News in South Africa 8th August:

1. Alerts issues over taxi violence:

Tensions between the City of Cape Town and the taxi council have boiled over, resulting in several countries issuing an alert to their citizens planning on travelling to the city – with some suggesting they delay their trips if possible to avoid harm.

Alerts issues over taxi violence
Photo by Life Matters

Taxi operators have been engaging in a violent protest for several days in response to the City of Cape Town authorities impounding multiple vehicles last week.

On Thursday (3 August), the South African National Taxi Council (Santaco) declared a seven-day strike against the city. As a result, they have ceased operations, leaving commuters and public servants, such as healthcare, teachers, and social workers, stranded.

Meanwhile, violence linked to the strike has erupted in the city, where vehicles have been petrol-bombed, roads have been blocked, and two men have been confirmed to have been shot and killed during the demonstrations, reported News24.

The Western Cape, known for its tourist attractions, has been negatively impacted by the strike, causing damage to its reputation.

The City of Cape Town has said that its tourism is now under threat as multiple countries have warned its citizens to exercise a high level of caution, with some suggesting they delay their trips to the coastal city.

These countries include the United States of America (USA), the United KingdomAustralia, and Canada.

The notices warn travelling tourists that “transportation strikes have been taking place in the Cape Town area. They have led to acts of vandalism, arson and violence. The situation is volatile and could escalate without notice”.

The notices added that the strikes had caused significant disruptions to transportation, including on major highways and roads to and from the airport, due to convoys and roadblocks.

They advised their citizens already in the province to:

  • Be prepared to modify plans and itinerary in case of disturbances;
  • Expect enhanced security measures and increased police presence;
  • Seek advice from trusted local sources, such as hotels, a travel agent or the police, if they consider using alternative routes; and
  • Monitor local media for the latest information on the evolving situation.

The UK and Australia have advised citizens who plan to travel to Cape Town to consider delaying their trips.

According to reports, the tourism industry in the Western Cape accounts for 9% of the gross regional product and employs 9% of the province’s workforce.

As a result of the strikes and the issues of warnings by these countries, the city expects lower bookings for local establishments. “This concern is amplified by the fact that the sector is currently in its peak booking season, which aligns with the upcoming summer period,” the chamber said in a statement.

2. BRICS expansion not anti-West:

A planned announcement on the expansion of BRICS at a summit in Johannesburg later this month isn’t aimed at countering the West, which remains a crucial trading partner for South Africa, an official said.

I don’t think we see BRICS as being pro-Russia or anti-Western. I think that would be extremely wrong,” South Africa’s Foreign Minister Naledi Pandor said.

“We have said many times before that South Africa’s trading partners in the West are very important to South Africa’s economic progress,” she told journalists at an online briefing Monday.

Africa’s most industrialized nation’s biggest trading partners are China and the US. It’s faced pressure from the latter to stop using Huawei in its mobile networks as Washington’s fight to suppress China’s technology ambitions escalates. The US has also criticized South Africa over its non-aligned stance toward Russia’s war in Ukraine.

Heads of state from Brazil, Russia, India, China and South Africa will set out strict criteria for who will be allowed to join the bloc when they meet Aug. 22-24, Pandor said.

Twenty-two nations have asked formally to become full-time members of the group, and more than 20 others have submitted informal requests.

BRICS, which invited South Africa to join in 2010, has failed to punch its weight as a group. That’s despite its members representing more than 42% of the world’s population and accounting for 23% of global gross domestic product and 18% of trade, giving credence to demands for more sway.

“I would guard against having any sort of criteria for expansion that lead us down a path where we contribute to increasing conflict in the global community,” Pandor said.

“It is not by any means an intention to build some form of bloc that is anti-Western, and I hope you will not convey any such intention on our part,” she said.

The minister also said the summit would put to rest the narrative that BRICS members remain divided on expansion.

3. Digital payment fraud on the rise:

Contactless payment methods, such as tapping your card, smartphone or smartwatch, have become very popular, but fraudsters are exploiting this convenient tech feature.

According to the Ombudsman for Banking Services, digital wallet payment fraud is on the rise, with criminals linking information on stolen cards to their smart devices.

“More recently, the Ombudsman for Banking Services has seen the emergence of a new scam involving the use of near-field communication (NFC) technology.

“This involves fraudsters using stolen bank card information, such as the card number, expiry date, and the CVV number (card data), to make fraudulent purchases via the digital wallet,” the organisation’s Reana Steyn said.

In most cases, digital purchases don’t require a one-time pin (OTP) to complete a transaction. This also makes it easier for criminals to make fraudulent purchases.    

“Unlike with the normal card-not-present (CNP) fraud transactions that we are accustomed to where the fraudsters would use the stolen card information to make online purchases which would prompt OTPs to be sent to the registered cellphone number of the legitimate cardholder for each of the transactions made, NFC/digital wallet payments do not require this added OTP mitigation tool for each and every transaction, “Steyn said.

International crime syndicates targeting South Africans

Steyn said more than 120 NFC fraud-related complaints were recently been reported to her office and were under investigation.

Losses associated with such cases involve millions of rand, especially with fraudulent purchases made in countries such as the United Arab Emirates, France, and Spain.

“This is a clear indication that an international crime syndicate is operating within this space and has South African consumers in its sights.”

Steyn confirmed that one of the major banks in South Africa received more than 6 000 complaints between January 2022 and 1 June 2023.

Statistics from the unnamed bank revealed that between January and June 2022, about 553 customers fell victim to this fraud, losing about R427 487. This year alone, the number of targeted customers spiked to 5 450, leaving them with a combined monetary loss of more than R6.5 million.

These cases, according to Steyn, are not age specific, and anyone can be a victim. 

She said everyone should be vigilant with their card information, especially OTPs.

4. Informal retailers growth climbs:

The country’s traditional trade (TT) sector is growing at a faster rate than the dominant modern trade (MT) sector as consumer shopping preferences change with lessening disposable income.

This is according to NielsenIQ (NIQ) South Africa’s insights released on Monday, assessing the sales performance of 17 000 stores within the fast-moving consumer goods (FMCG) industry.

According to the NIQ SA, the traditional trade sector – which includes non-branded superettes and spaza shops – grew by 23.6% in the 12-month period ended June 2023, raking in R187 billion in annual spend compared to R151 billion in the previous year.

The growth rate is ahead of the modern trade sector, which grew by 14.7% in the same period.

“Independent retailers have successfully commanded a substantial share of the market and now account for R27.40 of every R100 in FMCG sales,” Gareth Paterson, market leader at NIQ SA, says in a statement.

“This reflects the changing preferences of consumers and the lasting impact of Covid-19 hard lockdowns on spending patterns.”

5. Cost of load shedding:

An escalation in load-shedding is expected to cost the economy about R400bn more this year than in 2022 and wipe out R77bn in tax take, the electricity minister said as he outlined the heavy toll of the energy crisis on the country.

Kgosientsho Ramokgopa said the impact of load-shedding on SA’s total economic activity in the production of goods and services could amount to R1.6-trillion, compared with R1.23-trillion in 2022. The effect on the value-added approach to GDP, or gross value added, is projected at R725bn.

He said load-shedding could also wipe out R77bn in tax earnings in 2023. This would be equal to about 5% of the total tax revenue in 2021/22.

It illustrates how the inability of Eskom to meet the demand for electricity is “affecting the government’s ability to help the poor”, Ramokgopa said during a public lecture at the University of Pretoria.

In addition, he said job losses due to persistent electricity cuts could amount to about 860,000 in 2023.

Stats SA’s latest labour force survey put the unemployment rate at about 33% — among the highest in the world.

Despite recent improvements that have helped to narrow the gap between electricity supply and demand, resulting in lower stages of load-shedding, South Africans have already experienced more power cuts in 2023 than in any year before.

The country suffered 75 days of load-shedding in 2021. This increased to 205 days in 2022, and SA is on track this year for a record number of days with load-shedding, already on 218 up to the first week of August.

The figures presented by Ramokgopa show the value-destroying effect load-shedding has had on the productive sectors of the economy and their ability to contribute to the fiscus.

All information sourced from articles posted by: BusinessTech, DailyInvestor, Fin24, Moneyweb, and BusinessDay.

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