Big pension changes proposed, and major undersea internet cable for South Africa offline

The South African rand weakened on Tuesday following the release of first-quarter gross domestic product (GDP) data.

The stats report showed that the country’s GDP was marginally better than expected but indicated that the economy had stagnated. 

The economy experienced only a 0.1% growth quarter-on-quarter, as contractions in sectors such as mining and manufacturing offset strong performance in agriculture. 

The rand traded at 17.90 against the dollar, down 0.3% from Monday’s closing level. Additionally, the Top-40 index on the JSE closed about 0.4% lower.

On Wednesday, 4 June, the rand was trading at R17.87 to the dollar, R24.15 to the pound and R20.31 to the euro. Oil was trading slightly lower at $65.39 a barrel.

Here are five other important things happening in and affecting South Africa today:

Big pension changes proposed: Old Mutual is calling for a major overhaul of South Africa’s pension system, suggesting a shift to collective defined contribution (CDC) schemes. Currently, only 6% of retirement fund members are on track for a comfortable retirement, and the shift will protect South Africans’ retirement security. [Business Day]

Internet cable for South Africa offline: Some South African users are facing slow Internet speeds due to repairs on the West Africa Cable System (WACS), which connects Europe to South Africa. While many providers have backup capacity, issues are more prevalent in Cape Town. [MyBroadband]

What you’ll pay at the pumps from today: Despite the implementation of higher fuel taxes, fuel prices have decreased slightly in June. The price for 93 and 95 petrol will be reduced by 5 cents per litre, while diesel will see a cut of 37 cents per litre. The new prices will range from R21.24 to R21.35 for 93 and 95 petrol, respectively, and from R18.53 to R18.57 per litre for diesel. [BusinessTech]

Why the inflation target should be dropped: South Africa’s inflation target causes costs to rise faster than those of its trading partners, undermining competitiveness and economic growth. To promote sustained lower interest rates and boost exporter competitiveness, the inflation target should be reduced to 3%. [Daily Investor]

RAF CEO suspended: It has been confirmed that the board of the Road Accident Fund (RAF) has suspended CEO Collins Letsoalo for insubordination after he refused to appear before Parliament’s Standing Committee on Public Accounts (Scopa) last week. [Moneyweb]