South Africa’s top manufacturing union NUMSA said that 600 workers out of 1,500 at General Motors SA will lose their jobs by July after a decision last week by the car maker to sell its local operations.

The National Union of Metalworkers of South Africa (NUMSA) said in a statement that GM had confirmed the numbers and issued lay-off notices as required by law. 

American automotive giant General Motors had last week announced that it is withdrawing from the South African market. As a result, production and sales of Chevrolet models will cease and Isuzu will take control of the firm’s Port Elizabeth operations.


- Reuters

The Zimbabwean government says it will lift a ban on some imported products from South Africa, a year after it was first imposed.

The ban triggered angry demonstrations, some of them violent, by cross-border traders. Industry Minister Mike Bimha says the ban, imposed last June, had achieved its purpose. State media is reporting that the minister told a meeting of government officials and industry leaders the ban had cut the import bill and boosted local industry.

But he also said Zimbabwean producers were now facing threats of retaliation from some trading partners, including South Africa and Zambia. The ban on things like body lotion, potato crisps and building materials was opposed by many who survive on importing goods for resale.

In a statement, the Vendors Initiative for Social and Economic Transformation welcomed the lifting of the ban, saying vendors had suffered heavily under it.


Credit: EWN

Anaemic economic growth and a high unemployment rate have raised the stakes for South Africans to save more and reduce debt.

According to Greg Barclay, Head of International Personal Banking from Standard Bank it is never too late to start saving, but every person’s individual goals and appetite for risk need to be considered, in order to arrive at the optimal savings solution. It is equally important to ensure that not all of a portfolio’s eggs are in one basket, or just one country.

“It is hard to generalise about the ideal investment mix and strategy as each individuals’ goals and appetite is so different. However, there are a number of new and exciting ways to maximise the outcomes from a savings perspective, including tax free savings accounts and an array of offshore diversification opportunities,” says Mr. Barclay.

South Africa’s unemployment rate has soared to 27.1% - a 13 year high – while the economy is predicted to struggle to eke out even 1% growth in the year ahead. Inflation, meanwhile, is beginning to rear its head and add more pressure on the pockets of consumers. The appetite for taking risks has waned, but this should not prevent a balanced inter-generational approach to preserving and growing wealth.

“It is not all doom and gloom if investors adopt a long-term goals-based approach that aligns to future objectives and outcomes. This strategy needs to be carefully crafted by a financial planner after taking into account all the risks, rewards and the expectations of the investor,” he says.

The key is to ensure a long-term, disciplined savings strategy is adhered to so that wealth can not only be protected, but gets given the ability to grow.
“Many South Africans are struggling to retire with enough money to maintain their lifestyles – never mind leaving legacies for future generations. However, it is never too late to start with a plan that is ideally suited to your circumstances and future wealth goals,” says Mr. Barclay.

Tax free savings accounts, for example, were introduced in SA in 2015 in order to assist in improving savings levels, and as of last Budget, have a R33 000 annual allowance, but many people are still unaware of the benefits a tax free investment can deliver.

In contrast, the majority of employed people in SA already have retirement funds through their companies. The majority of these funds will have up to 30% invested in offshore assets in line with the regulations for pension funds investing in offshore assets. However, the decision to take a portion of an investment portfolio offshore will depend on an individual’s goals and appetite for risk.

“As exchange controls have been relaxed and access to offshore banking and investments becomes more accessible, we will see the number of people diversifying wealth offshore grow,” says Mr. Barclay.
“Simply trying to get away from the rand should never be a reason to invest offshore, but diversifying investments is certainly one of the factors – among many - that should be taken into account when structuring an offshore plan. Offshore investing spans traditional savings and fixed deposits, to capital protected structured products, to offshore unit trusts, discretionary/non-discretionary portfolios to property,” concludes Mr. Barclay.

Africa's biggest gold miner AngloGold Ashanti reported a 16 percent drop in first-quarter profit on Monday following a decline in South African production, sending its shares down nearly 5 percent.

AngloGold said adjusted earnings before interest, tax, depreciation and amortization (EBITDA) came in at $314 million (£242 million) in the first three months of 2017, down from $378 million in the same period a year earlier.

"South Africa had a difficult production quarter as an added focus on a safe start-up contributed to an unusually slow ramp-up after the year-end break," AngloGold said in a statement.

Shares in AngloGold, which competes with Harmony and Gold Fields, dropped as much as 4.7 percent after the market opened. By 0705 GMT, the stock had pared losses to trade 2 percent lower at 147.54 rand.

AngloGold is in talks with unions about cutting some 800 jobs in South Africa, a country whose vast resources come with the risk of volatile labour relations, rising costs, regulatory disruptions and dizzying shaft depths. "We are reviewing our South African operations to restore their margin and ensure they recover from a difficult start to the year," AngloGold Chief Executive Srinivasan Venkatakrishnan said, without giving further details.

The ongoing review comes some two years after AngloGold, which operates in eight other countries including Brazil and Ghana, shelved plans to isolate its local mines by spinning off its international assets into a new London-listed entity that it had hoped would have attracted a higher investor rating.

Output from its domestic mines, which contribute roughly a quarter of the company's annual gold production, has been declining in recent years due to regulatory disruptions related to safety. Overall output fell 3.6 percent to 830,000 ounces in the quarter but the company stuck to its full-year production forecast of 3.6 million ounces to 3.75 million ounces.

AngloGold said its net debt edged down 3.6 percent during the quarter to $2.05 billion, putting the ratio of its net debt to EBITDA at 1.38 times, well below the 3.5 times level agreed with creditors. The company plans to spend as much as $1 billion to revamp and extend the lives of its high-return mines, it said.


- Reuters

Experts have credited South Africa with having all the major ingredients to produce food that can feed the rest of the continent and other parts of the world.

Bosparadys Farm is near Magaliesburg and run by the Khourie family, which includes William and his sons, Joe, Anthony and Pieter, who all take charge of various enterprises. Dairying is the dominant business, accounting for 80 percent of the total farm income, but the Khouries also produce sheep, pigs, hens, goats and game.

They have farmed there for more than 20 years and have built up a profitable business with total farm income of about $19.3 million. The family owns 5,000 acres and rents a further 1,200 from a local landowner. Around 1,000 acres of this land are planted in grasses and 2,700 acres are used to produce corn silage averaging 5.6 tonnes per acre.

The remainder is natural land used for game farming.

Anthony Khourie is in charge of feed planning and production, and runs a stable feed bank for dairy production. Joe manages the dairy herd and the heifer herd while Pieter is the overall marketing manager for the farm. Bosparadys Farm milks 800 cows with an average yield of 30 litres per cow per day but it has a high yielding batch of 250 cows producing 40 litres per day. The high yielders are milked three times per day in the 14/28 herringbone milking parlour while the rest are milked twice per day.

“Our farm currently averages milk quality of 3.3 percent protein and 3.6 percent butterfat that is quite important as we bottle our own milk and produce yogurt, cheese and buttermilk on site as well,” said Anthony.

“In total, the farm’s daily production of 24,000 litres is used in our on-site factory together with an additional 26,000 litres that we buy in each day from a local supply network of 12 other dairy farmers.”

Liquid milk accounts for 85 percent while 12 percent is made into buttermilk and three percent goes into yogurt and cheese. Other dairy livestock includes 200 dry cows, 150 bred heifers aged up to two years old and 420 young heifers from birth to 15 months old. Artificial insemination is used on the older cows, using Dutch sires. The younger heifers run with groups of young Holstein bulls.

The business operates its own fleet of delivery trucks that deliver the milk to a network of 200 shops and supermarkets. Milk is most popular with customers when sold in two litre containers, which sell in the shops for around $2.41. The farmer receives 96 cents per litre for the milk and his cost of production is 39 cents per litre.

The dairy cows are kept outdoors in corrals and are fed according to yield, with the majority being fed to produce 30 litres per day, “Cows are fed 38.9 kilograms of a total mixed ration per day using our own feed mixers. The ration contains 2.3 kg grass, 6.7 kg brewers grain, 17.7 kg of maize silage, 6.3 kg of a 28 percent high protein content supplement and 5.9 kg of maize meal,” said Anthony.

“This ration costs 69.34 rand ($6.69) per cow per day and equates to a feed cost per litre of 2.72 rand (26 cents),” he said. The Khourie family employs 250 staff who work in all the sectors on the farm. The dairy factory operates on two shifts almost 24 hours per day, with a more relaxed timetable at the weekend.

The farm also runs 22,000 hens, 100 pigs, 1,000 ewes, 300 goats and a tourist holiday park. A herd of 1,000 Suffolk ewes produces meat lambs. All the ewes lamb outdoors with a lambing percentage of 150 percent.

Using Suffolk with the traditional black pigment colour in its face means less eye problems. “Rams run with the sheep outdoors from November to December to allow for lambing in May. Lambs are reared to 40 kg liveweight and are then sold for meat at around ($2.89) per kg. “The sheep graze on rougher pastures and are rotated every three weeks but are allowed to feed in the maize fields once we finish harvesting in April to clean up any surplus silage and maize stocks.

“One of the major threats to the lambs is the jackal, which kills them, but there are some diseases including bluetongue, Rift Valley Fever and pulpy kidney that we vaccinate for.” Pigs are purchased as weaners weighing 15 kg for $28.95 each. They are then primarily fattened on the waste dairy produce and are sold at 45 to 50 kg for $115.79.

There are 20,000 laying hens on the farm, with eggs sold in the same retail outlets as the dairy products. Anthony’s wife, Nina, helps to look after this enterprise. “We use the Hyline Red and White breeds as we receive a higher income from those breeds when they are being sold after their laying term finishes, usually after one year,” she said.

“The birds are purchased in at 20 weeks of age as laying pullets and reach their laying peak at 30 weeks with a 95 per cent laying rate.” The Khouries have found that the most profitable period to keep the birds within is around a year old, while maintaining an average 85 percent laying rate. “Eggs are collected twice per day from the cages and are marketed according to their size with the large ones measuring 30 to 40 millimetres commanding an income of 15 rand ($1.45) for one dozen. The retail outlets will add on its margin and sell the eggs for 24 rand ($2.32),” said Nina.

“When the hens arrive on the farm they are fed phase one starter feed with 16 percent protein content. Later in phase two they are fed a lower percentage protein feed, which is cheaper to buy. “All the feed is purchased but if the farm has any surplus maize from the dairy enterprise we mix it with a high protein content supplement and feed to the birds. “The manure produced by the birds is used to fertilize the grassland pastures with additional assistance from some 28 percent nitrogen bag fertilizer that is bought in,” Nina said.

Brand South Africa welcomes South Africa’s performance in the 2017 A.T. Kearney Foreign Direct Investment (FDI) Confidence Index, as well as in the Africa Investment Index 2016 by Quantum Global’s independent research arm, Quantum Global Research Lab.

South Africa has made a comeback in the 2017 A.T. Kearney Foreign Direct Investment (FDI) Confidence Index, and has been ranked as the fourth most attractive investment destination in Africa according to the latest Africa Investment Index 2016 by Quantum Global’s independent research arm, Quantum Global Research Lab published on Wednesday.

The Quantum Global report is constructed from macroeconomic and financial indicators and the World Bank Group’s Ease of Doing Business Indicators, and also averages the country’s macroeconomic and financial indicators rankings on the six different factors. The report advocates that South Africa received the number four ranking on the Index because it scored well on the growth factor of GDP, ease of doing business in the country and significant population.

Reflecting upon South Africa’s significant improvement, Brand South Africa’s CEO Dr Kingsley Makhubela said, “As a nation, we are cognisant of the role of all South Africans in building the country’s reputation and competitiveness and these improvements emphasise that South Africa is a competent and competitive investment destination and that we are indeed open for business. This also reinforces perceptions about South Africans, from a range of other studies, as hardworking and resilient – despite recent challenges relating to credit downgrades.”

The 2017 A.T. Kearney Foreign Direct Investment (FDI) Confidence Index report said that while overall FDI flows to Africa decreased 5% in 2016 to an estimated $51 billion, South Africa bucked the overall regional trend, with UNCTAD estimating its FDI inflows increased 38% in 2016. South Africa made a comeback in the Index – rounding out the Index in the 25th spot. “This is likely as a result of improving short-term economic prospects and the long-term investment potential in the country’s manufacturing sector,” A.T. Kearney’s report said.

Known as the melting pot of diversity and inspiring new ways that have shaped the nations young democracy, this year – World Economic Forum on Africa will be held in South Africa under the theme ‘Driving economic transformation in Africa through inclusive growth models’ on 03 – 05 May 2017 in Durban, KwaZulu-Natal.

Commenting on this Dr Makhubela concluded: “As a global partner, South Africa commits to the stated objectives of this conference, and it is our hope that this platform will create an enabling environment where we can all share insights on how to better improve the current landscape and map out innovative tactics to accelerate inclusive growth while bringing about sustainable development in the future.”

South Africa's central bank is concerned about further downgrades to local currency debt and the impact on the stability of the domestic financial system, it said in a report on Tuesday.

Africa's most industrialised economy has this year suffered from credit ratings downgrades after President Jacob Zuma sacked respected Finance Minister Pravin Gordhan in late March. "The possibility of further downgrades to South Africa's local currency rating and South Africa consequently being excluded from the remaining bond indices is disconcerting," the bank said in a financial stability review. 

The regulator added that should ratings agencies downgrade South African local currency debt further it could have a significant impact on the cost of funding and investment flows. "Market volatility could increase as a result, with sharp losses likely to be recorded in the currency, bond and equity markets, thereby negatively affecting the stability of the domestic financial system," it said. S&P Global Ratings cut South African foreign debt to sub-investment grade in April, while Fitch downgraded both the foreign and local currency debt to "junk" status.

Moody's, two notches above junk status, has put South Africa on review for a downgrade. Local currency borrowing makes up about 90 percent of the South Africa's total 2.2 trillion rand ($165 billion) of debt.

The role of “white monopoly capital” in post-apartheid South Africa has been in the news lately. In the South African context, it can be understood as the white population’s extensive control over the country’s economy.

The debate reflects a recanting view against the rainbow nation dream sold when the country gained political freedom 22 years ago. The idea is that white monopoly capital is the source of the problem of multiple failures of the South African political economy.

The response has been a rising chorus of white monopoly capitalism deniers who argue that the governing African National Congress (ANC) is using the concept as a shield against criticism. Instead of addressing its failings such as a faltering economy, widening inequality, unemployment, corruption and incompetence, the argument goes, the ANC is deflecting attention for the country’s difficulties by blaming white monopoly capital.

Some in this camp add that South Africa has recorded significant progress in redistributing the country’s wealth, mainly via the allocation of equity in formerly white companies to black economic empowerment groups. They quote figures that they say reflects rising levels of black ownership on the Johannesburg Stock Exchange.

But by relying on a single indicator, they ignore other key pointers which are critical to understanding the stranglehold that white capital has over the South African economy. The exclusive focus on the JSE ignores the fact that the stock market is just one of many forms of capital. Others include land – probably one of the most contentious of all forms of capital in South Africa’s history – home ownership and human capital, in the forms of knowledge, skills and education.

A multifaceted enquiry into the state of South African economy that includes all these forms of capital leaves no doubt that white capital continues to dominate the economy.

To reject this reality shows a clear lack of understanding of “capital” and the link between historic and contemporary forms of “capital accumulation”. This is because the historical legacies of colonialism and apartheid – which saw the transfer of a vast amount of the country’s resources into the hands of white European migrants – continue to shape the political, economic and social life of the country.

Persistence of white privilege

Legacies of white privilege still persist. High levels of poverty and rampant unemployment still haunt black communities.

This inequity is also evident in patterns of ownership. Despite claims to the contrary, a study of black ownership on the Johannesburg Stock Exchange shows clearly that black South Africans remain small time players. According to a recent study, only 23% of the shares traded on the exchange are held – directly and indirectly – by black South Africans.

On top of this, capital, in its varied forms such as the land, property and human capital, remains heavily skewed to white ownership. The land is particularly important in the South African context as it carries most colonial scars. The country’s colonial and apartheid regime (both white minority) used expropriation to remove people from their land. They then used this stolen land to accumulate capital in the forms of mining and agriculture.

At the time of apartheid in 1994, more than 80% of the land was in the hands of white minority. Data from the Institute of Poverty, Land and Agrarian Studies suggest that just under 60,000 white-owned farms accounted for about 70% of the total area of the country in early 1990s. Land reforms programme has been slow. Some suggest that less than 10 % of the total land has been redistributed from white to black ownership since 1994.

Another cornerstone of the colonial as well as apartheid designers was to deny all black people access to economic opportunities as well as to limit their scope in both education and jobs. These developments have had sequential implications and generational effects. The result is that racial inequalities continue to be reproduced.

There are a great many examples that can be cited to show this. For example, white people continue to be more skilled and attain higher education levels than their black counterparts. They are, therefore, more likely to attain higher positions in the labour market and, on average, earn higher wages.

Black South Africans remain heavily under-represented in the skilled jobs market because they are largely unskilled and hence most affected by the country’s high unemployment.

The colonial and apartheid legacy can also be seen in asset ownership. White people own houses, hotels, resorts, shops, restaurants, savings, cash, foreign assets and other forms of complex financial products. They leverage their ownership and control to extract rents and increase their wealth, while majority of the blacks are still poor.

Capital accumulation and wealth creation

The adoption of the market-based reforms in post-apartheid South Africa meant that the already skewed distribution of wealth in the country got worse. Whites continued to reap the rewards of their previous privilege under the new economic system.

There’s no doubt that the country’s new ruling party elite has also benefited from the political system, many through black economic empowerment deals. The alliance between the white monopoly capital and corrupt ANC government afflicts devastating consequence on the poor.

The South African government needs to do more to address widening inequality, rampant unemployment and deliver on the promises of development for all and not just few. It needs to prove its detractors wrong – that it’s pursuit of what it terms “radical economic transformation” fulfils the promise of addressing the country’s skewed economic ownership patterns.

Mohammad Amir Anwar, Post-doctoral Research Fellow, University of Oxford

This article was originally published on The Conversation. Read the original article.

South Africa's Deputy President Cyril Ramaphosa tells BBC dinner this has to happen and it is going to happen whether people like it or not. The transformation of South Africa's economy is inevitable.

He was speaking at the Black Business Council dinner under the theme Economic Recovery. "I would say to those who are dismissing this term, sit down, listen, smell the coffee... realise that the transformation of our economy is non-negotiable," said Ramaphosa.

He said the government had hoped to create more sustainable growth, higher investment, increased employment, reduced inequality and to deradicalise the economy. CYRIL RAMAPHOSA

The deputy president said radical economic transformation was essentially about building an inclusive and more collective economy in the country. As South Africa moves closer to the ANC's National elective conference in December and its policy conference in June many are paying even closer attention to its leaders, particularly Ramaphosa who said he was available for the role of becoming the ANC's president when the incumbent Jacob Zuma steps down in December.

Ramaphosa is facing fierce competition for the role from former African Union chairperson Nkosazana Dlamini Zuma, who has herself made strong remarks regarding the need for radical economic transformation. Sharing similar views Ramaphosa said transformation is what leaders in the country have been called to do.

"It is in the end about building a more equal society, drawing one third of the working age South Africans into the mainstream," said Ramaphosa. Ramaphosa, who received a warm reception from various business leaders in the room, also received rapturous applause when he was mistakenly called "Mr President" twice by the programme director George Sebulela, Secretary General of the BBC.
He said the government needed to increase the level of interventions that often leave some without getting assistance.

"Our political life at the moment is fractious, with public sentiments appearing to be more polarised and public discourse more charged and shriller than any other time since 1994," he said.


Source: News24

South Africa’s competition watchdog ruled that Kawasaki Kisen Kaisha Ltd’s (K-Line), one of Japan’s biggest transport companies, had conspired to rig bids for shipping cars.

The Competition Commission said it had recommended a fine equivalent to 10 percent of Kawasaki Kisen Kaisha Ltd’s (K-Line) local turnover. A K-Line representative in South Africa declined to comment on the case or to estimate the value of the fine.

The Commission said K-Line rigged bids with rivals between 2002 and 2013 to fix prices and divide the market for shipping from South Africa. The Commission said K-Line was working with Mitsui O.S.K Lines Ltd, Nippon Yusen Kabushiki Kaisha Ltd and Wallenius Wilhelmsen Logistics AS.

Nippon and Walleneus, a Norwegian company, admitted to colluding. Nippon paid 103 million rand and Walleneus paid 95.6 million rand in penalties, the Commission said. Mitsui was not fined because it was first to approach the Commission with information, the watchdog said. “South Africa is a strategic hub for the trade of goods in and out of the Southern African region,” the Commission’s head Tembinkosi Bonakele said in a statement.

“Cartels of this nature increase the costs of trading … and render the region uncompetitive in the world market.”

The Commission has passed its findings to the Competition Tribunal, which holds hearings on antitrust cases before giving a final ruling.



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