News in South Africa 28th April:

1. Populations exploding:

A wake-up call for SA’s ballooning cities: Their populations are exploding at rates far in excess of economic growth.

Populations exploding
Image taken by: sergio souza

Buried in the dry numbers of the latest State of South African Cities Report 2021 are some startling stats. City of Joburg’s population jumped nearly 30% between 2011 and 2019 and now numbers some 5.7 million souls.

Even more concerning is the 39% increase in the number of households, and the fact that informal housing accounts for more than one in five of all households.

Then we get to the economic stats: Joburg metro’s contribution to national GDP grew just 2.8% between 2016 and 2019, way behind the rate of consumer inflation.

It is a similar story for Tshwane, which experienced a nearly 25% jump in population between 2011 and 2019. Cape Town’s population is up 20% between 2011 and 2019, while the number of households grew 23.2%.

On the face of it, these are rather alarming stats: populations in our cities are ballooning while their economies are sluggish.

Msunduzi, which includes KwaZulu-Natal’s capital city of Pietermaritzburg, saw a 12.6% jump in population, but a 21% increase in informal housing. The unemployment rate sits at 34.2%, while the municipality’s contribution to national GDP grew just 6% over the three years to 2019.

What should be concerning to the national government is the rate of urbanisation and the apparent inability of our cities to absorb the newcomers, either in terms of housing and services, but most especially jobs.

The population of Nelson Mandela Bay Metro in the Eastern Cape grew nearly 5% between 2011 and 2019, while the economy remained more or less static since 2016.

The unemployment rate for the area jumped to 35.7% in 2019 from 31.6% in 2011.

Ekurhuleni, east of Johannesburg, experienced a 22.4% surge in population between 2011 and 2019, with a nearly 30% explosion in the number of households. Life expectancy for women is an average 69.1 years, and men 63.7 years.

Ethekwini (greater Durban), which also includes areas such as Umhlanga, Umdloti, Hillcrest and Amanzimtoti, has a population of 3.9 million, an increase of 13% between 2011 and 2019, but what’s astonishing is the nearly 25% growth in the number of households since 2011.

Like many other metros in SA, economic growth has nowhere near matched population growth.

Ethekwini’s R272 billion contribution to national GDP in 2019 is virtually unchanged from 2016 – and this was before the devastating contractions enjoined by government-imposed Covid lockdowns and the July 2021 riots.

Why isn’t SA making better progress in delivering on the various urban development plans cobbled together with such fanfare over the years?

“The politicising of the executive-administrative interface is a problem around the world, but is especially acute in South Africa, where through the years major political parties in control of urban councils have insisted on political loyalty from senior administrators,” reads the report.

“This has, predictably, resulted in high turnover and vacancy levels in senior administrative positions; allowed for significant executive interference in municipal administration and party-political interference in urban autonomy; and has left many administrations vulnerable to nepotism, infighting and corruption.”

2. Wealthy taxpayers leaving:

Data from New World Wealth and Henley & Partners shows South Africa has continued to lose high net worth individuals (HNWIs) overseas.

The report focuses on high net worth individuals (HNWIs) with a wealth of $1 million (R15.70 million) or more. Total wealth refers to the private wealth held by all the individuals living in each country. It includes all their assets  – including property, cash, equities, business interests – less liabilities.

The data shows approximately 4,500 HNWIs have left South Africa over the past decade. Most of these individuals have gone to the UK, Australia, and the USA.  New World Wealth said that significant numbers have also gone to Portugal, Switzerland, Israel, Mauritius, New Zealand, the UAE, Canada, Monaco and Malta.

“In particular, a large number of South African billionaires have left the country over the past 10 to 20 years. Notably, there are 15 South African born billionaires globally, but only five of them still live in South Africa.

“It should be noted that South Africa is by no means alone in losing wealthy people. All the BRICS countries have lost large numbers of HNWIs to migration over the past decade. Egypt, Turkey and Nigeria have also lost a substantial number.”

On a positive note, the group said there is a trend of wealthy people returning to South Africa, particularly from the UK. “This is a notable trend that we are tracking, and we should have more statistics available for this in the next report.”

3. Speed cameras broken:

Johannesburg’s speed cameras have not been operational for a year, with all speed prosecutions halted since 31 May 2021.

A tender process for the cameras is currently underway, with the Johannesburg Metropolitan Police Department hopeful that the issue will be resolved by the end of June.

But in the meantime, the city has lost millions in revenue and will continue to do so.

4. Transformation push lacking:

Since 2009, progress in the country’s transformation agenda has stalled, mainly due to state capture and lack of political will, according to Finance Minister Enoch Godongwana.

The minister spoke this week at the Black Management Forum’s gala dinner. He addressed issues relating to the country’s fiscal strategy and the transformation of the South African economy.

Godongwana noted that transformation was not only an economic and political imperative, but a moral one too. There had been efforts to address economic marginalisation and promote black economic empowerment and employment equity, he said. 

“Regrettably, however, since 2009, our progress has stalled particularly as a result of state capture and a lack of political will.”

Citing the Commission for Employment Equity’s 2020/21 report, Godongwana said the pace of transformation has been slow.

The progress of Black Africans into top management positions averaged around 15% in the three years between 2018 and 2020. The representation of the Coloured and Indian populations remained at 5.7% and 10.6%, respectively, in 2020. The White population continues to dominate top management roles, accounting for nearly 65%.- Enoch Godongwana

The skewed representation in the economy fed into income and wealth inequality and contributed to social instability, he said.

But Godongwana stressed that government was addressing the challenges to transformation through policies and legislation related to localisation, and the Preferential Procurement Policy Framework Act (PPPFA). The PPPFA incentivises government and businesses to work with BEE certified suppliers.

Godongwana described a Constitutional Court ruling that indicated certain aspects of the PPPFA are unlawful, as a setback. Treasury had since issued new regulations to the PPPFA for public comment, he said.

The bill is with the National Economic Development and Labour Council and Treasury intends to table it before Parliament in June.

“We are committed to using all levers at our disposal, including legislation, to advance economic transformation,” said Godongwana.

5. Tomato prices declining:

Prices for tomatoes in South Africa have declined by half over the past year, with a kilogram now costing under R10 due to large volumes of the fruit being available.

Last week, tomato prices declined 17% week-on-week, with the market price dropping to R9.04 for a kilogram. Prices continued their decline, with the latest price for the fruit now sitting at R7.16 per kilogram.

The drastic price drop is being driven mainly by the market being saturated with lots of tomatoes, which are also not of good quality, Dr Johnny van de Merwe, managing director of agricultural information group Agrimark Trends (AMT), said in his weekly YouTube video that tracks market prices for fresh produce.

“We probably saw one of the worst April months in recent years with low quality and high volumes driving down the producer price for tomatoes,” Van der Merwe said.   

He said the price of tomatoes is now 48% lower than it was last year at the same time.

“This season, in terms of volumes, can roughly be compared to two seasons ago when prices traded between R8 and R6” he said.

The tomato industry in South Africa had a rocky start in 2021 when heavy rains wreaked havoc on harvests, sending prices to multiple record highs.

All information sourced from articles posted by: Moneyweb, BusinessTech, ENCA, Fin24, and Business Insider.

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