By Monique Vanek
In the forward to Medium Term Budget Policy Statement (MTBPS) it warns that South Africa finds itself at a crossroads and highlights the difficult economic and fiscal choices confronting government over the next several years. These are the key takeaways:
Economic
• The consolidated budget deficit narrows from 4.2% in 2019/20 to 4% in 2021/22. 
• Gross debt is expected to stabilise at 59.6% of GDP in 2023/24. 
• GDP growth revised downwards to 0.7 from 1.5% in 2018 following a recession in the first half of the year. 
• GDP growth is expected to recover gradually to 2.3% by 2021 
• Global economy expected to continue growing at 3.7% 
• Tax revenue has been revised down by R27.4 billion in 2018/19, R24.7 billion in 2019/20 and R33 billion in 2020/21 relative to the 2018 Budget. This mainly reflects higher-than-expected VAT refunds. 
• In 2017/18, for the first time since the 2008 global financial crisis, tax revenue growth did not exceed GDP growth. 
• The cost of servicing government debt is expected to exceed 2018 Budget estimates by R1 billion in 2018/19, R4.9 billion in 2019/20 and R7.9 billion in 2020/21. This reflects a larger main budget deficit, currency depreciation and higher interest rates. An estimated 15.1 per cent of main budget revenue will be used to service debt in 2021/22 compared with 13.9 per cent in 2018/19. 
• Main budget revenue is projected to increase from 25.7% of GDP in 2018/19 to 26% of GDP in 2021/22. Main budget expenditure is estimated to remain stable at 30.2% of GDP over the medium term
Where the money will go
• The Medium-term expenditure framework commits public resources of R5.9trn over the next three years. Of this amount: 
&#8211; R3.3trn or 56.2% t will be allocated to education, health, the provision of water and electricity services, and social grants. 
&#8211; 
• Government is proposing reprioritisation of R32.4bn over the next three years. Of this amount: 
&#8211; R15.9bn goes towards faster-spending infrastructure programmes. 
&#8211; R16.5bn will be allocated to various programmes, including recapitalising the South African Revenue Service (SARS), a minimum wage for community health workers, critical posts and goods and services in health, and streamlining the management of the justice system. 
&#8211; In addition, changes to grant structures amounting to R14.7 billion will promote upgrading of informal settlements in partnership with communities. 
&#8211; Housing subsidies amounting to R1 billion will be centralised to better support middle- and lower-income home buyers. 
• In the current year, R1.7 billion is added to infrastructure spending (including funding for fast-spending school building programmes) 
• R3.4 billion is allocated to drought relief, mostly to upgrade water infrastructure aside funding for this purpose. 
• R3.4 billion is allocated in 2018/19 to provide water, improve infrastructure and offset the economic costs of drought. Funding is also provided for the South African Isotope Facility at iThemba Labs and, following approval through the Budget Facility for Infrastructure, for the MyCiti Phase 2A bus programme in the City of Cape Town. 
• R800 million added to the school infrastructure backlogs grant to complete approved projects. 
• R3.4 billion is allocated to the education infrastructure grant. Funds are also allocated to the same grant to continue repairing infrastructure damaged by storms and floods in KwaZulu-Natal in 2017. 
• The Department of Women has developed a framework to provide free sanitary towels to learners from low-income households. The project rollout is funded through the provincial equitable share. 
• Local government equitable share, which finances free basic services to low-income households and some administrative costs for municipalities, is expected to grow by9.4 per cent per year to R82.2 billion by 2021/22. 
• Over the medium term, public transport expenditure is expected to increase to R101.1 billion as integrated public transport networks are built and operated in 13 cities.
State owned entities
• South African Airways will receive R5 billion through a special appropriation bill to settle debt redeeming between now and March 2019. This will help to prevent a call on the airline’s outstanding debt of R16.4 billion, which is guaranteed 
• R1.2 billion is allocated to South African Express Airways. 
• The South African Post Office receives R2.9 billion to reduce debt levels
National Health Insurance
• R166 million added to the national health insurance (NHI) indirect grant (health facility revitalisation) component to procure medical equipment and to design a new academic hospital in Limpopo. 
• R546 million reprioritised within the NHI indirect grant to address the critical shortage of medical professionals in the health sector, and to procure beds and linen for health facilities.
Tax changes
• In 2019 annual adjustments to personal income tax brackets, levies and excise duties in line with inflation are expected. 
• White bread flour, cake flour and sanitary pads will be zero-rated from 1 April 2019.
Students
• The Department of Higher Education and Training is developing a funding framework to clarify students’ food, book, transport and accommodation allowances, and the obligations required of bursary students during and after their studies. 
• Funds recommended through the Budget Facility for Infrastructure, and from educational institutions and the department, will support the Student Housing Infrastructure Programme. Over the next 10 years, it will provide 300 000 new beds at universities, and technical and vocational colleges. 
• Over the medium term, an estimated R61.5 billion in revenue from the skills development levy will continue to expand participation in learnerships, internships and skills development programmes.
Land reform
• Government is working with the Land Bank to accelerate land reform and maintain the productive use of transferred land. 
• Under the Land Reform Programme, government will provide 30-year leases, enabling the Land Bank to extend loans to emerging farmers. 
• The Land Bank will use a combination of loans and grants to increase production through the Black Producers Commercialisation Programme. Funding from the comprehensive agricultural support programme grant will be reprioritised to produce foot-and-mouth disease vaccines.

SA’s #MTBPS2018: Key takeaways

By Monique Vanek
The public servants wage bill remains the single largest component of expenditure in the Medium Term Policy Framework, but with elections approaching in 2019 the Medium Term Budget Policy Statement (MTBPS) provided no concrete plans to address this, only stating that government is working on an approach to manage these pressures over the medium term.
According to the MTBPS, public servants compensation, accounts for 34.7 per cent of consolidated expenditure, and forms the major driver of spending pressures. The MTBPS highlights that “it is one of the fastest-growing items in the budget, increasing at an average of 11.2 per cent a year”.
It adds that “the 2018 public-service wage agreement (see box) exceeded budgeted baselines by about R30.2 billion through 2020/21. National and provincial departments are expected to absorb these costs within their R1.8 trillion compensation baselines over the same period.”
The MTBPS also states that “over the long term, government and trade unions need to agree on an approach that ensures fair remuneration and a sustainable wage bill”. 
An annexure to the MTBPS deflects that issue of the amount of public servants to earnings growth, stating that “earnings growth, rather than headcount, has been the major driver of the public-service wage bill over the past decade”.
The annexure says an analysis of compensation spending since 2006/07 reveals the following trends:
• The main driver of increased spending is large increases in wages and other employee benefits, rather than increases in employment. 
• The increase in average real wages is partly explained by above-inflation agreements reached between government and unions, but wage progression and promotion policies account for a considerable proportion of the rise. 
• Wages have increased most rapidly in the lowest ranks of the public service, compressing wage distribution. 
• Overall, the number of public servants has increased since 2006/07. Employment peaked in 2012/13, after which personnel numbers have fallen by just over 1 per cent. This decline is insufficient to contain real spending growth due to continued growth in real wages. 
• There is a significant amount of turnover in the public service, with as many as 6 per cent of personnel leaving in a given year.

#MTBPS2018: Public servants’ wages balloon, but headcount is not to blame

JOHANNESBURG (Reuters) &#8211; Telecoms firm MTN said on Tuesday that it was continuing to hold talks with Nigerian officials to find a mutually acceptable solution to a dispute over the alleged transfer of $8.1 billion of funds.
“Shareholders are advised to continue to exercise caution when dealing in the company’s securities until a further announcement is made,” MTN said in a statement on the Johannesburg Stock Exchange, where its shares are listed.
Reporting by Alexander Winning; Editing by Sunil Nair

MTN continues talks with Nigeria over $8.1 billion dispute

NAIROBI (Reuters) &#8211; Kenya’s Safaricom lost 1.6 percent of its telecom subscribers’ market share in the quarter ended June, the industry regulator said, marking the third straight quarterly drop for the country’s biggest operator.
The firm, part-owned by South Africa’s Vodacom and Britain’s Vodafone, had 29.7 million subscribers during the period, data from the regulator Communications Authority (CA) seen by Reuters on Monday showed.
While the users’ base was up 0.7 percent from the previous quarter, Safaricom’s rivals, including Bharti Airtel’s Kenyan unit added more subscribers, resulting in the company’s reduced market share.
Airtel’s subscribers rose 11.9 percent to secure a market share of 21.4 percent. Safaricom subscribers’ market share has plunged to 65.4 percent from 72.6 percent in June last year.
Investors were unlikely to be concerned by the market share drop as Safaricom grew its user base, and it commands a big lead in revenue, said Eric Musau, a research analyst who covers the company at Nairobi-based Standard Investment Bank.
Safaricom and the regulator have been tussling over a report on competition in the industry, which among other things calls for price controls on Safaricom to help smaller operators.
According to regulator data in 2015, Safaricom had enjoyed the lion’s share of revenue, with more than 90 percent in key categories such as voice calls. The latest revenue data was not available.
The fall in Safaricom’s market share comes in the backdrop of a nine-month absence by its Chief Executive Officer Bob Collymore for medical treatment.
Collymore returned to Kenya in August and attended at least two public events soon after he resumed work.
“Safaricom is one of the companies which you are quite confident that the CEO isn’t the only person who can run the business. He was ably represented and the organisation generally is quite well-structured,” Musau added.
Reporting by Duncan Miriri, Editing by Sherry Jacob-Phillips

Why Kenya’s Safaricom lost 1.6 percent of its telecom subscribers’ market share in Q2

JOHANNESBURG (Reuters) &#8211; South Africa’s net foreign reserves fell to $42.227 billion in September from $42.35 billion in August, the Reserve Bank said on Friday.
Gross reserves, however, rose to $50.394 billion from $49.848 billion , the central bank data showed.
The forward position, which represents the central bank’s unsettled or swap transactions, fell to $1.41 billion in September from $2.319 billion in the previous month.
Reporting by Olivia Kumwenda-Mtambo; Editing by Joe Brock

South Africa’s net foreign reserves drop to $42.227 billion, what you need to know…

JOHANNESBURG (Reuters) &#8211; South African engineering and construction firm Group Five will cut more jobs as it seeks to reduce the size of loss-making divisions, the company said on Tuesday.
The company posted a full-year loss of 1.3 billion rand ($90.76 million), 62 percent higher than a year previously, due to higher costs from the delayed Kpone power project in Ghana.
South African construction companies have been hit hard in recent years as stagnant growth has hobbled public infrastructure spending, prompting companies to seek opportunities elsewhere.
Group Five cut jobs last year when it began the restructuring process of its troubled Engineer, Procure and Construct (EPC) division.
The group, which also has a manufacturing arm, will further cut back its EPC and Turnkey Project Solutions businesses, it said in a statement.
“Unfortunately, there will be some additional retrenchments and we have started the relevant consultation processes,” the statement said.
In May, the company secured 650 million rand ($46.12 million) in short-term bridge funding from local banks in efforts to offset losses from the Kpone project and a lacklustre construction market at home.
Group Five reported a diluted headline loss of 1,380 cents per share, compared with a loss of 853 cents per share for the year ended June 2017.
Headline EPS is the most widely watched profit measure in South Africa which strips out certain one-off items.
($1 = 14.3235 rand)
Reporting by Patricia Aruo; Editing by Joe Brock

More job losses loom at SA’s Group Five firm as company posts year loss of $90.76 million

JOHANNESBURG (Reuters) &#8211; South Africa’s industrial output expanded in July as food and motor vehicle output rose, easing pressure on an economy that recently slipped into recession and is struggling for investment amidst policy uncertainty and possible credit downgrades.
The statistics agency in Africa’s most industrialised economy said on Tuesday manufacturing output rose by 2.9 percent year-on-year in July, following a revised 0.6 percent expansion in June.
Analysts polled by Reuters had expected a 1.1 percent year-year-on-year increase in July.
The rand responded positively to the data, strengthening to 15.0850 from 15.1200 before the release.
Analysts said manufacturing, which contributes 13 percent of gross domestic product and 11 percent of employment, is set to rebound for the rest of 2018 as inventories are replenished.
“This could be early signs of stabilisation in the sector, but we cannot rule out shocks especially as trade conditions are affected by the U.S.-China trade war,” said Isaac Matshego, senior economist at Nedbank.
The country slumped to a surprise recession, data showed last week, as manufacturing along with agriculture and retail shrank. Finance Minister Nhlanhla Nene on Monday said revenue collection could fall below target due to the recession.
Reporting by Nomvelo Chalumbira and Mfuneko Toyana; Editing by James Macharia

South Africa’s manufacturing output for July rises by 2.9 percent, what you need to know…

JOHANNESBURG (Reuters) &#8211; South Africa’s tax take could well be lower than forecast this year, with a downturn in the economy exacerbating problems at the tax revenue service, Finance Minister Nhlanhla Nene said on Monday.
The country entered recession in the second quarter for the first time since 2009.
Nene said tax avoidance and evasion would rise in any economy that was growing slowly and where taxes have been increased, and the recession would only worsen matters.
“There is now additional downside risk to the tax revenue projected at the beginning of the year because of the contraction in the economy,” Nene told a tax conference.
“Fixing our economy to ensure that it grows faster and in a more sustainable manner is therefore critical.”
Nene also cited problems experienced by the South African revenue service (SARS).
President Cyril Ramaphosa suspended its commissioner Tom Moyane in March over alleged misconduct during the previous administration of Jacob Zuma, establishing an inquiry into the allegations two months later. Moyane has denied wrongdoing.
Reporting by Mfuneko Toyana; Writing by James Macharia; editing by John Stonestreet

South Africa’s Finance Minister says tax target could be lower than expected, here’s why

(Reuters) &#8211; Amazon.com Inc (<a href="https://www.reuters.com/finance/stocks/overview?symbol=AMZN.O">AMZN.O</a>) on Tuesday joined Apple Inc (<a href="https://www.reuters.com/finance/stocks/overview?symbol=AAPL.O">AAPL.O</a>) in the $1 trillion club, becoming the second member of the group after its stock price doubled in 15 months.
If the online retailer’s share price continues at its recent pace, it will be a matter of when, not if, Amazon’s market valuation eclipses that of iPhone maker Apple, which reached $1 trillion on Aug. 2.
Apple took almost 38 years as a public company to achieve the trillion dollar milestone, while Amazon got there in 21 years. While Apple’s iPhone and other devices remain popular and its revenues are growing, it is not keeping up with Amazon’s blistering sales growth.
Amazon has impressed investors by successfully diversifying its business into virtually every corner of the retail industry, altering how consumers buy products and putting major pressure on many brick-and-mortar stores.
It also provides video streaming services and bought upscale supermarket Whole Foods. And its cloud computing services for companies have become a major driver of earnings and revenue.
“Amazon’s a little bit more dynamic than Apple because the iPhone has become more mature. Amazon’s cloud business is an extra growth driver that Apple doesn’t have,” said Daniel Morgan, portfolio manager at Synovus Trust in Atlanta, Georgia who describes Amazon’s cloud services as its “crown jewel.”
In the second quarter the unit accounted for 55 percent of Amazon’s operating income and 20 percent of total revenue, according to Morgan.
Apple started trading in December 1980 but its stock did not truly start to take flight for another 25 years, spurred by the iPhone, the breakthrough device that left competitors in the dust.
<div></div>
Amazon &#8211; founded as an online book-retailer in Chief Executive Jeff Bezos’ garage in 1994 &#8211; started trading on May 15 1997 at $1.50 on a split-adjusted basis.
By October 2009 it had risen to $100 and the stock hit $1,000 for the first time on May 30, 2017. It has held above that level since October 27, 2017.
Just 10 months later, on Aug. 30, Amazon shares hit $2,000 for the first time, just $50 per share away from giving the company a $1 trillion market value. That milestone, just a month after it reached a $900 billion valuation threshold.
Amazon shares were last up 1.1 percent at $2,035.69, pulling back slightly from the milestone level of $2050.2677.
Amazon currently trades up 74.0 percent for the year to date. In comparison, Apple has risen about34.7 percent year to date.
Analysts expect Apple’s revenue to jump 14.9 percent in its fiscal year ending in September, according to Thomson Reuters data, a hefty rise but still far short of Amazon’s expected revenue growth of 32 percent for 2018.
<div></div>
<div class="Attribution_container">
<div class="Attribution_attribution">
Additional reporting by Noel Randewich in San Francisco; Editing by Meredith Mazzilli
</div>
</div>

Amazon becomes second publicly traded U.S. company to reach $1 trillion market value, why it could pass Apple

JOHANNESBURG (Reuters) &#8211; Steinhoff reported a slight increase in nine-month sales on Friday as its managers remained preoccupied with cleaning up after an accounting fraud that nearly tipped the South African retailer into bankruptcy.
Steinhoff was thrown a lifeline last month when its creditors agreed to delay debt claims for three years after the multinational retailer uncovered accounting irregularities that sent its shares crashing and left it scrambling for working capital.
The company, which is registered in the Netherlands, said sales rose 2 percent to 12.9 billion euros ($15 billion) in the nine months through June as a strong showing at its separately listed African unit, Pepkor, offset weak results from Europe, the United States and Europe. The group’s brands include Mattress Firm in the United States and Poundland in Britain.
“As a management team we are focused on maintaining stability within the operations; finalising the implementation of the restructuring plan with the group’s financial creditors; improving governance at all levels,” the company said in a statement.
Shares in Steinhoff rose 3.17 percent to 2.95 rand as of 1026 GMT, valuing the company at around 12 billion rand, far from the more than 200 billion rand valuation the stock fetched just nine months ago.
Steinhoff has already written down the value of its assets by more than $12 billion following initial findings of an investigation into the company’s past bookkeeping practices.
The probe, being carried out by auditing firm PwC, has uncovered accounting irregularities that date back to at least 2015, and is expected to be completed by the end of the year.
($1 = 0.8570 euros)
Reporting by Tiisetso Motsoeneng; Editing by James Macharia and Susan Fenton

Scandal-ridden Steinhoff reports 2% increase in nine-month sales, what you need to know…

JOHANNESBURG (Reuters) &#8211; South African lender Nedbank reported a 26 percent jump in half-year profit on Tuesday, helped by a recovery in its west African associate, Ecobank.
Nedbank owns about 16 percent of Ecobank Transnational Incorporated (ETI), which is a recovering from weak investment and consumer spending in the commodity-rich west African region.
Diluted headline EPS, the primary measure of profit in South Africa that excludes certain one-off items, came in at 1,387 cents in the six months through the end of June compared with 1,098 cents a year earlier.
“While risks remain, it is expected that the actions taken to improve ETI’s financial position and governance, along with an improving macroeconomic environment, will continue to drive an improved financial performance in 2018,” Nedbank said in a results filing.
Reporting by Tiisetso Motsoeneng; Editing by Ed Stoddard

South Africa's Quantum Foods warns of 38% drop in first-half profit

South Africa’s Quantum Foods warns of 38% drop in first-half profit. budget_shutterstock_249974521

How Ecobank aided Nedbank to boost its H1 profit by 26%

By Francois Conradie, Head of Research at NKC African Economics
Workers at Total Gabon, members of the National Organisation of Petroleum Employees (Onep), have issued a statement saying they plan to go on a 15-day strike from Saturday, June 30.
Their demands are unpaid bonuses, a reduction in the number of foreign workers and some reassurances about job security. The statement, which was issued on Monday, June 24, follows an all-hands meeting held on June 19 in Port-Gentil at which union representatives raised some of these issues.
The strike has the potential to disrupt oil production and, if it is extended beyond the planned 15 days, to affect Gabon’s overall economy.
Nor are the Onep workers the only ones planning a strike. Civil servants are deeply unhappy about a press conference held on Monday at which Ike Ngouoni, a spokesman for President Ali Bongo, announced a plan to cut wages for government workers.
Government wants to try to conform to guidelines from the Economic and Monetary Community of Central Africa (Cemac) that the public sector wage bill should equal 35% of government revenues, rather than the 59% that they currently represent in Gabon.
Salaries for workers earning more than CFAFr2m a year are being cut by 15%, another effort is being made to eliminate a ghost worker problem, operating budgets are being cut by between 5% and 15%, and staff numbers are to be slashed in all departments.
Mr Ngouoni said that government intended to save CFAFr70bn a year or more by means of these initiatives. In response, Jean-Remi Yama, chairman of Unitary Dynamic, the biggest trade union in Gabon, threatened “radical action” in response, saying that the government should have started by cutting the number of political appointees. 
Research academics at the University of Science and Technology of Masuku have been on strike since Friday, June 22, demanding payment for overtime worked last year and efforts to address operating issues at the university. They have also indicated their refusal to work any more overtime.
One bit of good news on the same day was the announcement that a four-month strike by court clerks had come to an end, promising some relief for the overstretched prison system.
The trade union movement in Gabon is historically a combative one and strikes are common. However, it has been a while since there was labour action in the crucial petroleum sector. The efforts by Total to solve workers’ problems are important here.
There is also some risk that these demands from unions could begin to overlap with co-ordinated civil society action in response to cost of living concerns, as fuel and inflation prices have been increasing. 
Moreover, while civil servants are upset about potential salary cuts and layoffs, fiscal consolidation is and should continue to be a top priority for the government.
The country has run into substantial domestic and external arrears lately and more control over the wage bill is one of the key areas where the government hopes to optimise fiscal policy.
Spending should be kept in check, especially as uncertainty looms in the hydrocarbons sector due to volatile oil prices and maturing oil fields, which could put pressure on future revenue collection.

How 15-day planned strike by Total Gabon oil workers could impact the country’s economy

By Lusanda Raphulu, partner at Pan-African law firm Bowmans
Labour broking, working hours and minimum wages are hot potatoes in South Africa but the country is not alone in grappling with them. From Angola, Kenya and Nigeria to Tanzania, the United Arab Emirates (UAE) and Israel, employers are dealing with many of the same employment challenges as in South Africa – along with some twists unique to the jurisdictions they operate in. This is the view of Lusanda Raphulu, partner at Pan-African law firm Bowmans, after moderating one of the sessions at the 2018 Africa/ Middle East Client Conference of the Employment Law Alliance (ELA).
When it comes to the latest employment law trends, there are striking similarities across much of Africa and the Middle East.
Take the question of working hours which, it turns out, is highly topical in Israel and the UAE at the moment.
&nbsp;
Laws cast in stone stand in the way of flexible hours
In the UAE, a major challenge for many employers is the extremely low oil price, which is hitting business hard. One obvious cost-cutting method is for employers to implement more flexible working arrangements. This is easier said than done as the labour laws that were written in 1980 are far from flexible.
Many employers who can no longer afford to have all their employees working full time would like to introduce part-time work or shifts. However, the law in the UAE prohibits anyone from working more than eight hours a day, and part-time work is not an option for foreign workers (making up the majority of the workforce) who must have the sponsorship of one, full-time employer. There is no easy way around this, with penalties for breaching the employment regulations including fines, imprisonment or deportation. The only way to introduce flexible working arrangements is to obtain direct approval from the Ministry of Labour, a difficult and lengthy process that can take eight or nine months to complete. 
The situation is similar in some ways in Israel (whose labour laws were written in 1951), where the working week was recently reduced from 43 hours to 42 hours, without any cuts in pay, under a collective agreement between unions and employers.
One of the difficulties with this change is that numerous employees in Israel are paid by the hour and the complexities of adapting reduced working hours for hourly paid workers were not fully taken into account. This is a practical consideration that has had perplexed employers knocking on the door of law firms, seeking advice. 
Still, in a country whose employees work significantly longer hours than their counterparts in Europe and the United States, a shorter working week is considered a welcome step towards better work-life balance.
&nbsp;
Time off for breastfeeding stirs controversy in Kenya
Kenya is also grappling with the practical consequences of a change in employment laws, this time requiring employers to give nursing mother’s time off during the working day to breastfeed their babies. This has generated a discussion among politicians, lawyers, the media and celebrities with some commentators praising the government for its commitment to maternal and infant health and others expressing grave reservations about the practicalities and added burden on employers.
Another controversial labour issue in Kenya currently is the minimum wage, which differs in urban and rural areas and recently increased by about 5%. Commentators feel that the increase could have serious implications for certain industries, especially the private security industry. It has become the norm in Kenya for homes and businesses, especially those of national and international companies, to be guarded 24 hours a day but this is only possible while wages are low – a dilemma that highlights the tension between protecting workers’ rights and minimising job losses caused by cost cutting.
&nbsp;
The risks and costs of using labour brokers
Meanwhile, in Nigeria and Tanzania, a labour law issue preoccupying many employers, not to mention the labour courts, is labour broking and specifically the issue of who the employer is.
In Nigeria, this used to be a straightforward matter. For many years, the broker was the employer. That has no longer been the case since the National Industrial Court of Nigeria ruled that a sacked worker who went to court had two employers, the labour broker and the end-user.
Since there is a significant gap between what employers and labour brokers pay, this could have expensive implications for employers. Experts suggest a rule of thumb for employers trying to keep their costs down in Nigeria is to keep their distance from day-to-day matters affecting labour-broking employees. This way labour brokers, and not employers, are the ones managing the employees, which reduces the risks for employers. 
Although Tanzania does not yet have labour-broking regulations, the position is similar: the entity that has day-to-day control of the employees is considered to be the employer. The risk of the same employee receiving benefits from two employers has prompted some of Tanzania’s largest institutions to move away from labour broking and to start hiring people themselves, even though this is complicated and could virtually double their employee costs.
One country where the law is cut and dried on labour broking is Angola. Employers in that country are discouraged from using the services of labour brokers unless this is temporary and strictly for short periods. Since 2016, the maximum period for hiring temporary workers has been two years. After two years, the employer must hire the person directly and cannot get around this by replacing him or her with someone else as the law prohibits such replacement.
All in all, the discussions at the ELA conference showed that South Africa is far from alone in dealing with employment law challenges such as labour broking, minimum wages and the like. Other countries are in much the same boat and perhaps even navigating more challenging waters than South Africa’s currents.

Why more African countries are grappling with minimum wage and working hours

By Clement Uwiringiyimana
KIGALI (Reuters) &#8211; Earnings from Rwanda’s mineral exports more than doubled to $373 million last year from the previous 12 months, supported by a rebound in global prices of commodities, a top official said.
After meeting sector players in the capital Kigali on Tuesday, Francis Gatare, chief executive at Rwanda Mines, Petroleum and Gas Board (RMB), told journalists last year’s earnings were “fantastic”.
Mining is Rwanda’s second largest foreign exchange earner after tourism and the East African country took in $166 million from exports of the commodities in 2016.
The growth was “driven by very strong commodity prices on global market &#8230; good prices of new commodities particularly gold and gemstone,” Gatare said.
He said Rwanda planned to install two smelters to help add value to some of its minerals such as tin and coltan and that earnings were seen climbing to $600 million in 2019.
The country has been trying to draw foreign investment into new sectors like auto making and textiles to boost an economy still shadowed by the 1994 genocide in which an estimated 800,000 Tutsis and moderate Hutus died.
Editing by Elias Biryabarema; editing by David Evans

Earnings from Rwanda’s mineral exports rose to $373 million last year

Ghana’s economy is rebounding and the major commodity exporter is poised to wean itself off bailouts through sustained fiscal discipline and a battle against corruption, President Nana Akufo-Addo said on Wednesday.
<img loading="lazy" decoding="async" class="aligncenter wp-image-284117 size-full" src="http://cnbc.africa/wp-content/uploads/2017/09/Nana-Akufo-Addo_Ghana_Twitter_RZ.jpg" alt="" width="850" height="850" />
The former opposition leader, sworn into office a year ago, said his government spent the past year stabilizing the economy, including clearing huge debts while rolling out infrastructure such as schools and roads.
Ghana, which exports cocoa, gold and oil, is in the last year of a $918 million credit deal signed in 2015 with the International Monetary Fund to reduce the deficit, public debt and inflation and lift growth.
<div class="DPSlot_container_2dHIN StandardArticleBody_dp-slot-inline_eUPBt" data-ad-type="other"></div>
“I am glad to report that the hard work is yielding positive results &#8211; the macroeconomic fundamentals have seen improvements through improved fiscal and monetary discipline,” Akufo-Addo told reporters in Accra.
“The important aspect and the cornerstone of our government going forward is to remain committed to fiscal discipline so that never again will we go back to the IMF or any bailout of the sort.”
GDP growth in the West African state rebounded to 9.3 percent in Q3 2017 from 3.5 percent in the same period of 2016.
Akufo-Addo said the government saved about $7 billion after reviewing power sector deals signed by his predecessor covering a 13-year contract. Eleven of the contracts had been terminated.
It also saved at least $200 million through value-for-money procurement reviews, he said, without giving details.
Akufo-Addo, who last week named a special prosecutor to investigate graft, warned that his appointees would not be spared if found culpable of corruption.
He also said his government had yet to decide whether to extend the stay of two ex-Guantanamo Bay detainees transferred to Ghana under a special arrangement with the United States.
The two Yemeni nationals were sent to Ghana in January 2016 for an initial two-year period after being held for more than a decade at Guantanamo for suspected terrorism.
<div class="Attribution_attribution_o4ojT">
Reporting by Kwasi Kpodo; editing by Mark Heinrich
</div>

Ghana’s economy back on track: President

Construction firm Commisimpex has gone to a French court in its fight with the Congo Republic over what it says are more than $1 billion in unpaid bills, the latest step in a decades-old saga that has weighed on the nation’s economy.
Commisimpex, which worked on construction and public works projects from the early 1980s until a Congolese court ordered it into liquidation in 2012, wants Total, Eni and other energy firms to pay taxes and royalties to the company instead of paying the state.
Commisimpex, which has pursued Congo in courts in Europe and the United States for nearly two decades, launched its latest legal challenge in October 2016 at the commercial tribunal in the Paris suburb of Nanterre, documents seen by Reuters showed.
Details of the case have not been publicised by any parties involved until now, a sensitive time for the government as it starts another round of talks with the International Monetary Fund on support for an economy battered by weak oil prices.
The legal saga has weighed on Congo’s sovereign rating and forced a temporary default on a Eurobond this year.
Commisimpex has won several other court cases abroad, but Congo has not paid. In 2012, Congo said the firm owed 1.3 billion euros ($1.54 billion) in social security payments built up over 30 years. A Congolese court then ordered the firm into liquidation.
The construction firm filed its latest petition to the French commercial tribunal and served a summons to the Congolese unit of France’s Total and other firms informing them of its action.
A Commisimpex spokeswoman said the firm was pursuing $1.25 billion in unpaid bills and interest.
Commisimpex is seeking to activate a guarantee on oil field revenues it says it secured in 1986 as collateral against debt, the summons sent to Total showed.
Commisimpex said Congo used “as security all revenues, and notably all moneys owed, royalties, taxes rights, etc. whether present, future or eventual originating directly or indirectly from &#8230; hydrocarbon deposits.”
It applies to the Likouala, Loango, Tchibouela, Emeraude, Yanga, Sendji and Sendji Compl. oil fields, which were then operated by Elf Aquitaine SA, Elf Congo, Agip and Agip Congo.
Elf was later absorbed into French giant Total, while Italy’s Eni took over Agip.
Commisimpex’s petition lists Elf Aquitaine, Total E&amp;P Congo, Eni and Eni Congo as defendants.
A lawyer for Elf Aquitaine said it would not comment on the case. Eni declined to comment. A spokesperson for Total did not immediately respond to a Reuters request for comment.
Five smaller firms &#8211; Congorep, SNPC, Kontinent Congo, AOGC and Petro Congo &#8211; which acquired stakes in the fields at a later date are also listed.
Petro Congo said it was not aware of the case. The other companies did not respond to telephone calls and emails.
Congolese government spokesman Thierry Moungalla said: “The Congolese state will, of course, defend its position which is that these taxes cannot be subject to seizure.”
He described references to a guarantee in the Commisimpex documents as “allegations” and said it was up to the company to present proof to the court.
Oil accounts for about three-quarters of Congo’s revenues, and weak global crude prices have hit the country hard. Losing taxes or royalty payments would add to the economic pain.
Congo has opened talks with the IMF to support its economy. But Congo’s debt load has come under scrutiny by the IMF, which last month said Brazzaville had not fully disclosed its debt situation during a visit by IMF officials in March.
An IMF delegation began another week-long visit on Tuesday during which it said it would finalise its debt assessment.
Rating agency Standard &amp; Poor’s said last week it would consider raising Congo’s foreign currency ratings if the government reached a settlement with Commisimpex.
Earlier this year, Commisimpex briefly secured the freezing of a $21 million coupon payment Congo made to holders of its $363 million Eurobond. But its effort to secure the funds was unsuccessful, a U.S. court ordered them to be released, but the move temporarily pushed the bond into default.
($1 = 0.8469 euros)
<div class="Attribution_attribution_o4ojT" data-reactid="59">
Additional reporting by Valentina Za in Milan, Bate Felix and Emmanuel Jarry in Paris, and Christian Elion in Brazzaville; Editing by Tim Cocks and Edmund Blair
</div>

Construction firm chases oil taxes, royalties in $1BN Congo debt row

ArcelorMittal South Africa reported a deeper first-half loss on Thursday but forecast growth in steel demand in Africa in the second half.
Headline losses grew to 1.619 billion rand ($125.5 million)for the six months to June 30 from a loss of 458 million a year earlier.
The company cited higher costs for imported coking coal and iron ore, exchange rate volatility and continued weakening of the South African economy.
Shares in the company, majority-owned by top global producer ArcelorMittal, were down 2.6 percent in early trade.
&#8220;Projections are that Africa will experience growth in demand on the order of 2.3 percent,&#8221; ArcelorMittal said in its earnings statement.
African markets, specifically in the west and east sub-Saharan regions, have remained positive due to infrastructure investments in rail, roads and energy, it said.
Steel consumption in South Africa fell by 3.8 percent in the first half due to subdued economic growth and continued imports of large quantities of steel, especially from China, it said.
The steelmaker has long complained about cheap imports eating into its business.
South Africa plans to impose emergency &#8220;safeguard&#8221; tariffs on imports of certain flat hot-rolled steel products from July due to the damage done to domestic production.
The tariff is to stay in place for three years and fall from 12 percent in the first year to 10 percent in the second year and 8 percent in the third.
($1 = 12.8974 rand)
<div class="Attribution_attribution_o4ojT" data-reactid="49">
Reporting by Tanisha Heiberg; editing by Ed Stoddard and Jason Neely
</div>

Earnings

SA’s #MTBPS2018: Key takeaways

#MTBPS2018: Public servants’ wages balloon, but headcount is not to blame

MTN continues talks with Nigeria over $8.1 billion dispute

Why Kenya’s Safaricom lost 1.6 percent of its telecom subscribers’ market share in Q2

South Africa’s net foreign reserves drop to $42.227 billion, what you need to know…

More job losses loom at SA’s Group Five firm as company posts year loss of $90.76 million

South Africa’s manufacturing output for July rises by 2.9 percent, what you need to know…

South Africa’s Finance Minister says tax target could be lower than expected, here’s why

Amazon becomes second publicly traded U.S. company to reach $1 trillion market value, why it could pass Apple

Scandal-ridden Steinhoff reports 2% increase in nine-month sales, what you need to know…

How Ecobank aided Nedbank to boost its H1 profit by 26%

How 15-day planned strike by Total Gabon oil workers could impact the country’s economy

Why more African countries are grappling with minimum wage and working hours

Earnings from Rwanda’s mineral exports rose to $373 million last year

Ghana’s economy back on track: President

Construction firm chases oil taxes, royalties in $1BN Congo debt row

ArcelorMittal South Africa loss deepens

News Tips

Advertise With Us

Earnings

SA’s #MTBPS2018: Key takeaways

#MTBPS2018: Public servants’ wages balloon, but headcount is not to blame

MTN continues talks with Nigeria over $8.1 billion dispute

Why Kenya’s Safaricom lost 1.6 percent of its telecom subscribers’ market share in Q2

South Africa’s net foreign reserves drop to $42.227 billion, what you need to know…

More job losses loom at SA’s Group Five firm as company posts year loss of $90.76 million

South Africa’s manufacturing output for July rises by 2.9 percent, what you need to know…

South Africa’s Finance Minister says tax target could be lower than expected, here’s why

Amazon becomes second publicly traded U.S. company to reach $1 trillion market value, why it could pass Apple

Scandal-ridden Steinhoff reports 2% increase in nine-month sales, what you need to know…

How Ecobank aided Nedbank to boost its H1 profit by 26%

How 15-day planned strike by Total Gabon oil workers could impact the country’s economy

Why more African countries are grappling with minimum wage and working hours

Earnings from Rwanda’s mineral exports rose to $373 million last year

Ghana’s economy back on track: President

Construction firm chases oil taxes, royalties in $1BN Congo debt row

ArcelorMittal South Africa loss deepens

News Tips

Advertise With Us

Newsletters