News in South Africa 30th June:
1. SA – dangerous and violent:
The Institute of Economics and Peace (IEP) published its Global Peace Index (GPI) for 2023, showing South Africa is less peaceful than a year ago – dropping eight places in the rankings.
South Africa also now ranks as the 20th worst country in the world in terms of safety and security.
The GPI covers 163 countries comprising 99.7% of the world’s population, using 23 qualitative and quantitative indicators from highly respected sources, and measures the state of peace across three domains:
- The level of Societal Safety and Security;
- The extent of Ongoing Domestic and International Conflict; and
- The degree of Militarisation.
This year’s report noted that the average level of global peacefulness deteriorated by 0.42% – with 84 countries improving and 79 deteriorating in peacefulness in 2022.
Concerningly, over the past 15 years, the world has become less peaceful, with the average country score deteriorating by 5%, with two of the three GPI domains having declined significantly since 2008, the authors said.
The data showed that Ongoing Conflict deteriorated by 14% and Safety and Security deteriorated by 5.4%. The IEP pointed to a sharp increase in violent demonstrations worldwide as the culprit of the deterioration of peace, while Militarization was the only domain to improve.
South Africa:
In the Sub-Saharan Africa region, South Africa ranked 26th out of 44 countries. Overall, Sub-Saharan Africa recorded a slight fall in peacefulness in the 2023 GPI, with the average country score deteriorating by 0.57%.
This means that South Africa is less peaceful than most African countries, including Sierra Leone, Ghana, Rwanda, Namibia, and Zambia – among others.
According to the report, the region is less peaceful than the global average in the Safety and Security and Ongoing Conflict domains but more peaceful than the worldwide average in the Militarisation domain.
This put South Africa in the 130th position worldwide (out of 163 countries), dropping eight places from a year ago, cementing the country firmly in the bottom half of the ranking.
On the safety and security index – which looks specifically at criminality, political instability, violence and unrest – South Africa ranks in the bottom 20 (144th out of 163), just ahead of Ukraine, which is at war with Russia.
South Africa’s low ranking on this domain is due to its high murder rate, large number of violent demonstrations, high levels of violent crime, and high levels of perceived criminality.
2. Financial pressures mount:
South African consumers on both extremes of the income scale are the most affected by the rapid rise in living expenses with pressure exacerbated by unprecedented levels of Eskom’s power cuts.
This is according to the latest Consumer Default Index (CDI) figures that track the marginal default rate for credit card, home, vehicle, personal and retail loan portfolios, published by credit bureau Experian on Thursday.
According to Experian, the default rate for accounts that have never before defaulted soared to approximately 22% in the first quarter of 2023 compared to a year before, nearing lows last reported during the Covid-19 pandemic years.
Defaults were highest for the home loan (35%), retail loan (30%) and personal loan (27%) portfolios over a 12-month period.
“A significant deterioration for the latest reporting period was already pre-empted in 2022 Q4 when we saw an earlier-than-usual deterioration in CDI, considering the typical annual cycle of the CDI,” head of commercial strategy and innovation at Experian Africa Jaco van Jaarsveldt said.
“It would seem that the CDI has not only fully returned to the long-term deteriorating trend observed pre-Covid, but that the deterioration is happening at a faster pace,” van Jaarsveldt added.
3. Rate hike worries temper US data:
Asian markets fluctuated Friday as more forecast-beating data reinforced the US economy’s resilience despite surging interest rates but piled further pressure on the Federal Reserve to keep hiking to tame inflation.
Conversely, another set of dour figures out of China showed the country’s recovery from zero-Covid was fast fading but added to speculation officials would unveil a fresh round of stimulus measures.
While it has come down from the four-decade highs hit last summer, US inflation remains double the Fed’s two percent target despite almost a year and a half of monetary tightening.
At the same time, there is very little slack in the jobs market, pushing up wage growth and complicating the bank’s task of tempering prices while trying to guide the economy to a so-called soft landing.
This week provided further proof that policymakers had more work to do, with data showing US consumer confidence soaring, while home sales and big-ticket purchases also rallied.
That was followed Thursday by news that first-quarter growth was more than initially thought owing to strong consumer spending, while first-time jobless claims fell the most since October 2021.
The figures soothed worries that the economy was on the verge of a recession caused by the rate hikes, helping the Dow and S&P 500 higher on Wall Street.
That came even after Fed boss Jerome Powell said this week that rates would likely rise twice this year.
The readings pushed US Treasury yields up, deepening a curve inversion — when shorter-dated yields rise more than longer-dated ones — seen as a warning of a coming recession.
And Optimal Capital Advisors’ Frances Stacy warned that the pain might not be far away.
4. NHI Bill will nationalise doctors:
Profmed CEO Craig Comrie said that, if fully implemented, the National Health Insurance (NHI) Bill would effectively “nationalise” medical professionals and cause many to leave the country.
Comrie said South Africa’s poor economic growth, high unemployment rate, load-shedding, crime, and corruption has already led to professionals leaving the country.
“There is no doubt that young doctors and specialists have and are already moving for better safety and career prospects while earning foreign currency,” he said.
“This is a total loss of a crucial ingredient for any universal health system.”
Comrie said Profmed provides medical cover to over 16,000 doctors and medical specialists in South Africa and noted that emigration had been the number one reason for leaving the scheme over the past year.
“Adding the poorly drafted NHI bill which relegates medical schemes to provide ‘top-up or complementary services’ means that medical professionals are also effectively being nationalised… once the so-called NHI is fully implemented.”
Comrie also raised concerns about the NHI Bill’s funding model. According to the government’s website, “The funding for NHI will be through a combination of various mandatory pre-payment sources, primarily based on general taxes.”
Managing director at Intellidex Peter Attard Montalto estimated that the government’s NHI scheme would cost the country between R300 billion and R460 billion a year.
5. SARB stalls bid to bypass dollar:
The South African Reserve Bank (SARB) is cooling attempts from India and Russia to introduce an interlinking payment infrastructure for settlement in their respective currencies, with the aim of reducing the use of third currencies.
This aligns with the BRICS initiative to lessen the dominance of the dollar.
However, the SARB said that BRICS should instead focus on establishing a common vision and agree on data-exchange standards, which would lay the foundation for the interlinking system, while South Africa focuses on its interlinking initiatives in Africa.
All information sourced from articles posted by: BusinessTech, Moneyweb, Fin24, DailyInvestor, and Business Day.
