JOHANNESBURG – South Africa’s business sentiment and conditions deteriorated in May, data from the South Africa Chamber of Commerce and Industry (Sacci) and Standard Bank showed.
Sacci’s business confidence index waned from 93.7 points in April to 93 points in May on the rand’s depreciation against the major currencies with the decline of the JSE all-share index, poor vehicle sales and depressed retail sales weighing further on sentiment.
Sacci chief executive Alan Mukoki said although business confidence was not at an ideal level, there was a positive mood coupled with hopes that President Cyril Ramaphosa would drive a positive growth of the economy.
“There are still uncertainties about physical electricity supply, and this factor alone has the highest and immediate impact on business, consumer and investor confidence. This, among several other factors, needs urgent attention,” Mukoki said.
“Public sector financial challenges at all levels of government as well as some state-owned enterprises also call for urgent remedies by the new administration.”
The local bourse endured a torrid month shedding more than 4 percent, with Naspers responsible for a quarter of the loss as it slumped 10 percent last month due to its biggest subsidiary, Tencent, plummeting 14 percent in local currency-terms as Chinese markets bore the brunt of trade-war escalations between the worlds two biggest economies.
Dave Mohr from Old Mutual Multi-Managers, in an investment note, said that May was a gloomy month for the JSE.
“In rand, the JSE All Share Index lost 4.8 percent in the month, which reduced 2019 returns to 7.1 percent. This is still ahead of cash, but over one year local cash has beaten equities,” Mohr said.
The National Association of Automobile Manufacturers of South Africa yesterday said new vehicle sales fell 5.7 percent on a yearly basis in May with 40 506 units sold compared to the 42 950 vehicles sold in May last year. Export sales were also down for the first time this year, declining 8.8 percent.
Meanwhile, the Standard Bank Purchasing Managers Index, which gauges private sector activity, slid back into contraction territory in May, following a slight expansion in April. The index declined from 50.3 the prior month to 49.3.
Standard Bank said businesses were hampered by a faster drop in new orders and a fourth successive fall in export sales, leading them to reduce output and cut back on purchases.
David Owen, economist at IHS Markit, which compiles the index, said firms however remained hopeful that the new government would bring some much-needed stability to the markets.
“Future sentiment rose to the highest for 13 months, showing that there is still confidence in the South African economy.
“Nevertheless, recent PMI readings show that the government faces a difficult struggle to reignite growth this year,” Owen said.
The South African Revenue Service said last week that South Africa’s trade balance unexpectedly swung to a deficit in April, recording a gap of R3.4 billion against market expectations of a R1.6bn surplus.
Arab central banks’ chief laud Egypt’s successful economic reform experience
Governor of the Central Bank of Egypt (CBE) Tarek Amer
CAIRO – 15 September 2019: Governors of Arab central banks and monetary institutions applauded Sunday Egypt’s successful economic reform, which helped restore investors confidence.
This came during the 43rd session of the Arab Central Banks Governors and Arab Monetary Associations, which kicked off earlier in the day at the Central Bank of Egypt (CBE) with the participation of over 200 Arab bankers, central banks’ governors, ministers, economic experts and officials of the Arab Monetary Fund.
Participants asserted that the Egypt’s economic reform experience over the past four years should be documented as a model to be followed by other countries.
ICRC Partners with Tony Elumelu Foundation to Create Economic Opportunities in Conflict Prone Regions
Lagos, NIGERIA, September 12, 2019; At the just concluded Forum organised by the International Committee of the Red Cross (ICRC), key speakers Tony O. Elumelu, Founder of the Tony Elumelu Foundation and Peter Maurer, President of the International Committee of the Red Cross (ICRC) proffered entrepreneurship as the most sustainable solution to accelerating Africa’s transformation. During a one-on-one conversation at the event, both speakers called for a new private-sector-led approach to humanitarian development in Africa.
While speaking at the Forum, Peter Maurer commended the Tony Elumelu Foundation’s private-sector-led approach as the gold standard of humanitarian development in Africa focused on impacting lives at scale and transforming the continent.
Mr. Maurer said: “On one side, it is important that we assist and protect people when they are disrupted by violence and war. But what brought me together with Tony is not the white shirt and the blue suit, it is his deep conviction that with longer and protracted conflict we need to bring people much earlier into independence.”
He added: “We need, more than ever, in the most fragile, violent parts of society to show the pathway to independence and to a dignified life and this goes with income-generating activities, productive activities, with small businesses. This is why we partnered with the Tony Elumelu Foundation”.
On his part during the discussion themed “Private Sector Partnerships with Humanitarian Organisations: Putting People First”, Mr. Elumelu commended Mr. Maurer’s leadership and the decision to partner with the Tony Elumelu Foundation to eradicate extremism and violence.
He said: “Through the partnership between TEF and ICRC, a lot is happening that shows the catalytic impact of your vision. Ours was the first ever partnership that ICRC had explored using a different approach to humanitarian development, from the angle of empowering the private sector. Today, the Tony Elumelu Foundation has partnered with AfDB on empowering 1000 beneficiaries, UNDP which started with 1000 entrepreneurs and has now been scaled up to empower 100,000 African entrepreneurs starting with the Sahel region.
The most important thing is that we give economic hope and opportunity to our people and reduce the cases of fragility that we see across the continent.”
In 2018, ICRC and the Tony Elumelu Foundation partnered to sponsor 200 entrepreneurs from the North East and Niger Delta regions of Nigeria to catalyse and accelerate transformation while scaling impact in conflict-prone areas. The intervention is built on the existing Tony Elumelu Foundation’s USD 100 million commitment to empower 10,000 young African entrepreneurs in 10 years across the continent. Driven by the economic philosophy of Africapitalism, it represents a bottom-up approach with the goal of creating millions of jobs and increased revenue on the continent.
The ICRC Forum took place in Lagos yesterday and gathered key stakeholders in government and humanitarian development to explore alternative approaches to impacting lives on the continent. Present at the event were Princess Aderemi Adebowale, representing the Executive Governor of Lagos State, Mr. Babajide Sanwo-Olu; Mr. Babtunde Paul Runwase, President, Lagos Chamber of Commerce and Industry; Juan Luis Coderque Galligo, Head, New Financing Models, ICRC; and Mrs. Ifeyinwa Ugochukwu, CEO, Tony Elumelu Foundation; amongst others.
World Bank funds 2nd phase of Takaful, Karama by $500M
Marina Wes, the new country director of the World Bank in Egypt – Photo by Ahmed Maarouf/Egypt Today
CAIRO – 12 September 2019: Egypt signed on Wednesday, Sept. 11 an agreement with the World Bank to finance the second phase of the Social Security Nets Support Project, Takaful and Karama, by $500 million.
The agreement was signed by Minister of Investment and International Cooperation Sahar Nasr and Regional Director of the World Bank in Egypt Marina Wes.
Nasr clarified in a press release that the agreement is part of a $8 billion portfolio between Egypt and the World Bank.
She stressed that this project is an important part of the most important indicators to be followed up with the World Bank, which was announced at its annual meetings in Washington, which is investment in human capital.
Nasr expected that all components of this project will contribute to improving the income of Egyptian citizens.
She pointed out that this agreement came within the framework of projects and discussions that took place between President Abdel Fatah al Sisi, and the new president of the World Bank, who chose Egypt as the first destination in the Middle East.
The minister pointed out that the first phase of Takaful and Karama program contributed to the coverage of about 2 million families, or about 9.5 million citizens, revealing that the project reached beneficiary families in all governorates, and that women represent 88 percent of the total beneficiaries so far.
Based on this additional funding, the project will strengthen the social safety nets for an additional three years based on its achievements and willexpand its geographical scope, Nasrclarified, noting that the second phase is expected to include 12.8 million citizens, to reach 22.3 million.
The minister added that the additional funding will be allocated to develop the productive social protection network and employment program under the name of “Forsa”, and will continue to apply health and education considerations to the beneficiary families.
Meanwhile, Minister of Social Solidarity Ghada Waly explained that the signing of a second financing agreement comes to develop the program and works to expand its activities to shift from cash support only to productive support. This is addition to the transfer of assets and sustainable economic activities, which will achieve great returns for the beneficiary families.
Waly noted that the ministry has always worked to benefit from international experiences and practices in this regard, and from the recommendations of the international assessments.
“The objectives of the project have already been achieved in its first phase, and the funding for this phase has ended.We are working to provide highly concessional financing over a long period of more than 35 years, with a grace period of up to 5 years,” Minister Waly stressed.
For his part, the regional director of the World Bank in Egypt explained,“Through this project, we will continue our commitment to support Egypt’s efforts to develop human capital and create jobs, which are essential for the success of its reform program.”
Wes pointed out that the project reflects the World Bank’s commitment to promoting human capital development through effective social safety nets targeting eligible groups.
She said the project came in line with the World Bank Group’s partnership with Egypt and the expanded regional strategy for the Middle East and North Africa to promote sustainable and inclusive growth through development of skills and livelihood opportunities for women and youth.