The IMF says SA is resilient enough to overcome the impact of Covid-19 as long as it recalibrates its policies toward economic growth post the crisis.
By Jackie Cameron
- South Africa is resilient enough to overcome the impact of the coronavirus pandemic as long as its policies are recalibrated toward economic growth once the crisis has passed, according to the International Monetary Fund. “The country’s big strength is that it has very deep and liquid domestic capital markets relative to most other emerging-market countries” and generates most of its financing domestically and in rands, Abebe Aemro Selassie, the director of the lender’s African department, told reporters on Wednesday. “South Africa has always had very good international capital-market access” and isn’t in talks with the Washington-based institution about financing, Selassie is quoted as saying. Finance Minister Tito Mboweni has touted the possibility of assistance from the fund for the first time to deal with the fallout from the virus, and that, says Bloomberg, has raised the ire of some senior officials in the ruling African National Congress and its alliance partners, who argue this would undermine the nation’s sovereignty.
- Business leaders across industries are following President Cyril Ramaphosa and his cabinet in taking about a third of their pay for the next three months and donating the money to a government fund to fight the coronavirus, says Bloomberg. The news agency says that, for Rob Shuter, the chief executive officer of Africa’s largest mobile-phone company MTN Group, that will mean a donation of about R1.43m ($77,000), based on his basic annual pay last year of R17.3m. Alan Pullinger, the CEO of the continent’s most valuable bank, FirstRand, will be giving away more than R730,000, it adds. The show of support from company bosses will bolster the trust and confidence Ramaphosa enjoys from business, although it may come at a cost to winning over rival factions within his ruling African National Congress, political analyst Ralph Mathekga told the news service. “Politically it says business is too close to government to the point they might be dictating,” he said by phone. Still, for the first time since schisms in the party erupted with Ramaphosa taking over as president from the scandal-tainted Jacob Zuma in February 2018, corporates are stepping in with donations, Mathekga is quoted as saying. The Johannesburg Stock Exchange donated two-days of trading, clearing and settlement revenue to the government’s Solidarity Fund, while chemicals firm Sasol provided a million litres of jet fuel to help repatriate South Africans stuck abroad, points out Bloomberg. Insurer Old Mutual is providing free life cover to health workers, while DisChem Pharmacies is matching contributions made from members of its loyalty program, it adds.
- South Africa’s mobile phone network operator Vodacom said on Thursday that data traffic on its network has jumped 40%, while MTN reports a 30% increase in traffic as people work remotely. The telecoms sector has experienced a spike in network data traffic in recent weeks after the South African government imposed a five-week lockdown to the end of April.
- Amazon’s Jeff Bezos and Tesla’s Elon Musk are getting richer, even though much of the world is under financial pressure as a result of the Covid-19 pandemic. Bezos and many of his wealthy peers have seen their fortunes recover in recent weeks, helped by the boost given to markets by unprecedented stimulus efforts by governments and central bankers. While the combined net worth of the world’s 500 richest people has dropped $553bn this year, it has surged 20% from its low on March 23, according to the Bloomberg Billionaires Index. Jeff Bezos’s Amazon.com stock climbed 5.3% to a record on Tuesday, lifting the founder’s net worth to $138.5bn. Tesla Chief Executive Officer Elon Musk has added $10.4bn to his fortune this year, more than anyone except Bezos, says Bloomberg. The fortune of Zoom Video Communications founder Eric Yuan has more than doubled to $7.4bn, as demand for its teleconferencing service exploded in the wake of the pandemic-driven lockdown, it adds.
- South Africa will allow mines to operate at 50% capacity during a nationwide lockdown to curb the spread of the coronavirus, says Reuters, which reports on amended government regulations published. The government had ordered most underground mines and furnaces to be put on care and maintenance during the lockdown, which started on March 27 and has been extended until the end of April, apart from coal mines supplying state power utility Eskom, it says.