News in South Africa 17th March:
1. SA’s economy could take 4 years to recover:
The South African economy will take three to four years to get back to where it was before the Covid-19 pandemic, according to Absa chief economist and head of research Jeff Gable.
This is a very different outlook to the global financial crisis in 2008/09, when it took the economy only five quarters to get back to where it was before that crisis – although it took half a decade to recover the jobs lost, he said.
Gable was speaking at a Ford SA industry update breakfast on Tuesday at which the motor manufacturer reaffirmed its commitment to supporting the national government’s Covid-19 initiatives, by donating R2.5 million to help fund the enhancement of the national Occupational Health Surveillance System (OHSS).
The OHSS, a programme implemented by the National Institute for Occupational Health (NIOH), monitors workers in the public and private sectors using data supplied by employers on Covid-19 infections in the workplace under the direction of the Department of Employment and Labour.
This data, which is used to inform appropriate interventions and mitigate the spread of the virus, helps to identify industries and occupational groups at risk of infection and analyses the impact on industries and occupational groups.
Gable said only a few jobs were created in the South African economy in 2019, but 600 000 to 700 000 jobs were destroyed in the second quarter of 2020 and very few of those jobs have come back, with many sectors of the economy “really suffering”.
Gable said the hospitality, transport and construction sectors are more than 20% smaller than they were before the Covid-19 pandemic and “all those sectors are likely to rebuild very slowly going forward”.
2. Inquiry into Public Protector:
Yesterday, 275 MPs (against 40) voted in favour of an inquiry into Public Protector Busisiwe Mkhwebane’s fitness to hold office. The EFF said it would challenge the decision in court.
Public Protector Busisiwe Mkhwebane is the first head of a Chapter 9 institution to be subject to impeachment by Parliament after a vote in the National Assembly on Tuesday.
Altogether, 168 ANC MPs voted in favour and none against the motion.
This after party chairperson Gwede Mantashe, at a special ANC caucus meeting before Tuesday afternoon’s sitting, laid down the law and instructed ANC MPs to vote in favour of the inquiry amid division in the ranks on the matter.
3. Covid-19 loan scheme to end:
The government’s loan scheme of R200-billion, which is intended to help small businesses through the Covid-19 pandemic, comes to an end on 11 April.
The scheme was introduced in May 2020 by commercial banks, the National Treasury, SA Reserve Bank, and Banking Association SA (Basa) as a centrepiece in President Cyril Rampahosa’s plan to shore up the economy during the worst recession since the Great Depression. And the performance of the loan scheme has, so far, been dismal.
With R18.01-billion in loans advanced to small and medium-sized businesses as of 27 February, the scheme might fail to reach its 10% loan disbursement target (currently at 9%) when it comes to an end. By then, commercial banks will stop granting loans under the scheme and probably start arranging repayment schedules with business owners.
Basa, which helped administer the scheme, said banks had received 49,317 applications for loans since the scheme’s introduction, of which 26% were approved and were taken up by business owners. The average loan is said to be running at about R1.23-million.
The Treasury and Basa have described the loan scheme as “disappointing”, while financial research firm Intellidex was blunter in a report, saying it is now “moribund”.
In the latest earnings season, commercial banks have separately reported the value of loans advanced under the scheme. Standard Bank paid out R7.4-billion in loans for the year to 31 December 2020, and Absa advanced R2.3-billion over the same period. FirstRand, which owns FNB, had disbursed R1.4-billion from June to December 2020. Nedbank is yet to report earnings.
4. Load shedding at stage 1:
Load shedding will be reduced to stage 1 early on Wednesday morning; however, it will continue until Saturday morning as the power system is still “severely constrained”, Eskom said in a statement on Tuesday.
“Since Monday, Eskom teams successfully returned four generation units at Kusile, Grootvlei, Kriel and Matla, as well as the Cahora Bassa line from Mozambique. However, this has not been sufficient to suspend load shedding at this point,” Eskom said.
5. No repairs for Beitbridge border:
South Africa’s porous Beitbridge border fence won’t be repaired or maintained.
By June this year, a site clearance process should be finished, which will pave the way for a complete change to the fence.
This emerged from Public Works and Infrastructure Minister Patricia de Lille’s question-and-answer session in the National Council of Provinces (NCOP) on Tuesday.
De Lille and the Deputy Minister of Public Enterprises, Phumulo Masualle, answered questions in the NCOP.
She stated that: “The acting director-general sent a technical condition team to the Beitbridge border fence. The team discovered that the fence, in its current form, is not fit for purpose. It is non-compliant with the specification. The department has decided not to undertake any repairs or maintenance to the existing fence. It will lead to irregular expenditure.”