2025-04-10 1008 views
The vote on the Fiscal Framework was 194 for and 182 against, thus a slim majority of only 12. However, 24 members of Parliament (MPs) did not vote. A lot of uMkhonto weSizwe (MK) and Economic Freedom Fighters (EFF) members were absent, and some MPs who spoke against the Budget left the chamber before the vote.
2025-01-29 1159 views
Returning from a very relaxing holiday in Namibia, we walked into a storm around the closure of the long steel business by ArcelorMittal South Africa (AMSA). The saga concerns more than just steel – it is about public policy issues on tariffs, import protection, localisation and industrialisation. It is worth unpacking a bit.
2022-09-01 1796 views
Late on Friday 26 August, the National Electricity Regulator of South Africa (NERSA) put out an innocent-sounding and typically bureaucratic statement. It asked for public comment on three section 34 determinations made by the Minister of Mineral Resources and Energy, Gwede Mantashe, which the minister sent to NERSA for concurrence.
2022-08-03 2180 views
Before we go any further, let’s deal with load shedding. It will still be with us until the end of 2024. There is no short-term fix for Eskom. It needs new capacity to stop load shedding. ‘Finish en klaar’. We discuss the detail on page 3. Having said that, let’s look at the bigger picture and the longer term.
2021-04-29 1354 views
South Africa has now been in a ‘demographic recession’ for six years because the population grew faster than the economy. Our population growth is 1,6% pa (allowing for one immigrant every 2,5 minutes). Since 2015, economic growth has not kept pace with that number. The latest figures from the South African Reserve Bank show that by the end of 2020, per capita incomes were 11% lower in constant terms than at the end of 2014 – a six-year lag.
2021-02-25 1526 views audio available
It is useful to start with what was expected by many commentators, but then did not actually materialise in the budget. As a direct result of all the things that did not happen, the budget does provide a clear road back to fiscal sustainability. The numbers are still horrible, but the way out is clear.
2020-12-15 1801 views audio available
Covid-19 naturally stands out as THE development of the year. It dealt South Africa the most serious economic blow since the 1920s. Two million people lost their jobs. Many small (and some big) business had to close doors. In general terms, it worsened South Africa’s triple curse of poverty, inequality and unemployment.
2020-11-05 3178 views audio available
In October there were three important political announcements about the economy: the Expropriation Bill, the Post-Covid-19 Recovery Plan and the mid-term Budget. When combined, they paint quite a picture of where we are going.
2020-09-30 1289 views
A mountain of debt and load shedding. These are the two things at Eskom that concern South Africans’ most. In March we wrote about energy and Eskom in great detail, so what has changed since then?
2020-07-21 1348 views
In a time of intense contestation on the correct economic policy for South Africa, economists from the left, right and centre all agree on one thing: productivity matters. As left of centre and self-proclaimed progressive Paul Krugman put it: ‘Productivity is not everything, but in the long run it is almost everything.’ (He won the Nobel prize for economics.)
2020-04-23 2308 views
The new coronavirus has knocked the stuffing out of the world’s economy. South Africa was in a recession even before the virus struck. Then came the (final) credit rating downgrades in March and April, and then the global lockdown. South Africa’s economy is now expected to contract somewhere between 6% and 8% in 2020. Whatever the number, contraction means that unemployment goes up, poverty increases, inequality worsens, human development is undermined, and social cohesion frays. How do we deal with this?
2020-03-17 1586 views
Amidst Covid-19, an oil price war and financial market chaos, the CSIR (Council for Scientific and Industrial Research) has updated its data on load shedding. By Friday 13 March 2020, South Africa had already experienced 88% of the load shedding that it endured in the whole of 2019.
2019-11-12 2259 views
It is now 23 months since President Ramaphosa was elected president of the ANC and 21 months since he took over from Jacob Zuma. He set himself two tasks: rebuild the ethical foundations of the state (reclaim it from state capture) and revitalise the economy. We described the attempts to reclaim the state in a note ‘Act 1’, published in August. In the three months since then a lot more has happened to reclaim the state. We will update you in due course. In this note, we look at Ramaphosa’s other priority, the economy.
2019-10-21 18 views
One of the most important policies of the Ramaphosa government, the Integrated Resource Plan (IRP), has been approved and made public. It covers the decade to 2030 and gives clarity on and direction for energy investments in South Africa.
2019-03-12 1013 views
Recently, Trevor Manuel said at the Zondo commission on state capture that Eskom was once the envy of the world. Indeed. In 2001 it was crowned the global “Power Company of the Year”. In 2004 it was SA’s “most admired brand.” Corruption, maladministration, looting and the wrong people in the wrong jobs put an end to that.
2018-10-09 157 views
An acquaintance in the Union Buildings once had this profound observation of leaders since the advent of democracy: “Mandela gave us freedom, Mbeki gave us discipline, Zuma gave us chaos”. After working through the recent Job Summit agreement, one could add: “….Ramaphosa is giving us co-ordination”.
2017-05-11 517 views
Before SA was downgraded to sub-investment grade in April, a fundamental change had already occurred in SA's financial relationship with the world. That relationship is succinctly captured by the country's current account balance (CAB). This measure reflects whether SA sells more to the rest of the world than it imports. In SA the CAB has historically mostly been in deficit, but the change is that the deficit has decreased substantially over last four years.
2017-02-23 979 views
As he warned last year already, the finance minister is raising R28 bil from extra taxes: R16 bil from higher income tax; about R7 bil from a higher dividend tax (20% against 15%); and R5 bil from higher indirect taxes on petrol, tobacco and alcohol.
2016-10-19 1231 views
SA has 26 universities. On average over the last few weeks classes have been suspended at 8 to 9 of those (depending which week one looks at). The list includes both top-rated and other universities. Of the more than one million students enrolled at the 26, about 5% participated in class disruptions. An even smaller percentage engaged in the violent behaviour that saw destruction of property.
2016-07-04 388 views
A large number of clients have contacted us and asked for our comments on Brexit. The simple truth is, nobody knows. Not even the Brits.
2016-06-14 464 views
Amidst the noise from our body politic, it is good to look at some fundamental trends. Something extraordinary has happened in SA agricultural over the last 20 years.
2016-02-25 392 views
SA works with three year budget cycles that are updated twice a year – in February at the time of the main budget and again in October. It is thus useful to compare the numbers now to what was expected in October.
2016-02-15 345 views
26 years ago, on Sunday 11 February 1990, Nelson Mandela walked out of prison a free man, to start a new life and to help give his country a new lease on life as well. A quarter of a century later the single biggest question hanging over the economy is whether SA will be downgraded to junk status in 2016.
2015-12-14 424 views
Between Thursday evening when Minister Nene was fired and Sunday evening when his successor was replaced and Minister Pravin Gordhan was brought back as Finance Minister the country was on an extraordinary rollercoaster. It was in short a journey to hell and back. Two responses were noteworthy.
2015-12-10 413 views
In his shock announcement that he is replacing Minister Nene, Pres Zuma pays homage to the minister saying he “has done well since his appointment” and “enjoys a lot of respect in the sector locally and abroad”. That raises the question but why?
2015-12-08 311 views
The Big Seven trends that dominated our politics and economy in 2015 are: Eskom and electricity supply; the commodity collapse; the drought; slow economic growth; ratings downgrades; student unrest; and SOEs.
2015-11-11 197 views
October saw some major developments – three were high profile and very public, one low profile and almost not noted. The high profiles ones were students protesting with #Feesmustfall; the mid-term budget statement and thirdly the on-going narrative that SA is facing fiscal collapse and a debt crisis. We can call the latter the #Fiscalcollapse narrative. The low profile development was the release of the Development Indicators for 2014. In contrast to the other three, it got comparatively little airtime in the media.
2015-10-14 354 views
In both August and September I wrote in this Newsletter that the only way out for the stalled SA economy is a social compact, an agreement of sorts, where the powerful stakeholders in society agree on the way forward. What would such an agreement look like? Is it a practical possibility or just pie in the sky?
2015-09-10 382 views
It looks like it may be a hat trick, but in a negative sense. 1.5% economic growth in 2014, the same expected again for 2015 and now a growing consensus that 1.5% will again be the number for 2016. If those numbers materialise, it would mean that for three years in a row economic growth will only equal population growth, leaving no room for increases in per capita income. This would be the longest period of stagnant per capita incomes since democracy. That would also mean the single most important force for social and economic progress, rising per capita incomes, would have come to a standstill in SA.
2015-08-31 462 views
This month two years ago, in August 2013, I published a book “The Long View” describing some of the social and economic trends shaping the country. Several clients have asked me what I would write differently if I were to write it now.
2015-07-16 431 views
It does not often happen that the conventional wisdom of the day gets turned upside down. Yet that is what has happened to some cherished ideas on labour market flexibility and inequality. What is more, the turning-upside-down was done by two citadels of economic thinking, the IMF and the OECD.
2015-03-10 435 views
Over the years, we have often high-lighted the investment South Africa is making in infrastructure. It bears looking at again in 2015, when load-shedding, days without water, and communities up in arms because of weak service delivery leave us gloomy, undermine confidence and retard growth.
2014-12-09 404 views
Looking back over the year there were five developments that were in my opinion the most important developments in our political-economy. They were: electricity supply problems at Eskom; strikes; the elections; the split in Cosatu; and the 40% drop in the oil price. By looking back at these Big Five, what can we glimpse about the future?
2014-11-10 519 views
Several long-simmering tensions have come to the boil during the first week of November suggesting the game is in two areas: party-politics and inequality.
2014-09-22 434 views
Two recent developments have brought the equity/efficiency paradox into sharp focus: the Constitutional Court judgement in the Renate Barnard v SAPS case, and intense discussions around land redistribution. Let’s look at land, which illustrates the issue very clearly.
2014-04-17 334 views
This Easter is not so much the season of goodwill as the season of scenarios.
2013-08-19 757 views
There are a number of enduring myths that seem to have a stranglehold on our public conversation, which diverts our attention from the real problems. Here are three myths articulated in some media during the past two weeks.
2013-07-09 813 views
Last month it was 100 years since the Land Act of 1913 came into force on the 19th of June 2013. This act, its younger sibling the Land Act of 1936 and its much older siblings, legislation passed in the Cape Colony and Free State in the 1890s, moulded current South Africa in the most profound way.
2013-03-04 303 views
Every year it is the same story. As budget day approaches scary predictions flow thick and fast: taxes will rise, the rich will be soaked, company taxes must go up, infrastructure spending will be cut to help the budget numbers... In general, doom and gloom awaits us.
2013-02-15 306 views
Pres Zuma presented his 5th State of the nation speech to Parliament. It was largely a review of progress on the 5 key government priorities: creating decent work, education, health, rural development and land reform as well as crime and corruption. We give a brief summary of the most important points and discuss some context.
2012-10-29 313 views
Yesterday’s mini-budget addressed the concerns...
2012-09-13 486 views
Next year 100 years will have passed since the promulgation of the 1913 Act that severely stripped and restricted the rights of Black South Africans to own land in SA. We unpack some of the issues.
2012-03-09 559 views
What does the construction of a mega-resort in the Bahamas have to do with SA’s infrastructure drive recently announced in Pres Zuma’s State of the Nation and the Minister of Finance’s budget speeches?
2012-02-28 467 views
In reaction to last weeks budget, Finance Minister Pravin Gordhan stands accused that he targeted the rich with his recent budget and that he did so from some sort of malevolent, anti-rich stand-point. I am perplexed by this reaction as that is not what the numbers tell us.
2012-02-10 339 views
What a week that was!!Four important political developments have taken place over the last week.
2012-01-24 404 views
Looking back over the last 12 months it is most instructive to see what exercised our minds over the last year and where we find ourselves now.
2011-10-28 376 views
It is seldom that we have such a good 48 hours in SA’s public life. It is a useful counter-point to the planned ANC Youth League marches on Thursday and Friday.
2011-09-14 328 views
As the rugby world cup kicked off, it seemed as though the strike season in SA was drawing to an end. Here and there a wage dispute still simmers, and that may yet escalate into full-blown strikes
2011-08-16 362 views
During the current strike action several clients have asked why government allows strikes, why it is not “taking action” against strikers and why it does not grant companies exemption from minimum wages. Be careful what you wish for is the old warning. This applies to SA’s wage setting mechanisms.
2011-02-25 325 views
Finance minister Gordhan has submitted his (and the Zuma administration`s) second budget. What can we learn about the politics of this government from the budget?
2010-11-09 282 views
The last week of October saw several political developments - the announcement by Minister Ebrahim Patel of the ôNew Growth Pathö approved by Cabinet; the mini-budget delivered by Minister Pravin Gordhan; the cabinet reshuffle announced by pres Zuma.á W
2010-10-22 1336 views
The signals from the ANC body politic remain contradictory and confusing
2010-03-11 266 views
"First there were the BRICs - Brazil, Russia, India and China. Emerging markets that are elbowing their way onto the global economic stage, chipping away at the dominance of the traditional developed countries (US, UK, EU)."
2010-02-18 226 views
"If I were Cosatu I would feel very unhappy, even betrayed."
2009-07-01 222 views
On a recent swing through London talking to analysts and journalists I was struck by how much people wanted SA to be a success. Not that SA is top of their minds with the global meltdown on the one hand and the shenanigans of British parliamentarians` exp
2009-05-18 194 views
The new cabinet strikes a careful balance between different interest groups - also between different views on the economy.
2009-04-07 226 views
"The G20 meeting in London last week got a lot of coverage (fine), the IMF came out of it stronger (good), tax havens and hedge funds might be regulated a bit more stringently (probably good), but the critical problem of macro economic imbalances was not ta"
2009-03-24 225 views
"Growth rate: predictions, guestimates and credibility"
2009-02-26 303 views
The most recent agriculture census from Stats SA throws the spotlight on commercial agriculture in SA.
2009-02-10 226 views
Within a week it has erupted all over.
2009-01-28 265 views
The manifesto sets five priorities for the next five years
2008-05-07 305 views
The food crisis has now developed into a gale force storm. In SA it is not so much a case of shortages as price. The impact has been made worse by the findings of the Competition authorities about bread cartels
2005-06-15 249 views
"Zuma""s dismissal illustrates how far we have come"