Asset Management
Flash Briefing: SA govt to harness R28bn cannabis industry; SA economy 11% bigger than estimated; Treasury seeks emergency funds
South Africa’s economy is 11% bigger than previously estimated, after statistics authorities changed the way they calculate gross domestic product.
- South Africa's government unveiled a master plan aimed at harnessing a R28bn cannabis industry that could potentially create as many as 25,000 jobs and help attract foreign investment. The Department of Agriculture, Land Reform and Rural Development led a two-year process to craft a national strategy for the industrialisation and commercialisation of the plant. The document incorporated lessons learned from major cannabis producers including the U.S., Canada, Mexico and China, it said. "Establishment of the cannabis industry will lead to diversification of the economy and thus increase economic growth, create jobs and for poverty alleviation," the department said Wednesday in a presentation to lawmakers. It identified legislative restrictions and "the threat of takeover or dominance" by well-funded companies and pharmacy groups as the main challenges to the industry. The plan envisages encouraging the cultivation of hemp and marijuana, with applications ranging from medicine and food to recreational use.
- South Africa's economy is 11% bigger than previously estimated, after statistics authorities changed the way they calculate gross domestic product. GDP at current prices measured R5.52tn in 2020, compared with a previous estimate of R4.97tn, said Joe de Beer, deputy director-general of economic data at Statistics South Africa. The economy remains Africa's second-biggest, lagging behind Nigeria. The upward revision means some key fiscal metrics, including the ratio of debt as a percentage of GDP, may now look better, De Beer said in an interview. Ratios in which GDP is the denominator will decline if the numerator remains the same, he said. The statistics office altered its methodology for calculating the data by changing the reference year to 2015 from 2010, included new sources of information and refined its classification of activities to better reflect the structure of the economy.
- National Treasury has submitted the Second Special Appropriation Bill to parliament, seeking to unlock R32.9 billion in extra funding. Government departments will use the money to finance insurance claims related to the July riots, the deployment of soldiers and security forces to keep the peace after the riots, and to pay out social relief grants to those whose livelihoods were impacted and affected by the riots.