National minimum wage surprise, and trouble in Tshwane

 ·20 Jan 2025

Here’s what is happening in and affecting South Africa today:


National minimum wage study: A new study on the impact of the significant national minimum wage hike in 2024 found that the increase did not lead to many cases of job losses or cutting of work hours, as many had suspected. However, this comes with the caveat that under 20% of workers actually benefitted from the hike at all. In addition, there were cases of job losses and work hours cut, though these only impacted around 3% of the cohort studied. [News24]


Tshwane audit: A leaked audit of the City of Tshwane shows that the metro received a qualified opinion, which it admitted does not look good for the city. It showed the city incurred R2.3 billion in irregular expenditure in 2023/24, up from previous year, with wasteful spending around R340 million. The city issued an alert to note holders on SENS that it the report is not official. It is investigating the leak. The official tabling of the audit will be later this month. [BusinessLive]


Mafia crackdown: The National Treasury is drafting regulations to amend the Public Procurement Act to create a specific framework within which the construction mafia will be prosecuted. South Africa is plagued by criminal networks that extort various sectors using procurement laws as a cover for their actions. It is understood that the the coming regulations will better assist authorities in charging those who do it. [Daily Investor]


Growth cut: The International Monetary Fund’s latest World Economic Report has cut South Africa’s GDP growth projections by 0.4 percentage points to 0.8% for 2024—leaving it only slightly higher than 2023’s outcome of just 0.7%. While the group has a higher projection for 2025, at 1.5%, it previously flagged remaining risks around the country’s many crises. It said that growth depends on the Government of National Unity’s ability and capacity to effectively deal with these. [BusinessTech]


Markets: The rand ended last week in a slightly better position, moving away from the R19/$ levels seen earlier in the month. It traded at R18.80/$ on Friday, recovering slightly from its weakest level in nine months. The currency faced pressure from a strong dollar and uncertainties surrounding US monetary policy under Trump’s administration. On Monday, it started the week on better footing, trading at R18.67/USD, R19.27/EUR and R22.83/GBP. Oil is trading slightly lower at $80.62 a barrel.

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