News in South Africa 9th September:
1. Queen Elizabeth II passes away:
Queen Elizabeth II has passed away at 96 years old.
In a statement sent to reporters, Buckingham Palace said the Queen “died peacefully at Balmoral” on Thursday afternoon.
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“The King and The Queen Consort will remain at Balmoral this evening and will return to London tomorrow,” the statement added.
On Thursday, Buckingham Palace said that the monarch’s doctors were concerned for her health and recommended she remain under medical supervision.
Royals including Prince William, Prince Charles, and Camilla, the Duchess of Cornwall traveled to Balmoral Castle, the family’s estate in Scotland, to be by the Queen’s side, British media reported.
Her death brings to a close a monumental reign in British history and ushers in a new, uncertain one.
She is succeeded by her son Charles, Prince of Wales, who automatically ascended to the throne with her death.
Elizabeth was born on April 21, 1926, in the Mayfair district in London and was not expected to inherit the throne.
This changed, however, with the abdication of King Edward VIII, which left her father next in the line of succession in 1936. As the eldest child of King George VI, Elizabeth became Queen in 1952 at the age of 25 following his death.
On September 9, 2015, Elizabeth surpassed Queen Victoria as the longest-reigning English monarch, according to English Heritage.
The Queen’s reign began a decade before the Cuban Missile Crisis and lasted through the assassination of President John F. Kennedy, the Falklands War, the fall of the Berlin Wall and the end of the Cold War, the 9/11 attacks, and the inventions of the internet and the smartphone. As of February 2022, Elizabeth has reigned for 70 years.
The monarchy, while largely ceremonial, plays a huge role in British society — with the Queen’s longevity helping earn her a particularly beloved status.
What’s next?
Most people in the UK have never known a life without Queen Elizabeth II. And for 12 days after her death, the nation is poised to come to a standstill.
As Insider previously reported, the Queen’s funeral, as well as Charles’ coronation, are to be formal national holidays in the UK. The words of the national anthem, “God Save the Queen,” will change. Charles might even have a new name.
It will no doubt be a period of major transformation for the UK, the Commonwealth, and the world. But one thing will remain the same.There will never be another reign quite like that of Elizabeth II.
2. Load shedding – household damages:
Short-term insurance claims are now higher than those of burglaries in South Africa, given the country was hit by its worst-ever series of blackouts in the first half of 2022, says Sanlam CEO Paul Hanratty.
Intermittent power supply added additional pressure to an industry reeling from devastating floods in KwaZulu-Natal and a surge in vehicle replacement costs, says Hanratty, who described conditions for the industry in the first half of the year as “a perfect storm”.
Sanlam, which owns SA’s biggest short-term insurer, Santam, saw its headline earnings contract by 8% in the six months to end-June, mainly due to the drag coming from the short-term insurance business.
Net operating profits from Sanlam’s general insurance operations declined by 57%, overshadowing the 23% increase in operating profits from the group’s life insurance business as well as 25% growth in investment management operations. Because of the bigger decline in the general insurance business, Sanlam’s net operational earnings declined by 7% to R4.4 billion.
Hanratty said that while short-term or general insurance tends to be less a volatile business in terms of premium flows compared to life insurance, it has been battling tough conditions this year, and short-term insurers are now being forced to hike premiums.
“Insurers are having to put through very large premium increases on renewal. So those premiums are being pushed up really by inflationary and claims costs and pressures. So, the perfect storm in the short-term insurance industry meant that they had a 60% fall in their profits,” he said.
“The cost of meeting load shedding claims is now higher than the cost of burglary claims in South Africa … It’s a very tough short-term insurance environment out there,” said Hanratty.
3. Food cost effects:
Dhersan Chetty, equity analyst at Foord Asset Management says rising food inflation and rising interest rates are headwinds for both consumers and food manufacturers in South Africa.
The net effect of rising food, transport and borrowing costs is the reduction of discretionary — or non-essential — spending by consumers, the analyst said.
Higher inflation disproportionately impacts lower-income consumers, given the contribution of food and transport costs to their total expenses. “This is compounded by this consumer cohort tending to have lower savings.”
Middle-income consumers with mortgages, car loans and credit card debt are also squeezed because of their exposure to rising interest rates. A higher interest burden eats into budgets, causing consumers to be more conscious of their spending, said Chetty.
Analysis by professional services firm PwC showed that middle to higher-income groups are re-evaluating their discretionary spending patterns and are either “buying down” or reducing insurance and savings products.
Households in the lower to lower-middle income categories, meanwhile, struggle to sustain their monthly basket of goods purchases.
A survey conducted by Debt Rescue earlier this month found that as many as 81% of South Africans are cutting down on daily meals due to rising food prices as they can no longer afford three square meals each day, while 41% said their monthly grocery budget could no longer feed their families.
Unlike other consumer products such as clothing, entertainment and cars, food is an essential expenditure item, said Chetty.
“But a consumption squeeze still affects food expenditures as consumers reduce their monthly basket sizes by eating less, reduce non-essential foods such as sweets and snacks, switch to cheaper proteins and trade down to cheaper products.
4. Inflation still on the rise:
South Africa’s central bank governor said it’s too early to call the peak of inflation that’s running at its fastest pace in 13 years.
“Until the public can see that now inflation is definitely on a downward trajectory, it is too early to call the peak,” Lesetja Kganyago said Thursday in an interview in Le Morne, on the southwestern coast of Mauritius.
Until “we feel that inflation is now under control and is on a downward trajectory towards where we want, which is the mid-point of our inflation targeting range” the bank must do whatever it takes to nip inflation in the bud, he said. Kganyago is attending a meeting of central bank governors.
Annual inflation quickened to 7.8% in July and core inflation, which excludes the prices of food, non-alcoholic drinks, fuel and electricity, accelerated to 4.6%, breaching the midpoint of the central bank’s target range of 3% to 6% for the first time in more than four years. The Reserve Bank’s monetary policy committee prefers to anchor inflation expectations close to 4.5%.
Analysts including Investec Bank Chief Economist Annabel Bishop have said that the July number may have been the peak of the cycle after gasoline and diesel costs fell last month. The decline continued in September.
“We don’t have to wait for it to reach the midpoint,” the governor said. “What we have to see is this is the trajectory. It is now going to the mid-point and that is what would indicate to the price setters in our economy that inflation is now under control.”
Central banks across the globe are unleashing the most aggressive tightening of monetary policy in a generation to cool surging inflation and stem portfolio outflows. South Africa has raised its benchmark interest rate by 175 basis points this year — with a surprise 75-basis-point increase in July being its biggest in almost two decades.
5. Traffic department corruption:
Civil action group Outa says that corruption at South African traffic departments is continuing unabated, with officials being bribed, the booking system exploited, and dodgy dealings taking place between the departments and driving schools.
These issues have persisted in the country through all the measures the government has tried to implement to counter them.
The corruption is so entrenched that it has almost been formalised, with specific price points and processes.
All information sourced from articles posted by: Business Insider, Fin24, BusinessTech, Moneyweb and 702.
