The world is changing fast and to keep up you need local knowledge with global context.
By Jackie Cameron
- South African Airways’s business-rescue team said it’s been given access to R3.5bn from the state-owned Development Bank of Southern Africa to avert the airline’s collapse and has immediately taken R2bn. SAA has already cancelled some flights this month to save cash after the government missed a deadline to provide the money as part of the terms of its bankruptcy protection, says Bloomberg. The DBSA’s mandate is to invest in infrastructure projects in South Africa and the rest of the continent that will help with economic development. The financier can back state-owned enterprises as part of its remit, according to the company’s website. “In our view it would be no better than taking money straight out of the national revenue fund,” Alf Lees, a lawmaker for the opposition Democratic Alliance, is reported as saying. “The DBSA is a wholly state-owned entity.” At stake, notes the news wire, is an airline with more than 5,000 employees, as well as thousands more at suppliers and associated companies, in a country with an unemployment rate of 29%. SAA also flies routes to 21 destinations around Africa and cities further afield, including New York and London.
- Credit ratings agency Moody’s will give South Africa more time before reassessing its outlook on the country. It is particularly interested in how SA is going to improve tax collection. Moody’s Investors Service is looking for signs of a credible medium-term vision for South Africa and told Bloomberg it’s “a bit early” to judge the government’s policy and structural reforms after changing its outlook on the country’s credit ratings to negative almost three months ago. “It is relatively fresh, our negative outlook,” Lucie Villa, Moody’s vice president and lead sovereign analyst for South Africa, said in an interview on the sidelines of a conference in London on Tuesday. Economic growth data is “not pointing to a positive or a particularly negative direction. There is nothing really to flag for the time being,” she said. The ratings company cut the outlook for South Africa’s Baa3 foreign- and local-currency assessments to negative on Nov. 1, says Bloomberg. That brought Africa’s most-industrialised economy to the brink of a full-house of junk credit ratings, after Finance Minister Tito Mboweni presented a rapidly deteriorating outlook in his medium-term budget policy statement, it notes.
- Patrice Motsepe has apologised for being nice to US President Donald Trump, but warns that negativity towards the US could be hindering job creation in South Africa. Motsepe’s remarks to Trump at a business dinner during the World Economic Forum in Davos last week sparked a debate among his countrymen who questioned his right to speak on behalf of the continent. “I have a duty to listen to these differing views and would like to apologise,” Motsepe, the country’s only black billionaire and a brother-in-law of President Cyril Ramaphosa, reportedly said in an emailed statement on Tuesday. “I do not have the right to speak on behalf of anybody except myself.” His initial remarks, says Bloomberg, were partly aimed at encouraging discussion between the Trump administration and African leaders and “particularly in the context of the increasing feedback from certain American political and business leaders that South Africa and some African countries are anti-America and its political leadership,” Motsepe reportedly said. “This perception has had an impact on our ability to attract foreign investments and create jobs.” The continent, continues Bloomberg, has to create about 8 million new jobs for its youth every year, and South Africa, where half of those aged 15 to 24 are unemployed, has to generate more than 500,000 new posts, according to Motsepe’s statement.
- Anglo American Platinum shareholders can look forward to fabulous financial results in February, thanks to the price of metals. Amplats expects to report that profit more than doubled last year after prices of the metals it mines surged, says Bloomberg. Headline earnings were probably 131% to 151% higher than a year earlier, despite power outages which cut production and deferred processing of some metal, Amplats said Tuesday. It will report full-year results on Feb. 17.
- Apple and other big tech giants listed on global stock markets are expecting their supply chains to take a knock as the coronavirus continues to spread in China, which manufactures much of the world’s goods. Starbucks Corp., KFC, Pizza Hut and office-sharing company WeWork are shutting locations in China, while Facebook Inc., Nissan Motor Co. and other companies enact measures to shield employees in areas hardest hit by a deadly viral outbreak, says Bloomberg. WeWork reportedly said Tuesday it is temporarily closing 55 offices across China and encouraging employees to work from home or in private rooms. Global banks from Credit Suisse Group to Morgan Stanley are telling Hong Kong staff to work from home for two weeks, continues Bloomberg. Facebook employees based in China, and those who recently returned from trips to the country, are also being told to work from home.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.