce at 11:13 a.m. in Singapore, 1.2% lower this week.
3. E-toll fines up in air:
The government is currently deliberating the future of e-tolls on the Gauteng Freeway Improvement Project (GFIP).
These deliberations are taking place amid confusion and uncertainty about the validity of claims that motorists who do not pay their e-toll accounts will be fined R1 000 for each offence in terms of the Administrative Adjudication of Road Traffic Offences (Aarto) Amendment Act.
The government is currently deliberating the future of e-tolls on the Gauteng Freeway Improvement Project (GFIP).
These deliberations are taking place amid confusion and uncertainty about the validity of claims that motorists who do not pay their e-toll accounts will be fined R1 000 for each offence in terms of the Administrative Adjudication of Road Traffic Offences (Aarto) Amendment Act.
Ayanda-Allie Paine, spokesperson for Transport Minister Fikile Mbalula, said on Thursday she did not want to comment on a Democratic Alliance (DA) statement about e-tolls.
“It [e-tolls] is a matter that is before cabinet and there are deliberations about it as we speak. So nothing is concrete, nothing is settled on, everybody is holding on until we hear from cabinet. I think that is all that we will like to say because anything that we add on to that will make it seem as if things have been concluded and things are ready to be represented and that is not the case. We are waiting for cabinet to give direction on the e-tolls,” she said.
4. Adcorp revenue falls:
Adcorp, which focuses on personnel placement and training, says its revenue fell by 10% to 12% for the six months to end-August largely due to the interruption of classroom-based training in South Africa, as well as a fall in demand for new personnel.
Adcorp advises shareholders, with reasonable certainty, that operating profit, total basic earnings per share (EPS) and total headline earnings per share (HEPS) for the six months ended 31 August 2020 will be as follows:
- Operating profit of between R102.1 million and R112.9 million compared to operating profit of R86.3 million for the six months ended 31 August 2019 (the Comparative Period), representing an increase of between 18% and 31%.
- EPS of between of 30.5 cents per share and 51.1 cents per share compared to a loss per share of 413.3 cents for the Comparative Period (representing an increase of between 107% and 112%).
- HEPS of between 41.4 cents and 42.4 cents per share compared to HEPS of 5.1 cents per share for the Comparative Period (representing an increase of between 712% and 732%).
Still, its operating profit rose by 11% to 22% in SA and in Australia by 79% to 98%.
5. Transport a major household cost:
The coronavirus pandemic has added another burden to Gauteng’s poor: they are paying more for transport.
This is according to the 2019/20 Gauteng Household Travel Survey (GHTS) report, which found that poorer households were the most affected by Covid-19 from a transport perspective. The report, conducted in Gauteng by the Council for Scientific and Industrial Research (CSIR), shows that transport continues to contribute significantly to the increased cost of living.
Gauteng public transport and roads infrastructure MEC Jacob Mamabolo said, “What is of great concern to me is that the cost of transport remains one of the highest cost items for households, and particularly poorer households.
“That has implications for us in our planning, in delivery of transport infrastructure and, of course, in the overall integration of public transport,” he said.
The report shows that nearly 60% of households spent more than 10% of their incomes on public transport in 2019, up from 55% in 2014. It further showed that the average travel time in the province had doubled in the past 20 years, and increased by 17% from the 2014 figure.
All information sourced from articles posted by: BusinessTech, Business Insider, 702, Daily Maverick, Fin24, Moneyweb, and TimesLive.
