News in South Africa 19th February:
1. Third Covid wave coming:
As South Africa settles down from the second wave of Covid-19, government officials and health experts are all expecting a third wave to hit the country in winter.
“There is no question that the second wave caught much of the world and certainly South Africa off-guard. We had underestimated the risk and we mustn’t do the same thing again.” said Dr Tom Ellman, Director – Doctors Without Borders Southern Africa Medical Unit.
However, experts have warned that future surges in infections will likely be driven by new variants of the virus, which spread much faster. The key tool in combating these surges is behaviour change – something which South Africans were complacent with over the festive season.
“I want to reiterate the importance of communities remaining aware that the information that is spread is correct. We need to ensure that trust remains between the government health system and the people … In the absence of everyone being vaccinated preparing means we have an adequate supply of oxygen and our staff have access to essential PPE that they need.” stated Dr Tom Ellman, Director – Doctors Without Borders Southern Africa Medical Unit
2. Pfizer working to counter new variants:
A top Pfizer Inc scientist said on Thursday the company is in intensive discussions with regulators to test a booster shot version of its Covid-19 vaccine specifically targeted for a highly contagious variant that is spreading widely in South Africa and elsewhere.
Phil Dormitzer, one of Pfizer’s top viral vaccine scientists, said in an interview that he believes the current vaccine – developed with Germany’s BioNTech SE – is highly likely to still protect against the concerning variant (501Y.V2) first discovered in South Africa.
“We’re not doing that primarily because we think that that means that we’re going to need to change that vaccine,” he said. “It’s primarily to learn how to change strain, both in terms of what we do at the manufacturing level, and especially what the clinical results are.
“So if a variant comes along for which there is clinical evidence of escape, we’re ready to respond very quickly,” Dormitzer added.
The company is proposing to do a Phase I clinical trial of a booster shot of that prototype vaccine that it would test against a booster for the current vaccine.
3. First set of matric results out:
The first set of matric results are out, with the IEB exams showing an overall pass rate of 98.07%, down slightly from 98.82% in 2019.
All candidates who passed achieved a pass that is good enough to enter tertiary study, with 88.42% qualifying for degree study.
Over 13,000 candidates wrote the examinations, this includes pupils from Namibia, Eswatini and Mozambique. The National Senior Certificate exam results will be released on Monday, 22 February.
Umalusi has given the green light for the release of the results.
4. Low likelihood of tax shocks:
There are positive signs that it might not be necessary to increase tax rates this year and that there may even be room to give taxpayers full fiscal drag relief again (this is when tax brackets are shifted to take inflation into account rather than allowing inflation to move taxpayers into higher tax brackets).
Finance Minister Tito Mboweni will deliver his budget next Wednesday in an environment where there was a significant improvement in revenue collections in the fourth quarter last year, as well as an improved revenue outlook for the coming tax year.
Tax revenues for the pandemic year are likely to exceed the forecasts made in October by between R100 billion and R108 billion, says Kyle Mandy, PwC’s tax policy leader.
The projected shortfall is now R205 billion, still a massive amount by all counts, compared to October’s more than R300 billion. “This affords a degree of flexibility to National Treasury, and should have the effect of reducing pressure to raise taxes.”
In his June 2020 supplementary budget Mboweni announced the need for an additional R40 billion in tax increases over four years. The first increase of R5 billion was earmarked for the 2021 tax year.
5. Gold prices hit seven month low:
Gold prices hit a seven-month low overnight. Rising US bond yields and greater optimism about global growth are undermining the appeal of the metal.
Gold prices fell to their lowest in more than seven months on Friday, on course for their worst week since the end of November, as rising U.S. Treasury yields eroded the non-yielding bullion’s appeal.
Spot gold fell 0.4% to $1,769.03 per ounce by 0250 GMT, having touched its lowest since July 2 at $1,759.29 earlier in the session. Prices have declined 3% so far this week. U.S. gold futures slipped 0.6% to $1,765.30.
“U.S. bond yields have been rallying quite strongly in the last week, and there’s growing momentum that they can lift further as U.S. and global growth recovers more quickly as vaccines roll out,” said Lachlan Shaw, National Australia Bank’s head of commodity research.
Gold’s decline came despite an unexpected rise in U.S. jobless claims last week. “The bond market is looking forward to where the U.S. economy might be as we move through the year as vaccines ease the weight of the pandemic on economic activity, and with plenty of stimulus and support from U.S. Federal Reserve,” Shaw said.
The recent record surge in Bitcoin has also “been competing with gold so far as speculation, a store of wealth and portfolio diversifier,” Shaw said, adding that a continued rally in Bitcoin will be a headwind for gold.