The world is changing fast and to keep up you need local knowledge with global context.
By Jackie Cameron
- Financial markets and the rand could be volatile as the news of a ratings downgrade is absorbed. The decision by Moody’s could not have come at a worse time, is the warning from Finance Minister Tito Mboweni. South Africa, like many other countries, is seized with containing the outbreak of the coronavirus. The sovereign downgrade will further add to the prevailing financial market stress and the government bond market is set to experience further capital outflows as fund managers with investment grade mandates will be forced to sell South African government bonds, says Bloomberg. The interest rate for government, households and the broader economy is also expected to increase as a result, says the news service. While some market participants argue that the impact of a sovereign downgrade has already been priced in, it is difficult to stipulate with certainty the extent, it notes. “Therefore, to say we are not concerned and trembling in our boots about what might be in the coming weeks and months is an understatement,” Minister of Finance, Mr Tito Mboweni, is reported as saying.
* South Africa may approach the International Monetary Fund for the first time ever to help with funding to deal with the fallout from the coronavirus outbreak, Johannesburg’s Sunday Times reported, citing Finance Minister Tito Mboweni. While the minister isn’t currently considering an emergency budget, he also advocates asking the World Bank and the New Development Bank for assistance, the newspaper said.
- Billionaire Patrice Motsepe’s family and companies in which he has shareholding pledged to spend R1bn on fighting the Covid-19 pandemic in South Africa. Last week, the families of two of South Africa’s richest men, Nicky Oppenheimer and Johann Rupert, said they’d donate R1bn each.
- Africa is two to three weeks away from the worst of the coronavirus storm and needs an emergency economic stimulus of $100bn to bolster preventative measures and support its fragile healthcare systems, according to the United Nations Economic Commission for Africa, reports Bloomberg. Almost half of the funds could come from waiving interest payments to multilateral institutions, UNECA Executive Secretary Vera Songwe told Bloomberg by phone from Washington. “If we want to have a fighting chance, we need it immediately,” she said. “In the next two to three weeks, if we act really decisively, we may be able to flatten the curve and then when the storm comes it will be not be as brutal as we see in Europe.” There are more than 3,000 Covid-19 infections in 46 countries across the continent, according to the Addis Ababa-based Africa Centres for Disease Control and Prevention, reports Bloomberg. The continent has never experienced a crisis of the scale and magnitude caused by the coronavirus pandemic, Songwe said. While its impact is likely to be felt for 12 to 18 months – with a loss of lives, jobs and businesses as economies grind to a halt – the potential loss of health care providers and schooling would also weigh on the continent’s health and education sectors for years to come, she said.
- Sasol is producing alcohols for hand sanitisers and disinfectants, and prioritising local supply to help contain the Covid-19 pandemic, reports Bloomberg. The oil and chemicals company has come up with a blend of alcohols that can be quickly produced as demand rises in South Africa, Sasol said in a statement. It is supplying government entities and essential services in the country ahead of other clients. “Over the past few weeks, Sasol has experienced an increase in demand of nearly 400% for alcohol-based products,” said Chief Executive Officer Fleetwood Grobler.
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