<p>JOHANNESBURG (Reuters) &#8211; South Africa’s economic recovery plans face serious constraints with growing debt of state firms domestically and capital outflows as a result of global trade tensions, <a href="https://www.imf.org/en/News/Articles/2018/11/16/ms111918-south-africa-staff-concluding-statement-of-an-imf-staff-visit">the International Monetary Fund (IMF)</a> said on Monday.</p>
<p>In October the global lender said it saw Africa’s most industrialised economy expanding by 0.8 percent in 2018, down from a prior forecast of 1.5 percent. South Africa’s Treasury predicts growth of 0.7 percent.</p>
<p>The recession-bound economy and a bleak budget in October have piled pressure on President Cyril’s Ramaphosa.</p>
<p>“Some of the initial optimism has dissipated as growth remains stuck in low gear and reform implementation has faced constraints,” the IMF said, naming the state power firm Eskom as a key risk.</p>
<p>The president’s work is made harder by cash-strapped state-owned firms, including debt-ridden Eskom, which is struggling to supply the nation’s power.</p>
<p>The IMF said the proposal to amend property laws to allow for expropriation without compensation should be carefully considered and be guided by lessons of international experience.</p>
<p>“Land reform should focus on enhancing agricultural productivity and strengthening tenure security,” said the IMF.</p>
<p>A parliamentary team has recommended a constitutional amendment to make it possible for the state to expropriate land without compensation. The recommendation will now go to the national assembly for a vote.</p>
<p>Reporting by Mfuneko Toyana; Editing by James Macharia</p>
<p>&nbsp;</p>
<p>&nbsp;</p>


South Africa’s economic recovery plans fading: IMF

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5966358186001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>Investec Property Fund, a South African Real Estate Investment Trust, has released its interim numbers for the period ended 30 September 2018. Revenue growth was described as static, coming in at R890 million. The group also reported a 5.4 per cent increase in normalised dividend per share growth. Investec Property Fund CEO, Nick Riley joins CNBC Africa for more.</p>


Europe, Australia lifts Investec Property Fund’s earnings

<p>JOHANNESBURG (Reuters) &#8211; South Africa’s President Cyril Ramaphosa said on Monday there would be no mass layoffs of public sector workers as his government considers various ways to pull the economy out of a recession that has rattled the rand and investor confidence.</p>
<p>The economy slipped into recession in the second quarter for the first time since 2009, data showed in August, a stinging blow to Ramaphosa’s pledge to revive the economy and reduce record-high unemployment after a decade of stagnation.</p>
<p>In June, the National Treasury said it was considering layoffs and early retirement packages for staff in the public sector to avoid breaking its pledge to cut spending after unions clinched above-inflation wage increases.</p>
<p>“The mass retrenchment of public sector workers is not under consideration,” Ramaphosa said at trade union federation Cosatu’s electoral conference in Johannesburg.</p>
<p>“The context of slow economic growth and weak revenue collection means that expenditure on other critical things will suffer &#8230; but we need to address this in a way that does not put the livelihoods of public sector workers at risk.”</p>
<p>The contraction in the economy sent the rand tumbling and triggered warnings from ratings agency Moody’s that the country would struggle to increase revenue and deliver on a promise to cut spending and public debt.</p>
<p>South Africa needs faster economic growth to reduce its 27 percent unemployment rate and alleviate poverty and inequality, both of which stoke instability.</p>
<p>The ruling African National Congress has made repeated pledges to improve the economy. Unemployment is a key concern for voters ahead of elections next year.</p>
<p>Reporting by Mfuneko Toyana; Editing by James Macharia</p>


Is South Africa planning mass layoffs in the public sector to deal with recession? Here’s what president Ramaphosa has to say…

<p>JOHANNESBURG (Reuters) &#8211; Moody’s stable outlook on South Africa’s credit rating means there is little chance of a downgrade this year, the ratings agency said on Thursday, but warned that a commitment to fiscal consolidation would be key to maintaining its rating.</p>
<p>The agency, the last of the top three ratings firms to have Pretoria’s long-term foreign-currency debt in investment grade, however said a recovery in South Africa’s economic growth will be slow and less than the Treasury’s estimate of 1.5 percent for 2018 after a surprise contraction in the first two quarters.</p>
<p>South Africa entered recession for the first time since 2009, data showed last week, undermining President Cyril Ramaphosa’s efforts to revive the economy after years of stagnation under former president Jacob Zuma.</p>
<p>Lucie Villa, Moody’s lead analyst for South Africa, said the rising share of government revenue that South Africa spends on debt servicing was a concern for Moody’s, but that she expected some fiscal adjustment in the October budget statement.</p>
<p>“Growth is going to be below 1 percent, to what extent it’s difficult to say,” Villa told the agency’s annual Sub-Saharan Africa conference, referring to this calendar year.</p>
<p>“South Africa has a stable outlook, &#8230; there is little chance of a rating action,” Villa said, in response to a question about whether Moody’s would downgrade the country’s sovereign rating at a review scheduled for next month.</p>
<p>Moody’s has previously said the slide into recession would exacerbate fiscal and monetary challenges. It said weaker-than-expected economic data was “credit negative”.</p>
<p>Villa said two ratings strengths for South Africa was that its government debt had a long maturity and that relatively little of the debt was foreign-currency denominated.</p>
<p>“It’s very important what announcement will be made (at the October budget statement), &#8230; what we think is going to be critical is the wage bill, tax revenues,” she said.</p>
<p>Villa said plans by the ruling African National Congress (ANC) to nationalise the Reserve Bank were not “rating-relevant,” assuming that the bank’s mandate would not be affected.</p>
<p>The central bank has said any change of ownership would not affect its mandate or independence.</p>
<p>Africa’s most developed economy needs faster economic growth if it is to reduce high unemployment &#8211; currently at 27 percent &#8211; and alleviate poverty, analysts say.</p>
<p>Unemployment is a hot-button issue ahead of national elections in 2019, and the ANC has made repeated pledges that things will improve.</p>
<p>($1 = 14.8287 rand)</p>
<p>Writing by James Macharia</p>


What are the chances of a downgrade for South Africa’s credit rating? Here’s what Moody’s has to say…

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5834450026001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>The only ratings agency that ranks South Africa as investment grade, hosted a summit in Johannesburg today. The ratings agency is due to give its latest review on Africa’s most developed economy next month. CNBC Africa’s Fifi Peters spoke to Lucie Villa, Moody’s Lead Analyst for South Africa. She asked her whether the recession in the country could be the nail in the coffin for a ratings downgrade to junk status.</p>


Is SA on the precipice for a downgrade to junk? Moody’s answers

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5834443331001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>The task of emerging South Africa out of a recession is a simple one. That’s according to former South African Reserve Bank Governor, Tito Mboweni. CNBC Africa’s Fifi Peters sat down with the governor for the details.</p>


Tito Mboweni on emerging SA from recession

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5833919191001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>Dr Iraj Abedian, an economist by training and CEO of Pan-African Investment and Research Services, spoke to CNBC Africa&#8217;s Fifi Peters about a number of issues concerned with South Africa&#8217;s economic fall into recession; one of the points of discussion was rebuilding investor trust and confidence.</p>


Iraj Abedian on how SA can get out of recession

<p>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.</p>
<p>The country entered recession in the second quarter for the first time since 2009.</p>
<p>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.</p>
<p>“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.</p>
<p>“Fixing our economy to ensure that it grows faster and in a more sustainable manner is therefore critical.”</p>
<p>Nene also cited problems experienced by the South African revenue service (SARS).</p>
<p>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.</p>
<p>Reporting by Mfuneko Toyana; Writing by James Macharia; editing by John Stonestreet</p>


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

<p>JOHANNESBURG/PRETORIA (Reuters) &#8211; South Africa will soon recover from recession, President Cyril Ramaphosa said on Thursday in his first reaction to news that undermines his effort to revive the economy and attract investment after a decade of stagnation.</p>
<p>Ramaphosa staked his reputation on economic revival when he took over in February from Jacob Zuma, whose tenure was plagued by scandal, and investors welcomed his accession to power in part due to his strong ties to the business community.</p>
<p>Ratings agency Moody’s said the slide into recession in the second quarter would exacerbate fiscal and monetary challenges. It said weaker-than-expected economic data was “credit negative”.</p>
<p>Data on Thursday showed the current account deficit narrowed to 3.3 percent of gross domestic product in the second quarter, from a revised 4.6 percent in the first quarter. The rand extended its gains to more than 1 percent stronger on the news.</p>
<p>The deficit figure was slightly smaller than the 3.4 percent deficit analysts polled by Reuters had expected, a much-needed boost for after data this week showed the economy slipped into recession for the first time since 2009.</p>
<p>In his first comments on the recession, Ramaphosa said the setbacks were temporary.</p>
<p>“All these things that are happening now are transitional issues that are going to pass,” Ramaphosa was quoted by local news agency Eyewitness News as saying.</p>
<p>“I will be meeting with the business community soon, so that we rally everyone together and pull our country out of the situation that we are in,” added Ramaphosa, who was attending a China-Africa summit in Beijing when the data was released.</p>
<p>South Africa needs faster economic growth to reduce its 27 percent unemployment rate and alleviate poverty and inequality, both of which stoke instability.</p>
<p>The ruling African National Congress (ANC) has made repeated pledges to improve the economy. Unemployment is a key concern for voters ahead of elections next year.</p>
<p>&nbsp;</p>
<p><strong>MOODY’S WARNING</strong></p>
<p>The rand has slumped as much as 5 percent against the dollar this week and government bonds have sold off steeply, also hurt by the turmoil on Turkish and Argentinian financial markets.</p>
<p>“This weaker-than-expected economic performance will exacerbate fiscal and monetary challenges, a credit negative,” Moody’s said in a statement on the weaker GDP figures.</p>
<p>The agency is the last of the “big three” international agencies to rate South Africa’s long-term foreign-currency debt investment grade.</p>
<p>While releasing the current account data, the Reserve Bank, which meets on Sept. 20 to decide on interest rates, said the improved current and trade account figures were due to higher value and volume of merchandised exports.</p>
<p>“South Africa’s terms of trade (including gold) improved in the second quarter of 2018 as the rand price of exports, including gold, increased at a faster pace than that of imports,” the central bank said in a statement.</p>
<p>Several foreign banks have slashed their growth forecasts for South Africa to less than 1 percent this year.</p>
<p>“Moody’s has pointed out that the task of fiscal consolidation is going to get harder, but I don’t think they’ll change our credit rating yet,” said portfolio manager Wayne McCurrie at First National Bank.</p>
<p>“A narrow current account helps. Any good news in this environment is really good news.”</p>
<p>Writing by James Macharia; Editing by Matthew Mpoke Bigg</p>


Here’s what South Africa’s president Ramaphosa has to say about the country slipping into recession

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5830630980001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>CNBC Africa went on to the street of Johannesburg to find out what people on the ground think of the technical recession that descended over South Africa.</p>


South Africans speak out about recession

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5830628781001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>The rand plunged against the dollar as South Africa entered a recession and the greenback strengthened. GDP in the second quarter of 2018 fell by 0.7 per cent .Citadel’s Chief Economist &#038; Advisory Partner, Maarten Ackerman joins CNBC Africa for more.</p>


Rand plunges as SA enters recession

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5714927088001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>After speaking to CEOs, analysts and policy makers about what their expectations for 2018 this week, CNBC Africa hit the streets of Lagos to find out what the people think.</p>


Nigerians speak out about their expectations of 2018

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5677712966001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>Chizoba Iheme, Head of liabilities, emerging business at Diamond Bank joins CNBC Africa to evaluate the performance of SMEs in the country this year and give an outlook for 2018.</p>


Nigerian SMEs’ biggest challenges in 2017

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5640486454001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>Nigeria’s economy beat the recession in Q2 of this year spurred by a recovery in the oil production and improvements in foreign exchange availability. However, concerns remain that the economy is still not living up to its full potential.</p>


This is how Nigeria can unlock its economic potential

<div style="display: block; position: relative; max-width: 640px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5632906929001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>Nigeria&#8217;s economy exited a recession in the second quarter of 2017, but is this growth sustainable? Ejikeme Okoli, Research and Market Intelligence Officer at Diamond Bank joins CNBC Africa to discuss this.</p>


Business show optimism for Nigerian economy

<p><em>Andre Rosslee | Absa</em></p>
<p>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.</p>
<p>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.</p>
<p>Some key tips for wholesalers and retailers are:</p>
<p><strong>Differentiate your business through top-notch customer service and make your customers feel valued</strong></p>
<p>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).</p>
<p><strong>Manage your margins correctly</strong></p>
<p>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.</p>
<p><strong>Look after your staff</strong></p>
<p>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.</p>
<p><strong>Ensure you have an efficient omni-channel offering</strong></p>
<p>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.</p>
<p><strong>Consider what promotions are on offer</strong></p>
<p>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.</p>
<p><strong>Do not underestimate the importance of your brand</strong></p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>&nbsp;</p>


How wholesalers and retailers can weather the economic downturn

<div style="display: block; position: relative; max-width: 640px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=5588000442001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
<p>Since 2014, Aigboje Aig-Imoukhuede has served as the president of the Nigerian Stock Exchange. He joined the in a year when the bourse&#8217;s market capitalisation slid 11.53 per cent from 19.08 trillion naira at the end of 2013 to 16.88 trillion naira.</p>


recession

South Africa’s economic recovery plans fading: IMF

Europe, Australia lifts Investec Property Fund’s earnings

Is South Africa planning mass layoffs in the public sector to deal with recession? Here’s what president Ramaphosa has to say…

What are the chances of a downgrade for South Africa’s credit rating? Here’s what Moody’s has to say…

Is SA on the precipice for a downgrade to junk? Moody’s answers

Tito Mboweni on emerging SA from recession

Iraj Abedian on how SA can get out of recession

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

Here’s what South Africa’s president Ramaphosa has to say about the country slipping into recession

South Africans speak out about recession

Rand plunges as SA enters recession

Nigerians speak out about their expectations of 2018

Nigerian SMEs’ biggest challenges in 2017

This is how Nigeria can unlock its economic potential

Business show optimism for Nigerian economy

How wholesalers and retailers can weather the economic downturn

Aig-Imoukhede bows out of Nigeria’s Stock Exchange

News Tips

Advertise With Us

recession

South Africa’s economic recovery plans fading: IMF

Europe, Australia lifts Investec Property Fund’s earnings

Is South Africa planning mass layoffs in the public sector to deal with recession? Here’s what president Ramaphosa has to say…

What are the chances of a downgrade for South Africa’s credit rating? Here’s what Moody’s has to say…

Is SA on the precipice for a downgrade to junk? Moody’s answers

Tito Mboweni on emerging SA from recession

Iraj Abedian on how SA can get out of recession

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

Here’s what South Africa’s president Ramaphosa has to say about the country slipping into recession

South Africans speak out about recession

Rand plunges as SA enters recession

Nigerians speak out about their expectations of 2018

Nigerian SMEs’ biggest challenges in 2017

This is how Nigeria can unlock its economic potential

Business show optimism for Nigerian economy

How wholesalers and retailers can weather the economic downturn

Aig-Imoukhede bows out of Nigeria’s Stock Exchange

News Tips

Advertise With Us

Newsletters