by Ndumiso Mlilo
JOHANNESBURG South Africa (Xinhua) --
Economic commentators believe all hope is not lost on South
Africa after the downgrading of its foreign currency ratings to
subinvestment by international rating agencies.
Standard & Poor’s (S&P) lowered the country’s foreign currency
ratings to junk status, which led to seven banks suffering the
similar fate. Many economists contributed to a panel of
discussion on Thursday saying South Africa could rise from this
bad situation if they put their act together.
Lesiba Mothata, chief economist of Investment Solutions, said
the South African rand and bonds did not sharply decline after
Countries like South Korea, Hungary and Thailand have fallen
into junk status and lost policy direction which is not the case
with South Africa.
He said South Korea lost the ability to raise taxes with
currency falling and the banking sector in crisis. Columbia was
also in the junk status with drugs and wars which made it take
long in that state.
"The situation looks different in South Africa, the issues
are not exogenous.
"We have prospects to be fallen angels and can turn around
things if we do the right things.
"Our banks are capitalized and the Treasury as an institution
continues with clear transparency and vision.
"South Africa has shown agile response from Treasury,"
Aza Jammine, chief economist of Econometrix, also agreed with
Mothata that there is still hope for the country. He said the
rand has shown resilience even though had it not been for the
downgrade it could be around R12 against the U.S. dollar.
"The story is not over yet, what is worrisome may be an
opportunity as well ...
"If Malusi Gigaba (South Africa’s new finance minister) keeps
saying the things he has been saying in the last few days, we
may renew the momentum of recovery and avoid recession," Jammine
Jammine said there were some fears that the interest rate and
inflation would increase, but it has not happened and the
drought seems to be ending, with also no load shedding that
could contribute positively to the country.
The chief economist said the country has to do some
structural reforms and also implement the country’s economic
blue print, the National Development Plan (NDP).
One of the positive things was the confidence in the business
that had been inspired by the former Finance Minister Pravin
He also said Gordhan brought about unity in government, labor
and business to avoid protracted strikes. The country should
emulate some Asian countries.
"China made private sector partner with government while
maintaining oversight on them.
"How they invested on education and skills is unbelievable.
"I do not foresee that happening in our country," Jammine
Rabelani Dagada, Member of the Mayoral Committee of Finance,
City of Johannesburg, said currently residents owe the city
about R17 million.
If the city is downgraded there would be more pressure on
residents to pay for the rates, water and electricity, which
would increase the debt.
"If we are downgraded further it would be difficult for the
city to borrow as the debt would be expensive to service.
"We will be squeezed and affected on our quest to deliver
infrastructure," Dagada said.
He said the downgrade would mean that many cities will have a
backlog on their infrastructural projects and struggle to
maintain and provide services.
Dennis Dykes, chief economist of Nedbank, said South Africa
is consuming more than it could produce and has been relying on
investment to fill the gap.
There is a need for fiscal sustainability, making the ease of
doing business better and reducing unemployment.
The Nedbank economist said it would be difficult for state
enterprises, banks and business to borrow.
If they borrow they will pass on the cost to the consumer,
and there is still possibility that a country could survive the
Moody’s is expected to announce their decision in June, and a
possible downgrading is feared.
Dykes said even if the country goes into recession, the
government could respond in a positive way to speed up the
South Africa ranked most
attractive destination for FDI in Africa: report
CAPE TOWN South Africa (Xinhua) --
South Africa is ranked the most attractive destination for
foreign direct investment (FDI) in Africa, according to the A.T.
Kearney’s 2017 Foreign Direct Investment Confidence report
released on Thursday.
Globally, South Africa is the 25th most attractive
destination for FDI, the report said.
The report cited improvements in short-term economic
prospects and the long-term investment in the country’s
manufacturing as some of the key drivers of South Africa’s
improved rating on the Index.
The A.T. Kearney, a global management consulting firm,
considers South Africa as a gateway to Africa, with lucrative
value and opportunities for international investor partnerships,
boasting a combination of infrastructure and an emergent market
economy that gives rise to a vibrant and entrepreneurial
The report drew immediate applause from the South African
"The government is humbled by this ranking, which shows that
South Africa’s strategic partnership with foreign investors is
gaining momentum," Minister of Communications Ayanda Dlodlo
"The report demonstrates that our country’s blueprint on
development is yielding results and requires that we strengthen
this with also encouraging South Africans to save so that we
balance this show of confidence through involving South
Africans," Dlodlo said.
This came after international rating agenices Standard and
Poor’s and Fitch downgraded South Africa’s sovereign credit
rating to junk status, respectively on April 3 and 7.
In the current phase, the confidence in South Africa, as
demonstrated in the report, bodes well for the country, Dlodlo
"In this regard, South Africa has heeded President Jacob
Zuma’s call to focus on changing any negative perceptions held
by foreign investors by strengthening synergies within civil
society," the minister said.
South Africa remains a destination of choice, Dlodlo added.
South Africa says
committed to BRICS membership
PRETORIA South Africa (Xinhua) --
South Africa is committed to the BRICS bloc of
leading emerging economies and hopes being a member helps
address the country’s various challenges, a senior official said
While addressing a seminar in Pretoria on Thursday, Dave
Malcomson, chief director at South African Department of
International Relations and Cooperation, said the country is
satisfied with the progress achieved by the bloc and wants to
continue using it to address the country’s triple challenges of
poverty, unemployment and inequality.
Malcomson said BRICS will assist the industrialization
process in South Africa and the whole African continent by
supporting infrastructure, investment facilitation and an
upgrade of the manufacturing sector.
"We want to use BRICS to promote South South cooperation,
change global architecture, respond to global challenges and
bring about peace in the world," he added.
China will host the 2017 BRICS Summit in September as the
The bloc will discuss global economic growth, promote
cooperation and development then.
Noting that BRICS members, namely, Brazil, Russia, India,
China and South Africa, have coordinated and cooperated in
multilateral global bodies over major global issues such as
climate change, Malcomson said the bloc will always remain
relevant to global affairs.
South African experts say
BRICS relevant to tackling global challenges
PRETORIA South Africa (Xinhua) --
BRICS is relevant to tackling various
local and global challenges, experts attending a seminar held
here said Thursday.
The event, co-organized by the South African BRICS Think Tank
(SABTT), Institute for Global Dialogue (IGD) and the University
of South Africa in Pretoria, features topics such as the future
of BRICS amid changing global dynamics.
IGD Executive Director Philani Mthembu said BRICS is relevant
to global affairs, especially at a time of increasing
For BRICS to be sustainable, it has to expand beyond the
economic sphere to include exchanges between think tanks,
businesses and people-to -people communication, he said.
"BRICS will remain relevant and will not fizzle out.
"The onus is on us to sustain the relationship.
"The government has laid the foundation and it’s an
opportunity for us to capitalize on this strategic
"Let us not be distracted by many interpretations from the
North," said Mthembu.
He said BRICS should use the current uncertainties to make
the bloc stronger.
South Africa has access to both the Indian Ocean and the
Atlantic Ocean and can use that to its advantage in BRICS, he
Ashraf Patel, a researcher with SABTT, said there are
potential beneficiaries in the New development Bank, a
multilateral development bank established by the BRICS members,
since Breton Wood Institutions like the World Bank and the IMF
"were operating like merchant banks and did not serve the
purpose they were established for."
"BRICS have a bright future and will remain relevant. It is
relevant as a counter-balance force.
"South Africa must articulate more clearly its policy in
partnership with BRICS countries and no in competition with
them," said Patel.
Serges Djoyou Kamga from Thabo Mbeki Leadership Institute
echoed the idea that BRICS is relevant to correcting the
imbalances in the financial and multilateral institutions.
"BRICS is relevant because we all need it.
"It should be used to eradicate poverty, and economic
"If BRICS in all these meetings forgets people on the ground
it will become irrelevant," he said.
Former national defence
force member arrested for army base robbery
CAPE TOWN South Africa(Xinhua) --
A former South African National
Defence Force (SANDF) member was arrested on Thursday for an
army base robbery that rocked the country earlier this month,
The 40-year-old man was arrested in Khayelitsha, Cape Town,
the South African Police Service (SAPS) said.
The man, whose name was being withheld pending further
investigation, was among the men who robbed the Khayelitsha
Military Base in Cape Town on April 14, the SAPS said.
In an intelligence-led operation, police pounced on the
suspect at an identified location in Khayelitsha early this
morning, the SAPS said.
"Our detectives are currently questioning the man," Captain
FC van Wyk said.
During the armed robbery at 9 South African Infantry (SAI)
base in Khayelitsha, five armed robbers overpowered guards and
five soldiers, stealing a number of rifles and ammunition. The
robbers reportedly forced the guards inside the base and
overpowered another five soldiers in an armoury guard room.
Parliament’s Portfolio Committee on Police commended the
swift arrest of the man in a joint operation between the SAPS
and the Directorate for Priority Crime Investigation (DPCI),
also known as the Hawks.
"The speed with which the police and Hawks moved in
apprehending the alleged perpetrators of these serious crimes is
commendable. We hope this will send out a strong message that
the country does not take kindly to any form of crime," said
Committee Chairperson Francois Beukman.
Beukman called on community members to continue assisting
police in the fight against crime by informing their nearest
police station of any criminal activities taking place in their
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