Finance

5 important things happening in South Africa today

Staff Writer

 ·20 Jun 2017

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

• Reserve Bank governor Lesetja Kganyago has defended the bank’s primary objective, saying that the goal of keeping inflation low and protecting the country’s currency is already supportive of inclusive growth. His comments come as Public Protector Busisiwe Mkhwebane sneaked in a proclamation, calling for the Constitution to be changed, removing the ‘protect the currency’ bit from SARB’s primary goal, replacing it with ‘protect the people’.

• Ratings agency Fitch has warned that South Africa’s new mining rules – forcing all mining companies to be 30% black-owned – will likely deter investment in the country, saying it was a radical approach to BEE. The group said BEE has been a longstanding feature in SA, but this move shows government is prioritising ‘radical economic transformation’ above growth, and has created uncertainty around the outcomes.

• Absa says it will challenge the Public Protector’s order that government and SARB recover R1.1 billion from it, noting that it has already met all its obligations in respect of the loan provided by the SA Reserve Bank. The bank said it is under no obligation to pay, and will consider its legal options once it has received the report and consulted wit its legal team.

• Analysts and economists agree: president Jacob Zuma is tanking South Africa’s economy; with erratic political decisions and a focus on reform with no clear definitions, Zuma has destroyed investor trust and created an environment of uncertainty. According to investors interviewed by Bloomberg, the last time South Africa was in recession it was because of the global economic crisis – this time, it’s because of just one man.

• South Africa’s rand fell more than 1.5% on Monday after the public protector agency recommended changing the constitution to force the central bank to promote economic growth rather than currency and price stability. On Tuesday the rand was trading at R12.95 to the dollar, R16.53 to the pound and R14.47 to the euro.