Business

5 things you need to know in South Africa today

Staff Writer

 ·3 Feb 2017

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

• The Bank of China in South Africa is the latest bank to shut down accounts linked to Gupta businesses, on the basis of political and reputational concerns. In court papers filed by VR Laser – a Gupta-owned firm – the bank demanded that the group get rid of all of its Gupta shareholders, citing political risks. The company’s accounts were closed three weeks after they were opened.

• If finance minister Pravin Gordhan is axed in a speculated cabinet reshuffle, the consequences will be dire, analysts warn. The rand will tank and ratings agencies will immediately cut South Africa to junk status – but worse yet, in the longer term, there will be a mass exodus of talented, honourable people from the National Treasury, leaving it open to abuse from cronies and cadre deployments for years to come.

• Security will be tight at president Jacob Zuma’s state of the nation address being held next week, with streets around Cape Town’s parliamentary district being closed off two days ahead of the event. Security will move to block expected protests and disruptions from the EFF, which have occurred in prior years. Secretary to parliament Gengezi Mgidlana assured that cellphone signals won’t be blocked, and footage will not be cut, as was seen in previous years.

• Tax, tax and more tax – that’s what South Africans can expect to come out of the finance minister’s Budget Speech being held later this month. Finmin Pravin Gordhan indicatedin late 2016 that there would be tax increases of R13 billion in 2017, and a further tax increase of R15 billion in 2018. Taxes are seen as the ‘easy’ route to hitting these targets.

• The rand hit a one-week high on Thursday, boosted by a rally in commodity prices and a weaker dollar after the U.S. Federal Reserve’s policy statement. Stocks fell as the rand hedges came under pressure from the stronger currency. On Friday, the rand was trading at R13.39 to the dollar, R16.77 to the pound and R14.41 to the euro.