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Finweek - English

Finweek - English 3/18/2021

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Finweek is South Africa’s leading financial weekly magazine focusing on investment. With its brisk, creative and authoritative analysis of business and investment issues, it’s an essential business tool in the daily battle for competitive advantage. Today's business decision-makers have to cope with increased pressure on their time and are expected, more than ever before, to succeed in the face of stiffer competition. Finweek provides relevant information in quick bytes, along with award-winning investment advice.

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South Africa
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25 Issues

in this issue

3 min.
from the editor

South Africa’s GDP figures were published just as I started writing this week’s letter. On the face of it, they don’t look bad, with the economy expanding by 6.3% quarter-on-quarter annualised (a figure used to extrapolate the movement between quarters to the full year) during the final three months of last year. That compares with a 67.3% expansion in the third quarter of 2020, after the devastating contraction of 51.7% in the second three month period of last year, when the economy was locked down. For the whole of 2020, the economy contracted by 7% compared with a meagre 0.2% expansion in 2019. In real terms (or based on 2010 prices), GDP stood at R2.93tr last year. In 2016, the GDP, according to this measure of Stats SA, was R3.07tr. Between…

4 min.
banking on an inclusive digital revolution

If Covid-19 has done one thing, it is to lead a digital revolution. South African fintech firms have prospered. In early February, Mama Money, an app that facilitates international money transfers, announced growth in the volume of transactions of more than 500% in 2020. “The pandemic has pushed brick and mortar institutions,” says founder Mathieu Coquillon, “to explore new channels and markets that were not a priority before, especially when it comes to providing financial services for underserved communities.” Where this could not happen, fintech startups like Mama Money have filled the gap. “The biggest impact that we are excited about is how fintech will change the lives of marginalised and underserved communities to allow for upward mobility. Cost and access remain a massive barrier and we are actively working to…

4 min.
foreign skilled workers needed

There are no longer any doubts that South Africa’s labour market is suffering from a chronic shortage of critical skills, killing any prospects that our country could develop into a fast-growing, middle-income economy. SA is also home to probably the world’s most militant and strike-prone labour that always keep investors and capitalists on tenterhooks. Only the toughest capitalists stick it out and those that cannot take it anymore, exit the SA market to look for better investment returns elsewhere, where labour is placid and demands less pay. The scarcity of critical skills and our strike-prone labour are often listed by investors and financial pundits as some of the biggest contributors to SA’s anaemic economic growth. The government has not found a policy cure for our low-growth problem since the collapse of the…

3 min.
in brief

“I can’t survive without results.” — Newly appointed director-general of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, told CNN’s Richard Quest on her first day in office on 1 March 2021 the bottom line is that she becomes unhappy if she cannot achieve anything and that she cannot survive without results. This economist and former finance minister of Nigeria made history as the first woman and first African to hold the office. Former WTO leader, Pascal Lamy, said Okonjo-lweala brings stature, experience, a network and a temperament of trying to get things done to the table. Key to her success will be her ability to operate in the centre of a “US-EU-China triangle,” he said. “That indicates just how complicated this was or is.” – Christo Wiese, Steinhoff’s former chairman, said the National…

1 min.
double take

THE GOOD SA’s Information Regulator (IR) said Facebook (the owner of WhatsApp) cannot share any contact information it collects from WhatsApp users in SA with its other subsidiaries without first obtaining authorisation from the regulator. In January, WhatsApp informed users it was preparing a new privacy policy, under which it could share some data, including location and phone numbers, with Facebook and its other units. The changes to WhatsApp’s privacy policy have come under scrutiny globally, with Turkey’s competition board launching an investigation, and a legal challenge filed in India. The IR said its decision is in accordance with section 57 of the Protection of Personal Information Act. THE BAD Statistics SA reported that the country’s expanded unemployment rate, which includes discouraged job seekers and those having other reasons for not searching, was…

3 min.
south africa is boosting anglo’s earnings — again

South Africa accounted for 55% of Anglo American’s full-year earnings in 2020, a development that harks back to when the group’s Johannesburg headquarters was mothership to a business empire. In those days, the group was enmeshed with the SA economy, sporting interests in things as seemingly disparate as engineering, beverages, and media. The reason for the recent earnings bias – normally Anglo derives about 30% to 40% from its SA businesses – was the strong price performance (and cost controls) of Anglo American Platinum (Amplats) and Kumba Iron Ore, separately listed investments that still reflect the sprawling nature of the group’s past structure. That structure was in the crosshairs of analysts last month, however, following CEO Mark Cutifani’s comments at Anglo’s year-end results presentation that the abolition of historic exchange controls by SA’s…