Andre Rosslee | Absa
It was announced recently that South Africa is no longer in the technical recession that resulted from two consecutive quarters of negative growth. While welcomed news, it does not change the fact that consumers remain under pressure in the face of ever-increasing living costs, growing debt levels and significant political uncertainty.
All forecasts are that this constrained operating environment will continue. Unfortunately, no one-size-fits-all solution exists that will enable businesses to weather the storm unharmed. The good news however, is that there are ways that businesses in the wholesale and retail space can work to mitigate their losses and identify gaps that serve as growth opportunities.
Some key tips for wholesalers and retailers are:
Differentiate your business through top-notch customer service and make your customers feel valued
Customer service lies at the heart of the retail industry, so being able to meet consumer wants and needs is non-negotiable. And more than just meeting their demands customers want to feel special and valued. For example, clever retailers use the data they have available through social media channels to provide customers with a personalised experience. This gives the customer the sense that they are more than just another set of feet walking through the door (or just another online customer).
Manage your margins correctly
Any retailer or wholesaler who has worked in the industry for a length of time understands how vital it is to maintain the right stock levels. This includes ensuring there is an adequate supply of high-demand products and making sure there is not an excess of products that are harder to move. Finding the perfect balance requires monitoring and understanding customer buying patterns, replenishing stock at the right time and keeping abreast of product trends.
Look after your staff
Regardless of what industry you work in, staffing is one of the most important components of doing business. By recognising and rewarding your staff members’ hard work, you can ensure your staff is energised to help achieve your business objectives.  In an industry where staff often have to work longer hours – and especially in peak periods such as the festive season &#8211; it is important to show them that you appreciate their commitment and efforts.
Ensure you have an efficient omni-channel offering
An up-to-date and user-friendly eCommerce offering is a necessity for retailers hoping to stay competitive in an always-on world of digital convergence. A recent study by Ipsos found that the number of South African online shoppers is expected to triple in the next few years, indicating the need for a strong digital offering. However, it is key that customers’ needs are met at every touch point – from mobile and desktop to the bricks and mortar store. To do so, business owners and management need to understand how customers shop and build an omni-channel offering that caters to these patterns.
Consider what promotions are on offer
The age of the savvy consumer is upon us. Promotions are a necessary tool to drive feet into stores (and increase online sales). Retailers cannot simply place products on promotion without thinking of the impact it will have on their margins. Black Friday last year is an example of how promotions did not yield the intended result. Because the phenomenon is fairly new to the South African market, many retailers did not price their products correctly and therefore made a loss. As a retailer, you will need to make an informed decision on what margins you are willing to sacrifice on promotions.
Do not underestimate the importance of your brand
Retail’s busiest season has just started. Between September and December often businesses experience three times as many sales between as there are over the course of the rest of the year. This makes it a highly competitive period. You need to go the extra mile to attract customers – and building a brand or corporate identity through imagery, promotions and service are often successful ways retailers can achieve this.
As costs of operations rise, and the consumer becomes ever more aware of controlling budget spend, business profit margins become thinner. It is therefore necessary to partner with a financer that is aware of the nuances and climate our unique country finds itself in.
Overall, there is a generally muted industry outlook. Combined with challenges around heightened safety and security concerns such as robberies, card skimming and credit card fraud, among others, vigilance, creativity and resilience is needed to succeed in an extremely difficult operating environment.
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How wholesalers and retailers can weather the economic downturn

Kenya’s central bank invited bids on Tuesday for two-year and 10-year Treasury bonds worth 13 billion shillings ($126 million) in a tap sale.
The bank said in a statement the two-year bond will have an average yield rate and coupon of 11.619 percent, while the 10-year bond will have a coupon of 12.966 percent and average yield rate of 13.072 percent, and it will receive bids between Sept.26 and Sept.28.
At their auction on Sept.20, the weighted average yield on the two-year bond fell to 11.619 percent from 12.509 percent in December 2016, while the weighted average yield on the 10-year bond rose to 13.072 percent from 13.060 percent in August.
($1 = 103.2000 Kenyan shillings)

Kenya central bank extends sale of two-year and 10-year Treasury bonds

Zimbabwe put on trial on Monday an activist pastor accused of attempting to subvert the government, a charge that carries up to 20 years in prison on conviction, following protests last year against President Robert Mugabe’s handling of the economy.
Evan Mawarire, through his #ThisFlag movement, led a stay-at-home demonstration in 2016, the biggest protest in a decade, via a social media campaign that urged citizens to speak out against economic problems and government failure to pay workers.
Mawarire was arrested again for subversion on Sunday as he stepped down from his pulpit after police accused him of circulating social media posts that accused the government of wrecking the economy.
Appearing in maroon slacks at the High Court, the clergyman pleaded not guilty to two charges of subverting the government and two charges of inciting public violence. The latter carries a penalty of up to 10 years in jail.
State prosecutor Chris Mtungadura said social media posts by Mawarire last year were meant to incite the population to overthrow the government. The state has lined up eight witnesses.
“He was exercising his constitutional rights of challenging the policies of government. This &#8230; was done in a lawful manner,” defence lawyer Harrison Nkomo told the court.
<h3 data-reactid="48">ECONOMIC TROUBLES</h3>
Over the last few days, shortages of basic goods and fuel have emerged, resulting in panic buying by consumers. Shortages of cash, which started last year, have worsened, with some banks unable to provide money at all to customers.
Prices of imported goods, including cooking oil and dairy products, have also risen, and businesses say they are being forced to buy foreign currency on the black market at a premium, raising fears of a return to hyperinflation.
In 2009, the government adopted the U.S. dollar as its official currency, alongside the British sterling and South African rand, which helped to stabilise prices.
But the U.S. dollar has disappeared from banks and on Monday, buying $100 on the streets through a bank transfer cost $150, up from $133 a week ago, in a sign that dollar bank balances are fast losing value.
The domestic quasi-currency “bond note” introduced last year to try to ease the shortages is also in short supply as it has been sucked out of the banking system but can be found on the street.
Although bond notes have a 1:1 face value with the U.S. dollar, one needs $1.20 in bond notes to buy $1.
Mugabe, 93, has held power since Zimbabwe won independence from Britain in 1980 and critics accuse him of using the security forces to crack down on dissent.
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Reporting by MacDonald Dzirutwe; Editing by Gareth Jones
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Zimbabwe Pastor, Evan Mawarire, on trial for subversion, faces 20 years in jail

Daniel Buntman | Barclays Africa
It is getting easier and easier for anyone to protect your money from rand fluctuations and invest offshore. In fact, international saving is now so simple that you can put funds away in one of several currencies just by clicking a few buttons.
Absa clients can now open a currency account online, allowing them to save in 17 different currencies – such as the dollar, euro, pound, or even pula.
“Before we made it possible to save in foreign currency with just a few clicks, you had to go into a branch to open this type of account – and that meant waiting for between two and 14 days for the account to be opened,” says Daniel Buntman, Absa’s Retail and Business Banking head of international banking.
This, he notes, meant that the rand – known to be a volatile currency – might have shifted in between a client’s decision to save in foreign currency and when the account was opened.
Buntman adds online access also democratises, as he puts it, saving in different currencies.
“Most people just don’t have access to buy forex to save in, they usually have to go through brokers and open complex, costly accounts.”
Now, however, clients can invest in foreign exchange with ease and there’s no minimum amount, as long as the small money transfer fee is covered. Buntman explains the fee is a flat amount to cover exchange control costs, whether a client invests a few thousand, or a few hundred thousand.
“In fact, you can invest as much as R1 million a year without the need to provide the South African Reserve Bank with documentation.” The sophisticated platform has been more than 18 months in the making, and is set to grow in functionality. Because it is linked to a current profile, clients don’t have to queue to provide documentation such as a South African identity document, proof of address and a tax number, because the bank already has this on hand – as long as the information is up to date.
“In the future, we’ll be making it possible for clients to make online payments directly from currency savings accounts,” says Buntman. The functionality to pay out of your currency account is already available in almost 100 branches across the country.
In the meantime, it’s easier for people to hedge against the rand’s volatility by saving in different currencies, he says. Buntman adds it is also easier for people to save for international holidays. “You can save for your international trip over time, putting away some money each month, which eases concerns about currency fluctuations.”
This, he explains, will help reduce the stress of planning for a holiday. “We can’t eliminate the cost of traveling, but we will make it easier to go overseas and spend in the currency of your destination.” Over time, Absa will also build in the ability to transfer funds to its travel card online,
The Multicurrency Cash Passport card smartly matches the currency a shopper is spending to the appropriate pre-loaded currency purse, explains Buntman. It also means clients won’t incur international fees when shopping overseas. However, you can’t overdraw your international savings account, and the income you earn is taxable in South Africa.
“Currency accounts democratise savings because it gives you the personal freedom to quickly, easily and conveniently put some of your hard-earned savings in foreign currency – it’s all connected to your online banking and is quick and simple to use,” adds Buntman.

Offshore Investing: where to next?

François Conradie | NKC African Economics
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On Monday, September 18, the Higher Independent Electoral Instance (Isie) announced that municipal elections that were supposed to take place in December had been postponed indefinitely. The step was agreed at a meeting that brought together the prime minister’s office, the State president’s office, representatives of political parties and the Isie.
According to the Isie’s statement, the “majority of participants was in favour of the postponement.”
These elections had first been scheduled to take place in October 2016, then in March 2017, then in December. No municipal elections have been held in Tunisia since 2010, before the revolution that led to the flight of President Zine Al-Abidine Ben Ali.
The Isie has been subject to underhanded interference for months, and last week Parliament was unable to pick new members to the body because a number of deputies were not in the chamber, apparently in a deliberate move to make sure there was no quorum.
The disappointing postponement will further sour the national mood, which has been affected by the passing of the ‘Reconciliation in the Administration’ Act, on Wednesday, September 13. This new law grants amnesty to civil servants who worked in government under Mr Ben Ali and who were accused of acts of administrative corruption but who did not take bribes.
The law was backed by the two main parties in government: the Islamist Ennahdha and the conservative secular Nidaa Tounes, which is home to a number of veterans of Mr Ben Ali’s dominant party, the Democratic Constitutional Rally (RCD). Nidaa is the party of both President Beji Caid Essebsi and Prime Minister Youssef Chahed, and Mr Essebsi in particular has come in for criticism for his sponsorship of the law.
Many in the opposition (particularly on the left) and in civil society deplore the law as a whitewashing of corruption under the RCD and as threatening a potential return to dictatorship; on Saturday, September 16, the opposition and civil society, led by a collective called ‘manich msamah’ (we will not excuse), led a march in Tunis that brought together at least several hundred people.
Hamma Hammami, the leader of the leftist Popular Front (PF), expressed the feelings of many when he said: “Beji Caid Essebsi is today the head of the counter-revolution along with Rached Ghannouchi [Ennahdha’s leader].”
Doubt has now been cast on the government’s commitment to reining in corruption. With the reconciliation law, it seems that the government has chosen to sweep some old crimes under the carpet for the sake of retaining experience in the civil service, but this will be at the expense of probity and the support of the broader population for the government.
Nidaa and Ennahdha have seemingly connived to push back the local authority elections for fear of doing badly as voters react to these unpopular steps. Unfortunately, this means that overspending in government and ineffective revenue collection (meaning turning a blind eye to smuggling and tax cheating) can be expected to remain problems.

Tunisia – Municipal vote postponed indefinitely amid criticism of ruling parties

By: The National Treasury
The Minister of Finance would like to express deep concern about audit matters currently surrounding KPMG. These developments have created a bad image and have undermined the reputation of good governance and audit independence in one of the key sectors and institutions in our economy. These developments further threaten to undermine our efforts in reinforcing confidence and enhancing a climate for investments, both domestic and international.
The developments over the past week surrounding KPMG have reaffirmed our position that there must be mandatory rotation of audit firms. In this regard, government should explore possible regulations for both the public and private sector in an effort to ensure and preserve the integrity and good governance in the audit fraternity. This move will not only ensure that companies diversify their audit options but also build in a peer review oversight mechanism. It cannot be in the interest of good governance to have one audit firm auditing a company perpetually. 
In the immediate term, and as a measure to restore confidence in audits, all of government and its entities must consider reviewing their work programs with KPMG, to ensure that their audit processes have not been compromised in any way, and to take appropriate steps if it has been compromised.
Recent developments further highlight the risks posed by market dominance and concentration of a few firms in key industries and offer yet another opportunity for introspections and reforms. We call for a concerted effort by all stakeholders to open up the sector to more players for a more de-concentrated and transformed audit sector.
It is our belief that despite the setback, not all is lost. We should all join hands in rooting out bad elements that undermine the optimal functioning of our promising economy and its globally reputable institutions. 
It is therefore, warranted and critical that the relevant law enforcements and bodies such as the Independent Regulatory Board for Auditors (IRBA) look into this matter to identify and sanction those responsible for any wrong-doing.

South Africa’s Minister of Finance responds to KPMG

By: Mary-Jean Nleya * 
The 72nd United Nations General Assembly (UNGA) runs until Monday 25 September. Speeches from different heads of state commenced on 19 September. The much-anticipated debut of President Donald Trump on the world stage took place on Tuesday. He applauded the African Union and United in his debut speech for “[leading] peacekeeping missions [and] to have invaluable contributions in stabilizing conflicts in Africa”.
Among African heads of state, President Alpha Condé of Guinea was the first African to take the international stage. He was fifth on the list, directly after President Trump. Nigerian President Muhammadu Buhari was the second African head of state to address the assembly and eighth on the general debate list.
While there are many issues heads of state have to cover in the time granted them to address the international community, the entire programme, including the side events, provides an opportunity to discuss issues that may or may not be directly addressed by the respective heads of states. One of the important topics is on bridging the digital divide and harnessing technology to achieve the Sustainable Development Goals.
<h4>Rapid innovation versus digital inclusivity </h4>
The 21st century has brought about a significant rise in the use and advancement of technology. In recent months there have been widespread <a href="https://www.theatlantic.com/technology/archive/2017/07/musk-vs-zuck/535077/">debate and discussion</a> on the <a href="https://www.inc.com/kevin-j-ryan/elon-musk-says-artificial-intelligence-bigger-threat-than-north-korea.html">perils</a> or conversely the <a href="https://www.cnbc.com/2017/07/24/mark-zuckerberg-elon-musks-doomsday-ai-predictions-are-irresponsible.html">advantages</a> of artificial intelligence (AI), with tech giants painting various images on the future use of AI.
Debates on the future of technology have become so futuristic that there is a need to pause and look at the current issues surrounding existing digital infrastructure. The various debates on AI ought not to surpass the important discussions on <a href="http://www.g20-insights.org/policy_briefs/digital-infrastructure-overcoming-digital-divide-emerging-economies/">overcoming the digital divide</a> and the current inequalities as they relate to the basic infrastructure and access to technology, e.g. internet connectivity in some parts of the world.
While debates on the future uses of AI should be considered and <a href="https://qz.com/1061404/we-need-to-shift-the-conversation-around-ai-before-elon-musk-dooms-us-all/">genuinely</a> debated; practical and critical issues of preventing an irreparable digital divide have to be given due recognition, too.
Therefore, it is imperative that in the midst of the headline grabbing futuristic debates by tech billionaires that actions, strategies and methods of ensuring access to the internet should be implemented to connect those that are still unconnected. We’re talking here about the use of basic internet services, through affordable methods such as the <a href="http://whitespaces.microsoftspectrum.com/">TV White Spaces spectrum</a>. The digital divide affects certain segments of the populace, such as low-income and rural localities – due to unaffordability and inadequate skills.
<h4>Discussions on tech   </h4>
During a panel discussion on “The Digital Transformation of Social Impact”, co-founder of Xbox, Otto Berkes, said: “Technology is a powerful enabler of communication and outreach, [particularly] when internet &amp; mobile devices come together”, and that the way to harness technology as an enabler is to “harvest the intellectual capability across the globe”.
A subsequent side event during the UNGA was the “High Level Event on Innovation and Technology: SDG Innovation”. Here, Aliko Dangote had this to say, “There is no way we can reach the Sustainable Development Goals’ targets without leveraging on technology and innovation”.
Ashish Thakkar, dubbed “Africa’s youngest billionaire”, said: “By 2020, Africa will have 700 million cellphones online”. This emphasises the importance of finding ways to ensure that mobile penetration in conjunction with access to basic internet services, especially on the African continent, is leveraged to achieve the Sustainable Development Goals and break inequalities as they currently exist in areas such as access to education and healthcare.
<h4>Tech &amp; globalisation </h4>
Globalisation as it exists in the 21st century has been <a href="http://press.princeton.edu/titles/10433.html">credited</a> with a lot, among others, ensuring an interconnected and vibrant world economy; maintaining multilateralism; improving the standard of living exponentially for over half a billion people in emerging economies such as China, Brazil and India; and viz-a-viz being a proponent which has reduced inequalities across nations.
Conversely, globalisation has also been <a href="http://press.princeton.edu/titles/10433.html">critiqued</a> for having been the cause of inequalities within nations by benefitting a privileged elite, and having been the cause of the contagion effect all over the world during the 2008 economic crisis, etc.
It is essential to find ways to ensure that technological innovation is inclusive and does not widen socio-economic inequalities that exist today in order to preempt societal unrest from taking place as seen with complexities and paradoxes of globalisation in recent years and more so in recent months.
<h4>Conclusion </h4>
Bridging the digital divide and ensuring that indeed access to basic internet services and access to other forms of enabling technology is equalised and available to all requires unconventional and bold steps.
To buttress this point, the president of the 72nd session of the UNGA, Miroslav Lajcak, at the “High Level Event on Innovation and Technology: SDG Innovation” session highlighted the importance of “unleash[ing] innovation to unlock the potential of every person, everywhere, especially [among] young people”.
In this regard, bold and unconventional steps are required to harness technology and innovation for the SDGs. Countries such as Estonia have moved to offer the internet as a right to all citizens and offers it to all its citizens.
The step undertaken by Estonia is indeed ambitious; however, if one country has made access to internet services possible for all its citizens, there are other approaches that can be followed by leaders of governments and business to afford opportunities to all citizens (despite social and economic strata) and “unlock the potential of every person, everywhere”.
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* Mary-Jean Nleya is the founder &amp; editor of <a href="http://www.theglobalcommunique.com/">The Global Communiqué</a> , a current affairs online magazine. She has been selected as a 2017 UNLEASH SDG Talent and is a G20 Young Global Changer. Mary-Jean is attending the SDG Media Zone at the 72nd United Nations General Assembly in New York City and will be covering the event. Twitter handle: <a href="https://twitter.com/thegloco">@thegloco</a>.
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Op-Ed: Harnessing tech innovation for the SDGs – Leaving no-one behind

David Everatt | University of the Witwatersrand
Moses came down from the mount with tablets inscribed with 10 commandments. Most of us know (most of) them, and most of us fail to live by (most of) them. But if Moses had turned them over and looked in the fine print on the back, he’d have found the 11th Commandment:
<blockquote>Don’t get caught.</blockquote>
That in essence summarises the rise and fall of the South African arm of the international accounting firm KPMG which has been caught with its hands in the slush fund jar. It stands accused of taking money from companies owned by the politically connected Gupta family.
Even more damaging is the charge that it submitted formal reports “confirming” that a “rogue” unit was operating inside the South African Revenue Service (SARS) – accusations that were used as the smoking gun to remove ministers and senior public officials who were seeking to hold the line against state capture.
KPMG has miraculously grown a conscience. Suddenly – having broken the 11th commandment – it was reborn as a hand-wringing, apologetic company living up to high ethical standards. It was now willing to fire its CEO and some senior managers, to reject its own findings and to “donate” Gupta-company earnings to education and anti-corruption NGOs. The latter gesture was a revolting display of supine reprehensibility – we got caught in corrupt deals so we’ll hand the profits over to anti-corruption NGOs. Really? Go to jail would be a better outcome.
KPMG isn’t alone. Throughout South Africa’s history, and across the globe, the litany of private sector corruption is breathtaking.
<h2>Private sector corruption</h2>
South Africans can recall an unending litany of private sector corruption. In the recent past, there was the case of Tiger Brands making bread more expensive so the poor would pay more to eat. Tiger Brands paid a fine and carried on trading. And a clutch of major construction firms were found looting monies for the construction of stadiums for the 2010 Fifa World Cup in South Africa. They also paid fines and carried on building. The list continues.
The private sector, contrary to those who believe that ‘market forces’ will regulate the ethics of capital, is not taking a strong line against corruption. Those on the front line include, more recently, the portfolio committees in parliament, and previously, the Public Protector and a dwindling cluth of Ministers, MECs and the like.
NGOs such as Corruption Watch, the Socio-Economic Rights Institute of South Africa and the Council for the Advancement of the South African Constitution, have by a long distance, been the most vocal campaigners in the area, and academics have worked with them to uncover the scale and identify the perpetrators of corruption. The media has also played a massive part in exposing corruption.
So let’s not fool ourselves that the private sector has set a benchmark for anything more than export-class venality.
South Africa’s state is corrupt – “captured” makes it sound as if this occurred against its will. But &#8211; it has found a multitude of willing partners in the private sector. The match between corrupt state and corrupt private sector is perhaps South Africa’s most functional display of “willing buyer, willing seller”.
KPMG executives have not set any benchmark for probity, as claimed by some – they simply acted when they got caught. Their focus was on maximising profits, even if it meant signing off on the use of public funds for a private Gupta wedding (among other sins of commission), and now buying their way out of the mess with a few heads rolling and dirty money being donated to NGOs. If this is the standard for the private sector, South Africans are in more serious trouble than initially thought.
The KPMG “apology” can’t come close to compensating for the damage done. Its report “confirming” that a rogue unit had operated in the South African Revenue Services fuelled developments towards state capture and triggered events that have had a disastrous impact on the country. These included the axing of ministers, deputy Ministers, and the subsequent haemorrhage of senior public servants from the state.
Everyone in South Africa is paying for the sins of KPMG.
<h2>Holding power to account</h2>
Governance is about the distribution of power in society, and the ability of citizens to hold power to account. This requires an engaged citizenry – whether in NGOs, ratepayer associations, street or block committees or faith-based organisations – who are sufficiently organised to call officials to account.
What is fascinating about South Africa is how engaged its citizen are. They kicked out the ruling party from running cities after just two decades of democracy and they’ve given the middle finger to e-tolls. They don’t behave the way they are told to. And they’ve reached a tipping point. When South Africans of all shapes, colours, sizes, creeds share simply being gatvol (fed-up), there’s trouble.
Ask the British public relations firm Bell Pottinger what it feels like. The company faces foreclosure following a concerted campaign &#8211; domestically and abroad &#8211; to shame it for stirring racial hatred.
Ask the Guptas how it feels now that all of South Africa’s banks have said they aren’t willing to touch their money.
South African residents and citizens have become acutely aware that they’ve been screwed. By many in the state, to be sure. But by as many or more in the private sector, for decades. And they’re sick of it.
The world is watching – South Africans brought down Bell Pottinger. They’re now going after the likes of McKinsey, KPMG and SAP, all of these companies tangled up by allegations of corruption.
The only way South Africans will ever get governance and accountability is by being organised, vocal, obstreperous, and demanding. So keep it this way – private and public sector are both on terms. And South Africans will hold them accountable, or if necessary, break them.
This article was published in The Conversation.

Lessons from KPMG: be on guard, South Africans are on your case

Kenya’s presidential re-run has been rescheduled for Oct. 26, the election board said on Twitter on Thursday, a day after a detailed Supreme Court judgment laid out the reasons why the court had nullified last month’s poll.
The election board had originally said the re-run would take place on Oct. 17, but a French firm whose technology is being used for the polls said it would not be ready in time for that date.
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reporting by Katharine Houreld; Editing by Gareth Jones
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Kenya election board: presidential re-run to be held on October 26

Kenya Airways has started talks with the government, seeking its help in coping with competition from foreign carriers operating flights to its Nairobi hub, its chairman said on Thursday.
The airline, part-owned by the state and Air France-KLM, is restructuring its finances to cut huge debts and reduce finance costs to help it return to profitability after years of losses.
The losses, caused by a slump in tourism due to frequent attacks in Kenya by militants from neighbouring Somalia, came at a time when the airline was taking on debt to buy new planes and as Gulf-based rivals ratcheted up competition.
“We started out these negotiations both with KAA (Kenya Airports Authority) and ourselves and the government to see how we can better protect us,” Kenya Airways Chairman Michael Joseph told reporters.
“We don’t want to close our airspace,” he added.
Some of the foreign competitors enjoy massive state support including subsidies, Joseph said, without providing names.
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Reporting by George Obulutsa; Writing by Duncan Miriri; Editing by Mark Potter
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Kenya Airways asks state to help it with growing competition

South Africa’s central bank is concerned about “regrettable” practices at auditor KPMG, its governor said, as the company’s chairman held a meeting with a former finance minister it had tarnished in a report it later said was flawed.
“We will engage banks and audit firms primarily to understand the context so we are better placed to manage any potential financial stability risk that may arise from the issues around KPMG,” Governor Lesetja Kganyago said on Thursday.
KPMG cleared out its South African leadership last Friday after it found that work it did for firms owned by the Gupta family, businessmen friends of President Jacob Zuma, “fell considerably short” of its standards.
KPMG’s investigation into its work for the Guptas, accused by a public watchdog of improperly influencing government contracts, identified no evidence of crimes or corruption.
But it acknowledged “flaws” in a report that it compiled for South Africa’s tax service, which implied that former finance minister Pravin Gordhan had helped set up a “rogue spy unit” when he was head of the service.
Both Zuma and the Guptas deny wrongdoing and say they are victims of a politically motivated witch-hunt. The Guptas and their companies have not been charged with any crime, but the scandal is one of many that have dogged the Zuma presidency.
Gordhan and his former deputy Mcebisi Jonas met KPMG’s global chairman John Veihmeyer and other senior executives from the company on Thursday in South Africa.
Veihmeyer’s appearance in South Africa underscores the scale of the scandal to the auditor, whose work by its very nature is supposed to provide transparency to the world of business.
Gordhan and Jonas were unsparing in their criticism.
“We shared our strong feelings and disapproval of the manner in which KPMG SA has been involved in &#8230; corruption in respect of both the South African Revenue Service (SARS) and companies of the Gupta family,” Gordhan and Jonas said in a joint statement after the meeting.“KPMG has a moral duty to account for their conduct to the South African public and they have to be frank and transparent in their disclosures if they wish to restore their own reputation.”
Gordhan and Jonas have both been strident critics of the Guptas, making them poster children for swelling public resentment against Zuma’s scandal-ridden administration.
The scandal has cost KPMG at least three clients and several of South Africa’s largest companies are reviewing whether to continue using the auditing firm.
Separately, a South African industry body group said it would launch an inquiry into the conduct of its members employed by KPMG, which is already under scrutiny by the Independent Regulatory Board of Auditors.
The South African Institute of Chartered Accountants, or SAICA, said it would on Friday announce the establishment of an independent commission of inquiry “into the conduct of certain members of SAICA employed by KPMG”.
KPMG became the third global firm to be damaged by work carried out for the Indian-born Gupta brothers after the business consultancy McKinsey and the public relations agency Bell Pottinger, whose British business collapsed last week.
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Additional reporting by TJ Strydom; Writing by Ed Stoddard; Editing by Andrew Roche
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S.A central bank concerned about KPMG; chairman meets former finance minister

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Makers of generic AIDS drugs will start churning out millions of pills for Africa containing a state-of-the-art medicine widely used in rich countries, after securing a multi-million dollar guarantee that caps prices at just $75 per patient a year.
Global health experts hope the deal will help address two looming problems in the HIV epidemic &#8211; the rising threat of resistance developing to standard AIDS drugs, and the need for more investment in manufacturing capacity.
Bill Gates’ charitable foundation will guarantee minimum sales volumes of the new combination pills using dolutegravir, a so-called integrase inhibitor that avoids the drug resistance that often develops with older treatments.
In return the drugmakers, India-based Mylan Laboratories (<a href="http://www.reuters.com/finance/stocks/overview?symbol=MYL.O">MYL.O</a>) and Aurobindo Pharma (<a href="http://www.reuters.com/finance/stocks/overview?symbol=ARBN.NS">ARBN.NS</a>), will agree the maximum price of about $75 per patient for a year’s supply &#8211; less than the list price for one day’s supply of a dolutegravir combination in the United States.
The agreement, which will make the treatment available to 92 poor countries, starting in Africa, will be formally announced during the United Nations General Assembly in New York on Thursday.
“We need to make that guarantee because (of) the fixed costs of everybody gearing up to make high volume,” Gates told Reuters in a telephone interview. “That just wasn’t going to happen unless we put forward a very substantial volume guarantee.”
The Bill &amp; Melinda Gates Foundation’s pledge is a central plank of a new partnership &#8211; the largest of its kind in global health &#8211; that also includes the governments of South Africa and Kenya, the Clinton Health Access Initiative, and American, British and U.N. agencies.
Under the deal, Mylan and Aurobindo will ramp up availability of a new fixed-dose combination of tenofovir disoproxil fumarate, lamivudine and dolutegravir (TLD).
Health ministries and other public sector purchasers will be able to buy TLD from next year at the capped price. The agreement could potentially save them more than $1 billion in drug bills over the next six years, the partners estimate.
As well as improving treatment, the drug combination should also reduce the need for more expensive second- and third-line drugs.
<h3 data-reactid="51">TREATMENT AND RESISTANCE</h3>
Around 37 million people around the world are infected with HIV, according to the United Nations AIDS agency UNAIDS. Just over half of them &#8211; about 19.5 million patients &#8211; get antiretroviral therapy medicines to keep their disease in check.
That represents remarkable progress in the past 20 years, driven by the availability of a first wave of cheap generic drugs from Indian companies. But rising levels of drug resistance are now a growing concern, while low prices have cut the incentive for investment in generic drug-making capacity.
In six out of 11 countries surveyed recently in Africa, Asia and Latin America, researchers found that more than 10 percent of HIV patients starting antiretroviral drugs had a strain of HIV resistant to the most widely-used medicines.
Once the 10 percent threshold is reached, best practice calls for switching to different drug regimens.
Dolutegravir is already being used on a limited basis as a single drug in Kenya, Nigeria, and Uganda.
The drug was originally developed by ViiV Healthcare, the HIV business majority-owned by GlaxoSmithKline (<a href="http://www.reuters.com/finance/stocks/overview?symbol=GSK.L">GSK.L</a>). ViiV has offered licensing deals to generic companies to sell low-cost versions of the medicine in poor countries.
Clinical trials have shown that treatment regimens including dolutegravir work faster, have fewer side effects and demonstrate greater potency against drug resistance than standard HIV drugs used in Africa and other poor countries.
The TLD combination pill developed by Mylan and Aurobindo has already received tentative approval from the U.S. Food and Drug Administration under the President’s Emergency Plan for AIDS Relief program.
In Western markets, makers of patented AIDS drugs, such as GSK and arch-rival Gilead Sciences (<a href="http://www.reuters.com/finance/stocks/overview?symbol=GILD.O">GILD.O</a>), notch up billions of dollars of highly profitable sales each year.
But the picture is very different for low-price generic companies in India, which have very low margins.
“The market is always on the edge where these guys don’t make enough money to stay in the business,” said Gates.
With the HIV-positive population still growing &#8211; there were an estimated 1.8 million new cases of infection in 2016 &#8211; the number of patients needing treatment is steadily increasing.
Industry experts like Johnson &amp; Johnson (<a href="http://www.reuters.com/finance/stocks/overview?symbol=JNJ.N">JNJ.N</a>) Chief Scientific Officer Paul Stoffels question the feasibility of maintaining lifelong treatment for a patient population that could reach 50 million.
“The people who are infected today will need therapy for the next 30 to 50 years, so the science of treatment has to evolve and the science of prevention has to evolve as well to stop the pool of patients growing,” he told Reuters in a recent interview.
<div class="Attribution_attribution_o4ojT" data-reactid="72">
Editing by Pravin Char
</div>

Africa to get state-of-art HIV drugs for $75 per patient a year

African National Congress (ANC) MP Makhosi Khoza, a strident critic of scandal-plagued President Jacob Zuma, quit South Africa’s ruling party on Thursday, labelling Nelson Mandela’s 105-year-old liberation movement “alien and corrupt”.
The 47-year-old Zulu linguistics expert, an ANC supporter since the age of 12, denounced Zuma in July as a “dishonourable and disgraceful leader” due to the litany of scandals he has attracted during his eight years in power.
Her comments earned her death threats and a provincial party disciplinary hearing, but Khoza said she was not prepared to sit around and wait for its verdict, saying the decision to go after her, and not Zuma, was the final straw.
“Why haven’t we charged Zuma? Why are we charging Makhosi Khoza? We are making a mockery of the rule of law. We are making a mockery of the ANC constitution,” Khoza said in an interview on the SABC, the state broadcaster.
“Charge Zuma. Fire Zuma from the ANC, then I will know that you are serious about self-correcting.”
Khoza is believed to have been one of around 30 ANC members of parliament who voted against Zuma in an ultimately unsuccessful Aug. 8 parliamentary no-confidence vote conducted by secret ballot.
The ANC was not immediately available for comment.
The most serious allegations against Zuma relate to his friendship with the Guptas, a family of Indian-born businessmen accused of using political influence to secure lucrative contracts with state-run companies.
Zuma and the Guptas, who employ Zuma’s son, Duduzane, as a director of at least one of their companies, have denied any wrongdoing and say they are the victims of a politically motivated witch-hunt.
Several other high-profile ANC MPs, including former deputy finance minister Mcebisi Jonas and three former ministers ousted in a cabinet reshuffle this year, have resigned from parliament but not torn up their party cards, as Khoza has done.
She predicted that more would follow in her footsteps and hoped it would reverse the decline that has set in the so-called Rainbow Nation under Zuma.
“We can’t have South Africa going the same route as every failed state in Africa,” she said.
Zuma’s time at the helm of the ANC comes to an end in December when the party chooses a new leader, although he will remain head of state until the expiry of his second and final term in early 2019 unless the ANC removes him, as it did to President Thabo Mbeki in 2008.
As Khoza departed, Zuma’s former wife, Nkosazana Dlamini-Zuma was sworn in as a member of parliament, cementing the belief that she is his preferred successor against challengers led by Deputy President Cyril Ramaphosa.
The parliamentary seat gives Dlamini-Zuma, the former chairwoman of the African Union Commission in Addis Ababa, a platform from which to raise her profile ahead of a party leadership conference in December.
<div class="Attribution_attribution_o4ojT" data-reactid="54">
Reporting by Ed Cropley and Nqobile Dludla; editing by Andrew Roche
</div>

Anti-Zuma MP quits South Africa’s “corrupt” ANC

South Africa’s central bank kept its benchmark repo rate at 6.75 percent on Thursday, defying expectations of a cut based on easing inflation pressures and a sluggish recovery from a recession in the first half of the year.
Of 26 economists polled by Reuters, 17 had predicted a 25 basis point cut and one a 50 basis point reduction. The remaining eight predicted a ‘hold’.
Governor Lesetja Kganyago admitted the decision was tight, with the six-member monetary policy committee split 3-3 on whether to hold or cut, leading to the maintenance of the status quo.
However, he said it was appropriate to maintain a “balanced” monetary policy stance, with inflation expectations in Africa’s most advanced economy anchored towards the top end of the bank’s 3-6 percent target band.
The rand reversed losses against the dollar after the decision, moving to 13.2775 by 1333 GMT. Bonds also gained, pushing yields on the benchmark 2026 bond up 9 basis points to 8.495 percent.
Analysts immediately turned their attention to the bank’s next interest rate meeting, in November, at which it is expected to ease policy to help pep up the struggling economy.
“While we expect the central bank to cut interest rates further, the time horizon in which the Bank can achieve this is relatively short given various macroeconomic risks ahead,” FNB chief economist Sizwe Nxedlana said.
“Inflation is also forecast to start lifting again from mid-2018 onwards which will constrain the possibility of further policy easing in the second half of next year.”
<div class="Attribution_attribution_o4ojT" data-reactid="47">
Reporting by Johannesburg bureau; Writing by Ed Cropley; Editing by Ed Stoddard
</div>

S.African c.bank defies expectations by keeping rates at 6.75%

Kenya’s President Uhuru Kenyatta said on Thursday the country’s Supreme Court staged a “coup” against the will of the people when it annulled last month’s presidential election that he won.
“A coup in Kenya has just been done by the four people in the Supreme Court,” Kenyatta said in a live, televised speech delivered mostly in Kiswahili. “(The court is saying) ‘numbers don’t matter, it is processes that matter.&#8217;”
The court’s decision on Sept. 1 was the first time a judicial body has canceled the election of an African president and the ruling sent shockwaves through the country and beyond.
The court ordered a re-run within 60 days between Kenyatta and opposition leader Raila Odinga, who had rejected the result of the Aug. 8 vote and challenged it in court. The election board had declared Kenyatta the winner by 1.4 million votes.
The re-run is tentatively set for Oct. 17 in a vote being watched for any sign of instability. Kenya, a Western ally, has East Africa’s richest economy and is hub for diplomacy, security and trade in a region often battered by conflict.
The date for the re-run now looks unlikely since election officials lack time to prepare.
The court’s detailed judgment given on Wednesday hinged on the failure of the election board to check electronic tallies, which are vulnerable to typos, against paper forms intended as a fail-safe backup before announcing results. Judges did not say they found evidence of rigging.
Kenyatta said he would respect the court’s decision but said it subverted the will of the people.
“We have reversed everything in this country by the decision of a few people. I don’t know how history will judge these gentlemen,” he said. “The citizen has been told he does not have a voice &#8230; If that is not dictatorship, then I don’t know what to say.”
<div class="Attribution_attribution_o4ojT" data-reactid="52">
Writing by Katharine Houreld; Editing by Matthew Mpoke Bigg
</div>

Kenyan president says Supreme Court election ruling was ‘coup’

By: Mastercard
&nbsp;
Inaugural report shows July retail sales nominal growth was 7.2% while inflation adjusted retail sales volume grew 2.3% versus July 2016.
Despite challenging economic conditions, retail sales growth for July 2017 was the highest recorded for that month since 2015. This is according to the Mastercard SpendingPulse™ report, a macroeconomic report tracking retail sales launched today in South Africa.
Nominal (not adjusting for price changes/inflation) July retail sales grew 7.2 percent versus the same month last year, marking the 55th consecutive month of positive growth. Volume retail sales &#8211; which removes the effects of inflation &#8211; for July also saw a positive increase of 2.3 percent year-over-year, indicating that consumer spending remains resilient, despite higher consumer prices.
“The continued growth in retail sales in July is encouraging, and points to a slight improvement in the consumer economy as the country emerges from a technical recession,” says Sarah Quinlan, Senior Vice President and Group Head of Market Insights for Mastercard. “South Africa’s consumer has shown resilience in the face of weak wage growth and high unemployment, reported at 27.7 percent in the second quarter.”
The average growth rate of the past three months was up 2.3 percent year-over-year, slightly above the 2.1 percent growth rate in the second quarter of this year. For the past 12 months, volume retail sales are less favourable, growing by only 0.2 percent. This is slightly underperforming GDP, which rose 0.3 percent in 2016 and is forecast to increase to 0.7 percent in 2017.
“While consumer spending is showing signs of recovery, South Africans still face a challenging macro-economic environment. The economic health of the consumer warrants close monitoring as the economy looks to regain its footing,” says Quinlan.
Mastercard SpendingPulse South Africa reports on national retail sales and uses aggregated and anonymous Mastercard transaction data, coupled with survey-based estimates for other payment forms including cash and cheque, to offer insight into consumer spending trends and the South African economy. Available to subscribers on a monthly basis, the report also includes an overall retail sales and price index to illustrate whether spending growth is being driven by increased shopping or by inflation or increased promotions.
“Providing both timely and insightful data on retail spending trends, Mastercard’s new monthly macro-economic report will offer an early overview of market indices to help retailers, investors, card issuers, banks and government agencies in their decision-making processes,” says Mark Elliott, Division President for Mastercard, Southern Africa.
In addition to reporting trends for the retail sector as a whole, the inaugural SpendingPulse South Africa breaks out sales growth trends for General Dealers, and Pharmaceutical, Medical Goods, Cosmetics and Toiletries. These sectors together account for over half of South Africa’s retail sales volume.
Pharmaceutical, Medical Goods, Cosmetic and Toiletry sales have outperformed other retail segments over the past 12 months, with sales volumes rising 3.4 percent.  However, momentum has weakened since the start of the year, with sales volume in July rising two percent year-on-year, slightly slower than retail as a whole. Price inflation for products and services in the health sector accelerated from 5.3 percent year-on-year for July 2016 to seven percent for July 2017.
On the opposite end of the spectrum, General Dealer sales have underperformed, with sales volumes falling 0.3 percent year-on-year in July, and the value of retail sales down 1.1 percent over the past 12 months.
“Consumers spent less and consumed less, partly because inflation has eroded their spending power. South Africa’s CPI increased 4.6 percent, driven largely by a 6.8 percent rise in food prices,” says Quinlan.

S.A Consumer spending turns upward in face of tight economic conditions

Danny Bradlow | University of Pretoria
The formation of the BRICS – the bloc made of Brazil, Russia, India, China and South Africa – was supposed to be the harbinger for a new approach to global economic governance. The leading emerging markets and developing countries were becoming major players in the global economy. And they expected to play a commensurate governance role.
BRICS leaders have now been meeting annually for nine years. They recently met for the ninth BRICS Summit in Xiamen, China. They have positioned themselves as a force for transforming global economic governance so that it’s more responsive to the concerns of developing economies. They are seeking a more just and equitable global economy.
The question is: how effective have they been in reforming global economic governance and the fairness of the global economy?
The honest answer is that as a group, BRICS hasn’t been an effective force at all. This is for a number of reasons.
<h2>What’s not happened</h2>
The following examples illustrate the point.
At least formally the G20, which consists of 20 major economies including the five in BRICs, has supplanted the G7, made up of Canada, France, Germany, Italy, Japan, the UK and the US, as the premier forum for global economic governance. But the agenda in these meetings is still largely set by the most powerful countries which now include China but not the other BRICS.
The IMF and World Bank have both changed their voting arrangements to give a louder voice to developing economies and emerging economies. This has particularly benefited China, India and Brazil. But BRICS hasn’t supported South Africa’s call for a third African seat on the board of the IMF. This has left Africa as the most underrepresented region on the board.
BRICS countries, together with other G20 developing countries, have become more active participants in organisations responsible for developing international financial regulatory standards. This means that they now can participate in the writing of standards that guide the international financial system. But the system continues to be more responsive to the interests of the rich and powerful than those of the developing world.
New international financial institutions have been created, including the BRICS’ New Development Bank and the Contingent Reserve Arrangement, which provides financial support for BRICS countries experiencing balance of payments problems. Unfortunately, the New Development Bank operates in a less transparent and less accountable way than other multilateral development banks. For example, it’s harder for outsiders to access information on the operational policies and practices of the bank than those of the World Bank or the African Development Bank. Unlike those other banks, there isn’t yet a mechanism to hold the New Development Bank accountable if it causes harm.
The New Development Bank also risks repeating the tragic mistakes of these other institutions, which for many years concentrated only on economic issues in their operational decision making. Following a number of scandals they began to pay more attention to the social, human rights and environmental impact of their operations.
Members of the New Development Bank seem to share this concern. The BRICS leaders have reiterated their commitment to achieving
<blockquote>sustainable development in its three dimensions &#8211; economic, social and environmental- in a balanced and integrated manner.</blockquote>
But it’s hard to see how they expect the bank to meet this commitment if it continues to place more emphasis on speed in project implementation than on identifying and managing the adverse environmental, human rights and social effects of its projects. To fulfil their commitment to promote a more just and equitable global economy the BRICS will need to up their game.
<h2>How to fix the problem</h2>
Achieving a just and equitable international economic order requires governments to take seriously their commitment to protect and promote human rights as set out in the UN Charter and other human rights treaties.
The starting point is a commitment to respect and promote the rights of each individual affected by each project, programme or policy that governments undertake or support. This requires developing a good system to forecast the impact of a project on the environment, society as well as human rights. And to have a plan to manage them.
Another element is accountability. Any person adversely affected by a project should have access to a mechanism that can provide them with an effective remedy.
Finally, the relevant decision makers must be able to show how their proposed activity is using the maximum available human and financial resources to fulfil the human rights of all the people affected by their decisions. This suggests that the relevant decision makers bear the burden of explaining why the proposed allocations are the most feasible. This includes governments, international organisations as well as private parties.
There are reasons to think the BRICS leaders could be persuaded to adopt a human rights based approach to making global economic governance more democratic and responsive to the needs of developing countries and for a more just, equitable and sustainable global economy. They, and their colleagues in other developing countries, are governing societies with continuing, and some cases worsening poverty, inequality, unemployment and environmental degradation levels. And they don’t seem to have an effective strategy for meeting this challenge.
&nbsp;
This article was first published in The Conversation.

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BRICS needs a new approach if it’s going to foster a more equitable global order

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