South African national minimum wage will prove elusive

2017 ◽  
Keyword(s):  
South African ◽  
Minimum Wage ◽  
Medium Term ◽  
Short Term ◽  
Substantial Impact ◽  
Content Type ◽  
Macroeconomic Conditions ◽  
Current Minimum ◽  
Wage Floor ◽  
Labour Regulation

Significance Due to take effect on May 1, it would introduce a single wage floor set at 20.0 rand (1.5 dollars) per hour. The NMW is a significant departure from current minimum wage frameworks, both in terms of its level and its coverage, and is going to have a substantial impact on companies and low-wage employees in the short-to-medium term. Current labour market and macroeconomic conditions, however, increase the risk that the employment effects of the policy will be largely negative. Impacts The proposed minimum wage level, and the large proportion of workers currently earning below this, suggest likely job losses. From a labour regulation perspective, introducing a single NMW will simplify the extremely complicated minimum wage system. Inspection and enforcement infrastructure will require significant investment, but this is unlikely in the short term.

Africa's 'oil price winners' face mixed prospects

2015 ◽  
Keyword(s):  
Southern Africa ◽  
Oil Prices ◽  
Oil Price ◽  
Political Space ◽  
Medium Term ◽  
Short Term ◽  
Economic Diversification ◽  
Content Type ◽  
Civil Unrest ◽  
Sub Saharan

Subject Africa's oil price winners. Significance Despite traditionally being winners during periods of oil price decline, the medium-term outlook is mixed for sub-Saharan Africa's (SSA) oil importing countries -- reflected in the IMF's recent downgrade of its SSA outlook from 5.75% to 4.9%. Short-term gains reduce the fuel import bill, but uncertainty looms over energy investments in eastern African, while idiosyncratic risks cloud the outlook for southern Africa. While oil exporters may also reap some benefits, much will depend on the degree of oil dependency, political space to make the necessary policy retrenchments, and the extent of government financial buffers. Impacts If sustained, low oil prices could provoke civil unrest, rather than reforms, in oil exporting countries. Most oil exporters will struggle to maintain macroeconomic stability if oil remains low for more than a year. However, economic diversification to some degree helps to shield the region from sharp global slowdowns.

Nigerian energy reforms may track wider openings

2020 ◽  
Keyword(s):  
Foreign Currency ◽  
Operating Environment ◽  
Short Term ◽  
Content Type ◽  
Macroeconomic Conditions ◽  
Limited Government ◽  
New Energy ◽  
New Policies ◽  
Energy Reforms ◽  
Energy Network

Significance Yet worsening macroeconomic conditions amid the COVID-19 pandemic, including a fall in oil prices and declining foreign currency reserves, have forced President Muhammadu Buhari’s administration to change tack. Meanwhile, new energy and power policies are also in train. Impacts Increasing prices will add further to growing inflationary pressures over the short term, with only limited government social relief. With Buhari approaching the second half of his last term, he will care little about losing political capital through the new policies. Bolstered refining capacity and energy network improvements will have notable knock-on impacts on Nigeria’s operating environment.

South African lockdown easing will only do so much

2020 ◽  
Keyword(s):  
South African ◽  
Short Term ◽  
Content Type ◽  
The Government ◽  
Do So ◽  
Alcohol Sales

Significance President Cyril Ramaphosa, who had been under escalating pressure from business and organised labour to reopen the economy fully, justified the relaxation by citing reductions in new case figures. There are indications that all provinces may have reached their peak of infections by end-July. Impacts Despite the scale of the crisis, the government appears still to lack urgency in formulating a substantive economic response. Government's withdrawal of an appeal to a 2018 declaratory order will raise hopes for greater flexibility with miners in the short term. Lockdown-related drops in reported crimes will likely prove short-lived, given renewed alcohol sales, growing joblessness and hardship.

South African 2020 budget may delay Moody's downgrade

2020 ◽  
Keyword(s):  
South African ◽  
Civil Servants ◽  
Structural Reforms ◽  
Short Term ◽  
Content Type ◽  
Political Contention

Significance While the measures have been welcomed by investors, they depend on Pretoria reaching a deal with civil servants, whose unions have denounced the government’s plans. Impacts Despite commitments to a series of growth-boosting structural reforms outlined last year, progress will likely remain halting. Renewed funding for embattled South African Airways (SAA) will be a recurring source of public and political contention over the short term. Debt costs could rise further if a ratings downgrade sees investors demand even higher yields on South African debt.

South African emergency energy plans may disappoint

2020 ◽  
Keyword(s):  
South African ◽  
Energy Production ◽  
Load Shedding ◽  
Public Image ◽  
Successful Implementation ◽  
Medium Term ◽  
Power Outages ◽  
Content Type ◽  
Investor Confidence ◽  
Maintenance Programme

Significance Eskom's new CEO, Andre de Ruyter, recently warned that ‘load shedding’ (power outages) will continue in the medium term as the utility embarks on an accelerated maintenance programme to put the grid on a more stable basis. In turn, Ramaphosa and energy minister Gwede Mantashe have promised various measures to supplement energy production, notably allowing municipalities to procure electricity from 'independent power producers' (IPPs) and easing conditions for companies to generate their own electricity. Impacts An Eskom voluntary retrenchment package will partly buoy investor confidence about the potential for wider reforms. Eskom’s new spokesperson, a respected financial journalist, could help improve the utility’s poor public image. The coal lobby and related ANC-aligned figures will pose a formidable hurdle for the successful implementation of Pretoria's energy plan.

South African mining could ride out lockdown period

2020 ◽  
Keyword(s):  
South African ◽  
Power Supply ◽  
Economic Impacts ◽  
Policy Uncertainty ◽  
Short Term ◽  
Community Based ◽  
Content Type ◽  
Financial Position ◽  
Cast Doubt ◽  
The Government

Subject South African post-lockdown mining. Significance Three weeks into its COVID-19-related lockdown, the government allowed certain mines to ramp up to 100% capacity (coal and opencast operations) and others to 50% (underground operations), making it the first non-essential industry allowed to resume full or partial operations. This particularly benefits smaller, more marginal mines, as larger ones were already in a relatively resilient financial position. However, more fundamental issues continue to weigh on the industry, such as costly and erratic power supply and ongoing policy uncertainty. Impacts An extended lockdown and the economic impacts of the COVID-19 crisis could see a rise in community-based protests interrupting operations. A surge in COVID-19 infections at mines and subsequent closures will cast doubt over the feasibility of the industry's short-term strategy. The growing financial stress on workers may prompt more militant demands during scheduled coal wage negotiations later this year.

Immigration to linger as South African flashpoint

2015 ◽  
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
South African ◽  
Rapid Response ◽  
Customs Union ◽  
Short Term ◽  
Content Type ◽  
International Firms ◽  
Gateway Cities

Significance President Jacob Zuma cancelled a state visit to Indonesia to lead government efforts against the violence. However, popular perceptions of uncontrollable inflows linked state incapacity, a porous asylum system and continued weak economic growth mean that anti-immigrant sentiment will persist. Impacts In the short term, South Africa is likely to refrain from reforming the regional customs union out of fear of antagonising its neighbours. Reputational damage from the attacks is likely to undermine Zuma's efforts to create a 'rapid response' regional peace-keeping force. This reputational damage may encourage international firms to base their SSA headquarters in non-South African 'gateway' cities.

UK growth prospects limited if productivity steps fail

2015 ◽  
Keyword(s):  
Minimum Wage ◽  
Living Wage ◽  
Content Type ◽  
New Business ◽  
Current Minimum ◽  
Growth Prospects ◽  
The Government ◽  
Economic Considerations ◽  
The Eu

Significance The budget was the first Conservative-only budget since 1996. Driven by political as much as economic considerations, it aimed at entrenching the Conservatives in the political centre ground, in particular through the introduction of a statutory 'living wage' higher than the current minimum wage. The budget did not give priority to longer-term economic weaknesses, especially low productivity. However, the government is expected to address productivity in a follow-up package of supply-side measures today. Impacts Osborne's combination of welfare cuts with a minimum wage rise aims to increase incentives to work. However, it risks checking employment growth in low-wage industries. Osborne's introduction of the 'living wage' has discomforted the main opposition Labour Party. The two-part budget-plus-productivity-plan is a public showing for the important tandem of Osborne and new Business Secretary Sajid Javid. Any fresh Greece-related euro-area slowdown would hit UK export growth, stoking eurosceptic demands for weaker trade ties with the EU.

Cross-border ASEAN trade union cooperation to grow

2016 ◽  
Keyword(s):  
Minimum Wage ◽  
Trade Union ◽  
National Interests ◽  
Content Type ◽  
Labour Unions ◽  
Cross Border ◽  
Labour Standards ◽  
Labour Disputes ◽  
Labour Regulation

Subject ASEAN integration and labour unions. Significance Cambodia, Indonesia and Vietnam said in early June they would lobby for a standard minimum wage throughout ASEAN, as protection against workers' exploitation by foreign manufacturers. Controversial and probably unworkable, a wage-fixing system would undermine the competitiveness of industries in some economies and disrupt flows of capital and parts. Impacts Cross-border labour disputes and bargaining will increase. Growing workforce mobility will require fresh labour regulation reforms. However, national interests will scuttle efforts to implement regional labour standards.

Argentine economic shifts will not bring rapid relief

2016 ◽  
Keyword(s):  
Foreign Exchange Market ◽  
Exchange Market ◽  
Policy Changes ◽  
Medium Term ◽  
Short Term ◽  
Rapid Improvement ◽  
Content Type ◽  
Export Taxes ◽  
Substantial Progress ◽  
Rapid Relief

Significance In his first month in office, President Mauricio Macri made substantial progress in removing controls implemented by the former administration. The new government liberalised the foreign exchange market, increasingly constrained over the last four years, and international trade, with the lifting of most export taxes and the removal of controversial non-automatic import licences. Impacts Policy changes will not bring rapid improvement, with little recovery this year or next. This will raise social conflict in the short term, putting governability at risk. Medium-term price stabilisation, in the framework of a managed float and an inflation target regime, may drive a rebound.

Sign in / Sign up

Export Citation Format

Share Document