Africa (Xinhua) -- South Africa’s
gross domestic product (GDP) is projected to grow 0.7 percent in
2019, said International Monetary Fund (IMF) in its economic
outlook report released on Tuesday.
growth rate in 2018 was 0.8 percent.
IMF said it would continue registering a sluggish growth this
year due to energy constraints and labor issues.
In 2020, the country’s growth rate is expected to be 1.1
"Growth in South Africa is expected to be more a subdued pace
in 2019 than projected in April following a very weak first
quarter, reflecting a larger than anticipated impact of strike
activity and energy supply issues in mining and weak
agricultural production," the report stated.
In the first quarter of 2019, South Africa’s GDP declined 3.2
Power outages which impacted the country early this year and
recession in mining and construction sectors were blamed for the
GDP contraction in the first quarter.
Last week, the Reserve Bank said it was expecting an improved
growth in the second quarter of the year.
The bank initially projected the growth to be more than 1.5
percent, but later revised downward.
In Sub-Saharan Africa, growth is forecasted to be 3.4 percent
this year and 3.6 percent next year.
Nigeria’s growth is set to grow 2.3 percent this year and 2.6
"Higher, albeit volatile prices have supported the outlook
for Angola, Nigeria and other oil exporting countries in the
region," the report said.
South African finance
minister presents bill to bail out debt-ridden electricity
CAPE TOWN South Africa (Xinhua) --
Finance Minister Tito Mboweni on Tuesday presented to Parliament
a special appropriation bill which seeks additional financial
support to bail out debt-ridden electricity utility Eskom.
The government is urgently working on stabilizing the
utility, while developing a broad strategy for its future to
prevent it from a systemic failure, Mbowenti told MPs.
The bill requests approval of additional 26 billion rand
(about 1.87 billion U.S. dollars) in 2019/20 financial year and
33 billion rand (about 2.4 billion dollars) in the 2020/21
financial year for the state-run parastatal, according to
Earlier, the government committed 23 billion rand (about 1.7
billion dollars) to be allocated to Eskom over the next 3 years
in the current fiscal framework.
Staggering under a heavy debt of 450 billion rand (about 32
billion dollars), Eskom, which provides more than 95 percent of
the electricity consumed in South Africa, has been unable to
provide sufficient electricity for the past decade, particularly
for the past recent years when constant load shedding is
implemented across the country.
The utility, crippled by poor management and alleged
corruption, presents the biggest risk to the fiscal framework
because of its financial problems and negative impact on the
economy, Mboweni said.
Eskom is not financially sustainable based on its current
high levels of debt and its inability to generate sufficient
revenue to meet its operational and capital obligations, which
exposes the entity to high levels of liquidity and balance sheet
risks, said Mboweni.
Therefore, without major changes to Eskom’s business model
and financial assistance being provided by the government, the
company will be unable to meet its financial obligations through
the 2019/2020 financial year, he said.
Mboweni said the fiscal support he was announcing on Tuesday
"will come at a significant cost to the fiscus and to South
This could substantially increase the government borrowing
requirement for 2019/20, which will require the government to
revise its funding strategy and current weekly bond issuance
levels before the Medium Term Budget Policy Statement in
October, said the minister.
The future sustainability of Eskom will have to address the
debt and the restructuring of Eskom, he said.
The government remains committed to supporting and
strengthening Eskom in order to ensure that the entity achieves
business and financial sustainability and maintains adequate
liquidity levels to continue operating as a going concern and
ensure the security of electricity supply, the minister said.
The opposition Democratic Alliance (DA) lambasted the"bail
out bill" which it said includes deep cuts to basic services for
"Nearly every basic service on which the poor rely will be
cut to fund this bailout budget," the party said.
South African President
Cyril Ramaphosa commends
current socio-economic progress, despite challenges
JOHANNESBURG South Africa (Xinhua)
-- South Africa’s President Cyril
Ramaphosa on Tuesday said the country has made progress in
addressing socio-economic challenges in the last 25 years while
in other areas a lot still needed to be done.
Ramaphosa said this on Tuesday in Johannesburg while speaking
at the two-day 25 Years of Democracy Conference.
The conference was held by government, academia and civil
society to conclude the gains the country has made after
independence, identify challenges and the way forward.
He pointed out that when the country became independent in
1994, it had a substantial fiscal deficit, huge Apartheid debt
bill and stagnant growth.
"The substantial investment we have made in economic and
social infrastructure, in providing houses, water and
electricity, in expanding access to education and health care
has undoubtedly improved people’s lives," said Ramaphosa.
He noted that there have been improvement in education
qualifications of citizens, increase in middle class, reduction
in poverty and improved access to basic services.
Ramaphosa stated that the government’s immediate task is to
grow the economy and reduce poverty and address some of the
challenges like corruption.
"Growing an inclusive economy is by far our greatest focus.
"This progress has been undermined, particularly since the
global financial crisis, by stagnant growth, declining
investment, maladministration and corruption, among others," the
president said, the structure of the economy has to change to
have inclusive growth.
Ramaphosa said there has been a common national identity and
called on all stakeholders to join hands for the country’s
"We all have a stake in the stability of our country.
"Elected representatives should be held to account ... and
the national interest demands we each do our part ... in forging
our nation building efforts further," he said.
Mills Soko, Director of Cape Town University Graduate School
of Business, said the government have to take painful decisions
and trade off and also take a leaf from China—"with China what
was important was unity in government and execution."
South Africa identifies
priority areas to spur economic growth
JOHANNESBURG South Africa (Xinhua)
-- South Africa will in the next five
years prioritize improving the industrial competitiveness and
performance, expanding markets for the country’s products and
increasing levels of investment, said a senior government
official on Monday.
Trade and Industry Minister Ebrahim Patel said this in
Johannesburg while addressing the business community at an
He said the government is also focusing on promoting greater
levels of economic inclusion, initiating equitable spatial and
industrial development and increasing the capabilities of the
"The country’s growth levels are well below what is needed to
achieve our development goals.
"These conditions call for coordination between government
and business to lift the rate and inclusivity of growth," he
"We will use the talents of all South Africans, including the
expertise in the private sector to strengthen the implementation
capability of the state," said the minister.
He pointed out that the country is facing challenges in
sectors like construction and manufacturing, particularly in
"We need to work together in ensuring that this economy grows
at the kind of level that does not only generate taxes that
government needs, but also the jobs that are absolutely critical
and ensure that more South Africans are included," he added.
Patel said the African Continental Free Trade Agreement (AfCFTA)
is a "game changer" that will transform the South African
"The AfCFTA, which comes into effect in July next year with
tariff-free trade in 90 percent of goods, represents an enormous
opportunity for industrial expansion but it also carries big
risks too. It depends on what we do now as a country to ensure
industrial readiness for the free trade area," he said.
Zambia says South Africa
court ruling on KCM not enforceable
LUSAKA Zambia (Xinhua) --
The Zambian government said on
Tuesday that a ruling by a South Africa court granting India’s
Vedanta Resources an urgent interdict halting of the liquidation
of its Konkola Copper Mines (KCM) unit in Zambia cannot be
enforced because the ruling has no bearing in the southern
On Tuesday, a South African court ruled that wind-up
proceeding must be immediately withdrawn until a final decision
is made following arbitration.
But Richard Musukwa, Zambia’s Minister of Mines and Minerals
Development said the court ruling in South Aria has no
jurisdiction or enforceable mechanism in Zambia until it was
registered in the Zambian courts.
"To that effect, I want to state that foreign judgments are
not enforceable in Zambia until a rigorous process is undertaken
when it is registered.
"To that effect it has no effects to processes that are
ongoing in Zambia.
"The liquidator is still in charge of the liquidation
process," he told reporters during a press briefing.
He however said the government has asked its attorneys in
South Africa to appeal the judgment as it respects the
jurisdiction of the courts and urged people to remain calm.
The Indian mining firm has been locked in a dispute with the
Zambian government since May 2019 when the government appointed
a liquidator to run KCM after accusing the firm of breaching the
terms of its license.
South Africa has a sovereign debt problem: Its name is Eskom