Tag Archives: Economy

South Africa personal wealth and quality of life is declining

Legatum Global Prosperity Index 2013-1

 

South Africa slips 5 places to 77th most prosperous country in the world, hampered by poor health and education levels and a low sense of safety and security. Over the past 5 years, South Africa’s ranking has continued to decline. The majority of the lowest ranking countries in the Prosperity Index all come from the sub-Saharan Africa region.

The Legatum Institutes annual prosperity index ranks 142 countries across the globe in terms of income (GDP, economy, wealth) along with well-being (quality of life, governance, sentiment). The index utilizes thousands of datapoints from global data sources, tracking close to 90 variables as well as an average of over 1,500 interviews with people in each of the 142 countries covered.

Over the last five years, South Africa has dropped 33 places to 82nd in the Personal Freedom sub-index because of a decrease in civil choice. Fewer individuals in the country feel satisfied wiht their freedom of choice.  Due to an increasing perception of social support and volunteerism rates, South Africa has risen in the Social Capital sub-index to 65th position.

 

Legatum Global Prosperity Index 2013-2

The top performing countries in the index are Norway, with the strongest economy and highest level of social capital; followed by Switzerland in 2nd and Canada in 3rd.

The highest ranking country in the sub-Saharan Africa region is Botswana with a ranking of 72 followed by South Africa in 77th position. The highest ranked countries in the sub-Saharan Africa region fill out most of the middle and bottom reaches of the index, with plenty of countries slipping in the rankings.

When it comes to entrepreneurship and opportunity, South Africa performed well. This is the country’s highest rank when it comes to sub-indices. South Africa ranked 41st in entrepreneurship and opportunity and governance (53rd); however, education (91st), health (105th) and safety and security (106th) drag on the country’s rank.

The overwhelming majority of individuals that were interviewed (82%) believe that government corruption in the country are widespread and 73% do not feel safe in the country. South Africa has fallen.

Overall, Personal Freedom across the sub-Sahara regions has decreased significantly over the past 2 years. Countries such as South Africa , Ghana and Mali dropped out of the top 50 in the Safety & Security sub-index to 82nd, 79th, and 61st, respectively.  The main reason for the decline is due to the perceived freedom to choose the course of their lives in all 3 countries.

To view the 2013 Legatum Institutes annual prosperity index – CLICK HERE

Source: Legatum Institute

Survey suggest that most pupils do not complete high school

 

Two out of every three pupils in Grade 10 do not go on to pass matric, a survey has found.

“Most pupils who drop out before completing high school do so as a result of a lack of funds,” SA Institute of Race Relations (SAIRR) researcher Jonathan Snyman said.

“Other common reasons that pupils leave school are to look for work or because of family commitments. There is also a common view that being at school is not relevant to their lives,” he said.

 

The SAIRR survey found that fewer than half of those who enrolled in Grade 10 in 2008 sat for the 2010 matric exams.

Only 34 percent of all 2008 pupils went on to pass matric in 2010, and only a third of those passes were good enough to gain admission to university to study for a bachelor’s degree.

Those who did not complete high school along with those whose highest qualification was matric, accounted for 81 percent of all unemployed in the country, the survey found.

 

Only six percent of the unemployed were people who had completed a tertiary education.

Mr Snyman added the fact that ‘the most significant concern is that students who drop out of school more often than not never go back to complete their education. As much as one third of all 15-24 year-olds typically are not in employment, education, or training’.

The survey was based on data released by the department of basic education and will be officially released next week.

Source:  SAIRR

Zuma calls on business to stop fighting

President Jacob Zuma has called for an end to the squabbles that have resulted in a significant division within the country’s business sector subsequent to a recent decision by the Black Management Forum to cut ties with Business Unity South Africa. This has led to divisions, accusations and counter-accusations of racism from both parties.

However , on Tuesday, Zuma while addressing the inaugural Black Business Summit, moved to rein in the warring parties. He emphasised the necessity of unity within business, which he pointed out was critical to the achievement of the goals and objectives of the country.

He said government required a unified and united business voice to work alongside. “We therefore urge you, in your deliberations to debate the matter extensively with a view of finding solutions,” Zuma said.

 

President Jacob Zuma delivers keynote address at the Black Business Summit

 

As reported by Xolani Qubeka, one of several organisers, the summit was “influenced” by the decision by the BMF to withdraw from BUSA.

Zuma pointed out that he had intended to meet up with with BUSA last month however the meeting was later shelved as a result of BUSA’s unavailability at the time.

“Necessary arrangements are going to be made for us to meet. As government, our objective is to see unity … to be able to concentrate on the economic growth and development priorities that face the country,” he said.

He did admit that while politically the country had done well to establish a stable democracy, social and economic elements of transformation continue to lag behind. The impact of poverty and inequality was still glaring and human settlements still exposed the gap between the rich and poor, rural and urban, he said.

Zuma welcomed the attempts by black business to embark on internal dialogue with the intention to evaluate the progress made with the transformation of South Africa’s economy. The black business sector has repeatedly pointed out that a lot still needed to be done to completely transform the country’s economy, arguing that whites still enjoyed a tremendous advantage.

 

Xolani Qubeka Chairperson of Black Business Summit Organizing Task Team

 

A newly released report released by the Commission for Employment Equity unveiled that while black people accounted for about 86% of the employees in the workforce covered by the report, they only represented a mere 16.9% at top management level and 35% at the senior management level.

The report additionally pointed out that despite the fact that considerable progress had been made in creating a critical mass of both black people and women at the professionally qualified level, these groups appear to have “reached a glass ceiling.”

Zuma stated that government needed to makes use of the legislative environment to level economic playing fields, adding that it was in the interest of reconciliation, economic growth and control of the economy.

“We have witnessed the effectiveness of the affirmative action in the manner in which white women and Indian compatriots have benefited… We must draw lessons from that success to boost the empowerment of other designated groups, in particular Africans.”

When it comes to the ownership of the economy, Zuma said while authorities were pleased to see many blacks entering a variety of sectors of the economy, there were no visible “black industrialists.” South Africans were not seeing large factories and mines owned by black people or women.

Zuma told the summit delegates, which included mining magnate Patrice Motsepe and business tycoon Sandile Zungu, that the South African economy needed to create “authentic” black entrepreneurs who own factories and manufacture textile, furniture and metal products.

Source: BuaNews

SA prepared to protect its economy

The South African government is prepared to act in order to cushion the overall economy from the current global economic scenario, which unfortunately presents significantly greater uncertainty for developing nations.

“Precisely what we suggest is that we are going to assess and manage debt; we intend to make certain we do more than enough for infrastructure. We are going to do things we have to do to refloat the economy,” Finance Minister Pravin Gordhan stated.

 

Finance Minister Pravin Gordhan

 

“Our own view is that it’s 60/40 against a double dip recession while other people are predicting a 50/5 chance, dependant upon the decisiveness with which other countries in the world actually starts to deal with its problems. We will have to wait and see,” said Gordhan. The National Treasury and the Reserve Bank have already released a press release that the country would keep an eye on the impact of the downgrading of the US and sovereign debt crisis in Europe in relation to the South Africa’s economy.

Last week, rating agency Standard & Poor downgraded the US credit rating, reduced from AAA to AA+. The Treasury has briefed Cabinet on the effect of global developments and additionally precisely what it meant for the economy. What was currently happening in the recovery stages (which usually take 5 years at the very least) following the 2008 global financial crisis was that political constraints, as with the US, are now being experienced.

“… At which brinkmanship was exercised by key political players [and] the problem of sovereign risk, countries were required to bail out their banks. That took on a lot of debt and in addition to the debt, historically developed countries have taken on too much debt,” said the minister, adding that South Africa’s debt to GDP ratio was between 34 and 35 percent this year, when compared to the 80 to 200 percent of Japan.

The uppermost level of debt to GDP that South Africa is predicted to reach is 40 percent. “Political brinkmanship and political dithering along with a absence of decisiveness in certain regions of the world has created uncertainty in the world concerning whether or not we are going to have measures to make sure that the right level of growth is achieved in South Africa,” said Gordhan.

 

South Africa is going to take a growth friendly strategy along with the consolidation of debt. “What we’re undertaking is monitoring the channels through which South Africa could possibly be impacted upon,” he was quoted saying, adding the fact that this may very well be by way of financial systems. Gordhan said South Africa’s financial regulatory system was basically sound. He explained that South Africa had made it through the first crisis and that “we will ensure we make it through.”

South Africa continues to be cautious about how precisely it borrows money and that it has not asked the general public to pay extra for what it has borrowed. “All of us intend to make certain that we are able to bounce back if required,” said the minister.

Regarding the issue of South Africa’s conditional R2.4 billion loan to Swaziland, Gordhan pointed out that South Africa is going to keep an eye on the situation in that country. He explained that a joint board, following a 2004 agreement, will get together annually or more times if required to monitor the situation.

 

Previously Cabinet spokesperson Jimmy Manyi stated the advance to Swaziland was not a loan from the South African fiscus but a guarantee that is backed by their own South African Customs Union (SACU) payments.

The three tranches to Swaziland is going to be paid dependant upon the proven fact that the Swazi government generates confidence building measures not to mention that fiscal and related technical reforms requested by the International Monetary Fund are put in place and that South Africa offers capacity building support. Additionally it is based on the pillar that there is co-operation in multi-lateral engagements.

Repayment of the loan is going to be carried out by debit order, which will be paid to that country by way of a debit order against the SACU account which happens to be held by South Africa’s Reserve Bank. The money, which will not be taken from taxpayers, is furnished by the Reserve Bank on a 5.5% interest rate.

Source: BuaNews

Manuel urges partnership to deal with education system

National Planning Minister Trevor Manuel suggests that a combined strategy in government will undoubtedly be necessary to tackle the inefficiencies in the country’s education system along with other issues brought up in the diagnostic report of South Africa unveiled by the National Planning Commission last month.

President Jacob Zuma appointed the NPC comprising 26 commissioners to advise government concerning critical development challenges confronting South Africa. Commissioners were additionally given the job of creating a 2030 vision and development plan for the country which is to be monitored over time.

 

The document, drafted following a year of rigorous work by the NPC revealed nine key issues facing the nation specifically, poor education, divided communities, uneven public service performance, an unsustainable resource-intensive economy, a high disease burden, unemployment, existing spatial patterns, crumbling infrastructure and corruption.

A number of sectors of society have received the document with mixed emotions, with the ruling ANC stating it was in “full agreement” with the wide-ranging comments mentioned in the body of the report to the effect that the country has accomplished a great deal since the start of democracy in 1994 however a whole lot more remains to be done.

Manuel mentioned that ever since the release of the commission, they had been bombarded with feedback from the public.

“All of us are certainly encouraged by the advices we are receiving. Naturally the reactions are wide and varied for the reason that some individuals are reacting according to the South Africa we see now, whereas we are going to have a different South Africa by 2030, consequently dialogue is different from individual to individual, based upon how you see South Africa,” Manuel said.

 

National Planning Minister Trevor Manuel

 

The NPC is scheduled to release its first planning report which will be delivered to Cabinet in November.

While Manuel admitted that there were probably going to be fiscal difficulties for the country to deal with a number of the issues raised on the diagnostic document, he explained it was subsequently left to government to figure out how resources were designated to meet society’s pressing demands.

A member of the public had previously questioned whether or not funding patterns for the three spheres of government were sufficient for the country to take care of the majority of the challenges brought up in the diagnostic report.

“Of course there will probably be fiscal challenges down the road, however resources need to be allocated in a way such that the countries sees fit and it is up to the Treasury to make those choices definitely not us as the commission.

“We will put the plan forward on 11 November and will also take care of every one of these issues – several in greater detail than the others, however the tools that we utilized are the tools that all South Africans will make use of to deal with these challenges,” added Manuel.

He proceeded to state the fact that the diagnostic report was not a “prescription” for the government, but geared towards enabling correct planning for the country in the next upcoming decades.

“The diagnostic report addresses varying findings with regards to the South Africa that we know now, that we can speak from research and in conjunction with where we would like to be and say to South Africans, ‘discuss these problems and inform us whether this is the country you would like to live in 2050’.”

Free State Premier Ace Magashule talked about how the province had been working hard to make sure that popular participation of its citizens in the report, adding that there had been an agreement at provincial government relating to the problems raised.

“It is quite apparent that the people of the province who are engaging in the NPC discussions are incredibly enthusiastic in terms of ensuring that indeed, we have one plan as a country and I believe this is definitely the starting point of that process and additionally our call and plea is going to be for every individual to participate,” he was quoted saying.

Source: BuaNews