Poor infrastructure will weigh on South African growth

2020 ◽  
Keyword(s):  
Private Sector ◽  
South African ◽  
Government Expenditure ◽  
Load Shedding ◽  
Short Term ◽  
Content Type ◽  
Private Sector Investment ◽  
Plant Maintenance ◽  
Public Pressure ◽  
Poor Infrastructure

Subject South African infrastructure. Significance Building on previous government commitments to reverse the falling percentage of GDP spent on investment, last month’s 2020 budget sought to rebalance government expenditure away from consumption spending to capital budgets. In a time of severely strained government finances and an economy in recession, Pretoria is looking to shift resources from stalled infrastructure projects to more viable ones and to attract private-sector investment. Impacts Eskom's new CEO could face growing public pressure to ease ‘load shedding’ (power outages) necessary for key plant maintenance. Ongoing bureaucratic, legislative and procurement hurdles will hamper improved infrastructure spending over the short term. A flagship government aim for 30% of GDP to be spent on investment by 2030 is unlikely to be realised.

South African government’s GBV plans may disappoint

2021 ◽  
Keyword(s):  
Civil Society ◽  
Private Sector ◽  
South African ◽  
Foreign Investment ◽  
Gender Based Violence ◽  
Content Type ◽  
Management Structure ◽  
National Strategic Plan ◽  
The Government ◽  
Gender Based

Significance Although President Cyril Ramaphosa has publicly committed to increase funding to combat what he calls South Africa’s “second pandemic”, there is a lack of transparency in how the government disburses funds linked to its National Strategic Plan (NSP) on Gender-based Violence and Femicide. Impacts Civil society groups will increase pressure on the government to make expenditure on GBV programmes more transparent. A new private-sector fund to contribute to the NSP has received strong early support, but its management structure is opaque. High levels of GBV will not only have significant humanitarian and social costs but may deter much-needed foreign investment.

Liberia's next president faces mounting expectations

2017 ◽  
Keyword(s):  
Financial Institutions ◽  
Foreign Investment ◽  
Government Expenditure ◽  
Public Spending ◽  
International Financial Institutions ◽  
Content Type ◽  
Capital Spending ◽  
Election Violence ◽  
Poor Infrastructure

Significance Whoever succeeds outgoing President Ellen Johnson Sirleaf will have to tackle widespread state corruption, cut recurrent government expenditure and boost infrastructure spending to spur economic growth. Impacts Post-election violence could spike if the opposition loses and accuses a partial electoral commission of manipulation. Low capital spending and poor infrastructure will remain a persistent deterrence to long-term private and foreign investment. International financial institutions will pressure the new government to cut public spending. Further delays to a proposed constitutional referendum are likely.

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.

Japan will reboot its approach to African development

2019 ◽  
Keyword(s):  
Private Sector ◽  
Development Model ◽  
Policy Space ◽  
Content Type ◽  
African Development ◽  
International Conference ◽  
Private Sector Investment ◽  
Government Aid ◽  
Japanese Companies

Subject Japan's Africa development model. Significance The latest edition of Japan’s Tokyo International Conference on African Development (TICAD) concluded on August 30, with the summit largely continuing the developed world’s shift from traditional government-to-government aid to a focus on trade and private-sector investment. Impacts With 42 African leaders attending, the conference will help strengthen and create new bilateral linkages. The summit’s major themes will provide policy space for initiatives focusing on small, medium and micro-sized enterprise (SMME) development. The focus on SMMEs, conceptualised as a solution to many of the continent’s problems, may entrench the developing ‘business-first’ mindset. The conclusion of 110 new memorandums of understanding between Japanese companies and African states will be seen as a key success.

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.

South Africa's Mboweni will aid Ramaphosa reform push

2018 ◽  
Keyword(s):  
South African ◽  
Credit Rating ◽  
Short Term ◽  
Content Type ◽  
Rating Agencies ◽  
Reserve Bank ◽  
Freedom Fighters ◽  
Left And Right ◽  
The Government

Significance A former South African Reserve Bank (SARB) governor and minister of labour, Mboweni faces a crucial first few weeks in his new post as the government attempts to placate rating agencies and engineer an economic turnaround. Mboweni’s initial moves may be determined by Moody’s credit rating review expected today. Impacts In the short term, Mboweni’s appointment will be a boost for Ramaphosa’s bid for fiscal consolidation and growth. In the medium-to-long term, Mboweni will likely prove a more polarising figure inside the ANC than Nene. Allegations linking the Economic Freedom Fighters with a major banking scandal could give Mboweni and the ANC an early political 'win'. Mboweni's previous social media utterances could be further exploited by opponents, both left and right, in the months ahead.

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