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Books on South Africa
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Update No: 064 - (30/04/07)
April 26 marked 13 years since South Africa's first
multiracial elections brought the African National Congress (ANC) to power. A
country once on the brink of a civil war is now a stable multiparty democracy
and one of Africa's freest economies. Yet the ANC's behaviour is increasingly
intolerant towards political opposition, raising fears for South Africa's
political future. The end of apartheid was supposed to put an end to censorship.
But as an internal inquiry revealed last year, ANC-aligned managers have banned
a number of outspoken critics from appearing on the SABC. The ANC has also tried
to usurp power in Cape Town, the last major city remaining outside its control.
Cape Town is run by mayor Helen Zille. A recipient of the United Nations' Human
Rights award, Zille is a woman of unimpeachable anti-apartheid credentials. But
her membership in the Democratic Alliance makes her unpalatable to the ANC,
which recently tried to replace Cape Town's executive mayoral system with an
executive committee on which the ANC would have had substantial representation.
The culture of political correctness, actively encouraged by the ANC, stifles
public debate over the direction of South Africa's economic and social policies.
Those who dare to criticise the government are often labelled as racists.
Though the ANC continues to enjoy much of the international support it received
in the days when it fought apartheid, its political tactics remain rooted in the
Cold War. When the apartheid government cracked down on the ANC in the late
1960s, many of its top members went into exile. Some, including Mbeki, went to
the Soviet Union and became members of the ANC's sister organisation, the South
African Communist Party (SACP). While in exile, the ANC cadres were exposed to
the rigid structure and antidemocratic nature of the global communist movement.
On his release from jail, Mandela undertook the difficult task of modernising
his party's outdated political and economic agenda. He helped cut the ANC's
close link with the SACP and shed much of its Marxist ideological baggage.
However, Mbeki's appointment as president ensured that the ANC retained its
Marxist party structure and its intolerance of political opposition. It's long
past time to reassess the ANC's democratic credentials. The party appears
increasingly interested in little more than concentrating and maintaining power.
There needs to be condemnation of policies that undermine the rule of law,
independence of the judiciary, freedom of the media and the functioning of
opposition parties in South Africa. Criticism will only be effective, however,
if it is loud and unambiguous.
When President Thabo Mbeki and other leaders of the Southern African Development
Community (SADC) met in Tanzania early April to address the crisis in Zimbabwe,
they responded by announcing another round of "quiet" diplomacy. Not a
word was said in public about how Zimbabwean security forces arbitrarily arrest,
detain and brutally beat opposition leaders and ordinary citizens around the
country. In an effort to end the crisis, SADC mandated Mbeki to lead its efforts
to mediate a dialogue between Zimbabwe's ruling party and the opposition. But
Zimbabwe's worsening crisis will not be resolved until SADC leaders start
talking openly about the massive human rights violations committed by the Mugabe
government, and demand an immediate end to them. If the SADC is serious about
its solidarity with the people of Zimbabwe, it needs to stand up for justice and
human rights in Zimbabwe.
The South African government has given an early signal of its response to
Nigeria's disputed elections by both congratulating President-elect Umaru Musa
Yar'Adua and appealing to Nigerians to use "peaceful and constitutional
means" to redress their election grievances. In a statement released by the
Department of Foreign Affairs, the government said President Thabo Mbeki had
wished Yar'Adua well and assured him that South Africa was ready to "extend
a hand of solidarity with the people of Nigeria." Mbeki had also identified
himself with a statement in which the Economic Community of West African States
(Ecowas) said Nigerian authorities should empower electoral tribunals quickly to
resolve all disputes. Reuters news agency reported from Abuja that most
countries had responded to the elections with either silence or criticism, and
that South Africa's was the first "positive message" from a foreign
government.
The African Court for Human and Peoples' Rights is to start its operations after
July this year, Judge President Bernard Ngoepe said April 24. "I don't
think that the court will be able to take cases by July this year due to
logistical problems, maybe by the second quarter of the year," he said,
detailing the rationale behind the establishment of this court at a seminar
hosted by the Institute for Security Studies. The logistical problems include
finding a building for the court chambers in Tanzania and the appointment of the
Registrar of the Court, who will be in charge of the court's administration. The
court has no criminal jurisdiction and would only deal with issues pertaining to
violation of human rights. Ngoepe explained that non-governmental organisations
and individuals, for instance, could approach the court to institute actions
against their states. This process would be taken forward if the implicated
government signed a declaration of consent to allow for the case to be heard.
Ngoepe said member states of the AU would be required to sign a declaration of
consent, which would pave the way for any case of human rights violations to be
brought forward against them. While the court has a clear mandate of handing
down judgements on human rights violations, it remains to be seen whether such
judgements would be enforced by the governments concerned.
The South African Reserve Bank has kept the repo rate unchanged at 9 percent,
following its second meeting of 2007, April 12. The last MPC meeting in February
also resolved to keep the repo rate unchanged after hiking it four times by 200
basis points in 2006 in a bid to curb rampant consumer spending. Credit
extension by banks to the private sector had grown at an
"uncomfortable" rate the governor said, referring to consumer credit
spending which the Reserve Bank has long cited as a contributing factor to
increasing the repo rate. Petrol price changes over the past few months were an
indication of the volatility in the international oil market. "The risk
posed by oil and food prices appeared to have increased," the governor
said, outlining other contributing factors considered by the MPC in their
decision.
Cosatu Denies Having Sidelined Zuma
The Congress of South African Trade Unions (Cosatu) has been forced to fend
off a report that it had ditched African National Congress (ANC) deputy
president Jacob Zuma in his bid to become the ruling party's next president. The
labour federation said April 15 "there is no truth" to a report …
that suggested Cosatu had dumped Zuma in favour of ANC secretary-general Kgalema
Motlanthe for the ANC presidency. The ANC's succession battle, which comes to a
head in December, has left the ANC-led tripartite alliance, including Cosatu,
deeply divided as factions lobby for their candidates. This intense politicking
has resulted in mistrust and paranoia among its leaders. However, supporters and
critics of Zuma in Cosatu denied that they had endorsed Motlanthe. Cosatu
secretary-general Zwelinzima Vavi, a staunch Zuma supporter, confirmed the
official position of the federation and said no such discussion had taken place
in Cosatu structures. "There was never such discussion about Jacob Zuma or
Kgalema Motlanthe. We are drafting a discussion document which will guide our
discussions on the ANC leadership but we have not discussed any names at
all," Vavi said. Opposition to Zuma in Cosatu stems from the belief that he
is not a genuine candidate of the left and that it would be unwise for Cosatu to
put all its eggs in Zuma's basket. While Vavi's support for Zuma is a matter of
public record, the federation has never discussed or endorsed Zuma as its
preferred candidate in the ANC's leadership race.
ANC's Dirty Little Secret - All Expertise is in White Hands
Trevor Manuel should be complimented for opening an important debate on the
socio-economic health of South Africa. Manuel is right to be alarmed at the
growing disparity between the rich and poor. But it is his very economic
policies which are directly fuelling this problem. When you look at South Africa
now, it's obvious there is a huge economic boom with an abundance of prosperity
in some quarters. But South Africa is like a movie set - it's all a facade. When
you look behind the scenes you find very disturbing facts. The average age of
artisans is well over 50. There are no new artisans joining the ranks. It's
almost impossible to recruit experienced professional engineers. Hospital
services are collapsing. The great majority of the growing population is
technologically illiterate. Manuel admits all this but what he doesn't admit to
is that, for the illiterate poor, the problem is essentially unfixable. The very
foundation of ANC policy is that the problems of the poor can be soundly beaten
by dispensing housing and education. But this is an impossible task without
social discipline - and that's the root problem with Manuel's policies. It's the
job of the government to provide fertile soil for economic growth. But any
gardener will tell you that, in fertile soil, the most prolific growth occurs
among the weeds. And if you want a healthy garden, you must be ruthless about
yanking the weeds out. This is simply not happening. Nowhere does Manuel in any
way reward the poor who have small families or incentivise young girls against
teenage pregnancy. The socio- economic policies of South American countries,
with similar problems, are streets ahead on this. The dirty little secret of ANC
economic success is that it is running on the momentum left over from the
apartheid era. All the technical expertise and business acumen resides in
whites. And as this expertise is naturally retired, encouraged to emigrate or
forcibly replaced by less bright affirmative action appointments, so the future
of this country is visibly dimming. The upshot is that more and more of the poor
are being sustained by fewer and fewer competent citizens. And just like an
illegal pyramid scheme, eventually this pack of cards must collapse! It is the
root problems you must address minister, but are you listening?
Forgotten Continent?
The latest figures published by the Organisation for Economic Co-operation
and Development will alarm anyone who cares about Africa. While aid payments to
the developing world rose by a healthy 30% in 2005, these figures show such
donations fell last year. The Italian contribution to world aid budgets has been
especially poor. Germany's has been unimpressive. Aid from Japan fell by almost
10%. And donations from the world's largest economy, the US, fell by 20%.
Overall, the rich countries' governmental aid to the poorest nations totalled
R370 billion in 2006, down from R742bn in 2005. This represents the first drop
in aid payments in real terms since 1997. This come only two years since world
leaders gathered in Gleneagles to promise a doubling of aid to Africa by 2010.
At that time, Bob Geldof, the organiser of the Live8 campaign, declared:
"Never before have so many people forced a change of policy on to a global
agenda." He went on to argue that the deal would save the lives of 10
million people in Africa. But such successes were always contingent on delivery
of the funds. The world's richest nations are also falling some way short of
their commitment - in terms of the Millennium Development Goals - to devote 0.7%
of their gross national incomes to international aid each year. Only Sweden,
Luxembourg, Norway, the Netherlands and Denmark are doing so. The OECD says the
decline in aid donations last year was to be expected after the exceptionally
high support given by the rich world in 2005. The argument that "aid does
not work" is still being aired, the voices of those arguing that
intergovernmental cash transfers merely feed corruption in the developing world
and fail to reach the very poorest are growing louder. African countries
obviously need to reinforce their commitments to good governance (and deal with
the likes of Zimbabwean President Robert Mugabe) if they are to hold out for
aid. But it would be reassuring to know that the commitments made by world
leaders at Gleneagles were more than just hot air.
UN Organ Sets Dedicates $100 Million to Combat Poverty
The United Nations International Fund for Agricultural Development (IFAD) has
set aside over $100 million (R700 million) to combat rural poverty in developing
countries. These continents include Africa and Asia, as well as regions of Latin
America and the Middle East. The IFAD's executive board took this decision at
their meeting in Rome April 22. The board earmarked $63.5 million (approx R447
million) in loans and $59.2 million (approx R417 million) in grants for Burundi,
Cambodia, Comoros, Ethiopia, Kenya, Paraguay, Sierra Leone and Syria. The grants
also include $10 million (approx R70 million) for seven international centres
conducting research in agriculture and providing training and technical
assistance. In this regard, the recipient countries will each use the money to
improve the lives of the rural poor. In Burundi, a grant of almost $14 million
will fund a project to rebuild the central African nation's livestock sector
which was almost destroyed by 12 years of civil war. IFAD Senior Director, Gary
Howe said by increasing access to technology, veterinary services and markets,
this scheme would allow poor people in rural areas to improve the value of their
products and improve the livestock industry. "Farmers in Burundi will
benefit from training and research provided by new field schools," he said.
Meanwhile in Cambodia, a $9.5 million (approx R66 million) grant will finance a
plan to increase the access of 26 000 households to advance crop and livestock
technology. In Syria, over $20 million (approx R140 million) will be provided in
loans to meet the challenges posed by a growing population on the available
natural resources. The scheme will improve irrigation systems and foster the
growth of small businesses, including sheep and goat rearing, rural
transportation services and small-scale trading. Under a new framework,
countries determined to least be able to repay debt will receive 100 percent
grant assistance from the IFAD. While medium debt sustainability will receive 50
percent grant and 50 percent loan assistance from the agency. "This new
framework means that a poor country's opportunity to reduce poverty will no
longer be linked to its debt situation. "This is of particular importance
for development in Africa," added Mr Howe. In South Africa the Accelerated
and Shared Growth Initiative aims to halve poverty and unemployment by 2014, a
year before the target date of the Millennium Developmental Goals. Through
AsgiSA, the South African government also aims to attain 6 percent economic
growth by 2010. The government has also put in place other job-oriented
interventions to address extreme poverty including the labour intensive Expanded
Public Works Programme, the Agricultural Starter Pack Programme and the
Comprehensive Agricultural Support Programme.
UN Observer Shocked At State of Country's Housing
United Nations special reporter for adequate housing Miloon Kothari has
criticised SA's housing policy, saying there appeared to be an increasing gap
between delivery of housing and legislation -- which could affect development.
Kothari said April 18 that preliminary impressions after visiting Northern Cape,
Limpopo and Gauteng were that policy at national level, such as the social
inclusion policy, was not filtering down to local government, and so increasing
segregation. Speaking after talks with 11 non-governmental housing organisations
in Johannesburg, he said: "Some of what I have seen was worse than I
expected." Kothari was shocked at some of the living conditions of
Johannesburg's inner-city poor, which he saw during a visit on Tuesday,
particularly those living in buildings where water had been cut off. "I do
not accept the argument that these buildings used to be privately owned so the
municipality can wash its hands of ultimate responsibility for residents. A
visit to properties owned by the Johannesburg Social Housing Company suggests
there are problems with implementation. Joshco and Johannesburg Water are public
companies. Who is monitoring these companies and projects to ensure delivery? It
should be the municipality," said Kothari. He said non-governmental
organisations in developing countries, such as India, where he is from, were
jealous of the progressive standards in SA, and the fact that the right to
housing was enshrined in the constitution and in judgements of the
Constitutional Court. "This is sufficient ground for policy that ensures
the rights of the most vulnerable are protected." Segregation between the
rich and the poor was increasing, he said. "The implementation gap as a
preliminary observation seems to be growing instead of narrowing and that is
where I will be looking and trying to find ways to reverse that trend."
Kothari said cities such as Johannesburg were finding themselves caught between
trying to encourage growth and development in order to compete globally, and the
protection of human rights. Presentations were made by a number of organisations
including the Centre for Applied Legal Studies: Water Rights division, the
Landless People's Organisation, the Inner City Resources Centre and Social
Surveys Africa. Representatives from people who have been evicted or are facing
eviction also made presentations. Some of the issues raised were the lack of
consultation by the government when it came to moving people living in informal
settlements to new areas and consideration of the needs of the community
concerned. Jean du Plessis of the international Centre on Housing Rights and
Evictions said that "using eviction as a tool of development (which was a
global trend with China leading the way) did not promote development among the
poor".
South Africa Cautioned On Attitude to Iran Nukes
South Africa should remain aware that there is an international lack of
trust in Iran, a research fellow at the South African Institute of International
Affairs has warned. The institute's Thomas Wheeler said Iran should follow the
example set by SA when it dismantled its nuclear programme in 1994. Iranian
President Mahmoud Ahmadinejad announced April 9 that Iran had begun enriching
uranium on an "industrial scale". The Islamic republic's announcement
is seen as a challenge to the United Nations (UN) Security Council, which on
March 24 unanimously adopted resolution 1747 -- banning Iran's arms exports --
and gave Tehran 60 days to suspend enrichment. The country has ignored previous
deadlines set by the council. The security council demands were in response to
allegations by the US and some allies that Iran was using the development of
nuclear power to disguise a weapons programme in contravention of the nuclear
Non-Proliferation Treaty. Western nations fear Iran may divert its atomic work
towards a covert military programme to build bombs. Iran denies this and says it
wants reactor fuel only to generate electricity. Wheeler said SA wanted the UN
resolution amended when the text was put forward for consideration in March at
the security council. SA's demand was made on the grounds of Iran's right to
peaceful use of nuclear energy -- a claim that has failed to dispel western
suspicions in light of Iran's failure to fully open up its nuclear sites to the
scrutiny of UN nuclear inspectors. SA wanted the resolution crafted in a way to
de-escalate tensions and to leave the door open for negotiations to secure a
sustainable, long-term solution. "Some of the proposed amendments were
passed but the fact that a strict resolution was unanimously adopted is an
indication of the international community's mistrust in Iran's nuclear programme,"
Wheeler said. Rather than just leaning towards supporting Iran, Wheeler said SA
should have invited the Asian country to follow Pretoria's lead. SA, upon
becoming a signatory of the Nuclear Non-Proliferation Treaty in 1994, dismantled
its nuclear programme and invited inspectors on site. For Wheeler, however,
Ahmadinejad's announcement is an attempt to "deflect attention from some of
the serious problems he is facing". Having failed to deliver on the
electoral promises of poverty eradication, job creation and economic prosperity
that earned him victory in the 2005 presidential elections, Wheeler said,
Ahmadinejad had "gone demagogic" in a bid to rally support. Although
the Iranian leader was under strong internal pressure, "the sort of
belligerence Ahmadinejad displays towards western powers is just
demagogic," he said. Poor performance at the helm of Iran has come at a
very high cost for Ahmadinejad, who lost local government elections in December
2005. There were also parallel elections held to select members of the Assembly
of Experts, a conservative body of 86 senior clerics that monitors the supreme
leader and chooses his successor.
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AUTOMOBILES
New Players Aid Market Growth in Vehicle Sector
March sales figures added once again to the continued growth in the light
commercial vehicle market, with year-to-date sales rising 14%. In addition the
year-to-date growth in export sales has jumped to 37,7%, which bodes well for
the manufacturing sector catering to this particular international market. The
leader was Toyota, with the Durban plant producing 3881 Hilux models for export
under the Innovative Multi-purpose Vehicle programme. Locally Toyota also
dominated the overall light commercial vehicle market with sales of 5436, again
with the Hilux range topping the log, although this includes the various
lifestyle models as well as the trusty workhorse vehicles. General Motors and
Ford continue to battle things out in the half-ton segment, where the Opel Corsa
Utility just edged out the Ford Bantam for top spot with figures of 2136 and
2100 respectively. Then of course there is the Nissan 1400, which is still
showing strong sales with 1024 finding their way to customers last month.
Speculation continues regarding the replacement for this traditional workhorse,
but Nissan has previously stated that there will only be a replacement late next
year. Whereas Nissan is continuing to do extremely well with its Hardbody and
Navara models, it seems things are a little slow for the Patrol Pick-up. Sales
of just 16 models last month show the model has a great deal of catching up to
do if it is ever to overtake the legendary Toyota Land Cruiser Pick-up, that
even with a new model on its way still saw 158 arrive on SA's roads last month.
When it comes to panel vans, the Toyota Hi-Ace and Quantum definitely rule the
roost and it seems that consumers are ignoring the influx of models from other
historically competent, and occasionally more exciting, manufacturers. While 687
Quantum models reached customers last month, just 23 Opel Vivaro models, 57
Nissan Primastar's and 26 Volkswagen Panel Vans became the van of choice.
Reasons for this will vary, from limited availability to functionality and
pricing, but it would be nice to know that we are at least considering thinking
out of the box. It would certainly appear that when it comes to budget models
then price is the only overriding factor. Dealers sold 304 Chana Star vehicles
in March, showing that cheap, reliable transport solutions will be a major draw
card for the industry in coming years.
Chinese Aim for Large Slice of SA
The DFM Mini Truck is one of the latest Chinese vehicles to arrive on the local
market, although its strained attempt to look like a BMW will not appeal to all
in the styling stakes. An onslaught of Chinese-made vehicles has been saturating
the South African market in alarming numbers recently, following a tremendous
demand for low-cost commercial vehicles. Chinese vehicle manufacturers have
their eyes firmly set on the South African commercial market, with further
prospects of expanding into African countries. China Motor Franchise group (CMF)
is embarking on importing and marketing Chinese vehicles such as Fudi and DFM in
order to achieve a 10% market share in 10 years. Under the CMF commercial
vehicles umbrella, four models will be available from the DFM stable, which will
come equipped with 1.3l engines that push out 50kW. The DFM Mini Truck will
feature an 800kg payload capacity, which should find favour with office removal
companies and small construction entities. The three-quarter ton Mini Truck is
set to retail at R69995. Included in the model line-up is a multi-purpose
vehicle (MPV) in the form of the DFM Mini MPV, which is said to be both
functional and versatile. It's copious interior is ideal to cater for small
businesses such as delivery services and catering companies. The people carrier,
the DFM Star Passenger, is said to address a family's travelling needs in an
economical vehicle solution, as it offers seating for six passengers and is also
powered by the 1.3l engine. The Fudi Lion pick-up is available in both double
and single cab configurations, and is powered by either a 2.2l petrol or a 2.8l
diesel engine. With the entry-level single cab model pricing is expected to be
R89995. In addition to the DFM and Fudi range, CMF will also introduce a
half-ton pick-up aptly named City Blitz retailing at R59995. Additionally, there
will be a 1,8-ton multi purpose commercial vehicle (MPCV), which features a
versatile drop side cargo box fitted with a tipping mechanism. Additionally, the
medium commercial front will be spearheaded by the AW Series of medium-duty
trucks, a proven range of three-ton workhorse vehicles that are currently
available on SA roads and have managed to gain a 10% market share within its
segment since its arrival. For the new model line-up, CMF will ensure that the
dealership network offers first-class service and quality parts, with a network
comprising of stakeholder-based franchises. CMF will be the sole banner involved
in distributing and marketing both DFM and Fudi vehicles.
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BLACK ECONOMIC EMPOWERMENT
Manuel's Criticisms Stir BEE Controversy
Finance Minister Trevor Manuel has set the cat among the pigeons with his
remarks that the government's black empowerment policy was flawed and needed
reviewing. Speaking to the Financial Times, Manuel said the legislation, passed
four years ago, was being abused. He said: "There were all kinds of things
that businesses have done, good and bad, cynical and genuine." Manuel said
some companies were merely electing black people as tokens and cited a story of
his friend saying: "They (his white partners) say, 'We want you there. You
are a good man. But actually we do not need you close to what we do. We will run
the business, but we have bought an insurance policy through you'." Colin
Reddy, director of research company BusinessMap Foundation, said he was
surprised Manuel had aired such views to the media. Reddy said it was big
corporations that had control of how empowerment was implemented and redesigning
the black empowerment policy would not achieve much. Empowerment rating agency
EmpowerdDex said Manuel's comments were mainly related to the ownership and
management portion of the empowerment scorecard. These two elements had
traditionally been referred to as narrow-based empowerment and they benefited
the fewest black people, it said. "We believe that there is no need to
review the policies yet as the codes were gazetted only this year, and only
through implementation by the companies will we know what works and what
doesn't. The codes themselves cater for this as the trade and industry minister
can review them on an ongoing basis. To say they do not work at this time would
be a bit premature," EmpowerDex said in a statement. President Thabo
Mbeki's brother, Moeletsi Mbeki, said April 10 that nothing would come out of
Manuel's call for black economic empowerment to be reviewed, and dismissed it as
just talk. Reddy said Manuel's statement was actually questioning the degree of
control policy makers had in a free market system. "In a capitalist
environment, it is unavoidable to have a concentration of ownership in the hands
of a few individuals who have money," said Reddy. He said the government
could not assume direct control of the implementation of empowerment and still
have a free economy. "Unless the government wants to move towards
socialism, I don't see policy makers having more control. Also, if the
government is seen to be interfering in business, that would scare off foreign
direct investment. It is a catch 22 situation," said Reddy. Independent
analyst Siyabonga Mahlangu said there might be flaws in the implementation of
BEE, but these would be corrected along the way. "Empowerment is an ongoing
process, and the policy is fairly young. The minister is calling for checks and
balances, but these will be put in place as we move along," said Mahlangu.
He said empowerment should be viewed holistically and not merely as equity
stakes in big companies. Stephan van der Walt, analyst at financial systems
company Bravura, said the abuse of the BEE system was partly due to pressure on
firms to comply. "I would like to see more broad-based empowerment
transactions that do not involve the usual suspects," said Van der Walt.
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EMPLOYMENT
Job Creation 'Hits 20,000 a Month'
About 20,000 formal jobs a month were created in SA last year, or 240,000 in the
year as a whole -- a 2,9% increase in employment growth, according to the fifth
South African Employment Report, released April 25. The report estimates total
formal-sector jobs, excluding ones in agriculture, at 8,663-million. The
report's estimate is marginally higher than that of Statistics SA's quarterly
employment survey, which estimated the total number of people employed in the
formal sector to be 8,2million -- about 750,000 more than the previous quarterly
survey's figures indicated. The quarterly survey number is very similar to the
8,3-million that the Labour Force Survey (LFS) shows as the number of
formal-sector workers, suggesting the numbers are credible. Analysts estimate
that the country needs to create half-a-million jobs a year to start tackling
unemployment, which is officially at 25,6%. The latest LFS figures from
Statistics SA show a gain of 544,000 jobs in the year to March, but these jobs
include the agricultural or informal sector. The "expanded" definition
of unemployment, which includes those who have given up looking for jobs, fell
to below 39% from a peak of over 40% a few years ago. Mike Schussler, who
compiled the South African Employment Report on behalf of trade union the United
Association of SA (Uasa), said: "An increasing number of South Africans are
becoming self-employed and the highest number of unemployed people are those
with grade 11." In September 2002, nearly one out of every seven people
working were self-employed. This rose to one in every six by September last
year. The number of overall self-employed has grown 28,8% since September 2002.
According to the report, one in four white males, one in five Asian males and
one in five black females are self-employed, while there is a growing tendency
among white females (one out of six) to work for themselves. It shows 86,8% of
all black self-employed people are in the informal sector. "The challenge
is to make it possible for those in the informal sector to graduate into the
formal sector," Schussler said. "The second tendency is that
significantly more people have now completed primary school. But the problem is
that many people who can't find employment are those who passed grade 11 and
then left school," he said. Their unemployment rate is the highest, at
36,3%, compared with 3,2% for those with a degree or more. People who completed
primary school education but left high school before matric had a higher rate of
unemployment than those who did not go any further than primary school,
Schussler said.
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FOOD & DRINK
SABMiller Toasts Global Thirst for Beer
The world's thirst for beer has boosted SABMiller's lager sales volumes 23%
from 176-million to 216-million hectolitres for the year to March. Nigel
Fairbrass, head of communications for SABMiller in London, said the calculation
of the group's organic growth included volumes for South America from October
12, a year after it became part of the group. In SA, lager volumes for the year
increased 23% from 26-million to 32-million hectolitres, with fourth-quarter
growth of 8% benefiting from the hot weather. Fairbrass said the loss of the
Amstel brand last month had not had an effect on the current-year performance.
Soft drinks volumes for the year are up 7% from 13,7-million to 14,6-million
hectolitres, boosted by a 33% increase in the final quarter following an
improvement in the supply of carbon dioxide. Fairbrass said the carbon dioxide
shortage had not been entirely resolved, but the situation had improved
somewhat. In Europe, lager volumes grew 11% from 36-million to 39-million
hectolitres, with the final quarter up 15%. SABMiller attributed this to
continued good performances from Poland, Russia and Romania. "Poland
achieved strong growth of 13% notwithstanding challenging comparatives,
reflecting particularly strong market execution and good growth of our Zubr
brand," said Fairbrass. Russia recorded volume growth of 24% with Romania
up 23%, driven by the Timisoreana brand. Czech Republic was up only 1%, led by
the Pilsner Urquell and Kozel brands. Fairbrass said Africa and Asia delivered
growth of 27% in lager volumes, reflecting strong growth in China of 30% driven
by the national brand, Snow. Fairbrass said in India, volumes increased 36% on a
pro forma basis, benefiting from market deregulation in certain states. South
American lager volumes rose 12% with growth accelerating in the final quarter to
14%. Fairbrass said strong performances across the region reflected good
economic conditions, improved market shares and the effect of initiatives to
rejuvenate the beer industry. These initiatives, he said, included brand
renovations and launches, the introduction of new containers and increased
investment in marketing and merchandising at the point of sale. In Central
America, carbonated soft drink volumes were up 6% and lager volumes up 8%. In
North America, sales to retailers declined 3% from 47-million to 45,6-million
hectolitres, he said.
Coca-Cola Africa Pumps Up Volumes
Strong growth in Coca-Cola Africa's largest markets in Africa -- SA and Nigeria
-- contributed to the beverage company's first-quarter performance, with the
group posting a 12% increase in revenue to $1,276bn, from $1,140bn in December
last year. Unit case volumes (cases of 24 units) were also up 17% from
1,4-billion to 1,6-billion. Global volumes were up 4% from 21,4-billion to
22,2-billion unit cases. Alex Cummings, president and chief operating officer of
Coca-Cola Africa, said the revenue growth reflected a 16% increase in
concentrate sales, positive pricing and mix, partially offset by an unfavourable
double-digit currency effect. "Operating income growth of 9% reflected the
increase in net revenues and the continued investment in key marketing
initiatives," said Cummings. SA's unit case volume grew 29%, compared with
a 3% decline in the first quarter last year. The company said that the growth
was driven by strong marketing, the replenishment of trade inventory -- which
had been low due to the carbon dioxide shortage in the fourth quarter last year
-- and favourable weather. Nigeria's unit case volume increased 18%, compared
with an 11% rise previously. "This is a strong quarter and a strong start
to 2007. "We grew both sparkling and still beverages. "Our focus on
driving growth, building our innovation pipeline and managing our productivity
is working," said Cummings. "However, these impressive results are the
product of just one quarter and we must remain focused on delivering sustainable
growth into the future." Coca-Cola Africa is the continent's soft-drinks
leader, serving 925-million consumers through 900000 retail outlets throughout
56 countries. Every day, about 93-million Coca-Cola products are sold across
Africa. Cummings said Coca-Cola Africa, together with its 40 bottling partners,
was the continent's largest private-sector employer in the consumer goods
industry, with 55000 employees. "Over the past five years, we have invested
more than $600m in Africa, with much of this going into new plants, updated
equipment and advanced employee training," said Cummings.
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FOREIGN DEBT
Municipalities R40 Billion in Debt
South African municipalities are R40 billion in debt, a Local Government
Association report has revealed. The shocking figures were detailed at the Salga
national conference in Midrand. The hard-hitting report slams politicians for
their "backward tendency" of appointing inappropriate people to
positions within local government. It says this means they are forgoing
capacity, skills and expertise "in favour of purchasing a patronage network
within the council of loyal but largely incompetent officials". It
highlights the heavy impact that staff shortages and the lack of skilled and
experienced personnel have on service delivery. "This results in continuous
crisis management, with no time available for proper planning, personnel
development and term planning." The document warns that this affects vital
areas, such as the quality of water and effluent not being maintained to
required standards. The report finds that municipalities are battling to contain
debt levels "within acceptable norms" and points to water debts as a
particular concern. Municipalities are not able to easily disconnect supplies
because water is constitutionally protected as a basic necessity. During his
address, Salga chairman Amos Masondo said he was concerned that a year after the
local government elections, some municipalities had yet to finalise the
appointment of municipal managers and other key personnel. There were also
vacancies for key jobs across provinces, which were closely linked to failures
to complete employment contracts and performance agreements. Masondo told
delegates that although the 50/50 campaign had ensured the proportion of women
elected had jumped from 29% to 48%, this had to be complemented by the
appointment of senior women managers in various municipal administrations. Women
made up only 12% of managers in the Free State, 16% in Mpumalanga, 25% in
Limpopo and 30% in the Eastern Cape. Masondo highlighted the un-rest in Khutsong
on the West Rand, resisting incorporation into North West. He said Salga was
committed to engaging with communities and "appropriate structures" to
find a solution. The North West government condemned the use of violence by
Khutsong residents April 23.
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FOREIGN RELATIONS
SADC Tariff Deal With EU Now 'Unlikely This Year'
A recent update on trade negotiations between the European Union (EU) and
African, Caribbean and Pacific (ACP) countries, hosted by the South African
Institute of International Affairs, has exposed some stark contrasts. The EU is
negotiating economic partnership agreements (EPAs) with these nations to replace
the Cotonou agreement, which is incompatible with World Trade Organisation (WTO)
rules. A waiver on the agreement expires at the end of the year. If negotiations
are not finalised by then, or if the waiver is not extended, some countries'
trade with the EU will be governed by the stricter generalised system of
preferences. Junior Lodge, the Caribbean regional negotiating representative in
Brussels, describes negotiations that have made considerable progress. Caribbean
countries are eager to conclude an agreement and have almost acted with
"undue haste," he said. Aiming to lock in substantial benefits for
their economies, they have made minor concessions, while pushing for optimum
leeway from the EU on implementation periods for concessions on market
liberalisation. Transition periods of up to 25 years have been mooted. The
tactic is working for the Caribbean. Lodge says a draft text for the agreement
already exists but it needs some tweaking. There are a few sticking points --
notably on development co- operation and tariff liberalisation -- Caribbean
countries expect to conclude an EPA by September. A long journey lies ahead for
the Southern African Development Community (SADC) countries. Despite the
deadline, SADC members and the EU have yet to have a proper, formal negotiating
session, says Paul Kalenga, trade policy adviser with the Regional Trade
Facilitation Programme and SADC secretariat. This body appears to be at odds
about what and how much it wishes to give. Observers have even hinted that they
may not united at the negotiating table. The likelihood of a deal before the end
of the year appears remote, says Kalenga. Further complicating the negotiations
is a request from SADC in March last year that SA be included. The EPAs are
broadly punted as trade deals with a development aim -- a framework into which
SA does not neatly fit. It took exactly a year for the EU to process the request
and finally agree to SA's inclusion -- further delaying the crucial talks. SADC
argues that SA's inclusion will boost regional integration and help smooth the
way for greater trade harmonisation in the region. Some of the role players have
accused SA of seeking to enhance its own access to EU markets while obtaining a
greater measure of protection for its market by piggybacking on the EPA. The
regional integration argument also seems an ill-fitting jigsaw. All the members
of the Southern African Customs Union are now included in a single EPA
configuration, which is an important milestone. However, some SADC members are
negotiating an EPA separately with the eastern and southern African group, while
the Democratic Republic of Congo has slotted in with the central Africa
negotiating bloc. The EU attaches some important conditions to SA's inclusions,
calling for differential treatment of Africa's economic powerhouse. Its caution
is understandable. The EU recently indicated it would dismantle all tariffs and
quotas, offering full market access to ACP countries, excluding SA. Had it
extended that offer to SA, it would have created a situation where the EU would
open its markets to SA while some tariffs that had already been abolished under
a trade, development and co-operation agreement governing SA's trade with the EU,
would have to be reinstated on some EU goods entering SA -- clearly a reversal
that EU bureaucrats are unlikely to be able to sell at home. SA is also
unwilling to negotiate on new generation issues - or services - which include
trade issues such as government procurement, investment, transport and
telecommunications. SA cites the absence of these on the multilateral trading
agenda. SA's presence at the EPA negotiating table appears to have hardened the
EU's stance on the matter, which could force a stalemate, preventing the
December deadline being met. It may be argued that SA's negotiating capacity may
help its weaker neighbours in the region to conclude a fair pact. It could,
however, hurt them if SA's strong-arm approach prevents the deadline being met.
Namibia, Botswana and Swaziland, in particular, stand to lose. In the absence of
an alternative system to govern their exports with the EU, the stricter
generalised system of preferences will become the guideline, says Kalenga. If
these duties are applied, countries in southern Africa, not defined as least
developed countries, face tariff hikes, or the imposition of tariffs, where none
existed under the Cotonou agreement. Least developed countries would be
unaffected, enjoying duty-free access to EU markets. SA's trade relations with
the EU are defined by a bilateral agreement since 2000. If the EPA is concluded,
SA will see some real benefits, the EU has indicated. But if the EPA is not
concluded, SA will suffer no disruption, with its trade with the EU continuing
under this agreement.
Developing States Need Trade Talks to Succeed
United Nations Secretary General Ban Ki-moon warned April 23 that the current
round of international trade talks must succeed, or the world's poorest
countries will slip further behind. Addressing the Seventh Forum on Democracy,
Development and Free Trade, in Doha, Qatar Mr Ban said the entire multilateral
trading system will be in jeopardy should the new round of talks fail. Named
after the city where they were launched in 2001, the Doha Round of trade talks
stalled last year amid disputes between developed and developing countries over
agricultural subsidies, but talks have resumed recently. Mr Ban warned that if
the latest talks fail, "serious damage will be done to those who can least
afford it, to the multilateral trading system, and to multilateralism itself.
"Should this round of trade talks succeed, Doha will become synonymous not
only with free trade, but also indelibly linked to development." The
Secretary General urged UN member states to re-double their efforts to reach
agreement regarding sensitive issues in the realm of international trade, such
as agricultural subsidies which benefit farmers in developed nations and
effectively price-out farmers in emerging economies. "The global trading
regime needs to create opportunities for the poorest countries, instead of
leaving them at a disadvantage," said Mr Ban. The Secretary-General told
the forum that while democracy was intrinsically valuable on its own terms, it
also brought positive effects to trade and development. In so doing, he
explained, democracy also offered institutional certainty and stability and
encouraging businesses to have greater confidence in a country's economic
outlook. "Democracy, development and free trade share a conception of men
and women as free and autonomous individuals, capable of fulfilling their inner
potential," he said. Mr Ban further urged the world's countries to work
towards "truly free trade," transparent governance and institutions
based on the will of the people, and sustainable development and globalisation
that benefits everyone, and not just some of the world's peoples.
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INDUSTRY
Coega Industry Zone Lines Up Investors
The success of the Coega industrial development zone in luring investors has led
to its decision to expand its land area by about 63% to 18000ha. Coega
Development Corporation (CDC) CEO Pepi Silinga said mid-April that an in-
principle agreement had been signed to acquire 7000ha of land from PPC. The
purchase price is not being disclosed at this stage. "At the rate at which
we are growing we might run out of space in 10 years," Silinga said in an
interview. The land acquisition would eliminate profiteering on land and allow
the CDC to benefit from the projected growth in land prices. In the year to
March, the Coega industrial development zone succeeded in almost meeting its
target of securing 10 new investors, bringing in nine for the year. These
included the R20bn Alcan smelter, and investments by Dynamic Commodities' fruit
sorbet facility (R50m); Cerebos' salt production plant (R85m), Biomass Pellets
(R70m); an automotive components manufacturer (R50m); a precast products
manufacturer (R50m); and three logistics projects with a combined value of
R180m. Another target of 10 new investors had been set for the current financial
year. About R28bn has been invested in or committed to the zone which should see
about 9000 workers on site by the end of next year as construction of the Alcan
smelter, port infrastructure and other projects gets under way. CDC spokeswoman
Vuyelwa Qinga-Vika said lease agreements would also be signed on completion of
environmental impact assessments for a $20bn agro-processing project by SeaArk;
a R1,1bn thin strip mill investment from Germany; and a R5,8bn joint venture by
Chemicals Industries Far East Limited of Singapore and South African empowerment
partners in a chlorine refinery and desalination plant. The chemical plant is to
be officially launched next Monday by Singaporean President Sellapan Ramanathan
during his state visit to SA. Construction was due to begin in June, Qinga-Vika
said. Another major project in the pipeline is the plan by Russian company
Renova to construct a ferroalloys smelter to process Kalahari manganese.
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INFORMATION TECHNOLOGY
ICTs to Alleviate Poverty
Information and Communication Technologies (ICTs) should be used to develop the
brainpower needed to pull Africa out of poverty, says President Thabo Mbeki.
Addressing the unveiling of the New Partnership for Africa's Development (Nepad)
e-Schools Demonstration Project April 17, President Mbeki explained the project
aimed to change the continent for the better. "This project is about
helping our young ones to acquire knowledge and the capacity to use their brains
to change our country and continent for the better," he said at the Maripe
Secondary School. The initiative aims to provide a continental learning
mechanism, based on real-life experiences of implementing ICTs in schools across
Africa. This will inform the broader Nepad e-Schools Initiative roll out. The
Nepad Heads of State and Government Implementation Committee (HSGIC), in 2003,
adopted the initiative, aimed at ensuring African youth graduate from schools
with the skills to participate in global ICTs. The demonstration project is
being rolled out in six schools in each of the eight participating African
countries, namely Egypt, Ghana, Kenya, Lesotho, Mauritius, Rwanda, South Africa
and Uganda. Another 12 countries are to roll out the project later in the year.
Each school is equipped with a computer laboratory containing at least 20
personal computers, a server and network infrastructure, as well as peripherals
such as scanners, whiteboards and printers. In South Africa, Maripe Secondary is
one of the six schools that will benefit from the project. Other schools are
Isiphosethu High in KwaZulu-Natal, Hendrick Makapan in North West, Lomahasha
Secondary in Mpumalanga, Thozamisa High in Eastern Cape and Ipetleng Secondary
in Free State. While President Mbeki noted that poverty was still prevalent in
many areas of the country and the continent, he said it was about time people
stood up to empower themselves. Deputy Chairperson of the NEPAD e-Africa
Commission Henry Chaisa, said the project aimed to ultimately create a critical
mass of African youth with ICT skills. "In these days, people need such
skills in order to conduct business," Dr Chaisa said. He said the project
would go a long way in terms of narrowing the digital divide between the
continent and others such as Europe, America and Asia, which are considered more
technologically advanced. Communications Deputy Minister Radhakrishna Padayachie
said the project would be vital in the fight against the marginalisation of
Africa in the global economy. "The project will provide our learners with
the necessary skills so that they can become productive in the economy," he
said. Education Deputy Minister Enver Surty said for the project to be a
success, educators would need to be re-skilled and re-educated. "Its not
only about computers, we will need to re-skill and re-educate our teachers so
that the skills can filter down to the learners," he said. At the moment
the roll out is still at a pilot stage, in a bid to uncover any challenges that
could hamper the broader implementation of the programme. The ultimate aim is to
roll out the programme in about 600 000 schools across the entire African
continent over a period of 10 to 20 years.
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INTERNATIONAL ECONOMIC RELATIONS
South Africa Niger to Address Trade Imbalances
South Africa and Niger are to expand the variety of goods traded between them,
in order to address the huge trade imbalance between the two countries, in South
Africa's favour. This emerged April 18 following a meeting between the two
countries' Foreign Ministers Nkosazana Dlamini-Zuma and Aichatou Mindaoudou. Top
on the agenda of the meeting was the strengthening of bilateral political and
economic relations between the two countries. The meeting took place within the
context of South Africa's commitment to consolidate such relations with Niger.
Briefing reporters following a meeting, Dr Dlamini-Zuma said all available
opportunities on trade would be looked at. "As we are trying to improve our
co-operation, we will find goods to buy from Niger and they will also find
things to sell to us," she said. Figures provided by the Department of
Foreign Affairs indicate that South Africa exports more to Niger than it
imports, creating a huge trade deficit for the West African country. According
to the department, South Africa exported goods in the region of R54 million to
Niger in 2006 and imported only about R2 million, resulting in a shortfall of
about R52 million. The figures also show that this trend dates a few years back.
Dr Dalmini-Zuma said a part of the process to remedy the situation would be to
send delegations from South Africa to meet with representatives of trade and
industry, transport and minerals and energy sectors in Niger. A specific project
earmarked to boost Niger economically, is the development of an abattoir for
meat processing and the production of milk as well as dairy products. "We
have quite a full plan in terms of what to do and are happy that we have been
able to take one more step to take off with all these projects," Dr
Dlamini-Zuma said. "We will be exchanging delegations very frequently in
order to take these projects forward." She added the two countries were in
the process of finalising the establishments of embassy missions to further
strengthen their bilateral relations. Ms Mindaoudou said Niger would need South
Africa's experience in many fields in order to improve its economy. "South
Africa has a lot of experience in different fields and Niger has a lot of
potential and capacity in the same fields, especially the cattle breeding
sector," she said. The agriculture sector is critical to the Niger economy
since about 90 percent of that country's labour force is engaged in mostly
subsistence agriculture. The sector contributes over 50 percent of Niger's Gross
Domestic Product.
Singapore Can Strengthen Africa-Asia Links
Singapore could help strengthen relations between African regional organisations
and the Association of Southeast Asian Nations (ASEAN), says President Thabo
Mbeki. Addressing a state banquet in honour of Singaporean President Sellapan
Ramanathan April 19, President Mbeki said this was important as Singapore is
about to chair ASEAN. "I am confident that Singapore ... will strengthen
the relations between our regional organisations so that our countries and
peoples can derive more benefit from closer co-operation." Regarded as
Southeast Asia's wealthiest nation, Singapore will assume the chairmanship of
ASEAN later this year. ASEAN is a geo-political and economic organisation made
up of about ten countries located in Southeast Asia. It was formed in 1967 by
Indonesia, Malaysia, the Philippines, Singapore and Thailand as a display of
solidarity against communist expansion in Vietnam and insurgency with their own
borders. ASEAN aims to accelerate economic growth, social progress, cultural
development among its members and the promotion of regional peace. Brunei,
Vietnam, Laos, Myanmar and Cambodia later joined as members of the organisation.
In 1992 the member-nations of the organisation signed a Free Trade Area (FTA)
agreement, allowing the nations to exchange goods without tariffs, quotas and
preferences. President Mbeki said while Singapore was committed to regional
unity and development in Southeast Asia, South Africa was also doing the same
within the African Union (UN) and South African Development Community (SADC).
"Our two countries share a vision of peaceful, stable and democratic
world," he said. He added that together with other countries of the south,
South Africa supported the reform of the United Nations (UN). "We want the
further strengthening of this world body so as to better discharge its mandate
to ensure peace, security and development in all parts of the world,"
President Mbeki said. He added that South Africa was inspired by Singapore's
contribution towards the achievements of such ideals during its two-year term as
a non-permanent member of the UN Security Council (UNSC), which ended in 2002.
South Africa, which is currently a non-permanent member of the UNSC, would
follow in Singapore's footsteps, said president Mbeki. The visit by President
Nathan, accompanied by a 22-member business delegation, is the first by a
Singaporean head of state to South Africa. There were discussions with the
President Mbeki on strengthening of bilateral political, economic and trade
relations between the two countries. The Southern African Customs Union (SACU)
is looking at a proposal for South Africa and Singapore to have a free trade
agreement, President Thabo Mbeki said April 19. President Mbeki said South
Africa wanted to have such an agreement with Singapore, but added that there
were processes to follow. "We as South Africa want this free trade
agreement with Singapore but we are members of the Southern African Customs
Union," Mr Mbeki said "Other countries like Namibia, Lesotho and
Botswana are part of that, so, to engage in such a process requires the
agreement of the customs union." This was a matter receiving "urgent
attention" from SACU said the president, going on to explain that in the
context of a free trade agreement, concerned countries could agree to eliminate
tariffs, quotas and preferences on most if not all goods traded between them.
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MINERALS AND METALS
New Terminal to Boost Ferrochrome Exports
A $4 million (approx R28 million) construction project is to boost the export of
ferrochrome between South Africa and Zimbabwe. The construction of the
ferrochrome terminal at the Maputo Port in Mozambique is scheduled to be
completed in June. "The bigger ferrochrome terminal would boost ferrochrome
exports to more than one million tons per year over the next few years,"
said Dick Moore, commercial director of the Maputo Port Development Company (MPDC).
"So we are very pleased," he said. Ferrochrome is a
corrosion-resistant alloy of chrome and iron and is used to produce stainless
steel. In South Africa it is mined in Middelburg and Rustenburg. Mr Moore said
the new facility would be fully operational by the end of July. "The
original terminal at Maputo Port was commissioned less than two years ago and
was already operating close to capacity," said Brenda Horne, Chief
Executive Officer of the Maputo Corridor Logistics Initiative (MCLI). "The
terminal handled more than 500 000 tons in 2006, which was mainly shipped to the
steel mills of Northern Europe, Japan and China," she said. The MCLI aims
to improve trade and infrastructure like the road and rail link between South
Africa and Mozambique as part of the Maputo Development Corridor (MDC)
initiative. The MDC initiative was spearheaded by former Mpumalanga Premier
Mathews Phosa. It has already resulted in the construction of the R2 billion N4
toll road between Johannesburg and Maputo harbour, as well as linked rail and
communication upgrades. The MPDC has a 25-year concession from the Mozambican
government to operate Port Maputo. Furthermore, the Industrial Development
Corporation (IDC) has been used by the government of South Africa as the primary
catalyst for South African investment in Mozambique In March 2007, the IDC has
approved funding for 10 projects geographically spread throughout Mozambique and
is currently considering and investigating six additional projects in the
country. The spread ranges from mining and mineral beneficiation, agriculture,
tourism, chemicals, and forestry, transport infrastructure to energy. The Mozal
Aluminium Smelter (Mozal 1 and II) remains the IDC's largest investment outside
the borders of South Africa. Another major project funded by the IDC is the
titanium-bearing mineral sands in southern Mozambique totals $600 million
(approx R4.2 billion).
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MINING
Gold Fields Shines On Talk of US Buyout Bid
Market interest in Gold Fields surged April 11 after media reports that
little-known US financier Edward Pastorini could lead a group of five gold
mining companies bidding for the group. Gold Fields shares gained as much as 11%
to a peak of R152,50 after the reports, but gave up much of the gain to close up
3,5%. Bloomberg, citing internal documents and an interview with San
Francisco-based Pastorini, said Pastorini planned to accumulate a stake of about
10% in Gold Fields by June or July before making an offer in cash, shares and
bullion dividends. The basis of his offer was his belief, shared by private
equity firms and corporate raiders, that gold would rise to more than $1000/oz
in the next two to three years, he told the news agency. If it materialises,
this would be the second bid for Gold Fields in three years, after Harmony Gold
Mining launched a R24,5bn hostile bid in 2004, which eventually fell through
because of a high court ruling. The disclosure of Pastorini's strategy, which
would inevitably drive up the price of Gold Fields, is curious, as is the fact
that Pastorini is unknown to seasoned investors. Gold Fields head of corporate
affairs Willie Jacobsz said Gold Fields had never had any contact with or heard
of Pastorini. Cadiz African Harvest Asset Management fund manager Peter Major
said this could be a genuine intention to bid, which was not intended to be
leaked to the market, by an entrepreneur who had spotted an opportunity in the
rising gold price environment. On a more cynical view, it could also be a
strategy -- by an investor who had bought Gold Fields shares at R113,50 in its
recent capital-raising -- to drive up the price in the short term and no bid
would materialise. Major thought the second possibility was less likely. Gold
Fields head of investor relations Nerina Bodasing said that after Gold Fields'
recent capital raising, volumes of trade in the shares had increased but Gold
Fields had not noticed any particularly unusual activity. The group's biggest
shareholders, with just under 10%, were Capital Research & Management,
followed by Old Mutual Group and Black Rock Investment Managers, both with about
7%. Gold Fields had heard rumours about a potential bid but had been unable to
verify them, Bodasing said. As no formal offer had been received, Gold Fields
could not comment on any steps it might take. In principle, Gold Fields was not
opposed to a bid as long as it offered value to shareholders.
Harmony Gold, Uranium Riches to Start Tumbling in
Harmony Gold Mining's growth prospects are looking more certain now, as several
new mines that have been under development for years are due to start producing
shortly and rapid progress is being made on establishing the economic viability
of its uranium resources. Speaking at the group's March quarterly results
presentation April 25, CEO Bernard Swanepoel said that by June the first gold
should be produced from the Tshepong Sub 66 Decline and by September the
three-year build-up at Doornkop would start to show results. By the middle of
next year, Phakisa would deliver its first gold. The Hidden Valley mine in Papua
New Guinea was on track to pour its first gold in November next year. The
company said next year capital expenditure would increase by about R1bn because
the main costs of building Hidden Valley would be incurred. Swanepoel also
described himself as "excited" about the prospects for the group's
uranium resources, which are contained in about 56 tailings dams. Of those,
about five dams in Randfontein and six in Free State have been prioritised.
Harmony is on track to deliver a pre- feasibility study on the resources by
June. Harmony's Cooke dump alone contains an estimated 25-million pounds of
uranium which at the current price of $113/pound would have a net present value
of about R3,7bn. It also contains gold, which at the current gold price of about
R151000/kg would have a net present value of about R211m. Harmony estimates it
could recover about 54% of the uranium and 35% of the gold over the dump's
10-year life, using simple conventional technology. The capital cost for a gold
flotation plant would be about R100m and for a uranium plant about R750m.
De Beers Bemoans Political Demands and Supply Shortage
De Beers, the world's largest diamond supplier, says it is being increasingly
constrained by supply shortages and political demands in southern Africa. In a
recent letter to clients, De Beers' Diamond Trading Company (DTC) warned of
reduced supplies, notably in SA, as a result of increasing pressure from other
producing countries to supply their own local industries. It also warned clients
in SA that supply of better-quality two- carat and larger goods would be
constrained by De Beers' relatively limited production of this size range, which
it said was "substantially" below the current purchases by South
African-based clients, or sightholders. The company's difficulty was in meeting
the ambitious targets of governments in southern Africa and executing them with
a global client base of 93 sightholders and limited supplies. In SA, the
challenges appear to be intensifying as De Beers has less goods available with
the recent closure of Cullinan and Namaqualand. At the same time, the government
is putting in place a state diamond trader body, which would be offered a
proportion of its production for local diamond cutters in accordance with the
new legislation. The letter also focused on the need for clients in SA to start
manufacturing a wider range of rough diamonds profitably by enhancing their
manufacturing technology. "South African-based clients need to consider how
they can profitably take a broader range of goods," the company said.
"These objectives are unlikely to be achieved without innovative thinking
around enhancements to manufacturing technology and efficiency to optimise the
local manufacture of the goods being made available." DTC also said
competition for supply from London, its traditional supply centre, was expected
to intensify as more goods were sold through the local DTCs in southern Africa.
To meet the supply challenges in SA, it said it was considering allocating only
to those clients, or "applicants", that could demonstrate sufficient
manufacturing capacity to handle the ranges of diamonds being sought.
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TELECOMMUNICATIONS
Nokia Siemens Networks Arrives
A corporate scandal blasting through the German giant Siemens has been resolved
sufficiently to permit the belated launch of a joint venture with the Finnish
company Nokia. Nokia Siemens Networks made its official debut in SA late April,
three months after its expected start-up. The delay was caused by investigations
into alleged bribes of $570m paid to win contracts for the telecoms division,
which is the unit merging with Nokia Networks. Siemens is also under
investigation for allegedly illegally financing a rival to its main union.
Although the probe was not yet over, it had begun within the telecoms division
so delays in the merger were kept to a minimum, said Jan Mrosik, who is heading
the new joint venture in Johannesburg. Nokia had also intensified its due
diligence before the new venture went ahead, to make sure it knew exactly what
it was getting into bed with, Mrosik said. To emphasise its new squeaky-clean
stance, the company issued a statement saying it had "zero tolerance for
financial or other business misconduct and has also defined anticorruption
policies, principles, and materials". Siemens is pumping 2,4bn Euros and
Nokia 1,7bn Euros into the new company, which ranks behind only Ericsson in
revenues for fixed and mobile networking technologies, earning a combined 17,1bn
Euros in financial 2006. It serves 75 of the top 100 operators in 150 countries,
and its African clients include MTN, Vodacom, Cell C and Telkom. Locally, the
networking operations of Siemens massively outstripped Nokia Networks, employing
700 people compared to 50 at Nokia. Nokia Networks SA did not even have a
manager after the last incumbent, Henry Ferreira, resigned a few weeks ago. That
lack of high-level management clashes should make integrating the two operations
easier. "We don't see any major changes in terms of management
fallout," said Mrosik. "There has been no restructuring so far. In
other countries where there are similar strengths the situation was
different." Mrosik said the industry was in transition as new operators
were licensed, fixed and mobile operators muscled into each other's territories,
mobile TV and data services grew more popular, and rival technologies fought for
recognition. Operators struggling to cut their costs were putting pressure on
equipment vendors to bring their prices down, and only the largest vendors with
economies of scale and the cash to fund research and development would flourish,
he said. By 2015, about 5-billion people will have access to voice and data
services, up from 2,5-billion today. Of the 2,5-million yet to be connected, at
least 1-billion were in Africa and the Middle East, Mrosik said. "We
believe the number of subscribers will double, but voice and data traffic will
increase 100-fold by the growth in internet usage and by transferring video
clips and TV across the channels," he said. SA should prove one of the most
rewarding foreign subsidiaries of the new company.
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WORLD CUP
UN Teams Up With Fifa Ahead of 2010 World Cup
Ahead of the 2010 FIFA World Cup South Africa, the United Nations tourism agency
is teaming up with FIFA to help promote development across the African
continent. The heads of FIFA, the UN World Tourism Organisation (UNWTO) and the
UNWTO ST-EP Foundation (Sustainable Tourism - Eliminating Poverty) are preparing
a partnership to assist African countries within the framework of the 2010 FIFA
World Cup. The partnership's aims include helping to eliminate poverty and
supporting sustainable tourism in Africa by using soccer as a driving force.
"The World Cup constitutes an opportunity that the countries of the region
can seize in order to obtain the maximum socio-economic, promotional and
cultural benefits," UNWTO Secretary-General Francesco Frangialli said April
10. "It should also contribute to strengthening the image of Africa."
The UNWTO is also linking tourism with the UN Millennium Development Goals (MDGs)
and its own Global Code of Ethics. The MDGs are a set of globally-agreed
targets, set to be realised by 2015, aimed at eliminating a host of social ills.
They include securing universal primary education, providing adequate sanitation
and goals for the welfare of vulnerable women and children. The 2010 FIFA World
Cup, through the assistance provided by UNWTO and with travel and tourism as its
main thrust, represents an opportunity to promote the whole of Africa to
international markets. It also hopes to reinforce the image of the continent as
a safe and significant tourism destination and to help people develop closer
relations, the agency said. Earlier this year, the African Union (AU), South
Africa and Ethiopia nominated 2007 as the International Year of African
Football, an initiative that was welcomed by the UN as part of its global drive
of linking sport with development. Through the implementation of Legacy
Projects, the South African government itself hopes to derive long term benefits
from its opportunity to host the greatest soccer tournament in the world. By
improving infrastructure to cater for the games, the country hopes to lay the
foundation for improved facilities and services for years after the 2010 FIFA
Soccer World Cup.
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