News in South Africa 18th November:
1. Fourth Covid wave inevitable:
South Africa, which has the most confirmed coronavirus cases on the continent, will likely be hit by a fourth wave of infections but its impact probably won’t be as severe as during earlier surges, new modelling prepared for the government shows.
Sero-prevalence surveys and other data indicate that an estimated 60% to 70% of the population has already contracted Covid-19, which together with vaccinations will provide protection from severe disease, the South African Covid-19 Modelling Consortium said in a online presentation on Wednesday.
Even its worst-case scenario projected that deaths and hospitalizations during a fourth wave would be substantially lower than during prior surges.
While South Africa’s current caseload is “incredibly low” it’s “very hard to commit to say South Africa is over the worst” of the coronavirus, said Harry Moultrie, a senior epidemiologist at the National Institute for Communicable Diseases, which coordinated the modelling.
“It’s going to be a bumpy ride,” he said. “We don’t know where this virus is going to take us. We will still be seeing hospital admissions and deaths related to Covid for years to come.”
The seven-day rolling average of new infections in South Africa has dropped to below 300, from a third-wave peak of almost 20,000 in July.
The country has had 2.93 million confirmed coronavirus cases and 89,504 of those who’ve been diagnosed with the disease have died from it, although excess death numbers indicate the true toll may be much higher. About 34% of the nation’s 39.8 million adults have been fully vaccinated.
2. Government employee TERS fraud:
At least 6 000 employees in 24 government departments received payments from the Unemployment Insurance Fund’s (UIF) Temporary Employer-Employee Relief Scheme (TERS), the Special Investigating Unit (SIU) said on Wednesday.
In another case, a single individual submitted over 6 000 claims for a company in which he was the only registered employee.
Payments were also made using the ID numbers of prisoners or dead people.
The SIU was giving Parliament’s Standing Committee on Public Accounts (Scopa) a virtual briefing on its investigation into irregular payments from the fund during the pandemic.
The SIU’s submission to the finance oversight committee highlighted a total of over 300 matters in the probe that had been finalised, and 80 that have been handed over for criminal investigation.
Over R23 million has been recovered so far.
But SIU chief forensic investigator Johnny le Roux said the scale of total UIF payments involved millions of beneficiaries, millions of employers and billions of rands in payments, meaning that probing transactions would take a long time.
The UIF TERS was meant to assist South Africans who could not work due to the Covid-19 lockdown. It was announced at the beginning of the pandemic as a mechanism to allow businesses whose operations were restricted due to the pandemic to pay their employees.
But the system was abused, facing fraud by both companies and government employees. Abuses included claims paid to unqualified claimants, businesses making claims while continuing operations, claims made with identity numbers of prisoners or deceased people, or payments to government employees.
3. Unvaxxed – higher life insurance charges:
Old Mutual will not be charging its unvaccinated current customers higher premiums – for now.
The life insurance group, said this following it announcing a few weeks ago that it would “offer differentiated pricing” to new customers, depending on their Covid-19 vaccination status.
This announcement, however, led to confusion regarding its position on its current customers, as it led some on social media to believe that it would increase premiums on insurance products it has already sold to customers who have not been vaccinated.
Old Mutual has nevertheless not ruled out such a move.
“We are not making changes to existing customers premiums, although this may change in future,” says Old Mutual GM of Protection Solutions, Kavir Ramjee.
The group says that offering different prices depending on vaccination status should not be seen as unusual, as such practice has long been part of how it conducts business.
“We will assess each customer’s risk against a cross-section of relevant factors including age and the presence of co-morbidities,” says Ramjee.
“In the same way that non-smokers should not have to cross-subsidise the insurance premiums of smokers, we believe the same principle should apply to vaccinated customers, who should not have to cross-subsidise their unvaccinated counterparts,” he adds.
Though existing customers will not be evaluated on whether they are vaccinated, new customers will have to declare their vaccination status, age and possible presence of other co-morbidities, effective from 18 November 2021.
The group says customers who subsequently get vaccinated after buying an Old Mutual insurance product can have their status changed.
4. Hospitality industry pleads with SA to vaccinate:
The hospitality industry is pleading with South Africans to get vaccinated to avoid a hard lockdown during the festive season.
This comes after co-operative governance minister Nkosazana Dlamini-Zuma has extended the national state of disaster for another month, spurring fears of more restrictions over December.
Analysts expect Covid cases to start increasing as the year draws to a close.
Fedhasa says government should consider all options before implementing further restrictions.
It says a hard lockdown will damage the already ailing tourism industry.
“I think vaccination is the only route out,” said Fedhasa national chairperson Rosemary Anderson.
“Some countries are going through a fourth wave but vaccinations seem to be the way out. It’s not sustainable to keep closing down the tourism industry down in South Africa without giving financial support.
“If they do this now the damage may be worse than the COVID pandemic.”
5. Fuel price to affect repo rate decision:
Despite inflation for October being pretty much in-line with expectations and stabilising at 5%, fuel inflation on the back of a sharp increase in crude oil prices and a significantly weaker rand will be the biggest risk factor when the South African Reserve Bank (Sarb) decides on whether to hike or hold its repo rate at 3.5% on Thursday.
Economists and market commentators are split, and the Sarb’s Monetary Policy Committee (MPC) is likely to also have a split vote this time round, after unanimous repo rate votes at the previous few meetings.
The latest repo rate decision, set to be announced by Sarb governor Lesetja Kganyago just after 3pm on Thursday, is arguably the most anticipated one of the year, considering it being just ahead of the festive season and with ever-increasing prospects for the start of a rate hiking cycle.
Central banks around the world are facing an increasing inflation threat, with the Federal Reserve in the US having taken a notably hawkish tone in recent months touting tightening rates next year, which has been one of the factors hurting the rand in recent months.
While SA inflation stabilised in October, the spike in fuel prices to record levels in November needs to be recognised and will be a key risk factor to the inflation outlook taken into consideration at the MPC.
“Although higher fuel costs should drive inflation higher in the near term, services constitute around half of SA’s inflation basket and lower price pressures in this component of the basket [including medical aid tariffs and rental inflation] will likely continue to provide an anchor for headline inflation in 2022,” she adds.
“In our view, contained inflation and longer-dated inflation expectations [which remain close to the midpoint of the target band] could allow the Sarb to stave off rate hikes until the first quarter of 2022,” said Packirisamy.
“With financial markets having already partly priced in tapering by the US Federal Reserve, it is less likely that emerging market assets will have a similar experience akin to the 2013 Taper Tantrum,” she explained.
“We believe the medium-term profile for inflation should afford the Sarb additional time before commencing the interest rate normalisation cycle and adhere to our view for the first interest rate hike to take place in the first quarter of 2022,” she reiterated.
“Nevertheless, we acknowledge that risks to an earlier [November 2021] hike have increased. In light of higher short-term inflation pressures resulting from food and fuel, the Sarb may opt to act pre-emptively to keep inflation expectations anchored,” Packirisamy conceded.