The world is changing fast and to keep up you need local knowledge with global context.
By Jackie Cameron
- South African new car sales plunged to a record low in April. National Association of Automobile Manufacturers of South Africa data show only 105 cars were sold in April, a drop of 99.6%, reports Bloomberg. Some of those may be transactions that started in March and were only completed and recorded last month. The data form part of the Reserve Bank’s leading indicator, which gives a sense of the future state of the economy, says the news service.
- Mike Schussler, chief economist at Economists.co.za, says consumer spending – which makes up about 60% of Gross Domestic Product – will be a “disaster” this year. “I suspect we’re going to get very big-double digit annualised declines in the gross domestic product numbers on the back of very, very weak consumption expenditure,” he is quoted, by Bloomberg, as saying.The automotive industry is the largest component of the country’s manufacturing sector and employs more than 100,000 skilled workers.
- South Africa’s tax revenue losses could be as much as R285 billion in the current fiscal year, the commissioner of the revenue services said on Tuesday in a parliamentary briefing. “Whilst it is early days, revenue losses could be anywhere between peaking at between 15 and 20 percent lower and that translates into a revenue loss of up to 285 billion (rand),” said commissioner Edward Kieswetter, reports Reuters. Kieswetter has blamed Covid-19 and credit ratings downgrades.
- Covid-19 containment has taken down more businesses, with airline Comair entering voluntary business rescue, gaming player Phumelela warning it may be heading the same way soon and media company Caxton giving up on its magazine titles. Comair, which operates the British Airways franchise in South Africa and owns budget airline Kulula, joins state-owned South African Airways (SAA), which filed in December, and state-owned SA Express, which was was placed under “provisional liquidation” on Tuesday by a court after the airline’s administrators said rescue efforts that began in February weren’t likely to succeed, says Reuters. The airline was granted approval to suspend the trading of its shares on the Johannesburg Stock Exchange with immediate effect. Phumelela Gaming and Leisure is in talks to raise R300m to stave off collapse, says Bloomberg. If Phumelela can’t raise the money, the board will have to decide “whether there is any reasonable prospect that the group’s business can be rescued, or whether to make application for voluntary liquidation,” the group said in a statement. Phumelela, which used to count former Steinhoff International Chief Executive Officer Markus Jooste as a director and among its largest shareholders, had already started cutting jobs amid a horse-racing industry slump, says Bloomberg. Its stock has tumbled 94% since the start of last year, leaving the company with a market value of less than R75m, says the news service.
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