The world is changing fast and to keep up you need local knowledge with global context.
By Claire Badenhorst
- It seems economists’ worst fears were realised on Tuesday. South Africa’s second quarter GDP plunged by 51% – a far worse outcome than initially expected. According to Statistics South Africa, the second quarter of 2020 is the biggest fall in GDP since 1960 and the government expects an economic contraction of at least 7% in 2020. The strict Covid-19 lockdown came into effect during the April-June quarter so most economic activity was shut down. Nine industries experienced a massive drop in output with Construction coming in as the biggest loser, slumping by over 76%. Agriculture was the only sector which seemed to weather the storm – growing by 15%. Unfortunately it’s also one of the smallest industries in the country, representing a mere 4%. Household spending fell by almost 50% thanks to the closure of hotels, restaurants, and recreational facilities during lockdown. Spending on restaurants and hotels almost ground to a complete halt, plunging by a devastating 99.9%.
- South African drugmaker Aspen will sell its European Thrombosis business to US pharmaceutical company Mylan for almost R13bn. This will help to plug a few holes in the company’s R40bn debt burden. Understandably, the market celebrated the deal, sending the company’s shares up by more than 7% on Tuesday.
- The Zondo Commission continued to hear Eskom-related evidence – this time from former Eskom chairman Zola Tsotsi. Tsotsi described how he was invited to a meeting at former President Jacob Zuma’s home in Durban on 7 March 2015 by Dudu Myeni who refused to disclose the purpose of the meeting over the phone. Myeni was the chairperson of SAA at the time. “She made the statement that there is a concern about the performance of Eskom and that there needs to be an enquiry,” Tsotsi explained. “It is advisable that certain executives be suspended for this enquiry to proceed unencumbered.” He went on to say that Myeni’s involvement in Eskom matters confused him. “She’s not conducting herself as a messenger in the actual meeting itself,” he says. “Her conduct was of someone who had more of an involvement.”
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