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COUNTRY INSIGHTS

South Africa has a new Minister of Finance
SOUTH AFRICA · In Brief · 10 Dec 2015

President Zuma stunned the nation yesterday evening by removing Mr N. Nene, his Minister of Finance without any justifications whatsoever. Importantly, this was not part of a cabinet reshuffle; Mr Nene is left in the cold. His choice of the new minister, Mr David van Rooyen, is as astonishing for...

Reversal in Current Account Deficit Contraction
SOUTH AFRICA · Report · 08 Dec 2015

Figures released by the South African Reserve Bank (SARB) on the balance of payments today show that the current account deteriorated in the third quarter of 2015, thereby reversing an improvement that had been taking place since the third quarter of 2014. The deficit on the current account balan...

South Africa Takes a Giant Leap East
SOUTH AFRICA · In Brief · 04 Dec 2015

South Africa is currently hosting President Xi Jinping for the 6th China-Africa Forum, being held for the first time on the continent, aiming to restructure the relationship with China from that of a "perceived new colonizer" to an effective partner in development. China, too, is keen to recast t...

The South African Economy Avoids a Recession but Continues to Struggle
SOUTH AFRICA · Forecast · 30 Nov 2015

South Africa’s Growth: The South African economy has entered a difficult period once again; the most recent major one was the 2008-09 global financial crisis. Risks to the outlook remain on the downside, with a myriad of unfavorable conditions facing the economy. The country, however, narrowl...

A Recession Near-Miss for the South African Economy
SOUTH AFRICA · Report · 24 Nov 2015

On a quarter-on-quarter (q/q) seasonally adjusted annualized basis, growth during Q3 2015 was a paltry 0.7%. Quarter-on-quarter GDP contracted by 1.3% in Q2 2015, and this means that the South African economy managed to escape a recession during Q3 2015, albeit marginally. A recession by South Af...

Benchmark Interest Rate Rises for the Second Time in 2015
SOUTH AFRICA · Report · 19 Nov 2015

The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) voted to increase the country’s benchmark interest rate – the repo rate – from 6.0% to 6.25% at its November 2015 meeting. Four of the six members voted for an increase. Today was the second time the MPC increased the repo ra...

Student protests in South Africa: A middle class uprising?
SOUTH AFRICA · Report · 09 Nov 2015

A number of factors are slowly but inextricably re-shaping the political-economy landscape of South Africa in ways that could significantly erode the dominance of the African National Congress (ANC) ruling party and fundamentally shift political dynamics in next year’s municipal elections. Such f...

The State of the South African Economy
SOUTH AFRICA · Report · 30 Oct 2015

One of the signs that was held up by some students during the October 2015 protests by university students in South Africa read “Our parents were sold dreams in 1994 – we are here for a refund”. This message captures not only the lack of confidence that students clearly have in the state of South...

Unemployment Rises as Economy Struggles
SOUTH AFRICA · Report · 27 Oct 2015

According to official statistics released by Stats SA (see Graph 1) South Africa’s unemployment rate rose to 25.5% in the third quarter of 2015 from 25% in the second quarter. This represents a 0.5 percentage point increase for the quarter. This is not good news for the country’s economy that has...

SA Medium Term Budget Policy Statement (MTBPS)
SOUTH AFRICA · Report · 22 Oct 2015

In the midst of chaos and the exchange of stun grenades between the police and protesting students within the precinct of the Parliament, Minister Nene delivered his 2015 MTBPS. While the university students were adamant that education fees should be frozen, and even be eliminated altogether, the...

South Africa’s Economic Freedom: Government Consumption and Inflation
SOUTH AFRICA · Report · 30 Sep 2015

In mid-September 2015 the Fraser Institute released its annual report on the Economic Freedom of the World (EFW) for the year 2013, and South Africa’s global ranking had slipped from 93 in 2012 to 96 in 2013. To construct the EFW index, forty-two data points are utilized in measuring the degree o...

The Political Economy of the SA Steel Industry
SOUTH AFRICA · Report · 30 Sep 2015

Schumpeter famously argued that innovation along with the destruction of old technologies are fundamental in the capitalist economy, its growth and technical change over time. Hence in a capitalist economy, profit-seeking firms (and industries) innovate for growth and survival. Globalization, esp...

Repo Rate Remains Unchanged
SOUTH AFRICA · Report · 23 Sep 2015

The South African Reserve Bank (SARB)’s Monetary Policy Committee (MPC) voted to keep the repurchase (repo) rate unchanged at 6% today during its September meeting. This follows July’s decision that saw the repo rate increase from 5.75 to 6%.

The Current Account Deficit Continues to Contract
SOUTH AFRICA · Report · 15 Sep 2015

The seasonally adjusted annualized current account balance posted a figure of minus R124 billion, bringing the current account balance as a percentage of GDP to -3.1% in Q2 2015. This represents a contraction in the current account deficit as a percentage of GDP from -4.7% in Q1 2015. This contra...

Low Levels of Economic Growth Threaten Employment Creation
SOUTH AFRICA · Report · 31 Aug 2015

During his budget speech at the beginning of the year, the Minister of Finance estimated growth for 2015 at 2%. For the economy to grow at an average rate of 2% in 2015 it would have to grow at relatively high rates in the second half of the year because growth in the first half was disappointing...

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