Flash Briefing: SA has world’s worst youth unemployment; FirstRand sees profits jump as SA recovers

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  • 75% of youth in South Africa are unemployed, reports The Times of London. The first generation of South Africans to have lived free of apartheid, also known as ‘born frees’, are trapped in the country’s worst ever youth unemployment, says the British media outlet, quoting figures from Statistics South Africa. It notes that data gathered from 200 countries for The Global Economy website puts South Africa at the top for highest number of unemployed youth.
  • FirstRand sees profit rising more than expected, and by at least 35%, after the South African economy rebounded strongly from the early stages of the coronavirus pandemic, reports Bloomberg. “Current trends indicate that customers are utilising discretionary savings as the economy has opened up,” FirstRand said. “Consumer spending is now back at pre-Covid levels.” The lender joins other South African banks in seeing an improved outlook as the nation recovers from an economic contraction of 7% last year, largely caused by lockdown measures to contain the coronavirus.
  • Anglo American South African coal mines, which will be listed in a new vehicle this week, are worthless given the scale of environmental clean-up costs, according to a research report from short-seller Boatman Capital. Anglo, continues Bloomberg, will list Thungela Resources in Johannesburg and London this week, handing ownership to existing shareholders, as part of its retreat from thermal coal, the most polluting fuel. The world’s biggest miners have been looking to exit from the fuel amid intense pressure from activists and some investors.
  • The rand’s value was helped as offshore investors bought a net of R513m ($38.14m) of South African stocks last week and R1.02bn in bonds, reports Reuters.
  • El Salvador may become the first country to make bitcoin legal tender, President Nayid Bukele announced Saturday, saying he would soon propose a bill that could transform the remittance-dependent economy, says Bloomberg. The move would make the Central American nation the first in the world to formally accept the cryptocurrency as legal money and would “allow the financial inclusion of thousands of people who are outside the legal economy,” Bukele said.
  • Former finance minister Trevor Manuel says the decade under Jacob Zuma wasn’t just ‘lost as though everything was static..the country regressed’. He was speaking to the International Monetary Fund, which has published a Q&A with Manuel on its website. The Treasury was considered too powerful, so Zuma tried to take that apart, Manuel is quoted as saying. He also highlighted the relatively high pay of public servants by world standards as one of the reasons South Africa has underperformed other emerging markets.

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