News in South Africa 9th February:
1. Ramaphosa’s Sona today:
South African President Cyril Ramaphosa will deliver his seventh state-of-the-nation address on Thursday at a parlous juncture in his tenure.
An energy crisis dating back to 2008 dramatically intensified last year and rolling blackouts have been imposed for 102 consecutive days to prevent the grid from collapsing, hobbling the economy. There’s also widespread public anger over a 33% unemployment rate, surging living costs and the near collapse of government services in many towns.
With next year’s elections gearing up to be the most hotly contested since apartheid ended in 1994, Ramaphosa needs to provide solutions to the country’s myriad problems to bolster his chances of winning another term. He’ll deliver his speech in the Cape Town city hall, because parliament is still being rebuilt after being gutted by a fire.
These are some of the key issues the president is likely to address:
1. Power shortages
2. Government reorganisation
3. Wage costs
4. Infrastructure investment
5. Tackling crime
The live streaming of the State of the Nation Address by President Cyril Ramaphosa will be held today (9th February at 7pm.
2. Load shedding deaths:
he Health and Allied Workers Indaba Trade Union (Haitu) wants government to compensate the families of people who have died at hospitals during load shedding.
The union appealed to the department of health to ensure all public hospitals are added to the list of facilities exempt from power cuts.
Haitu claims less than 100 public hospitals out of 400 facilities were spared from electricity cuts.
The union’s Gauteng chairperson Bafana Tshabalala said the the rolling blackouts were crippling the healthcare sector.
“When we run out of power, we need to resuscitate our patients, we need to manually breathe for our patients because the ventilator is off, because the incubator in the neo-natal unit is off and we are so short-staffed that we need to choose which one we resuscitate, which one we let die.”
He added that government must be held accountable.
3. Breakthrough in budget health food:
Food prices are roaring ahead of inflation, which means new research on getting the best nutritional bang for your buck has come at exactly the right time.
Scientists at the South African Medical Research Council (MRC) and the University of the Western Cape evaluated more than 100 food items from supermarket shelves and the winner is … pulses.
Lentils, sugar beans, and split peas have the highest nutritional value per rand of any of the products the researchers monitored at Shoprite, Pick n Pay, and Checkers.
Bottom of the league are fats, oils, foods high in fat and sugar, and food and drinks high in sugar.
A 2003 government decision to improve nutrient intake by fortifying maize meal and bread flour with vitamin A, riboflavin, niacin, pyridoxine thiamine, folic acid, iron and zinc has paid off, the scientists say in the Journal of Nutritional Science.
“These fortified staple foods, which are widely consumed in South Africa, had the best nutritional value per cost within the starchy food group,” they say.
Food inflation reached 12.4% in December, according to Statistics SA, way ahead of the 7.2% overall inflation rate. For oils and fats, the inflation rate was 22.4%, and for bread and cereals it was 20.6%.
“The core food basket for low-income women consists mainly of starches (maize meal, rice, cake flour, bread), white sugar, vegetable oil, sugar beans and chicken, tea and condiments, and is not nutritionally balanced,” say the researchers.
“Low-income groups often rely on cheaper, energy-dense foods high in saturated fats, trans fats and added sugar, which put them at greater risk of becoming overweight/obese and developing diet-related non-communicable diseases (NCDs), and therefore food prices are a major contributor to inadequate diets and malnutrition.”
After pulses and fortified starches, the foods offering the best nutrition value per rand are dairy products, vegetables and fruits, and the group containing fish, chicken, meat and eggs, particularly chicken giblets, eggs, pilchards and low-fat fish.
Vegetables and fruits – particularly carrots, butternut and orange-fleshed sweet potato – had the highest nutrient density of the foods tested, but the researchers say: “Generally, vegetables and fruits are reported to be expensive. Although they are VAT zero-rated, cost prevents consumption of these foods among low-income households.
4. Capital spending plunged 37%:
Planned spending on capital projects in South Africa plunged 37% last year as the state scaled back expenditure, and the downswing is likely to continue in 2023, economists at the Nedbank Group said.
The value of new projects announced fell to R248.5 billion from R392.7 billion in 2021, Johannes Khosa, Crystal Huntley and Nomusa Soza said in a research note on Tuesday.
The decline in 2022 followed the unveiling of major projects in the two prior years that formed part of the government’s economic plan to help the economy from the coronavirus pandemic, they said. For instance, in 2021 the South African National Roads Agency SOC Ltd. announced plans to spend R30 billion upgrading two highways near the port city of Durban, compared with the R325 million rand investment it made last year on road-widening projects, according to Nedbank data.
The private sector announced plans to spend more last year, increasing its investment 59% to R193.6 billion, the data show. Most of the biggest projects were announced in the first half of the year, the economists said.
Some of the private-sector’s biggest investment plans were a R75 billion green hydrogen plant at the Coega Special Economic Zone, various renewable projects signed with government and a wind farm by Seriti Resources Holdings.
“Excluding those mega projects, total project announcements amounted to around R60 billion, suggesting hesitancy among businesses to commit to large capital expenditure given weak business confidence,” the economists said.
They expect growth in spending to continue to slow this year, forecasting that gross fixed capital formation will grow by 1.3%, down from an estimated 4.5% last year.
“Downward pressure will mainly be exerted by the impact of electricity shortages, which coupled with slower global and local demand, easing commodity prices, slow progress with structural reforms and persistent policy uncertainties will continue to hurt investor sentiment,” the economists said.
5. Rough year ahead for property owners:
Property analytics group Lighstone has published its House Price Inflation (HPI) forecast for South Africa’s residential property market in 2023, setting low expectations for growth – and a warning that further interest rate hikes are on the way.
According to Lightstone, the South African residential property market will be shaped by local and global challenges in 2023, but homeowners and other stakeholders will mostly feel the pain of the country’s stagnating economy, seeing prices grow at a rate lower than inflation.
Paul-Roux de Kock, Chief Analytics Officer at Lightstone, said the group’s three scenarios suggest HPI in South Africa would likely come in between 0.9% and 3.7%, depending on the broader economic scenario.
Adding to property owners’ woes, with no end in sight for South Africa’s electricity crisis and increasing water outages, the South African Reserve Bank (SARB) recently increased interest rates by 25 basis points and adjusted its GDP growth forecast to just 0.3% for 2023, down from its previous estimate in November of 0.6%. The bank expects growth for 2022 to come in at 2.5%.
The Consumer Price Index (CPI) and core inflation have significantly diverged over the past 18 months, with CPI ending 2022 at 7.2% and core inflation – which excludes the impact of the volatile fuel price driven by Russia’s war with Ukraine – ending at 4.9%.
For Lightstone’s forecasts, the more predictable core inflation rate has been used, de Kock said. However, under all scenarios, the group sees even more interest rate hikes coming – ranging from 50 basis points to a massive 200 basis points (175bp after the January hike).
All information sourced from articles posted by: Moneyweb, EWN, Business Insider, Fin24, and BusinessTech.
