News in South Africa 22nd June:
1. Gauteng lockdown to get stricter:
Premier David Makhura on Monday said he was open “to exploring” putting Gauteng under stricter lockdown if need be. “Gauteng is burning, and the province doesn’t want to send out a message that everything is OK,” Makhura warned on Monday.
He was welcoming 60 military health personnel who were deployed to help healthcare professionals in the province amid a surge in Covid-19 cases. They will be rotated to assist where the biggest needs are.
“I must say that the house is on fire. We will not change the projection of the virus unless we change our behaviour.”
According to acting health minister Mmamoloko Kubayi-Ngubane, on Sunday 1,470 patients were admitted to private hospitals and 3,448 to state facilities.
In spite of the health system in Gauteng operating under an increased load of Covid-19 cases, the province is able to cope with the pressure at this stage, Gauteng health MEC Dr Nomathemba Mokgethi said on Sunday.
On Monday she said the chances of infection are high, even within people’s own families. “If you go out for a small party, even if there are 10 of you, half of those people will probably have the virus.”
The director for nursing in the SA Military Health Service, Brig-Gen Zuziwe Maso, asked on Monday that the health department help them do their jobs by supplying adequate and enough PPE.
Makhura warned that despite extra beds being made available, by next week “they will all be full”.
“I can’t say that what we have done is enough,” he said. “This weekend as I went around townships and suburbs, I saw people behaving in a way that shows that they did not think that the virus was anything extraordinary.”
2. Schools could be closed:
While Gauteng is in the eye of the storm of the third wave, health experts warn that other provinces are not far off, with the Western Cape expected to be in Gauteng’s position within three to four weeks.
Calls are growing for harsher lockdown restrictions to be put in place, and for schools to be closed in a bid to prevent the spread of the disease among families. Unions have been calling for schools to be shut down temporarily during the third wave to protect teachers – however, the education department is pushing back against this, as school kids have already lost too much teaching and learning time to Covid.
3. Potato prices rise:
South Africa is currently experiencing a sharp rise in potato prices after extremely cold weather conditions in the northern parts of the country affected potato harvests.
Last week, the average price for a 10kg bag of potatoes soared 12% to R56.53.
In his weekly YouTube video that tracks the market prices for fresh produce in South Africa, Johnny Van der Merwe said that cold weather during the past two weeks weighed on production.
The price of potatoes increased while volumes were “22% lower than the long-term average for this specific week,” van der Merwe said. “The weather is still impacting the production levels, especially with the colder weather to the north at the moment,” he said.
By Friday, the average price for potatoes had risen further to R58.58, according to data from industry association Potatoes South Africa. A month ago, potato prices rose 11% to R44.29 compared to the week before.
The current price surge is due to weaker potato harvests, particularly in the east and west Free State as well as some parts of the Northern Cape, all of which are the major sources of potatoes at this time of year, Willie Jacobs, CEO of Potatoes SA, told Business Insider South Africa.
A combination of factors, including heavy rains at the start of the year (during their critical planting season), also contributed to lower yields.
4. Fed rates up?:
Indications are that rates will rise sooner than expected.
Meetings of the US Federal Reserve’s Open Markets Committee (FOMC) are always a big deal for global markets, as they determine the path of the world’s most important interest rate. Virtually all financial assets are in some way priced directly or indirectly off the Fed’s policy interest rate, the federal funds rate.
Most meetings end up being uneventful, but occasionally a slight shift in the Fed’s policy outlook can cause a sizable market response. Last week was one of those occasions.
Before getting into the details, it should be noted that although the Fed is effectively central bank for the world, its mandate is explicitly US-focused. It aims to achieve an average inflation rate of 2% over time (which means it will need to let inflation rise above 2% to make up for the time it spent below target) and maximum employment of Americans. While in recent years it has become more conscious of how its actions reverberate around the world, those reverberations are only fully considered to the extent that they impact the US.
Last week’s meeting took place against a particularly interesting background, and while there was no announced change in policy, change seems to be coming sooner than expected.
The US economy is recovering from the Covid-19 shock and growing strongly. The FOMC statement noted the progress on vaccinations and improvement in economic activity and employment, but also that the sectors most adversely affected by the pandemic are still struggling. It pointed out again that the rise in inflation is expected to be transitory. As a result, the statement concludes that its policy rate will remain close to zero and its monthly purchases of $120 billion in Treasuries and mortgage-backed securities will remain until maximum employment is judged to have been achieved and inflation is on track to moderately exceed 2% “for some time”.
Long before the Fed hikes rates, it will scale down or taper its monthly bond-buying (quantitative easing) programme, eventually halting it altogether. Fed chair Jerome Powell indicated that the committee is now discussing this, but would not commit to timing. An announcement will probably be made before the end of this year.
5. Quartz not a deterrent for miners:
Despite mineral experts finding that the gems discovered in KZN are nothing more than quartz crystals, desperate South Africans that flocked to the area seeking fortune are undeterred and continue to dig.
According to reports on the ground, many of the would-be miners do not believe the experts’ assessment, and still hope to find diamonds, while others believe even the quartz crystals hold some value that they will be able to cash in on.
Thousands of people flocked to KwaHlathi near Ladysmith in KwaZulu-Natal last week, after the diamond-like crystals were unearthed.