News in South Africa 20th May:
1. Retrenchments on the rise:
In early 2020, insurance group Liberty was processing about 10 retrenchment claims a month. But five months after Covid-19 struck, that number increased six-fold.
Liberty’s retrenchment claim statistics for 2020, released on Wednesday, give an indication of just how many people lost their jobs in the formal sector as a result of Covid-19. Between August and October last year, the insurer was processing more than 60 retrenchment claims a month.
Its clients, mostly middle to high income earners, were considered to be less susceptible to job losses.
“This trend was expected, given the harsh realities and subsequent affect on jobs because of the pandemic,” said Kresantha Pillay, head of Liberty’s flagship Lifestyle Protector product.
The most affected regions were Gauteng, the Western Cape and KwaZulu-Natal.
The insurer also had a 200% spike in death claims from the beginning of hard lockdown in April 2020 — three times above “normal” levels.
The claim statistics reflect only the effects of the first wave of Covid-19 in the middle of the year, Pillay said.
More than R500m was paid out by Liberty to cover confirmed Covid-related death and health-related claims, with death being the leading cause. Unsurprisingly, Covid-19 related funeral claims peaked during the first wave, with most claims coming from the Eastern Cape, Gauteng and the Free State. But the company said it probably paid out more than R575m in Covid-related claims, given that some Covid-19 deaths were recorded as natural causes.
2. Contact sport suspended:
The Department of Basic Education has suspended all contact sports in schools with immediate effect.
Last week, it was reported that the department would meet to discuss the issue in light of a number of Covid-19 cases in schools that were attributed to sports.
In a statement on Wednesday, the department said the decision was taken after a virtual meeting with the Council of Education Ministers earlier in the morning.
The department said that despite protocols and various government gazettes outlining safety measures to mitigate the spread of Covid-19 during contact sports, it was evident that these were not working.
“Following the school sports activities related to Covid-19 outbreaks in Gauteng and the general rise of cases in communities across the country, the Outbreak Response Team said that the risk was high when engaged in close-contact sports, especially with people who did not live together,” it said.
3. No time for state capture:
Parliament did not have the time, resources or capacity to investigate the early “noise” and “rumours” about the coordinated and wholesale looting of South Africa’s public coffers, Baleka Mbete told the state capture commission on Tuesday night.
The former National Assembly speaker was appearing before Deputy Chief Justice Raymond Zondo and his eponymous inquiry to testify about parliamentary oversight, or lack thereof, during the administration of former president Jacob Zuma.
Mbete and her parliamentary peers have been criticised for not sooner initiating investigations into allegations of state capture, and the alleged role that Zuma, his patronage network and the infamous Gupta brothers played therein.
She was still the National Assembly speaker when the commission started in 2018.
“There was a lot of noise [about state capture] in the fifth term that was scattered among portfolio [committees],” Mbete offered early in the sitting.
Evidence leader Alec Freund later put it to her that there was “overwhelming evidence” and “enormous public concern” by at least March 2016 about allegations of state capture and corruption, and yet “not one portfolio committee saw fit to investigate the allegations”.
“MPs were very busy,” responded Mbete, “although I wouldn’t be able to say with what. But it cannot be said they were sitting around.
“There came a time at a certain point where in fact those issues – you are right, in 2016, we were hearing noises and seeing reports, hearing rumours. At that time, when individual public representatives are hearing these matters, they are not sitting around idly. So when you say they didn’t go around and do oversight, maybe sitting here where we are, with hindsight, we are better off than those MPs were.
4. Farmers suffering from extreme drought:
As severe drought continues in the Eastern Cape, desperate farmers are pleading with Eastern Cape Premier Oscar Mabuyane to declare the province a disaster area.
The farmers say they are on the brink of losing everything.
If Mabuyane declares the province a disaster area, he can get additional funding from the national government to prevent an impending disaster, according to the farmers.
Their pleas come as the province is in the grip of a devastating drought, with dams supplying Nelson Mandela Bay at a combined 12.32% capacity.
The Kouga Dam is at 4.29% and will soon reach a point at which water can no longer be extracted.
The Dr Beyers Naude municipality has been dealing with extreme drought for the past five years, with the Nqweba Dam level continuing to plummet, and now at just 8.4%.
Commercial and emerging farmers in Willowmore, Rietbron, Steytlerville, Jansenville, Graaff-Reinet, Bedford and Tarkastad face severe water challenges.
When the Kouga Dam dries up, the municipality will lose its primary water supply, while the KwaNobuhle township in Nelson Mandela Bay will have no water at all.
5. Inflation data released:
Stats SA released inflation data showing that CPI, the Consumer Price Index, rose by 4.4% in the month of April on a year-on-year basis.
That is quite a marked increase on the 3.2% print that was registered for March this year. The question now is: will the Monetary Policy Committee, the MPC, react to it?
Chief economist at Alexander Forbes, Isaah Mhlanga stated “Indeed 4.4% in April from a 3.2% seems to be a very big jump. But if you look at the underlying components that drove that CPI, the biggest driver was fuel prices which rose 1.4%. Remember, last year fuel prices dropped to R13.96/litre and we probably saw it as high as R17.32/litre, which is one of the highest levels that we have seen in years.”
He went on to state “But if we look in terms of all the other categories, quite a number of them are still printing below target. If you look at things like clothing and footwear, that’s only printing at about 1%. If you look, housing and utilities are at 2.3%, and household contents still at about 0.7%. And if you had to look at communications, that’s still at ‑0.4%, which means deflation. So overall there are a lot more components that are rising at a lower pace compared to the Sarb’s midpoint target of 4.5%.”
Regarding a move or commentary by the Reserve Bank, Isaah stated “I think it’s going to emphasise some upside risks. They may highlight that the risks may be tilted to the upside, but they will also, like the Fed, say they see this as temporary and it’s unlikely to be sustained over the next couple of weeks.”
All information sourced from articles posted by: BusinessTech, Business Insider, TimesLive, News24, Mail & Guardian, and Moneyweb.
