5 important things happening in South Africa today
·22 Feb 2018
Here’s what is happening in and affecting South Africa today:
- With the budget speech out of the way, focus is now turning to an expected Cabinet reshuffle by president Cyril Ramaphosa – where it many anticipate finance minister Malusi Gigaba getting the chop. The North Gauteng High Court ruled on Wednesday that Gigaba had lied under oath, and he has been under constant fire for his ties to the Gupta family.
- While many South Africans are wincing at the VAT hike to 15% announced in yesterday’s budget speech, analysts warn that the country may face yet another VAT hike in 2019, as South Africa still faces a lot of budget constraints while enjoying one of the lowest VAT rates in the world.
- National Treasury says that ratings firms have responded positively to the budget. Treasury will meet with rating agencies today to discuss areas of concern. Fitch and S&P have downgraded South Africa to full junk, while Moody’s has held a wait and see approach. Government expects South Africa to return to investment grade in 18 to 24 months.
- Ford’s Kuga problems are still around, with a 2016 model of the vehicle bursting into flames in KwaZulu Natal in the past week. Ford recalled certain models of its Kuga line in 2017 after numerous reports of vehicles bursting into flames emerged since 2015. During that time, 72 Kugas were reported to have caught fire on South Africa’s roads.
- South Africa’s rand, bonds and stocks all rallied on Wednesday after Finance Minister Malusi Gigaba unveiled the first value-added tax (VAT) hike in over two decades, part of efforts to cut the deficit and debt under new President Cyril Ramaphosa. On Thursday the rand was at R11.66 to the dollar, R16.22 to the pound and R14.32 to the euro.
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