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mmm very werid many said the strenght of the rand would kill our economy but look how bloody well were doing ,if only the rand could ease up a bit to R7 to $ than again the oil price is going to be a killer if it does so

SA doesnt want to go the way of OZ where it is a stong export driven country (food, minerals, processed good ) which mean when the R/$ is high its cheep for the US etc to buy our goods, when the R gets stronger its more expensive and then the look at other markets. Its good for the country to have the R/$ at 8-10 as its great for investment ( I look at myself and I get loads of R for my $ and makes the country investment friendly especially property). OK imported good such as TVs , clothes etc are more expensive but thats really only for the upper classes who can affoerd that, for the avarage South African a weaker rand means more investments and more exports.

I think SA is already a very open and export driven economy. I dont know what the figures are now, but SA used to export (and import) around 1/2 of GDP - much more than Australia or most countries.

The SA economy is just not big enough to have much economy of scale in entirely domestic companies. To get big and competitive, companies have to look overseas and specialise.

SA could learn a lot from Australia as they are in a similar strategic position regarding background, position and resources. They do some clever things - like educate uni students from Asia. Oz has the highest % of foreign students and makes billions per year from educating them. Not only do these kids pour cash into Australia (you should see how they are revamping parts of Melbourne that used to be crappy), but it increases competitveness at these Unis which improves quality. Lots of stuff like this.

problem is if SA unis started that , at the end of the year the students would disapear into SA never to be seen agaibn. In OZ every student has to reapply every year and have a medivcal every year so they control them well. What with SAs pourous borders this couldent work.

Overseas students pay overseas rates - maybe 3x-5x what it costs a local. If some student from Africa can afford the R60,000+ per year then he probably reasonably wealthy and is unlikely to "disappear never to be seen again". Dont forget that there are many millions of rich Africans throughout the continent who want their kids educated - right now they are going to European Unis.

And besides - this is just one example of things to learn. Do you know how much Australia pays is mining labourers? Maybe $1500 a week = >R300,000 per year. And yet they are competitive against SA mine labourers getting probably 1/7 of that. Their agriculture is similarly competitive against ours even though they have much higher labour costs. There is much SA can learn.

SA is still THE slowest growing economy out of the largest 25 emerging markets. I notice that inflation (not sure which defintion) is at 1%. I think its time the reserve bank lowered interest rates some more to pep up growth.

SA's employment figures best since 1982
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South Africa's employment rate has grown at three percent over the last four quarters but is not enough to halve unemployment by 2010, said economist Mike Schussler in Pretoria on Wednesday.

Addressing journalists at a Solidarity union meeting, Schussler however painted a rosy picture of the South African economy.

"The job market has shown phenomenal growth," he said, explaining that these were the best figures since 1982.

He said the country had been losing jobs over the past 20 years.

He said it was not possible to pinpoint the exact turnaround but that it had happened somewhere in 2003.

He said this growth could be attributed to low interest rates that had led to higher fixed investments and a boom in the domestic manufacturing sectors of the economy.

"Employment and fixed capital normally run together (on a graph) but in South Africa these separated in the 1980s and have only just rejoined," Schussler said.

But he said the increase in employment could also be attributed to the fact that more companies were employing part-time workers instead of full-time staff.

He said it was a trend started in Holland and had spread to other countries including the United Kingdom.

Schussler noted, however, that he did not believe the current growth was enough to meet government's target of halving unemployment by 2010.

He said that in order for this to happen growth of five percent and higher would need to be achieved. This, he said, had not been witnessed in the last 30 years and then it had only been for a three year period. - Sapa

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Low inflation, a strong currency and low economic growth cries out for a drop in interest rates. I think they are being too careful and should loosen it up a bit.

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Rich and poor drift further apart:

The government received mixed results in an independent Economic Transformation Audit and Scorecard.

The audit, compiled by a panel of economic experts for the Institute for Justice and Reconciliation, confirmed other studies showing poverty and inequality are still increasing in South Africa.

Institute director Charles Villa-Vicencio said of the findings: "The bottom line is that though jobs have been created, unemployment has grown. Though change is taking place, poverty and inequality remain at morally unacceptable levels."

Yet the audit also shows that there are hopeful signs of more jobs, while government services and grants are starting to make a difference.

Called Taking Power In The Economy: Gains And Directions, the audit aims to track the manner in which the economy is "transforming the country's political and social landscape" and how appropriate policy is.

Villa-Vicencio said the project "emerged out of the work the institute is doing in promoting nation building and reconciliation".

"It became very clear to us that unless there is transformation which addresses the material needs of the majority, there can be no reconciliation," Villa-Vicencio said.

"We called upon a panel of experts and consulted widely on the ground with those who bear the brunt of alienation and poverty and came up with the audit, which we will repeat on an annual basis to assess the progress."

Sunday Argus had an exclusive preview of the scorecard, to be published on Wednesday. It gives a "snapshot" of the economy, based on carefully chosen markers in five categories.

The team cautioned that there was "surprisingly little information" available on poverty since 1994.

Between 1996 and 2001, they found that poverty measured in terms of income increased, with more households falling below the basic poverty line of R250 a day.

Those living under the mean (average) poverty line of R91 a day rose from 26 percent in 1996 to 28 percent in 2001, while African per capita income as a percentage of white income declined by 1,3 percent from the already low base of 8,2 percent in 1996. The average African now has less than seven percent of the income of an average white person.

White and Asian share of the total income is growing again after a slight drop, but the average white person is somewhat worse off, indicating more poverty as well as wealth.

"At the same time, real household income at the higher end of the income spectrum increased (in all population groups), resulting in an unambiguous widening in inequality, for the first time since 1975," the panel reported.

Only one positive marker was found in the income poverty category, a four percent rise since 1996 in the income of households headed by women relative to those headed by men.

The government received good marks for significantly increasing the percentage of households with clean water and electricity, although up to one third of the population is still without these basic services.

The percentage of families living in permanent structures decreased despite efforts to catch up with the housing backlog - from 77,6 percent in 1995 to 73,8 percent in 2002.

Institute political analyst Sue Brown said this was mainly due to families breaking up.

Brown said the differences between provinces showed clearly how improved service delivery made a difference to households, with Limpopo, for instance, making great strides, while the Eastern Cape lagged behind.

"As a result of (improved delivery), the very poor are not getting poorer, but the number and proportion of middle poor are increasing in direct proportion to job losses, a clear link between employment and poverty," she said.

More alarming is the fact that the percentage of children at school decreased by 0,7 percent between 1995 and 2002. There was also a 14 percent increase in infant mortality.

A number of positive trends were found in education, but Brown said the gains were far too small to meet the country's skills need. Last year, for instance, only 1 000 more pupils matriculated with maths than in 1994.

Over the same period, the average years of schooling had risen by only a third of a percentage point to nearly 10 years.

A positive trend is a change from job shedding to formal employment growth, although very small, to 10.5 million compared to 9,6 million in the early 1990s.

But due to the rapidly rising number of job seekers, unemployment has more than doubled in the same period to 42 percent, with a worrying 55,6 percent of youths seeking work compared to 41 percent in the early 1990s.

And the proportion of African managers and professionals has decreased from 36 percent in the early 1990s to just 31 percent, although the institute believes this could be partly due to a change in job definitions.

In its introduction to the scorecard, the team is highly critical of the Black Economic Empowerment policy, saying it is neither the anti-poverty or economic growth strategy it should be and is therefore insufficient and "a step backwards".

More positively, growth in per capita income is now evident, along with real productive investment.

Although the institute's calculations show that 58% of the population - 69 percent of Africans - now live under the basic poverty line, Brown cautioned that many of those would have been helped over the line by the massive increase in social grant payouts in recent years. She stressed that grants could not be a transformation tool.

SA doesnt want to go the way of OZ where it is a stong export driven country (food, minerals, processed good ) which mean when the R/$ is high its cheep for the US etc to buy our goods, when the R gets stronger its more expensive and then the look at other markets. Its good for the country to have the R/$ at 8-10 as its great for investment ( I look at myself and I get loads of R for my $ and makes the country investment friendly especially property). OK imported good such as TVs , clothes etc are more expensive but thats really only for the upper classes who can affoerd that, for the avarage South African a weaker rand means more investments and more exports.

Good point!

This ongoing error with stats SA is atrocious and was even reported with dismay in the internationally regarded Economist Magazine. Decisions affecting the whole country's future have been made based on highly suspect information. Foreign investment decisions are usually partly based on the health of the local economy and incorrectly low figures have surely resulted in missed opportunities.

some thing else we all forget is that the Aussie $ and the Rand have not actually strengthen against the US$, The US$ has weakend brought on by the massive foreign debt incured by Dubya. The middle east and china are the biggest lenders to the US and its helping their cause by being the US bankers. The chineese want the yAun to be a world currancy on par with the US$ and the Euro and what better way to do that than to weaken your rival.
Dubya is running a deffict of of $1billion per day with a total debt of $7 Trillion, music to the ears to the chineese

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shit, im earning less and less as the $ is taking a beating AGAIN. Need to get paid in Euros

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The Economist's World in 2005 predicted SA to have a growth rate of 3.3%. I am hoping they are being far too conservative. I believe that SA Stats is shortly to complete rebasing their GDP calculation and we will have a corrected value for economic growth - hopefully above 5%.

Although based on SA Stats current record, we should all take those figures with a pinch of salt.

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Awesome. With the revival in the value in the rand; the improved growth and improved measurement techniques, SA's official MER GDP has rocketed from around US$105b to $215b in just 3 years.

This pushes SA way up the economic importance rankings.

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is the book on sale yet?

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Transnet's R37bn bid to increase SA growth
January 5, 2005

By Samantha Enslin

Durban - Transnet's R37.2 billion integrated investment plan to increase the capacity of ports, rail and pipelines aims to boost the annual economic growth rate to between 4 percent and 6 percent.

Mervin Chetty, the SA Port Operations (Sapo) executive responsible for strategy, said: "Government wants to create capacity long before demand arises, thereby contributing towards economic growth in South Africa."

The spinoffs of this investment will be to reduce the cost of doing business and to enhance the country's competitiveness by supporting the export-led growth strategy.

Chetty said the cost of transport as a percentage of gross domestic product (GDP) was high.

In 2003, 745 million tons of cargo were transported at a total cost of R135 billion, which represented 14.6 percent of GDP.

One of Transnet's key objectives was to create an environment to reduce these costs, which required the support of all the supply chain partners, he said.

Transnet's mandate was to provide efficient transport infrastructure to fuel growth and to facilitate trade, Chetty said.

This integrated investment plan has prompted Transnet divisions Sapo, the National Ports Authority (NPA), Spoornet and Petronet to embark on an extensive infrastructure and equipment upgrade over the next five years.

Chetty said there was also potential expenditure of R20 billion for blue sky thinking on such projects as a second railway line between Durban and Gauteng.

The planning for this investment considered the needs of different sectors of the economy, he said.

In 2003, the tonnage throughput of the economy in the mining sector was 49 percent, in the manufacturing sector it was 45 percent, and in agriculture it was 6 percent.

Of the R37.2 billion capital expenditure, R11 billion will be spent on the Gauteng-Durban corridor, which handles 67 percent of the country's container traffic.

A total of 53.4 million tons of cargo are transported on this route annually, with 44.7 million tons transported by road and the rest by rail.


Chetty said the integrated investment plan included the conversion of Pier One at the Durban harbour into a container terminal, expenditure on six gantry cranes and the refurbishment of older cranes and straddle carriers.

Three of the gantry cranes have already been installed at the Durban container terminal and the other three will arrive next year.

The conversion of Pier One will increase container capacity by 560 000 twenty-foot equivalent units (TEU) and will cater for growth in container volumes until 2008. Thereafter, there are plans to develop container facilities at Salisbury Island.

The Durban container terminal currently handles 1.5 million TEU and this is expected to rise to 3 million TEU by 2012.

Plans also include spending of R2.5 billion by Petronet on upgrading the Durban-Gauteng pipeline from 12 inches to 14 inches.

About R1.19 billion will be spent on the Gauteng-Maputo corridor, R4.79 billion has been allocated for the Gauteng-Richards Bay corridor and R3.98 billion has been earmarked for the Gauteng to Port Elizabeth and East London corridor.

In addition, R2.14 billion will be spent on the Gauteng to Cape Town route, R250 million will be spent on the route between Sishen and Port Elizabeth, and R1.83 billion has been allocated for the Sishen to Saldanha corridor.

The NPA and Spoornet will also invest R3.2 billion at Coega.

Overall, Spoornet will spend R16.98 billion on upgrading rail infrastructure and rail operations.

Tau Morwe, Sapo's chief executive, said a key achievement last year was the fact that Sapo, the NPA and Spoornet had begun operating in an integrated manner and were now part of decision making within Transnet.

Chetty said: "The benefit of this integrated approach is that we have aligned the needs of the various stakeholders."

Gandalf please buy the South Africa 2014 book for me please im but a poor student ....

^^ That makes two of us .. I am also a poor student.

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Ceilings for foreign currency debt and bank deposits to Baa1 from Baa2

By Helmo Preuss

The upgrade by international ratings agency Moody's Investors Service of South Africa's country ceilings for foreign currency debt and bank deposits to Baa1 from Baa2 confirms South Africa's good news story, National Treasury Director General Lesetja Kganyago told I-Net Bridge on Wednesday.

"The upgrade is good news as it lowers our country risk premium and therefore the cost of capital. It confirms our good news story, which has already been reflected in foreign investor optimism and should result in increased foreign direct investment in South Africa," Kganyago said.

Moody's said the upgrade was principally due to the substantial strengthening of the country's foreign reserves position.

Moody's placed South Africa on ratings watch on October 14 2004 and the upgrade was widely expected, especially after the third quarter 2004 showed the highest economic growth since 1996.

At the time, Kganyago told I-Net Bridge that South Africa's growth acceleration was broad-based and it was striking that after 24 consecutive quarters of growth, instead of slowing down, the economy had achieved the highest quarterly growth rate since the first quarter of 1996.

South Africa's third quarter 2004 gross domestic product (GDP) growth increased by 5.6% on a quarter-on-quarter (q/q) seasonally adjusted annualised (saa) basis from a revised 4.5% (initial estimate 3.9%) in the second quarter, Statistics South Africa (Stats SA) said.

"The figures were very positive and confirm that the economy is very strong. In 1996 we were coming off a low base, but now the growth is broad-based. What is remarkable is that those sectors considered sensitive to the strong rand, such as mining and manufacturing, have also had a very good performance," Kganyago said.

Mining grew by 6.2% q/q saa in the third quarter after growth of 3.2% in the second quarter, while manufacturing expanded by 6.3% q/q saa in the third quarter following increases of 6.1% in the second quarter and 4.9% in the first quarter.

Only two sectors (electricity, gas and water as well as general government services) had q/q saa growth rates in the third quarter of less than 4%, while two (agriculture 14.7% and construction 10.3%) had double-digit growth rates.

Last year Finance Minister Trevor Manuel said that structural changes that have been implemented over the past decade of freedom will support faster South African economic growth, raising growth from an average of only 1% in the decade prior to April 1994 to an average of 3% in the subsequent decade with the prospect that growth will average more than 4% in the decade ahead.

"We have just entered the 24th quarter of continuous positive growth.
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marks the longest structural expansionary phase in the history of the South African economy. We have also witnessed a remarkable transformation in the structure of the economy. A largely natural resourced based economy has given way to a more modern, dynamic and resilient economy in which higher value added manufacturing and service are thriving," Manuel said.

Manuel noted that marked improvements in tax policy and administration have been the cornerstones of the turnaround in overall fiscal performance.

"Just last month, Moody's Investors Service announced that it has placed

South Africa's country rating on review for a possible upgrade. This was in recognition of the country's significant improvement in external liquidity, our modest reliance on external debt financing, and our macroeconomic policies.

Within one week of this announcement Fitch Ratings revised the outlook on South Africa's sovereign rating from stable to positive, an unprecedented vote of confidence in the South African economy," Manuel said.

"A growth rate of 4% and beyond is eminently achievable for this economy in the years ahead. Not, of course by government working alone. But, by every worker and every entrepreneur coming together to give expression to fuel our acceleration," Manuel said.

However, Moody's also emphasised that South Africa faces formidable long-term challenges related to chronic poverty and unemployment, whose grip has become more intractable with the spread of HIV/Aids. These problems are being addressed gradually, with skills training, education budgets, targeted government spending, national health insurance, and hopefully, black economic empowerment initiatives that will benefit the broader population.

The government's response to HIV/Aids has been frustratingly inadequate, although a substantial increase in resources is finally being channeled in the area such as through the fledgling anti-retroviral treatment programme.

"In facing these challenges, it would seem that the African National Congress government is not complacent, in spite of having been elected last April by a record margin and rightly boasting considerable economic and political success in the first decade after the democratic transition. The authorities appear determined to record further progress towards bridging wide income disparities through both public and private sector efforts. Moody's acknowledges the sensible motivations behind these strategies, but cautions against an overly expansive fiscal stance that would endanger policymakers' hard-won reputation for fiscal prudence."

Kganyago acknowledged Moody's concerns, but said the February 23 2005 Budget would show that a more expansionary fiscal stance was sustainable and would remain cautious.

Data released by Statistics SA yesterday showed that the upward trend in retail trade sales continued unabated in October last year, reaching the highest year-on-year growth rate in almost six years.

January 13, 2005

By Dirk De Vynck

Cape Town - Data released by Statistics SA yesterday showed that the upward trend in retail trade sales continued unabated in October last year, reaching the highest year-on-year growth rate in almost six years.

According to Statistics SA, retail sales showed annual nominal growth of 16.7 percent to R27.59 billion in October.

In real terms (excluding inflation), this is equivalent to sales of R21.59 billion, up 12.8 percent year on year.

These are the highest growth rates since 1999, which is as far back as Stats SA's growth figures on retail trade sales stretch.

The latest figures bring the total sales for the first 10 months of 2004 to R252 billion, 13.2 percent higher than the R223 billion sold in the corresponding period in 2003.

Johan Rossouw, chief economist and strategist of Vector Securities and Derivatives, said this indicated that the demand side of the economy was healthy and would continue this year.

"I think the strong growth performance can continue for the first six months of this year, although it is doubtful that the pace will continue accelerating.


"Contrary to what most other economists are saying, I expect an interest rate increase by mid-year, driven by continued strong consumer demand and further growth in credit extension."

An interest rate increase would stem consumer demand, although a lag of between 12 and 18 months implied that the impact on retail sales would not be immediate, he said.

Rossouw predicted real growth of about 10 percent for the first half of this year.

John Loos, a senior economist at Absa, said: "I had forecast the growth in retail sales to start decelerating from the fourth quarter.
"But given Stats SA's latest data, I foresee the slowdown kicking in from January this year."

His assumptions were based on the limited scope for further interest rate cuts, with a possible 0.5 percentage point drop still expected for next month and possibly a further 0.5 percentage point later in the year.

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JSE down for fourth straight day

The JSE Securities Exchange South Africa (JSE) suffered a fourth straight day of losses on Thursday as widespread profit taking continued. Weaker world markets added to the negativity.

The all share and all share industrial indices finished 0.34% and 0.5% softer respectively. Financials fell 0.4% and the banks index closed 0.38% in the red. Resources dipped 0.11% and the platinum mining index surrendered 0.46%, but the gold mining index gained 1.54%.

The rand was quoted at 6.06 per dollar from 6.01 when the JSE closed on Wednesday, while gold was quoted at US$422.50 a troy ounce from $425.35/oz at the JSE's last close.

On the all share index, 79 shares were down, 24 were unchanged and 59 were up. There were 26 decliners on the Top 40 index and 13 advancers, while two stocks were flat.

"I am a bit disturbed by the market. We are seeing a flurry of selling. We have had a lot of good news, but against that we don't see the momentum drive continuing. I think the market needs to suffer more losses before we see buying coming in," a dealer said.

He added, however, that it was far too early to call a bear market.

"One has to remember where the market has come from. This is a cyclical move after a very strong rise," he commented.

The dealer said that the sell-off on the JSE also had to be measured against overseas markets, which were not performing well.

Another dealer said earlier that some stocks had bounced after being under pressure in recent days. The extent of this was small considering their losses, however.

On the JSE's downside, London-listed brewer SABMiller (SAB) slumped 2.21% or 2.07 rand to 91.65 rand.

SABMiller was under pressure in the UK on a report in the Financial Times that said the group was in pole position to take control of Columbia drinks company Grupo Empresarial Bavaria.

The Financial Times claimed a deal could be worth up to $9 billion.

Analysts said a deal was highly possible but they expressed surprise over the reported cost of $9 billion, arguing it is unlikely SABMiller could fund the acquisition on current cash levels.

Transport and logistics group Imperial (IPL) plunged 3.04% or 3.01 rand to 96.01 rand and telecoms group Telkom (TKG) gave up 1.5% or 1.50 rand to 98.50 rand.

Brand management group Barloworld (BAW) weakened 1.03% or 1.01 rand to 97.49 rand.

Shares in sugar producer Illovo (ILV) slid 4.19% or 36 cents to 8.24 rand after the group said that it expected its headline earnings and earnings per share for the year ending March 31, 2005 to be between 50% and 60% lower than the previous year's.

Swiss-listed luxury goods group Richemont (RCH) shed 14 cents to 18.66 rand.

London-listed diversified miner Anglo American (AGL) lost 70 cents to 138.65 rand and BHP Billiton (BIL) eased 36 cents to 70.65 rand.

AngloPlat (AMS) was off 1.80 rand at 218.95 rand.

Investment trust VenFin (VNF) tumbled 2.27% or 55 cents to 23.65 rand.

Banking group RBM Holdings (RMH) slipped 1.41% or 29 cents to 20.21 rand, while FirstRand (FSR) weakened seven cents to 12.63 rand. Nedcor (NED) dropped 1.41% or one rand to 70 rand.

Financial services group Sanlam (SLM) was down nine cents at 11.65 rand, while London-listed Old Mutual (OML) was five cents lower at 14.37 rand.

On the JSE's upside, Gold Fields (GFI) gained 2.39% or 1.66 rand to 71.16 rand. Harmony (HAR) was 1.16% or 60 cents higher at 52.50 rand and AngloGold Ashanti (ANG) added 1.47 rand to 198.50 rand.

Kumba (KMB) leaped 1.48% or 80 cents to 55 rand. Its intraday high of 56 rand was its strongest since March 2002.

Petrochemicals group Sasol (SOL) climbed 29 cents to 122.80 rand.

Kumba said in a trading update on Thursday that its earnings for the second half of the 2004 financial year would be 75% to 85% higher than the corresponding period in 2003 due to higher iron ore and coal prices and volumes.

Furniture group Steinhoff (SHF) surged 4.01% or 48 cents to 12.45 rand and retailer Edcon (ECO) rose 1.11% or three rand to 273 rand. Electronics group Reunert (RLO) rallied 4.08% or 1.39 rand to 35.49 rand.

Investment bank Investec Plc (INP) bounced 2.06% or 3.50 rand to 173 rand.

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New vehicle sales start 2005 on a strong note


South African new vehicle sales started on a strong note for 2005, with aggregate new vehicles sales registering a 20.9% rise in January compared with the same month of 2004, but this was off the 37.9% increase registered in December 2004. Figures released on Wednesday by the National Association of Automobile Manufacturers of South Africa (Naamsa) show that new vehicles sales in January rose to 40,627 units - an improvement of 7,026 units compared with the 33,601 units sold during the corresponding month last year.
Naamsa said from a seasonal perspective, January represents an increasingly strong sales month as buyers, particularly new car purchasers, sought to benefit from the new year's model registration date and the associated higher resale value of motor vehicles.

Sales in all segments registered gains compared with the same month last year.

Compared to the 2004 December aggregate sales figures of 35,962, total January 2005 sales had risen by 4,665 units or 13.0%.

January new car sales - at 28,910 units - was the highest January monthly total on record and reflected a gain of 5,259 units or 22.2% compared to the 23,651 new cars sold during January 2004.

Sales of new light commercial vehicles, bakkies and minibuses at - 10,216 units during January - reflected an improvement of 1,373 units or 15.5% compared with the 8,843 units sales of the corresponding month last year.

Supported by positive investment sentiment, sales of vehicles in the medium and heavy truck segments of the industry had also started the year on a high note and January sales - at 736 units and 765 units respectively - recorded an exceptional improvement of 314 units or 74.4%, in the case of medium commercials, and 80 units or 11.6%, in the case of heavy trucks and buses, compared to the corresponding month last year.

Sales in the heavy and extra heavy commercial vehicle segments of the industry remained in a strong upward phase.

Naamsa also commented that under pressure from the strong rand and highly competitive global market conditions, the momentum of vehicle exports had continued to soften throughout 2004.

Aggregate industry vehicle exports during 2004 declined by 15,408 units or 12.2% to 111,253 units compared with the 126,661 vehicles exported in 2003.

In revenue terms, vehicle exports during 2004 would have approximated 18 billion rand, Naamsa added.

The industry's 2005 built-up vehicle export performance would be closely allied to conditions in the global economy and current projections for 2005 - taking into account various new light commercial/multipurpose vehicle export programmes - suggested an improvement in exports of about 15.5%.

Looking ahead, Naamsa said an expanding domestic economy, stable new vehicle prices and interest rates and positive consumer and business confidence represented a positive environment for further growth in new vehicle sales.

The growth trend established in 2004 was expected to continue and following an improvement in aggregate new vehicle sales of 22% during 2004, industry projections for 2005, at this stage, anticipated an improvement in aggregate sales for the year of at least 10%, Naamsa concluded.

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SA job employment up by 6%

February 16, 2005, 18:00

A survey of business owners has found that South Africa's medium-sized firms have boosted their workforces by around 6% and most plan to employ more staff. The Grant Thornton Employment Growth Index survey adds to recent evidence that jobs creation is starting to pick up.

South Africa ranks joint-second with the United States in terms of employment creation in the global survey.

Australia and India snatched joint first place.

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FNB say one in four sales are to first-time buyers

Cries of woe from leading real estate players that first-time buyers have become a dying breed in the current residential property market in the wake of savage rises in property values have been knocked flat by the second edition of the FNB Residential Property Barometer.

Released to the media in Johannesburg on February 17 the barometer, which is based on in-depth grassroots research among top estate agents during the fourth quarter of last year, shows the one in four of all homebuyers are first time market entrants. This figure is also supported by data gathered from FNB’s own homeloan book, which puts the number slightly higher at 27 percent of all sales.

The figure flies in the face of a mounting clamour from some leading real estate players urging government to ease market entry for first time buyers through relief on transfer duty, rebates on personal income tax and other measures. And while FNB’s figures are not likely to stop the lobbying its stridency is likely to be less intense.

However, the fact that first-time buyers are, according to the barometer, purchasing property in the range of up to R400 000 can be used to some extent by the lobbyists to further their cause as stock is extremely scarce up to this price level.

Another of the findings announced by Ed Grondel, CEO of FNB HomeLoans, at the briefing was that of emerging evidence of the market shifting from a seller’s to a buyer’s market from the fact that the number of properties being sold at less than the asking price had increased form one in three to one in two over the past year.

Grondel said the findings could indicate that sellers had become more open to negotiation on property prices with buyers and that buyers were digging in against paying premium prices.

Another finding was that nine out of 10 properties were being sold within six weeks of listing during the period under review. Only 11 percent of properties were taking longer than six weeks.

Another popular market belief confounded by the barometer was that the buy-to-let market was cooling down, but this was disproved by evidence, which established constancy in this market.

Interestingly, there were significant differences between the inland and coastal buy-to-let market during the fourth quarter. The sentiment of the real estate professionals was that, while 16 percent of properties bought inland are bought-to-let, the figure, at 35 percent, was more than double at the coast.

I have (very) often been asked in the past few years whether SA was going "to go down the tubes" and I have never wavered from my confidence that it would NOT. I became quite good at elucidating SA's potential.

However the timescale I always thought it would come right in was 20-50 years. I cant express how impressed I am that it has turned the corner in just 5 (since I have been overseas) and is clearly on track for success. The news is getting out there - the questions by foreigners are now about investment potential and when I am likely to go back.

Go SA! :)

now thats a positive story :)

what do you guys think of this budget

Manuel Puts Growth First With R11bn Tax Payback

Business Day (Johannesburg)

February 24, 2005
Posted to the web February 24, 2005

Linda Ensor And Tim Cohen
Cape Town

In a budget that reflected the mood of optimism sweeping the South African economy, Finance Minister Trevor Manuel was yesterday able to announce both a package of tax cuts and significantly increased social spending.

Manuel said his budget would mean "more for all", reflecting government's intention to spread the benefits of SA's growth a decade after apartheid ended.

Taking centre stage were tax cuts amounting to R11bn designed to steer economic growth on a higher path.

Manuel predicted a 4,3% economic growth rate this year and 4,2% over the next three years, which was "a significant step-change in the pace of economic growth", Manuel told Parliament.

Economists welcomed the broad outline of Manuel's measures, but some warned that even a growth rate of about 4,5% was not sufficient to significantly reduce SA's roughly 30% unemployment rate.

Revenue overruns of R11bn gave Manuel room to manoeuvre, as he stayed true to a tradition of fiscal constraint while simultaneously boosting spending.

Manuel gave the surprise surplus straight back, with companies benefiting by a one percentage-point cut in the corporate tax rate to 29%, which will cost the fiscus R2bn, and small businesses getting R1,4bn in tax relief.

After a series of budgets focusing on administrative and structural changes, Manuel focused on immediate tax issues this time, also announcing an across-the-board cut in personal income tax of R6,8bn for mainly low- and middle -income earners.

Manuel announced measures to ease the administrative and tax burden strangling small business, including scrapping the training levy for small businesses.

Taking his cue from President Thabo Mbeki's state of the nation speech, Manuel emphasised infrastructure investment in the R418bn budget.

Capital expenditure has clearly been placed on a higher growth path, with R92bn for capital expenditure by all spheres of government this year, rising to R108bn next year and R122bn in 2007-08.

At the same time, substantial sums were earmarked for social expenditure, with R55,4bn for social benefits for the elderly, poor, disabled and children.

Manuel said that in total social security programmes now represented 14% of SA's noninterest expenditure.

"The 2005 budget is strongly redistributive, channeling significantly more resources to the poor through rising social grants, higher spending on municipal and social services and community infrastructure such as water and sanitation, schools, clinics, multipurpose centres, police stations and roads," the budget review said.

CPIX (consumer inflation excluding mortgages) is expected to average 4% this year, rising to 5,1% next year and 5,4% in 2007, while the deficit increases from the 2,3% to 3,1% of gross domestic product (GDP).

Real growth in public spending rises 9% in 2005-06 and will average 5,5% over the next three years. An additional R74,4bn has been allocated over the medium-term expenditure estimates.

Budget revenue after the tax proposals grows a hefty 9,4% to R370bn, translating into a higher budget deficit of 3,1% of GDP in 2005-06 from this year's lower-than-expected 2,3%. Manuel expects the deficit to fall to 3% in 2006-07 and 2,7% in 2007-08.

The net borrowing requirement has been estimated at R53bn, or 3,1% of GDP, up from the previous R37bn (2,8% of GDP). Although this might seem like a chunky increase for the bond markets to digest, the overall deficit estimate is actually less that predicted last year.

Of the R480bn expenditure, provinces will get R209bn - an extra R43,3bn over three years, mainly for social security grants - and local government R21bn.

Highlights on the expenditure side include R6bn for land restitution, R7bn over three years to improve teachers' salaries, and R2bn to provide housing.

In addition, Manuel announced that R3bn received in levies from the forex amnesty and the taxation of declared amounts would be used for investment in community infrastructure.

Tobacco and alcohol products were once again hit with tax increases, ranging from 7% to almost 16% in real terms, which will bring in a combined R1,6bn more for the fiscus.

South Africa pushes cross-border property boom
3/14/2005


JOHANNESBURG, March 13 (Xinhuanet) -- South African companies setting up shop in neighboring countries are driving up the prices of commercial and residential real estate, thus sparking a regional property boom in southern Africa.

Sunday Times reported that residential property prices are hitting the 1 million rand (one US dollar equals about six rand) mark in Botswana, and several South African property agencies are exploring partnership arrangements with agents in Mozambique, Zambia, Namibia and Zimbabwe.

The presence of cellphone networks, mining companies and banks from South Africa has boosted confidence in property markets. And the appreciation of the rand has made properties in neighboring countries more affordable, the report said.

Gaye de Villiers of Pam Golding Properties, which operates in Namibia, Botswana, Zimbabwe and Mozambique, said the affordable prices and easing political tensions in some of these countries were the attraction.

Seeff Properties, which opened its office in Gaborone in Botswana two months ago, has also taken over Zimbabwean property company Gainsborough. It is also currently finalizing negotiationsto open up an office in Mozambique.

And RE/MAX of Southern Africa has set up offices in Botswana, Namibia and Zambia. The gradual change from the leasehold system to the freehold approach more familiar to South Africans is makingthe prospect of buying properties in these countries more attractive.

Traditionally, vast sections of property in Botswana, Mozambique, Namibia and Zimbabwe have been owned by their respective governments.

Ownership took effect only through renewable 99- to 999-year leaseholds.

However, some governments are in the process of reviewing this practice, "a move that has boosted investor confidence."

Botswana is currently removing leasehold agreements on game parks and some farms.

David Stone, who heads Seeff's office in Botswana, said many South Africa property investors were attracted to Botswana becauseit had no exchange controls.

"Foreigners can bring in as much money as they want and when they exit Botswana, they can take out all that money "including their profits ... that is quite unique by African standards," he said.

The Botswana authorities have also set up an International Financial Services Center which effectively gives off-shore statusto foreign companies operating in the country. This gives them certain tax advantages.

Stone said these factors had made the country more attractive to do business in, and there was an accompanying increase in the amount of residential and commercial property bought by foreigners.

But this has made the government wary. The increase in foreign buyers has caused some tension in other countries, too.

"These countries are very welcoming of investment from South Africa since it often creates jobs and contributes to the economy ... but most of the tensions arise because of the disputes that arise around land claims," said Neuma Grobbelaar, head of the Business in Africa Project at the South Africa Institute of International Affairs.

South Africa investors are still reluctant to put money into Zimbabwe's residential property market, but commercial opportunities in the country were attractive, said Seeff Properties managing director Stuart Manning, "the commercial property market is very similar to Johannesburg's CBD, where you can pick up commercial properties for a song."

Estate agents said the demand for commercial property in Zimbabwe had pushed up prices by about 20 percent in December and 10 percent last month.

Graham Barclay of Ewing & Associates said investors were looking at the potential of buying the properties relatively cheaply and selling later as the market picks up.

we will always be the power house of the entire sub saharan part of the continent

Plenty of people do not understand as to why President Mbeki is always busy with African issues. Remember that the neighbouring countries are affecting us and as the African power, every African comes here and fill up our streets. Now the President is trying to make sure that other African countries stand on their feet so that the could be minimal migration to South Africa. I just hope that Mugabe will retire and someone else govern the country with different policies. I think that countries that are really improving are Mozambicue and Botswana. Wish should watch out for Angola pretty soon, I remeber there was one documentation after Savimbi's death whereby there were talking about South African business people were on their tour to research business in vestments in Angola. Motsepe went on to buy mines in Swaziland monarchy and all te guys will bring posetive results out of Southern Africa. I hope that the king of Swaziland will leave politics and let those who knows about them run the country.

Big ups to South Africa for making sure that Africa is up to its feet. Remeber it to Dr Nelson Mandela, a brave man, to change Muhamah Gaddafi's approach and opened the doors of negotiations between Libya, America and Britain. Libya is getting places now and their economy is strengthining.

Property set to score from the 2010 World Cup


(Residential) Much has been said about the positive sentiment towards South African property created by winning the right to host the 2010 World Cup; now an analysis of major global sporting events has put some numbers to the hype.

Speaking at the launch of SOLD, a new magazine for estate agents published by MortgageSA, managing director Saul Geffen says, “We can get an idea of what is likely to happen to our property prices if we analyse major global sports events like previous soccer world cups and the Olympics.

“For example, Paris property prices escalated by as much as 55% over a one-year period before and after the 2002 World Cup and properties across the city made astronomical gains with apartments close to some of the stadia rocketing by over 100% over the same period.

“And certain neglected neighbourhoods burst back to life too. We expect the same sort of phenomena will happen in SA despite the market’s good run, as our property is still undervalued in global terms and the long-term macro economic outlook is very stable and favourable.”

Geffen notes that hosting an Olympic Games or World Cup encourages city regeneration and is usually accompanied by an improvement in facilities and transport links.

“Property prices in Athens, Sydney, Atlanta, and Barcelona, all got a kicker as new transport and sporting facilities spurred regeneration plans and pushed them ahead of rival cities.

“On average, these four Olympic cities outperformed their national market by 19 percentage points in the five years leading up to the games, but in Barcelona the impact was even greater. Prices there raced ahead by 131% compared with 83% nationally to open up a 48% price gap over other Spanish cities. In Sydney the differential was 11%, in Athens 9%, and in Atlanta 6%.”

Geffen says that even the less prestigious Commonwealth Games in Manchester in 2002 provides another yardstick for South Africa’s potential. In the five years leading up to the 2002 Commonwealth Games, house prices in central Manchester rose by 102%, compared with a 52% rise in prices in the North West and an 83% increase across the United Kingdom.

Geffen points out though that although there is much speculation on just how much prices will rise, urban upliftment and positive social impact is what really counts so that all South Africans benefit from this event.

“Well planned government expenditure aimed at local regeneration will give impetus to host cities in creating a more suitable and attractive inner-city environment – that’s because public infrastructure that would otherwise have taken years to complete due to bureaucratic red tape will now be fast-tracked.

“For instance, prior to the 1995 Rugby World Cup, Johannesburg International Airport was severely under funded, today it’s world class. The R7-billion Gautrain high-speed service between Johannesburg and Pretoria will certainly be completed in time for the 2010 World Cup, creating a wealth corridor and increased property values across both cities.

“Other projects that stand to benefit from the event include Coega’s giant ‘signature bridge’, the Statue of Freedom in Port Elizabeth and Durban’s new international airport at La Mercy, North of Durban. All of these will be fast-tracked into reality by 2010.”

Geffen points to the R2-billion Greater Ellis Park Precinct Project as one of the shining examples of the positive impact the event will have. “It will see the business, commercial and light industrial areas of surrounding Doornfontein, New Doornfontein, Troyeville and Lorentzville being given a welcome facelift. Property owners in these neglected suburbs, as well as nearby suburbs like Bez Valley, Judith’s Paarl and Bertrams, stand to gain significantly.

“Of course it’s not just the run up to the world cup that’s important, it’s that South Africa and its spectacular properties, people and lifestyle will be permanently etched on the minds of TV viewers and visitors alike and will establish us as one of the best places on earth to buy property.”

:redx:

its a tough call cos with a strong rand the imports are cheaper but exports arent as competitive. I would personally prefer the R to be 14 to the GBP and around 10 to the $. This makes our exports (coal/cars/fruit/steel) etc that much cheaper and in direct competiotion with china/india etc which are trying to gain entry to the US and European markets. Its also good for property speculators who can buy in SA for what they would have bought in spain/crete etc creating a property boom, leading to more employment , leading to greater spending power of the population , typically leading to a lower inflation rate.
But what do I know, Im just a dumbass living in a desert

but lower rates like that would more than likely lead to uncontrolled development and increase inflation. personally i believe there should be a compromise. the rand should over a 2 year period get to R8 to the dollar and leave it like that. much worse and sa spending power falls too much

but lower rates like that would more than likely lead to uncontrolled development and increase inflation. personally i believe there should be a compromise. the rand should over a 2 year period get to R8 to the dollar and leave it like that. much worse and sa spending power falls too much

Nooooooooo - wait until I get my money out of SA ;) It should stay around 5.8 to the Dollar until July 2005 and then I agree with SABoy - R10 to the Dollar should secure more jobs.

i dont think a weak exchange rate is what this country needs

it is if it wants to compete with low wage contries like china /brazil/ india etc. Exports need to be viable and they onl;y are if they are produced at a low cost (in relevant dollar terms) so the cheaper the cost of the car is to make in rands and with the dollar strong against the rand the car is very cheep in dollar terms, subsiquently it makes secnce to buy the south african made car/coal/steel etc

it is if it wants to compete with low wage contries like china /brazil/ india etc. Exports need to be viable and they onl;y are if they are produced at a low cost (in relevant dollar terms) so the cheaper the cost of the car is to make in rands and with the dollar strong against the rand the car is very cheep in dollar terms, subsiquently it makes secnce to buy the south african made car/coal/steel etc

It also brings in the big spenders and more tourists if the exchange rate is low. Many 5 star Hotels in Cape Town are reporting a huge drop in occupancy levels because of the strong Rand (maybe they should charge less ;) )

Cape Town just charges tooooooo much period!!! They are gonna wake up with a bump soon. I know of many international tourists that say they will not return to cpae town because of the ridiculous prices. Now in marketing one learns that word of mouth is the most powerful means of advertising...do you think they are going home to say good things about cape town if thats the way they feel?

I find it cheaper to go to maurituis for a week than to cape town. Now honestly which one would you choose? dah...maurituis anytime

Cape Town just charges tooooooo much period!!! They are gonna wake up with a bump soon. I know of many international tourists that say they will not return to cpae town because of the ridiculous prices. Now in marketing one learns that word of mouth is the most powerful means of advertising...do you think they are going home to say good things about cape town if thats the way they feel?

I find it cheaper to go to maurituis for a week than to cape town. Now honestly which one would you choose? dah...maurituis anytime

I agree, full stop ;) I have been to Mauritius 3 times and I never get sick of it, I have stayed at Le Touesserok (used to be the best hotel in the World) and it was the bomb baby !

and the cheap shopping........ ahhhhh bliss

oh stop moaning the tourists still flock to cape town, just deal with it,

and the cheap shopping........ ahhhhh bliss

The funniest thing is how cheap jerseys are - 100% wool. You won't even expect to find a jersey in Mauritius but they are everywhere :) .. @ Mo Rush - who is moaning ?, nobody said that the tourists will stop coming. What we have said is all fact Darling and besides we don't really care ;) .. just build something TALL is all we care about.

ok mauritius did have cool jeans :)

maurituis is like shopping heaven. i mean when i'm not on the beach, i'm in the little dorps buying all sorts of stuff. The Ralph stores are my fav...also found some great la coste and full circle stuff there

But i'm off to miami in a week.... oooh the life :)

Inflation at record low
30/03/2005 12:23 - (SA)

Johannesburg - South Africa's CPIX inflation (headline inflation excluding mortgage costs) was up 3.1% year-on-year (y/y)for metro and other areas in February - the lowest CPIX ever - compared with 3.6% y/y in January, Statistics South Africa (Stats SA) said on Wednesday.
CPIX was up 0.1% month-on-month (m/m) in February compared with a 0.5% m/m increase in January.

Headline consumer prices - the 12-month rate of change in the consumer price index (CPI) for metropolitan areas - was up 2.6% y/y in February from a 3.0% y/y increase in January.

The core inflation rate, which excludes volatile foods, municipal rates and monetary policy changes, was up 3.1% y/y in February compared with a 3.7%y/y rise in January.

Inflation beats economists' expectations

South Africa's CPIX, which is used by the South African Reserve Bank (SARB) for its inflation target, was expected to rise to 3.3% y/y, according to a survey of economists conducted by I-Net Bridge. Economists' forecasts for CPIX ranged from 3.0% y/y to 3.5% y/y.

The February headline CPI for all items was also expected to ease with the median forecast at 2.7% y/y and the range from 2.5% y/y to 2.9% y/y.

South African economists have racted to South Africa's consumer price index excluding mortgage rate changes (CPIX)for February.

"The February CPIX figure was slightly better than what I had expected, most probably due to the decline in the petrol price during February. However, inflation is likely to tick up in March and April due to the petrol price in March and April," commented John Loos, Economist at Absa Bank.

Investec economist, Annabel Bishop expects February's CPIX inflation rate to be the low point.

"We expect petrol price hikes, indirect tax increases and rand weakness will cause CPIX to rise back above 4.0% this year. We still expect that the inflation target will be consistently achieved in 2006 and, consequently, that interest rates will remain on hold this year.

Interest rates

With inflation expected to be higher for the rest of the year, economists are predicting interest rates to be kept on hold after the Monetary Policy Committee meeting in April.

"The figure is pretty much as expected, but the main concern is on the outlook for the next few months. The trend seems to be higher at the moment and I don't think this figure justifies an interest rate cut at all," said Colen Garrow, economist at Brait.

Absa's John Loos believes there could be room for a rate cut in the second half of the year.

"I don't see any change to the repo rate at the South African Reserve Bank's (SARB's) April meeting. I see think there is room to cut interest rates, but only in the second half of the year.

"The SARB is waiting for a decline in local consumer spending, which I think will start coming through in the months ahead, a decline in the international oil price and a fall in the local petrol price," said Loos

Johannesburg - Turnover on the JSE Securities Exchange South Africa's (JSE's) secondary share market soared to a record R298bn in the fourth quarter of 2004, beating the previous record of R254bn in the first quarter, the South African Reserve Bank (SARB) said in its quarterly bulletin released on Wednesday.

The SARB said that trade on the JSE was buoyant in 2004, with R1 trillion worth of shares trading - exceeding 2003's turnover by 37%.
Turnover in the first two months of 2005 amounted to R173bn, as share prices continued to rise.

According to the SARB, non-residents holdings of local shares increased by R32.9bn in 2004 after net sales of R400m in 2003.

In the fourth quarter, net foreign purchases of local shares reached a record R21bn. The last time net purchases of this magnitude were reported was in the third quarter of 1999 when net purchases amounted to R18.2bn.

The SARB said that the JSE's all share index had reached consecutive record highs from December 2004, with its all time high reached on March 17 representing a 41% increase on the recent low reached on May 18 last year.

The total value of capital raised in the domestic and international primary share markets by companies listed on the JSE almost doubled to 42.1 billion rand in 2004 from R22.7bn in 2003, the SARB said.

However, the quarterly value of capital raised declined sharply to R4.7bn in the fourth quarter from R28.7bn in the third quarter.

The SARB said that dual-listed companies contributed to the increased capital raising activity last year.

In December, Aquarius Platinum became the first foreign company to list on the JSE under the new dispensation for inward-bound listings of foreign companies

Cape Town decline reversing
Chris van Gass
Posted Tue, 05 Apr 2005

Reversing the economic decline in Cape Town has been helped by a cumulative investment of more than R9.1-billion in the past five years, the Cape Town Partnership said yesterday.

Andrew Boraine, CE of the partnership, a joint venture between the city and organised business, said yesterday that the project to rejuvenate the city centre had been successful in not only retaining existing businesses, but also attracted more businesses to the city.

The R9.1-billion covered the capital value of current leases, new developments, investment purchases, upgrades and the renewal of existing buildings, according to the latest survey commissioned by the partnership.

Number of residential conversions


Another key measure of the city centre's performance was the number of residential conversions, of which there were 29 in recent years.

The demand for office rentals in the city centre showed a "significant" jump for the first time in many years, the partnerships most recent survey showed.

Hike in rent prices


With the increased demand came a hike in rent prices. The average cost of renting A-grade office space went from R43/m² in 1994 to R75/m² in 2005.

The average prime retail rental increased from R70/m² in 1999 to R250/m² this year.

At the same time there was a decrease in commercial vacancies, which this year stood at nine percent — the lowest it has been in ten years. By comparison, vacancies in Durban stood at 16 percent and were at 25 percent in Johannesburg.

Shift in black-owned shops


Although there had been a decrease in retail vacancies, with only 14 shops vacant out of 980, there had been a marked shift in the number of black-owned shops, which stood at 300.

However, 200 shops were still being used for storage and informal retail.

In the residential sector, 340 units were made available in 1999, jumping to 840 units last year with 2340 units expected to be built and transferred by 2006.

The average selling price of the units was R1-million.

The survey indicated that up to 90 percent of the units had been sold to capetonians and that 75 percent were owner-occupiers.

A further "good" economic indicator for the city centre was that an additional 1100 hotel rooms had been added.

With all the construction under way in the city, the multiplier effect has shown that this had sustained 39 000 construction jobs.

Business Day

:redx:

http://www.reuters.co.za/locales/c_newsArticle.jsp;:425405d8:c5a89da6b268620?type=businessNews&localeKey=en_ZA&storyID=8104028

GM to build Hummers in S. Africa plant, add jobs
Wed April 6, 2005 5:50 PM GMT+02:00

By Michael Ellis

DETROIT (Reuters) - General Motors Corp. said on Wednesday it will invest more than $100 million (614 million rand) in its Struandale, South Africa, plant to assemble the Hummer H3 sport utility vehicle there, creating 450 new jobs.

The plant will build more than 10,000 annually of the SUV, a smaller and more road-friendly version of the Humvee military vehicle used by the U.S. military in Iraq, generating about $3 billion (18 billion rand) in output from the plant through 2012, GM said.

The additional production beginning late next year in South Africa, and continued growth of the brand, will raise sales for the profitable Hummer brand outside the U.S. market to 80,000 annually in two-and-a-half years, from just under 30,000 last year, Hummer brand manager Susan Docherty told U.S. reporters on a conference call from South Africa.

Analysts welcomed the news as a significant boost for South Africa, struggling to reduce a jobless rate of around 26 percent and boost meagre inflows of foreign direct investment (FDI) -- which remain well below levels seen in other emerging markets.

"This is a continuation of a trend of expansion of existing investments in South Africa, and will hopefully mark the start of a real upward trend in FDI," said Reg Rumney, head of independent think-tank Business Map.

EXPORTS

Production will begin in South Africa in late 2006 for left-hand drive models for export to Europe, the Asia Pacific region, the Middle East and Africa, GM said.

The plant will later build right-hand drive models for sale in South Africa beginning mid-year 2007, and with exports to other right-hand drive markets such as the United Kingdom, New Zealand, Australia and parts of Asia.

"To this end, we are looking to set up a distribution network (in South Africa) that can support the unique nature of the vehicle," Robert Socia, president and managing director of General Motors South Africa, said in a statement.

GM plants in Port Elizabeth, South Africa, currently assemble Opel and Isuzu vehicles.

South Africa will also build a diesel version of the H3 to meet demand for diesels in some markets, particularly with gas prices mounting.

Environmentalists have criticized the larger H2 for getting low fuel economy of only 12 or 13 miles per gallon of gas. But the Hummer H3 will get about 20 miles a gallon, similar to competitive models, and the brand image outside the United States won't be hurt by the gas-thirsty H2, Docherty said.

"It doesn't have some of the baggage that you've seen on the fuel economy side in the United States," she said. "In fact, what we've heard is they love the capabilities of the vehicle," she added, referring to the SUVs off-road handling.

http://www.mg.co.za/articlePage.aspx?articleid=201055&area=/breaking_news/breaking_news__business/

SA economic growth 'as good as it gets'
Helmo Preuss | Johannesburg, South Africa
07 April 2005 02:26

Growth in the South African economy is "as good as it gets", says investment company Citadel's chief economist Dave Mohr.

"Whilst we believe that 4% growth for 2005 is achievable, we are concerned that our new-found prosperity does not appear to be so solidly based as is commonly believed. What seems to be happening is that the good news is over-emphasised, whilst potential risks are ignored.

"The common perception is that the current sweet spot will last for ever, but we know that is not going to happen," Mohr said.

The South African economy is currently delivering its best performance in many decades with the expansion entering its 68th month, but Mohr believes that the growth is unbalanced, with South Africa dependent on volatile foreign capital inflows for its continued prosperity.

"Economic growth is above 4%, whilst inflation is at 3%. Consumer borrowing rates hover around 20-year lows and the long-term investors are happy to lend to government at about 8% -- also the lowest in more than two decades," Mohr said.

Mohr pointed out that, very importantly, almost all South Africans appear to be benefiting from the current economic trends.

Although interest rates are at two-decade lows, depositors and lenders are still receiving significant real returns of about 4% on their investments.

Homeowners are enjoying a boom in property prices. In the past five years, residential property prices have registered their biggest real price gains in more than four decades.

After a rocky period in 2002, local equity investors have also shared in almost a doubling in the JSE Securities Exchange since mid-2003, provided they were not boots and all in resource shares.

In the labour market, conditions are also favourable. The latest labour survey indicated 251 000 new jobs were created between March and September 2004. In addition, wages and salaries rose 4% above inflation.

Consumers received a further boost to their international purchasing power from a soaring rand.

In the past three years, the estimated dollar purchasing power of the average employed South African rose by 150%.

Consumers have not been shy to use their surging consumption power. For example, car sales rose by 50% between early 2003 and March 2005. Real household spending ended 2004 accelerating at a rate of 7% -- the highest in 16 years.

Government finances also benefit from the buoyant economy and markets. Borrowing costs are down and revenue is up, allowing the government to spread the benefits of economic prosperity.

In the past two years, the number of people receiving social grants rose from 7,9-million to about 10-million, and this is projected to grow to 12-million in 2007.

Foreign investors also appear to be endorsing the increased prosperity of the local economy.

Foreign capital inflows surged to R64-billion in 2004, allowing South Africans to consume much more than they are producing and enabling the South African Reserve Bank to rebuild the country's official foreign exchange reserves by $7-billion over the past 12 months.

"However, despite the booming economy and markets, several developments call for caution. South Africa's economic growth continues to lag the average emerging market and global growth rates. According to the International Monetary Fund, global growth reached a three-decade peak of 5% last year [the highest since 5,1% in 1976]," Mohr cautioned.

In addition, the acceleration in domestic growth appears to be based on a domestic spending boom. Consumers, companies and the government are all joining in the spending spree.

At the end of 2004, domestic real consumption and fixed investment grew at annual rates of 8,5% and 9%.

Although some of the spending boom reflects "catch up" from years of suppressed spending, several warning lights are starting to flash.

Firstly, local consumers are rapidly expanding debt levels. Several indicators of household borrowing are growing beyond real rates of 20%. Lower interest rates and the booming residential property market are acting as catalysts for higher borrowing.

However, given the current rates of debt escalation, any sharp rise in interest rates or setback to the property market could result in substantial distressed debt.

"Whilst the acceleration in fixed capital formation is to be welcomed, the surge in property related investment [real residential investment growth in 2004 was the highest since the mid-1960s] suggests that potential surplus capacity could be developing. Previous property booms typically ended with substantial surplus capacity and tears as owners have over-capitalised," Mohr said.

Following years of spending restraint, government outlays have picked up significantly. With armament purchases, increased social grants and accelerated infrastructural spending all kicking in at present, the share of government spending is currently approaching the bloated levels of the early 1990s, despite a rapidly growing economy.

Government spending appears to be on a 9% real spending clip, a rate clearly not sustainable over the long term. In his November 2004 Medium-Term Budget Policy Statement, the minister of finance, for example, stated that the current acceleration in the number of people receiving social grants is not sustainable over the longer term, and the government strategy is to move people from being dependent on the government to becoming contributors to the government as they become tax payers by being employed.

The combination of a strong rand, lower interest rates, buoyant financial and property markets and strong increases in real wages has led to a rapid rise in imports.

In the past two years, import volumes are up more than 30%. At the same time, domestic exports have not fully benefited from the booming world economy.

Commodity prices have surged about 50% in dollar terms, and related export volumes have picked up. However, manufacturing exports have suffered and overall export growth severely lagged import growth.

Consequently, the balance on the current account of the balance of payments deteriorated to its biggest deficit in more than 20 years, despite booming commodity prices.

At its current rate of deterioration, the deficit on the current account as a share of the economy could soon reach the levels currently being experienced by the United States.

Any deterioration in the present elevated levels of commodity prices, as has happened so often in the past, will merely accelerate these trends.

Although the Reserve Bank's level of foreign exchange reserves has risen substantially, it's still believed to be well short of levels that could act as a buffer to any adverse current account developments.

Expressed in months of import cover, the foreign exchange reserves are still only hovering at about three months.

Measured against the reserve levels of other emerging markets, South Africa continues to be close to the bottom of the ladder.

This low level of reserves is a direct consequence of the different exchange policies followed by South Africa and most of the emerging markets.

Whereas most of the successful emerging markets, particularly in Asia, appear to be targeting a competitive real exchange rate, the domestic real exchange rate is allowed to fluctuate widely. In the past three years, the real trade-weighted rand rose by 60%.

Currently, the widening current account deficit is easily financed by capital inflows, hence the continued strength of the rand.

However, a close examination of the composition of these inflows reveals potential sources of concern.

Firstly, the bulk of the identifiable inflows appear to be portfolio flows. These flows are typically fickle and any change in sentiment towards emerging markets could, as in the past, trigger a reversal of such flows. The past few years' emerging markets have been the darlings of the financial markets.

Negative real short-term interest rates in the US led to an international search of alternative higher yielding markets.

Emerging markets were major beneficiaries and emerging market financial ratings rose to historically high levels.

Emerging market assets appear to be priced for perfection. In recent weeks, however, with US interest rates rising, markets are starting to question the current high rating of emerging markets.

Secondly, direct foreign fixed investment, the most stable component of capital inflows, remain at disappointingly low levels and totally inadequate to fund the growing current account deficit.

Economic cycles historically have often been dictated by balance-of-payments developments. Current balance-of-payments trends are precariously balanced and could easily lead to unstable financial trends.

Such instability will lead to significant financial volatility, with the rand weakening and interest rates rising. Current favourable economic trends will be negatively influenced and financial and property markets will not escape unscathed. -- I-Net Bridge

my neighbour has an H2 and its a bitch of a car, we went out quadbiking in the desert and used the humvee to go wadi bashing and that thing is like a nuclear power plant on wheels. It had so much torque it made my jeep cherokee look like a dinky toy.
Good news that.
BTW where is struandale? is it in PE?

Struandale is indeed in Port Elizabeth. Near Motherwell I think? Maybe Pule knows. I haven't been to PE since about 2001. I tell a lie, actually since 2003, but it was a short stop, and just to take pics for ss.com/emporis.

caisson boy ,long time no hear . How is Hell, errrr.... London??

never been to PE. Is it a nice city?

its OK, Im not a fan as its not a very pretty city, Industry come too close to the coast, the Harbour is right next to the CBD and the CBD is very small as its confind by a hill to its West, the Sea to the East and a big elevated freeway that disconets it from the coast.
Seems to be having a second wind with the Coega harbour being built just up the coast a bit

caisson boy ,long time no hear . How is Hell, errrr.... London??

Shit that must make me a demon, cos I miss London like...

We havent heard much from Cassion Boy since London is too exciting to waste much of one's time on internet forums ;)

Dont know about that clive, too many people, too crowded and dense for my likeing. Weather sux big time and the poms arent my favourite people in the world. Im very happy In dubai, loads of sand,beaches and sun, just up the ally for a durban boy

Fingertips Middle Eastern interest, terrorism and the Chinese


AMERICANS are aghast at rising anti-Yank sentiment around the world. But it’s an ill-wind which is blowing South Africa some good. Tired of being hassled at US airports, oil-rich Middle Eastern investors have been looking south rather than west. Hard on the heels of the hefty Lebanese investment in South Africa’s third cell phone network Cell-C, comes the R1-billion plus that Kuwaiti property and hotel group IFA is pumping into the KZN resort of Zimbali. IFA’s commitments include the building of a R650-million hotel and a R50-million golf course. IFA has already introduced the resort to many wealthy investors from the Middle East, and is looking for other opportunities elsewhere in the country. It’s not all one way. South African construction companies have invested heavily to participate in the Middle Eastern boom, especially in Dubai. Also, Old Mutual recently established partnerships with Saudi Arabians to develop half a dozen shopping malls in that Country.

While on the subject of unhappiness at American’s perceived double standards, one statistic which should stick in your mind regards massive distortions created by the subsidies paid to rich countries’ farmers. Respected British economic commentator Martin Wolf estimates such subsidies exceed $375-billion a year. That’s 15 times the $25-billion annual aid which UK Prime Minister Tony Blair says would be enough to get Africa back on track. The rich world shamelessly uses subsidies to price the poor world out of the one area where it might be able to complete. But don’t bet on changes anytime soon. Doing the right thing has always come second to retaining votes.

We at moneyweb have been among the frontrunners in a Sasol Bull Stampede which has seen the share price jump 50% since early December. But there’s now a need for some caution. Sasol’s big bet is on the project which will convert Qatari natural gas into liquid fuel. So news on that global terrorist network al-Qaeda is targeting the tiny Gulf State should send shivers up Sasol shareholders’ spines. March’s bomb blast at Doha’s Player’s Theatre killed a Briton and injured 12 others. It was the first such incident in Qatar, and followed a call three months ago from the terrorist leader Osama bin Laden that his followers target three of the most successful Gulf States – Bahrain, the United Arab Emirates and Qatar. Reason? Their friendship with the west, particularly the US. Qatar has been used by the American military as its Central Command base from which the Iraq invasion and subsequent operations were co-ordinated. It’s time to bank some of those Sasol profits. No point getting your money caught up in the crossfire.

The firm Rand has had an undeniable impact on the relative wealth of South Africans. It has also helped the country’s institutions improve in the global rankings. The JSE, for instance, ended 2004 as the 15th biggest stock exchange in the world, up three places from the year before. In terms of liquidity, though, it ranked a lowly 38, slipping three places from 2003. There’s a clear message in that. Interestingly, the JSE is now well behind China with the local market’s December 2004 market capitalization of $455-billion some way off the Chinese $639-billion.

The Johannesburg exchange remains the second largest emerging market in value terms, enjoying a slight margin over Taiwan and Korea, but comfortably ahead of India, Brazil and Russia.

MONEY WEB

Not only will you guys produce Hummers, you're also gonna produce Toyotas!

http://www.sabcnews.com/economy/business/0,2172,102949,00.html

SA selected as Toyota's global manufacturing base
April 25, 2005, 17:30

South Africa has been selected by Toyota Motor Corporation as one of its five global manufacturing bases for the new range of IMVs. The Innovative International Multi-purpose Vehicle will be the biggest investment into the South African Motor manufacturing industry.

The IMV programme is aimed at supplying markets in 140 countries. The major volume product of the five models based on the IMV platform is the new Hilux and for the first time it will not feature Japan as a source country for production. World production of the IMV will come from six countries, each tasked with meeting specific regional demands and feeding components into the global network. Eight hundred new jobs will be created at the Durban plant with major spin offs for local suppliers.

"We have a free trade agreement with Europe, which of course is being utilised and of course also the motor industry development programme gives us some benefits. But then Toyota is integrated into the global supply network and we do have some advantages over other countries," said Johan Van Zyl, the CEO of Toyota South Africa.

The Toyota plant in Durban is gearing up with a new R1 billion paint shop to handle the new vehicles. Production of the new Hi Lux will be followed by an SUV vehicle built on the same frame. Within two years Toyota South Africa will be building 160 000 units for local as well as export markets.

nice one for Durban and prospecton( area wher the Toyota factory is situated)

yip, Toyotas prospecton plant will be the sole provider of the hilux to 70 world markets, and will be one of 3 producing the SUV, but the only one supplying Europe. Quite good going!!! created the 800 jobs mentioned, but over 500 more in other areas of the supply chain, and this is only the start

And more than just that - highly productive jobs such as auto have a massive trickledown effect beyond just the supply chain. I would estimate this as: the increased salary bill (of the Toyota plant and all its suppliers) plus any profit remitted locally, divided by the average salary (of Durban as a whole, including marginal workers) to give you a total trickle down.

R300m
-------- = 12,000
R25000

So the multiplier could be 10x.

Then you throw in the indirect effects of training, experience, stability, foreign knowhow and US$. Pretty damn good.

plus they say that 200 000 units a year is just the start and they are aiming for 500 000 units a year by 2012

South Africa's Finance Minister Trevor Manuel yesterday approved Britain's Barclays' bid to buy a majority stake in the country's biggest retail lender Absa.

Manuel announced his approval at a news conference in Johannesburg, saying the potential benefits of a Barclays/Absa tie-up outweighed any potential risks or disadvantages.

A financial source said Barclays had increased its offer from R79 per share to R82,50 a share, winning the support of Absa shareholders.

South Africa's monetary authorities would ensure no disruption to foreign currency markets from the Barclays/Absa tie-up, Treasury director Lesetja Kganyago said.

The two banks would formally announce the transaction today.

good news!!!

The deal is an interesting bet on the future value of the rand. If Barclays thought the rand would go down significantly in the next year or two, they might well have held off the purchase until then.

SABMiller to buy Slovak brewer Topvar
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Brewing giant SABMiller has agreed to buy a majority stake in Slovakian brewer Topvar to boost its presence in central Europe, the company said yesterday.

SABMiller said in a statement the value of net assets to be acquired was around $15,2-million. The company would initially buy a stake in Topvar of at least 33%, with a further sale six months later to allow SABMiller to increase its stake to at least 67%.

The remaining shares held by the controlling shareholders are subject to put and call options exerciseable within 18 months of SABMiller bringing its stake up to 67%.

Analysts said the deal valued the brewer, based in Topolcany in western Slovakia, at around $49-million including debt. The Slovakian brewer sold 569 000 hectolitres of beer in 2004.

Lets hope SABMiller dont turn those fantastic central European beers into the shite they sell in SA like Castle, Black Label, Lion etc.

when i lived in poland the best beer was Zywich (sic) which was also a SAb brand.
The best larger in the world is Pilsner Urquel (chech) and again its a SAb brand.
Clive I think they will respect the brands them selves butt are buyiong up factories to make castle so it become a mid range brand and more importantly a world brand , think fosters , heineken etc

Zub (sic) and Budwar are among my favs!

Castle etc is popular because it is cheap. An engineer mate of mine who worked at the Durban brewery explained that normally beer takes quite a few days to brew. For most traditional SAB labels they do it in like 24 hours.

This requires some sort of catalyst/accelerant. Unfortunately the cheap-ass chemical they use kills the head, so they put in INDUSTRIAL DETERGENT to force one. Unfortunately this makes you sick, so they put in some anti-sick chemical to stop you getting feeling ill after drinking a few - but you feel it the next day. Its a nasty chemical soup, but its cheap which is why its popular! I have no reason to disbelieve the guy.

Scary hey? I stick to very "traditionally brewed beers", although I admit to buying a castle at JHB airport on my first trip back to SA after living abroad. I was absolutely horrified to be charged R9 (this was ~2000) until I realised that this was only like 70p!

I love Castle Lite, its my favourate beer.

all sab home grown products taste kak to me

I have never liked beer. All tastes the same to me.

Give me wine rather. (and a Cosmopolitan goes also goes down well - and rather quickly)

I used to Drink Smirnoff Spin and Savana, but I must say that nothing will come close to my Castle Lite.

i'm a SoCo boy...with lime

Rob Rose

Chief Reporter

RATINGS agency Fitch said yesterday that SA’s chances of getting a sovereign rating upgrade within the next 18 months were looking good.

Fitch senior director Paul Rawkins praised SA’s economy.

"The budget came in much better than we expected." Any rating upgrade was most likely "within the next eighteen months".

An upgrade from the current investment-grade rating of BBB would make it cheaper for SA’s government to borrow money. It also would encourage foreign investment as foreign investors typically chose countries with higher ratings.

Last October Fitch placed SA’s currency rating on a "positive outlook", suggesting that the country’s overall sovereign rating could be upgraded soon.

In January the largest ratings agency, Moodys Investor Services, upgraded SA to a Baa1, equivalent to a BBB+ and only one notch below the coveted A category.

Standard & Poor’s gave SA a BBB rating in May 2003.

Fitch yesterday released a special report on what it would take to raise the credit profile of sub-Saharan Africa. It said this region should take advantage of the stronger international environment "to build on macroeconomic stability, press ahead with reforms and improve the investment climate".

Fitch’s A category included a number of developing countries, including Chile, South Korea, Malaysia, Israel and Hungary — but not any African countries.

In Africa only Tunisia has the same BBB investment-grade rating as SA.

Most sub-Saharan countries have a B rating, although Fitch director Veronic Kalema said many were making progress by improving their economies, stabilising politically and reducing debt.

Six industrial parks planned for Gauteng, Durban, Cape Town

5/19/2005

Old Mutual Properties

Six distribution parks offering a range of warehousing and factory space are being planned for development by Old Mutual Properties on 50 ha in key locations in Johannesburg, Centurion, Durban and Cape Town.

The developments are aimed primarily at large space users and will be built to their requirements, says Ben Kodisang, managing director of Old Mutual Properties. “Some speculative building to accommodate the mid-market is under consideration, given a swing in the property cycle that brings the industrial sector into play. “

He says that while the office market remains in over-supply, excellent economic conditions favour investment in the industrial sector.

“Continuing domestic growth and space shortages in key locations underscore the need for projects offering premises for service and light industries, wholesaling, warehousing and distribution, transport depots and showrooms,” he says.

Three of the developments are proposed for Gauteng, two for greater Durban and one in Cape Town.

Kodisang says the sites form part of Old Mutual’s land holdings and are generally big enough for one tenant, yet easily sub-divisible for a number, depending on their requirements. The developments are to be known as M³ Distribution Parks because of greater volumes, with the focus being on cubic metres as opposed to square metres. This is created by having 8m-high eaves instead of the conventional 6m.

One of the largest properties is a 14 ha site in Centurion, on the development corridor between Johannesburg and Pretoria. Its northern neighbour is the SA Mint and it is located between the highway, on its western boundary and the old Johannesburg road, on its eastern boundary. Erven range in size from 5 000m² to 2 ha but can be consolidated to create larger stands.

Kodisang says two further M³ Distribution Parks are proposed for greater Johannesburg. One is planned for 10,7 ha on Heidelberg Road, south of Johannesburg, with excellent access to the arterial network and the other on a 5,5 ha site in Yaldwin Street, Jet Park, close to main Gauteng distribution routes around Johannesburg International Airport.

One Durban property is on 7,5 ha in Goodwood Road, Mahogany Ridge, in Westmead, a short drive from the container harbour and close to the N3 to Pietermaritzburg.

The other M³ Distribution Park in greater Durban will be on the 14 ha Mount Edgecombe site which housed the temporary Sugar Mill Casino before the opening of the Sibaya project at Umdloti. Kodisang says this has the advantage of having roads and a 7 000m² warehouse already in place.

The Cape Town site earmarked for development is on 2,2 ha fronting onto Omuramba Road, Montague Gardens, an area which offers quick access to arterial routes and has grown rapidly in recent years.

Kodisang says experience gained by Old Mutual Properties in pioneering industrial parks in South Africa will ensure the projects incorporate features that facilitate business. These, he says, include clear eaves heights suitable for maximum racking, ample yard space and truck turning circles, security, landscaping, versatile office layouts and abundant parking.

its interesting to see that there are two in jozi and durbs and only one in CT. Its alos interesting that the two in durban are both rather large, compared to the smaller ones elsewhere. Of the 50ha they will be developing nationwide, 21,5ha will be in durban...is that a sign that the durban industrial market is growing alot more than the rest? or that we just are in dire need of space?

SA to provide Swedes with armoured vehicles
--------------------------------------------------------------------------------

South African armoured and peacekeeping vehicle manufacturer BAE Systems Land Systems OMC has a confirmed order from FMV, the Swedish Procurement Agency.

The order is for production of 102 specialist RG-32M patrol vehicles valued at close to R180-million.

This follows the successful delivery and trials of a pre-production vehicle as part of a contract signed with FMV in May 2004 when Land Systems OMC beat international competitors in Sweden's mine-hardened patrol vehicle (MHPV) evaluation programme The Swedish order comes shortly after the US placed an order for 148 of Land Systems OMC's RG-31 medium mine-protected vehicles, the largest single new vehicle export contract ever placed on a South African defence manufacturer for what is considered by many the best mine-protected vehicle in the world.

Production of the technologically advanced RG-32M mine-hardened patrol vehicle (MHPV) will start immediately at Land Systems OMC's Benoni plant outside Johannesburg.

The first ten vehicles will be delivered by year-end and thereafter production is scheduled to proceed at ten vehicles a month during 2006.

This particular version of the RG-32M has been customised to meet customer and regulatory quality standards, including homologation for Sweden and Europe.

Modifications included changes to axles, wheels and tyres, bonnet and louvres, steering wheel and instrument panel.

The 'winterisation' of the vehicle for Sweden's below 35°C temperature extremes is also a new feature for the RG32-M.

Land Systems OMC's RG32-M for Sweden also features two unusual developments in this class of vehicle: a full armoured body in station-wagon configuration for up to nine personnel, and an engine bay with ballistic protection.

Hopefully we will see much more of this. SA makes among the best specialist land military equipment. Our stuff is better than much of America's and FAR better than Australia's hilariously outdated and crap looking APCs and IFVs (all of which are NOT anti-tank mine surviving)

No one else can produce mine-surviving light armour capable of sustained 100kph over rough, hot, dry and sandy terrain. And our stuff is very battle tested against traditional 3rd world munitions (ie old soviet stuff).

here in Dubai that have loads of SA equipment, I have seen G5 and G6 convoys as well as the odd ratel. Even when I was in Oman there were ratels there.

I love the G6. It makes an MBT look like a fly.

when I was in the army many moons ago we were out at luhatla and the G6s were in a firting line, like 20 of them and we were in the rooikats and then these bladdy things sounded like the end of the world

Manuel sees increase in economic growth
I-Net Bridge

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Finance Minister Trevor Manuel has outlined a favourable picture of the economy for the year, pointing to the national treasury's expectations of rising GDP growth, low inflation, a very low budget deficit and improving employment trends, as well as continuing strong capital inflows.

Speaking during the adoption of the Finance Ministry's budget at Parliament today, Manuel pointed out that GDP growth was expected to reach 4,3%, up from 3,7% last year.

Manuel said that inflation declined to 4,3% last year and is expected to remain "well within" the target range of 3-6%.

"Our budget deficit is now about 1,5% of GDP, primarily because the SA Revenue Service (SARS) harvested R354,9bn in the last financial year, or R21bn more than we anticipated at the time of the 2004 Budget.

"We witnessed capital inflows of R60bn ast year, and this trend continues..."

Furthermore, Manuel added, employment trends continued to improve, and business and consumer surveys all signaled that there was a new optimism - "an unprecedented degree of confidence in our economic outlook".

"The improving outlook is the hard-won fruit of forward-looking macroeconomic plan we placed before this House in June 1996."

The finance minister went on to add that, on the strength of this success, the government was able to be "bolder yet" in the years ahead.

It was "acutely aware" of the extent of the need for employment, broader participation in economic activity, relief from the poverty trap, housing, better education, and reliable health services.

"These challenges have disciplined our policies and budget plans over the last ten years, and they remain firmly in mind in the growth and development strategy for the decade ahead."

when I was in the army many moons ago we were out at luhatla and the G6s were in a firting line, like 20 of them and we were in the rooikats and then these bladdy things sounded like the end of the world

:runaway: AWESOME!

SA armoured vehicle firm wins R64m Italian job
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Italian company Iveco Defence Vehicle Division (DVD) has ordered a full production batch of 30 RG-12 public-order vehicles from BAE Systems' Land Systems OMC in South Africa, for use by the Italian Carabinieri.

The order is valued at some R64-million and delivery is expected early in 2006.

The order was confirmed as Land Systems OMC prepares to deliver the remaining five of six custom-built pre-production vehicles - part of an overall contract for up to 200 of the RG-12s, won by Land Systems OMC in partnership with Italy's Iveco DVD in mid-2004.

The Italian order comes close on the heels of other major orders from the US and Sweden.

With increasing international demand for its armoured and peacekeeping vehicles, Land Systems OMC is experiencing a major upturn in vehicle production and job creation.

Iveco, as prime contractor in Italy, is supplying mechanical components such as engines and transfer cases as well as in-country support for the vehicles, while Land Systems OMC will build the vehicles in South Africa.

The Iveco partnership also provides modern driveline components for Land Systems OMC vehicles for other applications, including conformance to Euro 3 emission regulations.

The first pre-production vehicle, customised to Carabinieri specifications, was delivered in late 2004 and successfully passed technical and ballistic testing in South Africa followed by extensive customer verification tests in Italy, which included European homologation.

The RG-12 is the second Land Systems OMC vehicle to pass European homologation requirements (for use on European roads), the other being the RG-32M which recently passed homologation tests in Sweden.

Successful verification of RG-12 in Italy cleared the way for production of the remaining five custom-built pre-production vehicles in the first batch of six, all of which have been up-dated to the latest specifications following the Italian tests.

These vehicles, customised for the Carabinieri, include features unique to the Italian version of RG-12.

A specific feature is a fully integrated commercial climate control system, which meets the requirement for a commercially available and commercially supportable system yet with full protection for the crew against small arms fire, shrapnel, hand-thrown missiles and even petrol bombs.

Barclays takeover will benefit few and widen poverty gap:
June 3, 2005

It is sadly long forgotten that banks are publicly chartered to garner the common wealth for the general benefit of society. Banks are the lifeblood of any economy.

The social contract that accords banks with privileged status requires, in turn, that banks operate with integrity to garner the common wealth for the general benefit of society.

Savings are to be gathered and lent out to finance new enterprises, and so create jobs and new wealth. That, at least, is the theory. The reality is vastly different. Bankers have come to believe that their public charters are simply licences to print money for their shareholders and senior directors.

The proposed Barclays takeover of Absa doesn't even pretend to benefit the public. A handful of institutions will profit from massive stock market speculation, and senior Absa directors and managers will receive an estimated R1.7 billion.

The takeover proposal is motivated solely by short-term greed. It is crony capitalism at its most vicious, intended to transfer wealth from the middle class and poor to the already-rich.

International analysis of bank mergers over the past decade finds that they result in higher fees and poorer service for consumers and small businessmen, and substantially increased risks of corporate failure.

And the poor - especially in South Africa - are thrown to the mercy of loan sharks and their gangster friends. Yet when they crash, these mega banks turn to the government, pleading to be bailed out at taxpayers' expense on the rationale that they are now too big to fail.

Absa is itself an amalgamation of failed banks and building societies that were closely associated with the apartheid regime. We will never know how much were used for the benefit of the Broederbond and the politically well-connected.

The Reserve Bank bailed out Trust Bank in the infamous lifeboat scam at a cost to taxpayers of over R1bn. The more recent Saambou collapse is estimated to have cost taxpayers over R12bn. And Unifer is also part of the Absa stable.

If Absa's background is distasteful, Barclays's is even more so. Its history originates from the slave trade in the West Indies, and the subsequent plunder of British colonies for the enrichment of a London elite.

When South Africa defaulted on its foreign debt in 1985, a total of
243 foreign banks were caught in the net. Barclays was by far the largest creditor, thus illustrating the scale of its complicity in financing the apartheid system.

Unapologetic and unrepentant, Barclays is now financing the BAe Hawk and BAe/Saab Gripen fighter aircraft of the arms deal .The British government was timeously alerted to the fact that serious allegations of corruption pertaining to BAe had been forwarded to the Heath Special Investigating Unit, and it was informed that finalising the financing arrangements would be fraudulent.

SA Air Force chiefs and the former secretary for defence objected to the BAe proposals, but were overruled by the late Joe Modise who insisted that buying British would support Denel, the state-owned arms company that hovers on bankruptcy.

And the default clauses in the 20-year loan agreements are so onerous and catastrophic that the Minister of Finance, wittingly or unwittingly, has ceded control over South Africa's economic and financial policies to Barclays, the British government and the International Monetary Fund.

He has also done so without requisite authority of the erstwhile Exchequer Act or the current Public Management Finance Act or parliament.

The default clauses illustrate how Third World countries become entrapped in foreign debt, leading to anarchy in countries such as Zimbabwe and Indonesia.

The much-hyped claim that the Barclays proposal represents a massive vote of confidence in South Africa has no substance. Instead of improving consumer banking services, Barclays evidently has no intention of challenging the present cartel arrangements.

Its focus, apparently, is to concentrate on corporate banking and, in particular, to finance Black Economic Empowerment projects, an issue of dubious economic logic also known as black enrichment of the elite .

The Banking Council admitted at the Truth and Reconciliation Commission's business hearings in November 1997 that South Africa's banks had dismally failed their social responsibilities during the apartheid era. Promises then to remedy those failures have not materialised.

South Africa is already dangerously polarised between rich and poor, but the Barclays proposal can only aggravate the situation.

That article is a mound of shit by some lefty idiot.

Who cares if Barclays was involved in the slave trade 300 years ago - what the hell does this have to do with this deal?

How are the poor "thrown to the mercy of loan sharks and their gangster friends" because of a change in ownership?

"Bankers have come to believe that their public charters are simply licences to print money for their shareholders and senior directors" - what the fuck is this guy on? I could demolish this idiots argument statement by statement. The author should move to Cuba or North Korea.

Along with foreign currency, additional capitilsation and sorely needed foriegn banking know-how Barclays will bring some serious investment credibility to the SA economy. SA banks are about the most incompetant organisations it has even been my misery to deal with. Enigma - I am suprised you would repeat this gutter "ekonomik" journalism

That article is a mound of shit by some lefty idiot.

Who cares if Barclays was involved in the slave trade 300 years ago - what the hell does this have to do with this deal?

How are the poor "thrown to the mercy of loan sharks and their gangster friends" because of a change in ownership?

"Bankers have come to believe that their public charters are simply licences to print money for their shareholders and senior directors" - what the fuck is this guy on? I could demolish this idiots argument statement by statement. The author should move to Cuba or North Korea.

Along with foreign currency, additional capitilsation and sorely needed foriegn banking know-how Barclays will bring some serious investment credibility to the SA economy. SA banks are about the most incompetant organisations it has even been my misery to deal with. Enigma - I am suprised you would repeat this gutter "ekonomik" journalism

This is the guy that wrote the article - maybe it wil help bring some insight ;)

"Terry Crawford-Browne was regional treasury manager for Nedbank in the Western Cape until he became adviser to Archbishop Desmond Tutu and Dr Allan Boesak during the 1985-1991 international banking sanctions campaign against apartheid. He now chairs Economists Allied For Arms Reduction - South Africa."

Well clive is right. He IS a lefty idiot and a well know prat with no credability whatsoever amongst economists. Methinks you are getting desperate in your quest to run down SA enigma or gandalf or whatever your name is. The Barclays deal is SUPERB for SA as it solves the current account problem at the same time as being HUGE vote of confidence in SA and the direction it is going in. It will also increase the liquidity of SA's capital markets which is a major step forward in the quest for growth above the 5% mark as cheap tradeable capital means economic expansion.

This is the guy that wrote the article - maybe it wil help bring some insight ;)

"Terry Crawford-Browne was regional treasury manager for Nedbank in the Western Cape until he became adviser to Archbishop Desmond Tutu and Dr Allan Boesak during the 1985-1991 international banking sanctions campaign against apartheid. He now chairs Economists Allied For Arms Reduction - South Africa."

It certainly does.

It sounds like he couldnt cut it as a regional treasury manager (:lol: that sounds like a golfing job) so became a full time banking advisor for 2 priests (:lol: ), one of whom served time for corrupt financial dealings (:lol: ). He now chairs a bizarre organisation that presumably attempts to use interest rates to cut gun availablity and crime (:lol: ).

He probably should also chair Florists Allied For Arms Reduction - Earth.

ha ha ha you two are classic. Me agrees, I mean so what if they were involved in apartheit loans? do we now punish voltwaken cos they helped hitler? should we punnish every company that worked with Sadam? where do you draw the line?
business is business and based on that the now left leaning SA govenrmnet is supporting the absulate nutter in Bob Mugabe by providing some sort of credibilty to his governmnet not to mention food and aid.
That terry character sounds like a real dick and should stick to his alalpha beans and growing his own tea and leave the real world to those who have the balls to make big decitions like being the gigest forigen investment in the country for ages.

Scrapped Projects A Worry - 2005/06/17


Concern is mounting as reports continue to surface of property developments having to be re-priced or even scrapped because of exceptionally rapid input cost increases during the planning phases.

"This is a phenomenon that is seemingly not restricted to up-market developments and it does not bode well for home affordability or for long-term stability in the real estate market," warns Gerhard Kotzé, CEO of ERA South Africa, who believes it is also only a matter of time before the same factors impact on commercial and industrial property developments.

"The problem has appeared in spite of the fact that building industry tender prices are rising above inflation and builders' cost inputs - the Bureau of Economic Research (BER) projections being that the rate of tender price increases will be 12 percent higher than the inflation rate during 2005.

"This should be sufficient cushion against developers and contractors having to re-price during the lead time to completion of a given project, but clearly, it is not."

Long delays in town planning departments are certainly not helping matters, he says, and continuing steep increases in the prices of certain building materials are a part of the equation, as is a shortage of skills in the construction industry.

"Basically the construction industry is hard-pressed to keep up with demand right now and the situation is likely to intensify as a result of Government and private sector projects in the pipeline, including projects related to the Soccer World Cup and infrastructure improvement.

"Demand on construction industry capacities in the residential sector may be slowing somewhat due to affordability constraints, but any slack has been taken up by rising demand for new commercial and industrial developments.

"Moreover, international expansion by South African building industry heavyweights has resulted in the export of South African skills to many parts of the world, depleting the available pool of skills in South Africa itself. At least one major construction group has suggested that the shortage of skills may have to be off-set by recruiting overseas, as in the '70s and '80s."

However, he says, while the construction industry may be forgiven for "making hay while the sun shines", property developers are increasingly uneasy about the viability of new developments as it becomes more difficult to forecast selling prices accurately.

"The problem with this scenario is that more developments may be put on hold or scrapped, and that the supply and demand equation could be upset, leading to artificially inflated property prices rather than the steady rise in values that the market now needs."

So long as the economy continues at a reasonable pace, this sort of problem will gradually clear up. Years of stagnation must have surely reduced the amount and quality of businesses, skills and equipment. This shallow service industry has obviously rapidly maxxed out.

If it seems that demand will continue for the next 5-10 years, a huge amount of extra capacity will be developed by existing businesses and entrepreneurs. If I were you, SA Boy, I would be considering going home pretty quick and opening a related business. Huge vertical market opportunities do not present themselves often - maybe only a few times per country per CENTURY.

I have had offers for a move but am happy here in Dubai and besides Im in the middle of the biggest building boom the world has ever seen, believe me I have enough to worry about here.
Lets hope that the skilled masses that left feel the time is right to go back and invest and contribute, however Im sure the BEE is a concern to most people even with great skills and experience.
I mean with out sounding racist, when a collage graduate with a degree and zero experiance can get a job in a senior position because is he covered by AA and a simmilar qualified but with 20 years experience white guy who has worked all over the world cant get a job, then we have our prioritys all wrong.
Suerely empowerment will come with time as do all good things, its an evolution and you cant force change to reverse 40 years of bad ideas.
I dont think my time is right to return as even with my experience (worked on projects in 7 countries and am curerently developing over 3 billion worth of projects) i dont think Id get a good deal. Im still looking at around 2010

Quite true. And SA is the loser.

But at the same time I can see why they wanted to force through BEE even with guaranteed mistakes and inefficiencies that would result. If they had left it purely up to the market, blacks would never have broken into the professional job market.

$hit man - when is it all going to end ??

SA sheds 136 000 jobs -

Pretoria - Formal employment in the non-agricultural business sector dropped by 1.9%, or 136 000 jobs, from last December to March this year, Statistics SA said on Tuesday.

The number of employees dropped from 7.075 million to 6.939 million over the period, it announced in Pretoria.

The decrease was due both to seasonal workers employed over Christmas becoming unemployed again, and to retrenchments.

More temporary workers than usual were hired over Christmas.

Stats SA also announced an 8.4% drop in gross earnings - salaries and wages - from December to March.

This reflected a quarterly decrease of R13 386bn.

The latest figures are contained in Stats SA's first release of its new Quarterly Employment Statistics (QES), which replaces the old Survey of Employment and Earnings (SEE).

The new survey includes all businesses registered to pay income tax, while its predecessor focused only on those with a minimum R300 000 annual turnover and registered for VAT.

The QES includes about 25 000 businesses while the SEE had about 10 000.

While the SEE covered employing and non-employing businesses, the QES looks only at employing enterprises.

The reason for the change, Stats SA said in a statement, was that the SEE did not allow it to calculate estimates of average monthly earnings, because it did not separate employees from the self-employed and employers.

The QES excludes employers and the self-employed, but has extended its scope to include small businesses.

In its report released on Tuesday, Stats SA said the drop in employment was largely in the "financial intermediation, insurance, real estate and business services industry", which shed about 125 000 jobs.

This was probably largely due to an increase in security company activity over the December holidays, followed by retrenchments in quieter times.

A total of 30 000 jobs were lost in:
the wholesale and retail trade;
repair of motor vehicles, motorcycles and personal and household goods; and
the hotels and restaurants industry.

This was probably due to an increase in temporary appointments by hotels, restaurants, wholesalers and retailers over the December holidays.

Three thousand jobs were shed in mining and quarrying, 2 000 in the manufacturing industry, and about 1 000 in transport, storage and communication.

On the upside, 15 000 jobs were created in the community, social and personal services industry, 8 000 in the construction industry, and 2 000 in electricity, gas and water supply.

The decrease in gross earnings was most marked in the manufacturing industry with a drop of R3.925bn.

Statistician-general Pali Lehohla said the new QES formed part of the Stats SA's continuing process of improvement. This would also see the introduction over the next few years of a survey on vacancies.

Deputy director-general Ros Hirschowitz said the response rate by businesses targeted for the survey exceeded 80%. But she warned that those remaining recalcitrant could face legal action.

Its never good to see employment falling, but GDP is still rising at >3-4%. If the number of workers is falling by 2% that means productivity per worker is rising at around 5-6% which is good. It is high productivity per worker that will create new jobs, and higher paying jobs.

No doubt the jobs lost were in underproductive companies and industries. There are still a lot of junk companies and jobs out there that have never been viable in the long term.

I dont think my time is right to return as even with my experience (worked on projects in 7 countries and am curerently developing over 3 billion worth of projects) i dont think Id get a good deal. Im still looking at around 2010


Can I ask what is it that you do for a living. Engineer? Architect? Project Manager?

Im a development manager but spent most of my career as a design /project manager

http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A57464

20 June 2005
Car sector adds jobs rapidly in first quarter
Carli Lourens
Trade and Industry Editor

CAR makers in SA employed 1110 more people in the first quarter this year compared with the year-ago quarter as the automotive industry continued its relentless expansion.

The statistic suggests that the employment tide might have turned in an industry that in the past has come under fire for generating only jobless growth.

Last year, the industry created 1185 new jobs — only slightly more than the total achieved in the first quarter of this year.

The new jobs represented mainly skilled positions, according to the first-quarter business review of industry body National Association of Automobile Manufacturers of SA (Naamsa), released on Wednesday.

Several car makers have introduced additional shifts to keep up with strong demand in the domestic market, which has continued to expand on last year’s record growth.

Naamsa said domestic passenger car sales were 23% higher in the quarter under review compared with the corresponding quarter last year. Commercial vehicle sales were 17,6% higher.

. . .

http://www.automotive-business-review.com/article_news.asp?guid=7E049E89-79E6-43ED-8B54-8235D32FD48A

Volvo Trucks switches assembly plant to South Africa
Heavy truck specialist Volvo Trucks is opening a new factory in Durban, South Africa after electing to switch production from its Botswana facility. The move is part of a wider plan to shorten lead times and lower freight costs.

28 Jun 2005, 16:52 GMT - Volvo Trucks has assembled CKD-kits (Completely Knocked Down) in Botswana since 2000, when it took over the factory from the previous Volvo importer. Because the bulk of the trucks manufactured there are intended for the growing South African market, the move to Durban is expected to significantly reduce lead times

Work on preparing the new plant in Durban has started, with Volvo expecting to start production by December. The company will close its Botswana site on completion of the transfer of operations.

Volvo Trucks is part of the Volvo Group, one of the world's largest manufacturers of trucks, buses and construction equipment, drive systems for marine and industrial applications, aerospace components and services. Last year Volvo Trucks sold almost 1,000 trucks in South Africa.

go cars and trucks!!!!!

well aint that good news for durbs :)

Toyota and Volvo...mind you, the Volvo plant is only costing R45 million so cant be so big or doing much

I rember a few yers ago, well many in fact when I was living in Richards Bay developing a prison in eMPANGANI, AND THE rb CHAMBER OF BUSINESS WAS TRYING TO lURE bmw AWAY FROM bRITS, shit caps.
Anyway it was unsecessful politically but economically from an export point of view car making is geared for coastal conditions, just think of Mercedes EL, VW in PE and Toyota in Durbs.
That leaves Ford and BMW inland.

maybe they will one day see the light? then again ford is not a major exporter at this point though and it would cost a fortune for BMW to move

Actually it isnt that hard to move a car company - you wait until a new model is due, and build the new model in a completely new factory somewhere else. Happens all the time.

South Africa's improving economy
Sep 22nd 2005
From The Economist print edition


LAST week, the IMF gave South Africa a thumbs-up in its annual review of the country's economic performance. GDP is growing quite fast (by 3.7% last year, maybe faster this), inflation (3.5% at last count) is under control and public finances are in good shape. The rand has recovered from its 2001 depression, and foreign-exchange reserves are strong.…

I don't have the full article does anyone else have the full article?

South Africa's improving economy
Sep 22nd 2005
From The Economist print edition


LAST week, the IMF gave South Africa a thumbs-up in its annual review of the country's economic performance. GDP is growing quite fast (by 3.7% last year, maybe faster this), inflation (3.5% at last count) is under control and public finances are in good shape. The rand has recovered from its 2001 depression, and foreign-exchange reserves are strong.…

I don't have the full article does anyone else have the full article?

its so weird after two years of economics i know exactly what each word inthis article means and its implications....urrrgh pity the economics final exam was a shocker....

I have a question. South africa has a booming economy and is a developed country yet how is it that the government still cant help the black population?

I have a question. South africa has a booming economy and is a developed country yet how is it that the government still cant help the black population?

the black population is 80% of the country...if u knew he backlog the government is facing...in helping all of them...the previous government left them with a huge task...if one can first fully understand that then you can try and understand no matter how much money we have wont solve the problems and mess left behind after and before1994

I have a question. South africa has a booming economy and is a developed country yet how is it that the government still cant help the black population?


I think they're definitely trying to alleviate the problems faced by the poor peeps of sunny SA, but the problem is most certainly not going to be solved overnight. I think another 20 years, provided the economy remains on it's growth rate and we remain politically stable, one will start to see major changes happening.

Yep, one also needs to take into consideration that the country experienced negative growth before 1994 with a majority, illiterate rural population. Reversing the growth pattern and getting where we are now, have been pretty extraordinary & exceptional. The growth (eventhough good, is still not enough to lift the majority out of poverty very soon). Things will only get better though, as the rate is picking up. The government is aiming for a growth rate of at least 6% over the next few years to eradicate unemployment and poverty within the next 10 years.

'Economic growth already above 6%' (Yay!)


Johannesburg - South Africa's gross domestic product (GDP) was under-estimated between 10 percent and 20 percent and the economy had already been growing at more than 6 percent year-on-year (y/y) for several quarters, T- Sec economist Mike Schussler has said.

Schussler was presenting the findings of the second South African Employment Report commissioned by trade union federation UASA.

This showed that formal non-farm payrolls (NFP) increased by 8.8 percent in the year to end August 2005. Economists use a rule of thumb that employment growth is half real GDP growth.

South Africa's real GDP growth as measured from the expenditure side by the South African Reserve Bank was 6.2 percent y/y in the second quarter from a 5.3 percent y/y gain in the first quarter.

The Statistics South Africa (Stats SA) seasonally adjusted production data show that real GDP only grew by 4.5 percent y/y in the second quarter from 4.4 percent y/y in the first quarter.

The differences between the production and the expenditure sides are normally resolved in the November 22 benchmarking exercise.

The high growth in employment is supported by data from the motor manufacturing sector and job advertising space.

The number of persons employed by the South African new vehicle manufacturing industry rose by 10.3 percent since January 2004, the National Association of Automobile Manufacturers of South Africa (Naamsa) said on October 24.

The Sunday Times job advertising space has risen by 24.2 percent y/y in the first six months of 2005 compared with a 9.1 percent y/y increase in the first six months of 2004.

"This view that the size and growth rate of the economy is being under- estimated is fairly general and lately we even have the Treasury commenting on this," Schussler said.

Various indicators such as new car and cement sales show that growth is accelerating, the Treasury said in its Medium Term Budget Policy Statement on October 25.

Economists point to the increasing divergence between Value-Added Tax (VAT) receipts and nominal value-added GDP estimates made by Stats SA as a reason for expecting an upwards revision to previous GDP growth estimates.

In the past, the percentage point difference between the two measures was less than two percentage points, but over the past two fiscal years, which end in March, the gap has widened dramatically.

In the fiscal year ended March 2000, nominal GDP grew by 10.6 percent, while VAT receipts increased by 10.8 percent.

In the fiscal year ended March 2003, the respective increases were 13.9 percent and 14.9 percent, but in the fiscal year ended March 2004, nominal GDP only grew by 7.0 percent compared with a 15.0 percent rise in VAT, while in the fiscal year ended March 2005,
the respective growth rates were 10.1 percent and 21.6 percent.

This means the economists have increasingly turned to other indicators of accelerating growth such as cement sales, which have increased by 10.2 percent in volume terms for the year ending June 2005, driven by the strong growth in investment in residential buildings.

Stats SA last week reported that the value of recorded building plans passed by larger municipalities during the first eight months of 2005 increased by 50.9 percent from 27.842 billion rand to 42.005 billion rand compared with the first eight months of 2004.

New vehicle sales have enjoyed strong growth with unit sales increasing by 26.1 y/y for the year ending June 2005, while real retail trade sales increased by 8.4 percent y/y and real wholesale trade sales increased by 11.2 percent y/y over the same period. - I-Net Bridge

Published on the web by Business Report on November 3, 2005.

(Just a little FYI)

According to the Economist 2005

These are the World's fastest Economies in terms of GDP growth

You will be suprised

The world’s fastest GDP growth %

1 Equatorial Guinea 16.02
2.Azerbaijan 14.02
3.Chad 14.04
4.Georgia 12.05
5.Angola 11.96
6.Iraq 10.3
7 Sudan 8.38
8.Algeria 8.29
9.China 8.1 (China is the world's fastest growing large economy)
10 Kazakhstan 7.9

I wouldn't say "yay" yet.

The SA economy will see a slowdown in 2006

I think that the talk of 6% growth is wishful thinking. I don't think it will happen until another 15-20 years given the structural deficiencies in the economy most severe of which is the chronic skills crisis and an inflexible labour market. I'm afraid that the boom is not going to happen yet because of external factors in the global economy with the Eurozone growing at barely 1% GDP this year and next and the uncertainty in the US which is seeing a sharp slowdown to below 3% growth.

As an emerging economy, SA's economy grew by 3.7% last year with the expectation that GDP will grow a tad faster at around 4.0%. This is still too slow to generate resources to tackle poverty and widespead unemployment. And given the external shocks caused by the oil price, SA's rising trade and current account deficits, a slowing real estate market, rising consumer debt and slower retail and car sales, I think that GDP growth for 2006 will slow considerably to below 3.0% GDP and maybe slightly higher at about 3.0 - 3.5% in 2007-8. Hardly a boom when considering that the Asian Pacific economies are at twice that growth rate while SA's GDP growth still remains below that of most other African countries.

I think that the rand is overvalued by at least 25% and is causing the slowdown in the SA economy reaking havok on most export industries. The implication is that there has been significant job losses taking place in these sectors, mining, agriculture, manufacturing, and engineering. Even tourism, which along with financial services, is the most promising job creators, saw a net loss of about 25,000 jobs last year as a result of an overvalued rand cutting the flow of high-spending European tourists to SA. The number of overseas tourists visiting SA stagnated at 0.2% growth in 2004 compared to a global tourist arrivals average of above 8%. This is unfortunate given that the real unemployment rate remains above 40% and the economic growth right now is largely jobless. The rand must come down or there will be more serious problems ahead.

What was the reason that the number of tourists to South Africa fell?

Pieter,
There are several factors for the malaise in SA's tourism sector. The most serious one is the rand, which is at least 25% overvalued and thus making SA too expensive as a tourist destination for foreign tourists especially when compared to Kenya and Tanzania which are benefiting at SA's expense right now with their arrival numbers up over 30% last year. SA hotel rooms are too expensive compared to the quality one can get elswhere including Asia.

Another concerns the persistent levels of violent crime which affects SA's perception as a safe destination. There were more murders in SA last year than in the whole US, about 18,000 according to SAPS.

Last, I think that Marthinus van Schalkwyk, the NNP tourism minister, is a dud who doesn't know what he is doing. He's appointed former Nat lackeys to the tourism ministry. I think that Valli Moosa, the previous ANC tourism minister was superb. At least he knew what he was doing. "Kortbroek" must go.

Here's a quote found from a newspaper that I found interesting.

"Retired politician Helen Suzman, always a fierce opponent of the Nats, said the announcement(When NNP merged with ANC Last Year) came as no surprise. "They [NNP leaders] are after a few more perks. They are going wherever they think they will get rewards and positions. They have no principles whatsoever," she said."

I think "Shortpants" knows what he's doing, no one needs to be rocket scientist to know that tourism is a very vital part to the economy of South Africa, and it needs to be taken very seriously.However, I wouldn't be suprised if he and those creeps (NP Imperialists) are trying to sabatoge it, due to the fact that they are very bitter over the death of their evil party. Who was the genius that thought of appointing him, anyway? You're totally right Valli Moosa was doing a much better job.

But shortpants or no shortpants, I think that crime is a major issue that cannot afford to be downplayed. Yes, crime has gone down, but not enough. And most people outside of South Africa are not really aware of it, and many are still afraid to go. But you can't talk about tackling crime without tackling economic problems.

However, to steal the show, economically, South Africa must do something really different. South Africa must embark on some kind of major mega project that will put it on the front page. South Africa is working towards it but I feel it could be doing so much more when compared with other countries. As a tourist destination, what makes South Africa a better place to be than say Dubai, Bangkok, Sydney, or any European city. What do they have that South Africa doesn't have? Or vise versa.

I also agree with you that it would be a good idea to reduce the rand. But I feel it would also be good for the major companies to invest in projects that would kidnapp the Western tourists attention, and bring him to South Africa, kind of like what Dubai is doing. Maybe they should exand the UShaka Marine world and make it the worlds largest water park. If they get the Africa theme park thing going they should try to make it the world's largest theme park, or build the world's tallest building somewhere or anything that will bring South Africa to the forefront of the worlds attention.

I have a feeling that South Africa's economy will improve after 2010, but it also really needs to get its act together (especially with the Gautrain) otherwise it will turn into a great disaster.

It's so funny, just when we get all these wonderful opportunities, politicians with their big ego's, go out of their way to f*&k things up. I.e Raymond Ackerman could have man alone, won the Olympic Bid 2004 for Cape Town. But the ANC had to grab it away from him portraying SA as a state in need of charity!
It was reported that SA has the best chance of getting Rugby WC 2011. It's only draw back> its political infights in Rugby circles threaten to mess it up.
Now it seems like the Gautrain is turning into a debacle. So much so, that it was mentioned that Germany might play host again, should SA not get things in place!

Two sides of the GDP debate:

Tale 1:

Official data underestimate growth in jobs and GDP - union

By Andile Ntingi

Johannesburg - South Africa is creating more formal sector jobs than the official statistics show, indicating that the local economy is larger than initially thought, according to a new report from the United Association of SA labour union.

Released yesterday, the latest SA Employment Report says that about 30 000 formal jobs are being created monthly and that the total number of workers in the formal labour market could exceed 9 million, compared with official figures of 8.3 million.

The report says Unemployment Insurance Fund (UIF) data show that over 871 711 new employees were registered between January 2004 and August 2005, although some of these were late registrations.

By the end of August, about 6.5 million people were registered with the fund. UIF data exclude public servants, contract foreign workers, pensioners, commission-earning employees, learners, self-employed people and domestic workers. About 1.2 million people work for the state.

Presenting the report, Mike Schussler, the chief economist at Tlotlisa Securities, said it was clear that the gross domestic product (GDP) was being underestimated as workers in some small enterprises and the informal sector were still unaccounted for in official employment numbers.

"The growth in employment and increase in tax collections suggest that the South African economy is bigger than initially thought," he said.

Schussler said annual employment growth could be galloping along at well over 4 percent, reflecting an expansion rate of between 4 percent and 4.5 percent in the economy.

He added that if the government's target of raising economic growth to a sustainable 6 percent was realised, the economy could create more jobs.

"At a 6 percent growth rate, South Africa could create 40 000 jobs a month in the formal sector, but there will always be a skills constraint that comes into play," said Schussler.

The report also appeared to back jobs figures published by Statistics SA in September, which showed that the number of workers in the formal non-agricultural sector jumped by 131 000 in the second quarter after shrinking by 152 000 in the first.

Earlier this week, the trade and industry department said the number of entrepreneurs had swelled to 2.3 million in March from 2.1 million in September 2003, partly due to strong domestic spending fuelled by a series of interest rate cuts since mid-2003.

Goolam Ballim, Standard Bank's group economist, said recent Reserve Bank warnings on inflation were intended to send signals to workers not to demand higher wages and manufacturers to refrain from raising prices lest interest rates rise.

"Standard Bank believes the Reserve Bank is talking tough so as not to act tough," said Ballim.

Published on the web by Business Report on November 3, 2005.
--------------------------------------------------------------------------------
© Business Report 2005. All rights reserved.

Tale 2:

Inside statics

GDP growth debate needs reliable data
November 3, 2005

By Pali Lehohla

Controversy and debate often accompany the measurement of economic growth. In all countries, gross domestic product (GDP) is a key indicator of progress and development, and is invariably the object of contestation.

In South Africa, the level of the GDP is closely linked to key national programmes for job creation, poverty alleviation and improved service delivery. The government's target of raising GDP growth to 6 percent a year from its current rate of 4.8 percent (in the second quarter) has fuelled debate over economic growth and its measurement.

For example, there has been discussion over how increased VAT collections reflect on economic growth
"Controversy has been attached to the measurement of retail trade"
. Some analysts have argued that the increased VAT collections necessarily demonstrate an underestimation of growth in GDP.

However, a rise in VAT collections can be the result of at least two different factors:


Increased efficiency by the tax authority in collecting VAT, enforcing compliance and bringing defaulters into the VAT net. New collection efficiencies would not relate in any direct way to increased economic activity or higher growth; and


An increase in economic activity and hence growth. It is probable that both of these elements apply to the current rise in the amount of VAT being collected.

A number of data sets are used in quarterly and annual GDP estimations. As newer data become available, so GDP estimations are routinely revised.

VAT collections do not feed directly into GDP estimation, although changing levels of VAT receipts are an important control factor against which changes in GDP can be assessed.

Information from two data sets directly influencing GDP estimation has recently been published by Statistics SA. Last week, the results of the 2004 economic activity survey (EAS) were released, while yesterday saw the publication of the latest data on retail trade sales.

The purpose of the EAS is to derive a set of measures of industry performance based on information available from the financial accounts of enterprises.

The survey is designed to give information on selected income and expenditure items, and the consolidated balance sheet. Results of the survey are used to compile estimates of annual GDP and its components.

The EAS reported that the total turnover of all industries for 2004 was estimated at R2 578 540 million, an increase of 6.2 percent compared with 2003. All industries except mining and quarrying reflected an increase in turnover.

The largest percentage increase of 19.6 percent was reported in community, social and personal services (excluding government institutions); followed by electricity, gas and water supply (10.3 percent); transport, storage and communication (10.1 percent); construction (8.1 percent); trade (6.7 percent); manufacturing (5.6 percent); and real estate and other business services (excluding financial intermediation and insurance) (2.7 percent).

The mining and quarrying industry reported a decrease of 2.1 percent. However, capital expenditure on new assets decreased by 5 percent between 2003 and 2004.

The largest decrease of 24.1 percent was reported in community, social and personal services; followed by mining and quarrying (minus 17.8 percent); construction (minus 17.6 percent); real estate and other business services (minus 5.7 percent); manufacturing (minus 5.6 percent); and transport, storage and communication (minus 1.9 percent).

The electricity, gas and water supply, and trade industries spent 40.1 percent and 11.7 percent more, respectively. Stats SA's monthly retail trade sales report is also an important source for estimating overall economic growth.

Some controversy has been attached to the measurement of retail trade, with Investec Securities having questioned the accuracy of Stats SA's data.

Investec compared the official statistics with data from members of the Retail Liaison Committee (RLC), and concluded that the official data did not capture growth in retail sales adequately.

However, retail sales data from the RLC are not directly comparable with the official statistics. One reason is that some RLC members conduct business outside of South Africa, and the data published do not separate the contribution and growth of South African and non-South African activities or sales.

Yesterday Stats SA released August figures for retail trade sales. According to these results, retail trade sales have resumed an upward trend cycle following a levelling for the first half of 2005.

In real terms, retail trade sales at constant (2000) prices for June to August increased by 5.6 percent compared with June to August 2004.

Similarly, retail trade sales at constant prices for January to August increased by 5.9 percent from a year earlier. Retail trade sales for August increased by 7.2 percent compared with August 2004.

In the vibrant debate over South Africa's economic growth rate, a range of stakeholders - including private sector institutions, economic analysts and trade unions - can contest and assess economic strategies and developments on an informed basis.

However, many of the questions can only be answered when official GDP estimates for the third quarter are released towards the end of November.


Pali Lehohla is South Africa's statistician-general and the head of Statistics SA. For more information on Stats SA and its statistical outputs, including the economic activity survey and retail trade sales, visit www.statssa.gov.za, or contact user services on (012) 310-8600

http://www.busrep.co.za/index.php?fSectionId=553&fArticleId=2977993

I agree 100%, I typically stay in Ritz carlton, Four Seasons, Peninsular and if I have to intercon when I travel and when we go on holiday and havenig stayed in Honkers, Bangkok, Beiruit, Toronto and even adelaide this year in good 5 star hotels, I shudder when I see what is beimg asked in the good hotels in SA. I couldent believ what was asked to stay at the Hilton Durban etc.Considering the level of service in SA (not great) and the value for my buck, I would deffinatly do more trips to places where the $ goes further.
the rand is deffinatly over valued compared to major currancies and while it helps with the preseption of the situation to have a strong currency, ithe realiuty is a strong rand kills exports and does not instil investor confidence. If I have a billion $ to build a smelter, I can get more building it in Oman or kenya than in SA due to the over valuation of the rand.
Oh and beers are now expensive in SA compared to a lot of other places, Me thinks its the typical SA situation of killing the golden goose


Pieter,
There are several factors for the malaise in SA's tourism sector. The most serious one is the rand, which is at least 25% overvalued and thus making SA too expensive as a tourist destination for foreign tourists especially when compared to Kenya and Tanzania which are benefiting at SA's expense right now with their arrival numbers up over 30% last year. SA hotel rooms are too expensive compared to the quality one can get elswhere including Asia.

Another concerns the persistent levels of violent crime which affects SA's perception as a safe destination. There were more murders in SA last year than in the whole US, about 18,000 according to SAPS.

Last, I think that Marthinus van Schalkwyk, the NNP tourism minister, is a dud who doesn't know what he is doing. He's appointed former Nat lackeys to the tourism ministry. I think that Valli Moosa, the previous ANC tourism minister was superb. At least he knew what he was doing. "Kortbroek" must go.

read, when mandela goes by Lester venter. Brilliant book and its prequal in the shadow of the rainbow (harder to read , too technical) and then see what SA has in store for the future

I agree 100%, I typically stay in Ritz carlton, Four Seasons, Peninsular and if I have to intercon when I travel and when we go on holiday and havenig stayed in Honkers, Bangkok, Beiruit, Toronto and even adelaide this year in good 5 star hotels, I shudder when I see what is beimg asked in the good hotels in SA.


15 nights aboard the Queen Mary II (which includes every luxury one could think of and brilliant service!) was the equivalent of 13 nights in the 4* Protea Wanderers Hotel, which includes a bed and a breakfast.

prices are indeed becoming mad

read, when mandela goes by Lester venter. Brilliant book and its prequal in the shadow of the rainbow (harder to read , too technical) and then see what SA has in store for the future


Do you think South Africa has a bright future?

i deffinatly do, thats why im so passionate about the place and have invested hevily there. My biggest concern is the skewered politics (I know the ANC has done wonders, however the way certain issues are glossed over could be the undoing of the future for all)
My examples of problems are
Redistributiion of land-if there is a willing byer /willing seller so be it, but to expropriate a commercial farm, carve it up into sustainable allotments helps no one and in the worlds eyes (the gauge for investment) seems like Zim part II
Afermitive action-(not to start this agian) but in my personel opinion, you cant have equality with descrimination
Crime- not such a big topic as there is crime the world over, but African crime seems more violent and brutal compared to say OZ. carjackings are big in OZ now , but no one is murdered , might be shot in the leg or something like that
Nepotisim- My PET HATE, jobs for mates and the continuing cycle of incopotent/corrupt officaila loosing a PM job but then ending up as anambassador somewhere cussie. Not acceptable , if you are fired then you should have no future in a governemt for the people by the people.
I think the government has sound fiscal policies, is slowley learing from mistakes but is to afro centric. How many whites, indian and colourds are there in decition making positions, MPs(ANC ones) and mayors etc. Seems a purge of everyone not alligned to the political party of the day al la socialist thinking has rid SA of good non black administrrators who will take thier skills else whare ultimalty to the detriment of the people.
When Mandela goes was aprofound book for me to read and I see history comming true in the book, 2015 will see a dawn of a new black political thinking where rase and the past will be forgotton and the future will be all important

Sounds like a pretty interesting book(When Mandela Goes). I'll have to read it sometimes. Yes, I also have a strong hatred for nepotism, but my biggest pet peeve is corruption, there should be an absolute zero tolerance for corrupt officials. They should be made examples of. Horrifying examples, if I had my own they would all be shot, but hey thats my opinion. South Africa is way too precious and has no room for it.

too true mate

Kevin O’Grady and Rob Rose

AT LEAST 1000 new jobs are being created in SA every day — enough to absorb all new entrants into the labour market, a new study shows.

The findings suggest that jobs are being created at a faster rate than is reflected in the official employment figures and that the economy may already be growing at the 6% annual rate sought by government, as it tries to reduce the rate of unemployment.

"The South African economy is a heck of a lot bigger than most people expected," T-Sec chief economist Mike Schussler said yesterday, as he released his South African Employment Report, commissioned by trade union Uasa.

The study delves into the records of the Unemployment Insurance Fund (UIF), which are not used by Statistics SA in the calculation of the official unemployment rate of 26,5%.

Schussler said UIF records show 871111 new commercial employees registered with the fund between January last year and August this year — or about 46000 new registrations every month for the past 20 months.

Adjusting the figure for likely late registrations reduced this to about 30000 a month, enough to cater for the 360000 new entrants into the labour market every year.

Factoring in workers not covered by the UIF’s "commercial employees" category, such as domestic workers, public servants, the self-employed and those who earn only commission, suggested there were as many as 9-million people with jobs in SA.

This was much more than the "biggest estimate to date of 8,3-million, according to (Stats SA’s) Labour Force Survey", Schussler said. "This substantially changes the picture of the South African labour market."

The new numbers could help explain "what has happened to new car sales, why house prices are at these ridiculous levels, why three times as many people are flying through Johannesburg International Airport, why VAT collections are so much higher than expected," he said.

He was referring to an array of data and anecdotal evidence that some economists have already said points to much faster economic growth than the 3,5%-5% reported by Stats SA during the past year.

"We’ve underestimated the economy for far too long and we must start getting the growth rates right," Schussler said.

Although the job-creation rate was encouraging, it was not enough to achieve government’s goal of halving unemployment by 2014. To do this, 60000 jobs needed to be created every month, he said.

Raymond Parsons, convener for the National Economic Development and Labour Council, said that Schussler’s research "underscores why it is essential to have better official data on employment trends, which have been notoriously unreliable".

However, he warned that while it was plausible that overall growth had been underestimated, this did not diminish the need to put more muscle into creating new jobs.

Congress of South African Trade Unions chief economist Neva Makgetla said Stats SA’s quarterly employment statistics, which exclude informal and farming jobs, showed an increase of 30000 jobs a month in the second quarter of this year — but it was sustaining this growth that was vital.

She also warned against relying too heavily on the UIF data "rather than the Labour Force Survey for the year to March, which showed no growth in formal sector jobs".

how many jobs are permanent and how many part time. In oz the government showed low unemployment but the ratio of temp to permanent was very dispreportional. temp also does not attrect the same labour protection and rightes as a perm emplyee so its a cop out by companies expanding

The latest by SA's highest ranking Statistician on how GDP is calculated:

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GDP data benefit from continuous improvement plan
November 24, 2005

By Pali Lehohla

Gross domestic product (GDP) estimates compiled from both the production and income approaches rely on a variety of economic and social data sources. These data sets cover economic activities in the various industries (agriculture, mining, manufacturing, trade and so on) of the economy.

Over the past few years, Statistics SA has engaged in a continuous improvement strategy for its economics statistics. This has involved an improvement in the quality of basic economics statistics as well as the GDP estimates derived from these statistics.

The benchmarked and rebased GDP estimates that were published at the end of November 2004 were an output of this strategy
"The use ... of a single data set cannot provide a solid basis for criticism"
. Economic activity is measured through surveys that differ in frequency.

Short-term surveys entail monthly and quarterly data collection, while long-term measurement is undertaken bi-annually, annually or sometimes even less frequently.

The annual economic activity survey (EAS) is one of the most important long-term tools used for the estimation of annual GDP. In addition to the EAS, the improvement strategy also makes provision for in-depth coverage of the total economy over a three-year period through an instrument referred to as a large sample survey (LSS).

More detailed than the EAS, the LSS is the data set from which the cost structures of the various economic industries are sourced.

While data sets such as the LSS and EAS form the basis of the components of the annual GDP estimates, short-term samples such as the quarterly employment survey (QES) are used as an indicator for a specific variable, for example, compensation of employees.

Through the QES, the quarterly trends are established until the next annual estimate of the same variable is available through an annual data set (EAS and/or LSS). National accounts estimates rely on a combination of short- and long-term surveys.

Not only are different data sets used for the compilation of GDP estimates, but these data sets are also assembled through different collection methods. Most economic data sets are collated through postal surveys, where a questionnaire is mailed to the respondent, who completes it and then returns the document via a business reply envelope.

In a second collection method, direct price collections, an enumerator visits a retail outlet and collects the prices of the required products. Other data is sourced from administrative records, including year books, annual reports or government records such as, for example, the number of building plans passed and completed.

Data that feed into GDP estimates are also collected through household surveys such as the income and expenditure survey, and the labour force survey. These are conducted by field staff employed and trained by Stats SA.

GDP estimates are compiled through an input-output framework, as this allows for the comparison and confrontation of all data sets in a comprehensive and systematic manner. It also combines the three different approaches (production, income and expenditure) for GDP compilation. This is why the use and analysis of a single data set cannot provide a solid basis for criticism of the complex and multisourced estimation of GDP.

Comparison and confrontation of new data, as well as routine revisions to economic data sets (both short- and long-term) will culminate in the publication of the latest GDP estimates on November 29. This will include revised annual and regional estimates for 2002 to 2004 as well as quarterly estimates up to the third quarter of 2005.


Pali Lehohla is South Africa's statistician-general and the head of Stats SA. This is the last in a series of articles on the measurement of GDP, culminating in the release of the latest GDP estimates next week. For more information on Stats SA, go to www.statssa.gov.za, or contact user services on (012) 310 8600

http://www.busrep.co.za/index.php?fSectionId=553&fArticleId=3007526

Third quarter GDP expected at 4.4%
Reuters

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Treasury sees faster economic growth


SA’s economy is likely to have slowed in the third quarter, a Reuters poll showed on Friday, but sweeping revisions to annual growth data also due next week cast doubt over the expected outcome.

Growth in gross domestic product (GDP) is seen to have slowed to 4.4% on a seasonally adjusted and annualised basis, from 4.8% in the second quarter, consensus forecasts from 14 economists showed.

But analysts say they are shooting in the dark given that Stats SA will also revise annual growth rates for 2002-2004, along with the first two quarters of 2005, when it releases the third quarter data on Tuesday.

This is normal practice at this time of year.

Given a raft of comments from Treasury officials suggesting that SA’s economy can achieve and sustain a much faster pace of growth, the data may show that the economy is growing faster than expected, the analysts say.

"All the forecasts are in question because if the base year changes, the numbers will be different," Rand Merchant Bank economist Ettienne le Roux said.

"One would expect that any revision would be on the upside as other sources of data suggest the economy could be bigger and growing faster than what official data tell us," he added.

Growth in the continent’s biggest economy has accelerated steadily since the demise of apartheid in 1994, with the average annual expansion rate quickening to 2.7% over the past decade, from less than 2% beforehand.

It has also experienced the longest phase of sustained growth on record, expanding by 28 consecutive quarters.

But the pace still tends to lag many other emerging markets, which means that foreign direct investment inflows have also remained meagre, although they have picked up in the past year.

In 2004 the economy expanded by 3.7%, quickening from 2.8% in 2003. The Treasury expects growth of more than 4% over each of the coming three years, and has a target of 6% annual expansion by 2010.

"We are on the right track. We have no doubt that this economy has the ability to sustain growth of 6% plus. This economy is very strong and it’s pumping," Treasury Director Lesetja Kganyago told a business breakfast on Friday.

His comments reinforce those of Deputy President Phumzile Mlambo-Ngcuka, who said two months ago that tax collection data suggested the economy was growing faster than believed.

Interest rates at their lowest levels for more than 20 years, personal income tax relief of R74bn since 1995 and the emergence of a growing black middle class have all helped to boost domestic demand — the main engine of growth.

But so far the supply or output side of the economy has failed to meet that demand, resulting in a growing tide of imports and hampering the manufacturing sector, which accounts for more than 16% of the economy.

Sustained strength in the rand currency has been blamed for the trend, but officials have repeatedly said this is unwarranted. SA’s glaring skills shortage is a more obvious and intractable issue.

Nevertheless, the economy has embarked on a massive infrastructure spending drive in a bid to boost growth and reduce a jobless rate of 26.5%.

Brait economist Colen Garrow said the multiplier effect of this step on the broader economy could be underestimated. He forecast growth of 4.6%, quarter-on-quarter in the three months to September.

Great news although I think that growth is still being underestimated due to problems at stats SA.

South Africa will require some R171-billion over the next decade in energy infrastructure spend, according to Development bank of Southern Africa (DBSA) energy sector specialist Jean Madzongwe.

Addressing delegates at this year's DBSA Knowledge Week in Midrand, she said that this money would need to be focused on upgrading existing liquid-fuels infrastructure as well as investing in renewable energy sources.

She added that there is a potential for eGoli Gas to expand beyond its borders and go countrywide.

Currently, renewable energy accounts for some 16% of the power produced, while coal provides 70% of South Africa's energy supply.

South Africa has coal reserves of some 55-billion tons, the fifth largest reserve base in the world.

It also has around 40-million barrels of oil, with a potential of 5-billion barrels.

Natural gas reserves are at 1,3 tcf, with a potential of 25 tcf and some 261 000 tons of nuclear power.

Hydropower only provides some 300 MW of power.

Madzongwe makes the point that much of the renewable energy South Africa could benefit from is still at an early research and development stage and, as a result, is still cost prohibitive.

Currently, the Central Energy Fund is looking into standards that would be internationally acceptable in this sector.

But South Africa faces severe electricity challenges, with the peaking power crunch due in 2007/8, and a current population of over 40-million people who need power.

Electrification is at about 74%, with an average of 450 000 households being connected each year, a figure that has slowed in recent years.

Currently, she said, there are insufficient funds for the provision of electrification to all, as the backlog stands at around 3,3-million households.

The worst of this backlog is in provinces such as Kwazulu-Natal, the Eastern Cape and Limpopo Province.

And, with a 3,3% growth in demand each year, between 1 000 and 1 500 MW of power needed each year to deal with the capacity crunch, more innovative ways of dealing with the problem have to be sought.

Some R1,2-billion has been earmarked for this in the 2005/6 financial year and already Eskom has indicated that it will be spending around R84-billion on electricity generation.

Counting in Eskom's mothballed stations, a biomass station and a wind-powered station - all of which still need to be commissioned - the country has a local generation capacity of 43 064 MW.

Already Eskom is looking into a 1 000 MW open-cycle gas-turbine plant, as is the Department of Minerals and Energy.

The DME is currently in the process of an independent power-producer plant, to be located at the coast.

Firms, such as Anglo Platinum, are looking at cogeneration and are using mine water and shafts to power turbines.

The Pebble Bed Modular Reactor, in experimental stage, will see units of 150 MW being built.

These, says Madzongwe, could be exported.

But there are challenges in the sector, including the need for cost-reflective tariffs and a culture of nonpayment.

Another challenge is a lack of capacity at municipal level, leading to insufficient maintenance.

There are, however, opportunities for private-sector involvement.

World Bank sees 5% SA growth in '05
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Growth in South Africa's economy looks set to accelerate to 5% this year in an upswing which is having tremendous impact on the rest of the world's poorest continent, the World Bank said yesterday.

Ritva Reinikka -- country director for the institution in Botswana, Lesotho, Namibia and South Africa -- said research showed that the spillover effect of prosperity in Africa's powerhouse was greater than elsewhere in the world.

"If this is really the case, economic growth in South Africa is important for poverty reduction on the continent," she said.

"This means that reaching (the official target of) 6% annual growth is not just important for this country but for the rest of Africa," she told Reuters in an interview.

Reinikka was referring to an International Monetary Fund study which showed that a one percentage point increase in South Africa's economic growth was associated with gains of between 1/2-3/4 percentage point over the whole of sub-Saharan Africa.

This was surprising as elsewhere in the world the knock-on gains of an accelerating economy amounted to just 0,4 percentage points and were confined to neighbouring countries, she said.

The study completed earlier this year was based on data for the period 1960-1999, but reasons for the link are speculative.

Reinikka said South Africa was on course to achieve the government's target of 6 percent annual growth by 2010, although steps were needed to remove officially identified constraints, which include currency volatility and reform of the regulatory environment.

"It is achievable and should be achieved. It is welcome that the government has adapted a more pro-growth strategy," she said. South Africa plans to spend 320 billion rand on infrastructure over the coming years in its efforts to boost growth and reduce a steep jobless rate of 26%.

Reinikka said that revised data from Statistics South Africa already showed the economy would probably grow by 5 percent this year -- well beyond official forecasts for a 4,4% rise.

The data released last week also revised growth in 2004 up to 4,5% from 3,7% previously -- its fastest pace since 1984, when the economy expanded by 5,1%.

Achieving a "stable and competitive" exchange rate was crucial because of the impact which the rand's volatility had on South Africa's exports, Reinikka said.

She did not say what level would be appropriate for the unit but pointed out that its depreciation so far in 2005 was good news for exporters, after three consecutive years of gains.

"Export growth is absolutely vital for growth and jobs -- this is an issue," she said. "The economy cannot grow on the basis of domestic demand alone."

South Africa's economy has been driven mainly by domestic demand over the past couple of years, after the central bank reduced its key repo rate by 6,5 percentage points to 7.0 percent, driving commerical lending rates to near-record lows.

The rand rallied to a three-month peak of R6,28/dollar yesterday, extending a recent rally spurred mainly by surging prices for key South African commodities like gold and platinum.

But its resilience over the past year has taken a mounting toll on exports, eroding corporate profits and prompting job cuts. World Bank research showed that during 2004 imports amounted to 27% of GDP while exports 22%, Reinikka said.

Creating more small and medium-sized enterprises was also key to boosting growth and employment in South Africa, where the sector contributed 42 percent of the country's GDP, she noted.

South Africa's skill shortage was an issue but one which could probably be overcome, she said.

this is very good news. By 2010 this country is probably going to be so different and 1st world.

Maintenance as cricical as R372bn infrastrucutre spend - DBSA
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A newly-released study into the state of South Africa's infrastructure calls for as much priority to be given to the maintenance and refurbishment of existing infrastructure as is currently being paid to the development off new energy, transport, telecoms and water projects under the R372-billion Accelerated and Shared Growth Initiative (Asgisa).

The report, entitled 'Infrastructure Barometer 2006', which was released on Thursday by the Development Bank of Southern Africa (DBSA), warns that the sustainability of existing as well as new infrastructure would be placed in peril, unless urgent attention was given to the issue of life-cycle maintenance. It argued further that the mere provision of infrastructure would “never be a sufficient” condition for growth and development and that effective infrastructure investment would depend materially on the development of strong and appropriately-skilled institutions, effective regulation, long-term, economy-aligned planning, and the efficient use of infrastructure.

The 300-page study calculated the maintenance backlog in the electricity distribution industry alone at R5-billion a year, and suggested that the level of recurrent investment in water would need to rise from R80-billion to R120-billion a year to address the shortfall. Figures for transport and telecoms were more complicated to compute, but the report points to serious maintenance backlogs for South Africa's railways, provincial roads and harbour infrastructure.

Speaking at the release of the report, outgoing DBSA CEO, Mandla Gantsho, who would take up office at the African Development Bank in Tunisia in June, said that Asgisa had placed infrastructure delivery at the forefront of South Africa's ambition to reach a six per cent gross domestic product growth rate by 2010. He added that, as an infratrucutre-focused organisation, DBSA intended to play a leading role in shaping the way infrastructure was delivered.

“The importance of appropriate and sustainable infrastructure as a foundation for socioeconomic development, and particularly in improving the quality of people's lives, is no longer a matter for debate. The focus is on meeting the many challenges of delivery facing South Africa and other countries on the continent,” Gantsho said.

The editor of the report, Marié Kirsten, said it addressed, among other issues, the question of the current realities governing decision making, a series of complex strategic challenges which include meeting South Africa's rapid growth in energy needs, the maintenance of South Africa's ageing infrastructure stock and dysfunctional institutional arrangements.

The report also introduced a model to assess the financial sustainability of reducing South Africa's municipal infrastructure backlogs and indicated that, in addition to the estimated R140-billion in capital expenditure (2005 prices), municipalities would have to increase income by 50% over the same period to cover the operation and maintenance of the new infrastructure.

This, the authors suggested, would exacerbate the current trend where municipalities' operational costs were far outstripping revenues.

They argued, therefore, that local government should count the cost of higher levels of service before moving towards implementation, even if this required a revision of targets and scaled-back delivery.

Black middle class booms
26/03/2006 14:33 PM

Johannesburg - Post-apartheid South Africa has experienced exponential growth in its black middle class with a new study showing the birth of a powerful consumer market.
According to the most comprehensive study to date on the emerging black middle class in South Africa, the group is responsible for nearly a quarter of the annual cash buying power of R600bn.

"There were huge surprises for the average marketer in this study," said John Simpson, director of the Unilever Institute at the University of Cape Town which conducted the research.

"The one is the sheer size of the group and then it also accounts for 23% of total consumer power in this country, which has been achieved in a very, very short period and continues to grow very rapidly indeed," he added.

The so-called "Black Diamond" marketing survey found the new black middle class to be two-million-strong or about 10% of the black adult population.

"It's taken off in a space of 10 or 15 years," said Simpson, referring to the end of apartheid in 1994 when Nelson Mandela became the first democratically-elected president.

"We've had political intervention which has suddenly unleashed opportunities for a group of people who normally would have been part of a vibrant middle class," he told AFP.

Cultural paradox

The report said that under apartheid, "black society was a single, monolithic, classless society with limited, menial jobs, no home ownership and under-educated".

But the end of apartheid caused a "dramatic disruption" with "enormous and immediate effects - access to jobs, finance, credit, homes, education".

The research was compiled from 750 face-to-face countrywide interviews lasting about 50 minutes in November and December last year.

Research project leader Refiloe Mataboge said the black middle class was a very complex group to understand because they lived in two worlds - modern and traditional.

"What makes South Africa's scenario more intricate is the cultural paradox," she said.

"There exists a 'pull-back' to cultural roots that is often in contradiction towards westernisation."

Some 86% of respondents said they still believed in the practice of "lobola" - a payment to the father of the bride - while 75% believed in slaughtering cows to thank their ancestors.

Growing at 50% a year

Nearly half of them said they believed in the power of traditional healers and 34% said they would consult a traditional healer before going to a medical doctor.

Almost 90% said it was their duty to "take care of my parents after I have left home".

"There is a very strong cultural manifestation which is very unusual," said Simpson. "It is also quite common to have one member of a family in the middle class while the rest is dirt poor."

Three-quarters of the black middle class, partly defined by their average monthly R5 900 income, still live in townships but in formal houses with electricity and hot water.

Simpson said although South Africa's poverty figures remained sky-high with more than half of the population living below the breadline, the study showed that the black middle class was growing at about 50% a year.

"The growth of civil servants is very significant," he said, adding that access to proper education and affirmative action have opened many doors for blacks.

"But there are very, very few black South Africans we would regard as being upperclass and BEE has benefitted a minute number of South Africans," said Simpson, referring the government's black economic empowerment drive to turn the country's mainly white-held wealth into black ownership.

Building boom to boost jobs

Johannesburg - Construction is seen as a major contributor to economic growth this year and going forward, as the country earnestly sets about improving its transport, power and water infrastructure and also readies for the 2010 Soccer World Cup.
Economist Lumkile Mondi says the R320bn committed by government to upgrading the country's infrastructure will have a huge positive impact on the economy.

He says while the construction sector will play the lead role and will create the most significant number of jobs, "there will be a huge multiplier effect on the other sectors, especially manufacturing as inputs are sourced".

Mondi expects the fixed expenditure works to add on as much as three-quarters to a full one percent to the country's gross domestic product, pushing overall growth over the next five years to around six percent.

"We expect that some 400 000 jobs will be created in the next four years."
The fact that the projects take off at about the same time and to very tight schedules is causing concern though.

The simultaneous roll-out of the projects poses a capacity challenge to the building and civil engineering sectors.

"The industry will be stretched and stressed to perform," Master Builders South Africa chief executive Pierre Fourie said. "But I think we are up to the challenge."

"Given the amount of work, sourcing skills might prove a challenge, but since we live in a fast globalising world it should be relatively easy to source the skills overseas, although that might prove expensive".

Fourie hopes the many professionals, including architects and engineers, who left South Africa for countries such as Australia and Dubai, can be enticed back.

The South African Federation of Civil Engineering Contractors (Safcec) has said it was looking forward to substantial growth, which would become bullish in the next few years with positive spin-offs for employment creation.

Safcec's head of economics Pierre Blaauw said confidence in the civil engineering industry was buoyant on the "back of the award of the Bergriver Dam project, the approval of Gautrain, the 2010 Soccer World Cup as well as several announcements of major infrastructure investments to address the growing capacity constraints related to transport and electricity provision".

"The expanded public works programme is also expected to be implemented in earnest and this will contribute to a general rise of the skills level of the labour pool available to the industry.

"With the prospects of increased activity, it is expected that serious stresses will be placed on the skills available to the sector. The scarcity of skilled people relevant to the construction sector will potentially lead to increases in the cost of these skills on the back of increased demand," said Blaauw.

In readiness for increased demand, Africa's leading cement manufacturer PPC has recommissioned its Germiston plant.

The re-opening of the Jupiter plant will increase production by 550 000 tonnes a year.

It is envisaged that PPC will employ up to 100 people at the Jupiter operation when running at full production. The plant will be commissioned in mid-2006 and production will commence shortly thereafter.

Other businesses are increasing capacity in order to meet the expected increases in demand for inputs such as steel.

Construction company shares have also been booming on the JSE Securities Exchange.

Analysts said construction companies had returned performances that beat expectations in the third and fourth quarters of 2005, ahead of the anticipated infrastructure boom.

Order books are at record levels, they say, an indication that the much-anticipated boom is imminent.

The single-biggest of the infrastructural projects kicking off shortly - the R20bn Gautrain - to be built to extremely tight schedules, will cost R2m an hour during construction.

Overall some R150bn will be spent over the next few years as transport utility Transnet refurbishes and upgrades fixed rail infrastructure and invests in new rolling stock.

The power utility, Eskom, is re-opening mothballed powerstations as the country moves to address electricity shortages and outages and increase capacity for the years ahead.

The TCTA, the implementing government agent for bulk water projects, is also spearheading efforts to ensure there is enough water for household usage and to drive industry going foward.

Energy powerhouses Sasol and Eskom will be the biggest beneficiaries of a 124km pipeline that will transfer water from the Vaal Dam to smaller reservoirs in Mpumalanga.

The hope is that as these projects are implemented they will also go some way in addressing the country's biggest challenge - creating jobs.

Are there any new updates on this development? Does it mean that the Cape Town harbour will be expanded? (I'd love to see it doubled in size). Please keep us posted :)

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R1.7bn oil investment for W Cape

23 March 2006

German-based industrial giant MAN Ferrostaal has unveiled a major investment in the Western Cape, announcing plans to establish two offshore oil and gas fabrication and refurbishment facilities, together worth R1.7-billion, at the ports of Saldanha Bay and Cape Town.

Making the announcement at the Oil Africa 2006 exhibition and conference in Cape Town, MAN Ferrostaal chairman Matthias Mitscherlich said the offshore fabrication yard at Saldanha and a service and refurbishing hub in Cape Town - would amount to R220-million.

According to Business Day, the balance of R1.5-billion would be in "indirect" investment involving relocating operational equipment from other parts of the country and putting it to full use at the new locations.

The projects are expected to create thousands of jobs locally.

'The cream of South African industry'
The investment, to be made with local partner Atlantis Marine Projects and other financial partners, "will be entirely committed to the development of world-class oil and gas-related portside infrastructure in Saldanha Bay and Cape Town," Mitscherlich said.

MAN Ferrostaal's local technical partners in the project - described by Mitscherlich as "the cream of South African industry" - include Grinaker LTA, DCD Dorbyl Heavy Engineering, DCD Dorbyl Marine, SA Five Engineering and Globe Engineering Works.

Service hub for the oil industry
Wednesday's announcement marks a breakthrough after years of work by the government to position the Western Cape as a service hub for west Africa's booming oil industry.

"The establishment of these world-class facilities will, we believe, open a new chapter in the African landscape, whereby the excellent industrial infrastructure and technological capacity of South Africa can be channeled through to support the growing west and southern African offshore oil and gas fleets," Mitscherlich said.

The developments, he said, would have "a profound effect on the continental and international status" of the ports of Cape Town and Saldanha.

With international demand for oil and gas growing and the political risks of investment in the Middle East seen as more acute, Africa has emerged as a major future source for these precious commodities.

The United States, which consumes 25% of the world's oil, is increasingly looking towards Africa to feed what US President Bush has called its "addiction".

US Senator Rodney Ellis, in his keynote address at Oil Africa 2006, said the US estimates that it could be importing as much as 25% of its oil from Africa by 2015, compared with 16% at present.

New capacity on African soil
South Africa, while not a major oil producer, is seen as capable of contributing to the expansion of African offshore fields through the establishment of world-class, internationally certified facilities in the Western Cape.

Ellis said MAN Ferrostaal's investment showed how significant Africa and South Africa were becoming on the international stage, and was a positive indication of what was yet to come.

Atlantis Marine Projects' Brian Blackbeard told Business Day that South Africa currently had only 6% of the potential market in the offshore oil and gas industry, due to lack of infrastructure and coordination of logistics.

With the new facilities, Blackbeard said, local companies would be able to ramp up capacity and increase their stake in this sector.

"The advantage of the two projects is that they offer new capacity on African soil, geographically the closest facility [for west African oil fields] compared with Asian, European, Mexican and European facilities."

Construction timetable
Construction on the Saldanha Bay and Cape Town facilities is to be fast-tracked, and both are expected to be operational within 10 months, according to Mitscherlich.

Businesses servicing multinational players in the oil industry will "already be in a position to engage with the market and respond to tenders to load the sites for work early next year", Mitscherlich said.

Final assembly capability will be ready by the second quarter of 2007.

How ridiculous SA's salaries have become, and bosses complain about our expensive labour! No wonder South Africans will never be properly housed.

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Average Sa House Needs R29k Monthly - 2006/09/08

The fact that SA families now need to earn a monthly household income of R29 021 to be able to afford the average priced, mid-sized home clearly illustrates how much less affordable South Africa's residential property market has become over the past few years . By Joan Muller

Three years ago SA households needed a monthly income of roughly R10k/month or less to qualify for a 100% mortgage to buy the average priced home. That is despite interest rates being 3, 5% higher at the time than the current prime rate of 11,5%.

These affordability calculations from Absa are based on the bank's latest house price index that puts average house prices at R816k in August (up 13,6% y-o-y). Absa's affordability figures assume that the house is financed with a 100% bond over 20 years at the current prime rate of 11,5% and that homebuyers are allowed to borrow an amount where monthly repayments will not exceed 30% of gross monthly income.

That translates into a monthly bond repayment of R8 706 on a R816 401 mortgage loan, about 50% more than the monthly bond repayment that buyers had to pay in August 2003 on the average, mid-sized house that was then priced at R442,5k. The repayment on a bond of R442,5k at the then prime rate of 15% was R5 827 per month.

Gold discovered in Mandela Metro may open economic opportunities
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The recent discovery of gold in the Nelson Mandela Municipality could lead to increased economic opportunities and national government would return in three months to discuss possible mining opportunities, Minister of Minerals and Energy Buyelwa Sonjica said.

Speaking on Saturday, on the first day of a Presidential Imbizo to the area, the minister said this means economic development and employment opportunities for local people.

President Thabo Mbeki, accompanied by several cabinet ministers; mayor Nondumiso Maphazi and acting Eastern Cape Premier Thobile Mhlahlo embarked on the two-day imbizo, which is one of government's tools for directly interacting communities and listening to their concerns.

The communities of Uitenhage, Motherwell, Port Elizabeth and surrounding areas welcomed the visit, greeting President Mbeki and his entourage with ululation, song and dance.

Some residents raised concerns about a lack of service delivery with regard to housing, water and sanitation, while most praised government's progress with regard to the provision of social grants and its recognition of women in the country.

Nosimo Ngobeni, a resident of Motherwell thanked Mbeki for restoring women's dignity as well as his contribution towards finding peace in Africa. “Our president is up and down trying to stop the war in Africa; we also have to play a part by treating our fellow African brothers and sisters with dignity. It is also about time that we stopped the name calling,” said Ngobeni.

Mayor Maphazi announced that government was to embark on an extensive training programme for emerging contactors in the area.

“After several disappointments with the work of our contractors, as government we are trying to grow our upcoming contractors to become the best in this field,” said Maphazi.

She said the municipality was to also launch a monitoring programme for housing provision which would keep an eye on proceedings from the moment construction projects began, until completion. - BuaNews

R1bn paint plant key to Toyota SA’s export ambitions
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A new R1-billion replacement paint plant in Prospecton, Kwazulu-Natal, which has been built by Toyota in anticipation of the new Hilux production as an element of the the Japanese vehicle manufacturer’s international innovative multipurpose vehicle (IMV) programme, is set for commissioning in October.

The plant, which replaces an outmoded facility, will also reportedly move Toyota South Africa closer to the completion of its five-year plant modernisation and expansion programme. The company is 75% owned by Toyota Motor Corporation Japan.

“Investment in this, the first true high-volume export model for Toyota South Africa, was R2,4-billion,” said Toyota SA president and CEO Johan van Zyl, who added that the Prospecton plant would become a source plant for a second high-volume export model.

“Like the IMV, this model is destined for export to Europe with the start-up of production during 2007.”

The introduction of the second export model required that the Prospecton facility be expanded to a volume capacity of 220 000 units a year working on a two-shift basis.

The production level will be achieved during 2008.

A new, low-emissions water-based paint plant expansion was a requirement to meet production, quality and global environmental expectations.

The expansion will see Toyota South Africa established as the major exporter of fully-built-up vehicles from South Africa by 2007.

The completion of the 220K programme could create as many as 1 000 new job opportunities by 2009 as production is ramped up.

In addition to the new paint plant featuring the latest technology in the world, there is a further investment in a press-shop expansion, which will double component stamping capacity with the addition of a second “A0” press line.

Enhancements in the vehicle assembly hall, body and chassis line, plastic-component production and painting, and tooling up for the new model are also under way.

About 50% of the total investment amount is being spent with local suppliers.

A further production enhancement is a steel blanking line. This facility is a joint venture between TTC and Toyota Tsusho Corporation and Toyota Tsusho Africa and will, for the first time, see Toyota South Africa take delivery of steel for body panels in coil form for on-site processing into cut sheets for stamping.

Van Zyl reported that about half of the 220 000 units a yearproduction would be destined for export markets.

“This will be a 120% increase over the 50 000 units due to be exported by Toyota South Africa in 2006,” he concluded

gold in PE. spectacular. Egoli-by-the-sea! PE is entering its golden years :)

LOL very well put pussy cat. :scouserd: gold in PE. spectacular. Egoli-by-the-sea! PE is entering its golden years :)

France: R3bn for SA development
Veronica Mohapeloa

13 September 2006

South Africa and France have signed a partnership agreement setting out joint development projects worth R3.1-billion.

Deputy Finance Minister Jabulani Moleketi signed a Framework Charter for Partnership with his French counterpart, Brigitte Girardin, in Paris on Monday.

Moleketi is the country following Girardin's visit to South Africa in April, when the partnership was first discussed.

Nuclear power station repairs
At the time, South African Foreign Minister Nkosazana Dlamini-Zuma thanked France for helping South Africa deal with problems at the Koeberg nuclear power station in the Western Cape.

This followed a series of power blackouts in Cape Town and in other parts of the province caused mainly by a damaged electricity generator at Koeberg.

Replacement parts acquired from Electricite de France included a rotor and stator bars to replace damaged ones.

'Strategic partner'
The Framework Charter Partnership sets out development projects for the next four years in the fields of service delivery, support for small business, job creation and energy efficiency.

"We see South Africa as a strategic partner, both willing and able to contribute to African development and the resolution of crises on the continent," Girardin said at Monday's signing.

France's development relations with South Africa date back to 1994.

Through the Agence Francaise de Developpement (AFD), the French government, in partnership with the Development Bank of Southern Africa, has supported projects worth more than R3.2-billion over the past five years in affordable housing, basic utilities, support for the productive sector, and capacity building.

In August, AFD signed a €40-million (R360-million) agreement with the City of Johannesburg to finance the improvement of Soweto's water supply, and an agreement worth €6-million (R54-million) with Durban to use methane emissions from rubbish dumps to generate electricity.

Source: BuaNews

At last Cosatu agreed that Job creation is on increase and governemnt have played a major role, but their concern is still Chinese products.



SA signs new trade deal
03/10/2006 15:27


Pretoria - The foreign ministers of South Africa and the Dominican Republic on Tuesday signed a declaration of intent in Pretoria to improve trade relations between the two countries.
Foreign Affairs Minister of the Dominican Republic Carlos Morales Troncoso said his country had decided to establish a diplomatic mission in Pretoria.

"South Africa has one of the most promising and sophisticated emerging markets in the world. We are looking into investing in the trade market."

Foreign Affairs Minister Nkosazana Dlamini-Zuma said the agreement would benefit both countries.

"The next step is to sign a proper agreement that will allow us to do things," said Dlamini-Zuma

Refractories giant set to move ahead with R65m SA smelting project
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The world's largest refractory-materials manufacturer, RHI Group of Austria, has approved an initial R65-million project for the construction of a new fusion plant at Isithebe, Kwazulu-Natal.

In an announcement made on Tuesday, the company said it would establish a smelting plant, comprising two electric-arc furnaces, with a capacity to produce 30 000 t/y. However, there were already plans for a further R20-million expansion to introduce a third furnace that could raise output to 45 000 t/y.

The development reportedly received board sanction at a meeting in Vienna on September 20, and, once built, will process locally-sourced chrome ore and imported Chinese magnesite ore into fused magnesia-chrome. The sinter is a key ingredient in the production of refractory bricks used to line high-temperature furnaces employed in the production of steel and nonferrous metals. The fast-track initiative is scheduled to produce its first sinter for export to China, where RHI has three refractory-materials manufacturing plants, by the middle of 2007.

RHI Refractories Africa MD Mike Williams tells Engineering News that Isithebe, which was chosen in preference to a greenfields site in Richards Bay, is also set to emerge as its domestic production hub, with plans advancing to relocate its smaller Tugela and Germiston units to the site. Once at full production, the combined facility should employ some 70 people, with the bigger group, which sells refractories and related services to the local metals industry, employing close to 400 people.

RHI's Gavin Standing says the project will support its ambition to have a 'one-roof' production philosophy, with 22 000 m2 of factory under cover facilitating the consolidation effort. He adds that construction is scheduled to start in February, with strong pressure from Europe to deliver product as soon as possible.

The plant is to be developed on a brownfields site owned by the Ithala Development Finance Corporation, Kwazulu-Natal's economic-development agency. Previously occupied by Scaw Metals, the revamped facility will initially comprise two fusion furnaces designed in-house by RHI technical specialists.

The company plans to source all the components, materials and project expertise necessary for the delivery of the project in South Africa and is in advanced negotiations with prospective project managers, furnace manufacturers as well as electrical and civil-engineering contractors. Long-lead items such as transformers are already on order.

The refractory-grade chrome ore is to be supplied by Samancor Chrome, under a long-term supply contract and will see some 10 000 t/y of chrome ore, hitherto exported, diverted for local beneficiation. Samancor Chrome chairperson Dr Danko Konchar is on record as stating that it has beneficiation projects worth $1,5-billion under review, including a chrome chemicals initiative. The magnesite ore, meanwhile, will be sourced by RHI in China and will be imported through Richards Bay and transported some 120 km over land to Isithebe by either road or rail. The final product will be bagged and shipped out of Durban, also some 120 km from the production location.

Williams reports that the group's decision to expand its production base in South Africa is part of a strategic desire for greater geographical diversity, particularly given a production concentration in China. The Kwazulu-Natal site was chosen over competitor sites in Asia and South America owing to RHI's well-established local infrastructure and South Africa's competitively priced electricity. But the project also feeds in to the group's expansionary vision, with an internal target of growing sales from €1,4-billion to €2-billion having been set.

RHI will celebrate its 40th anniversary in South Africa next year and currently sells some 20 000 t/y of refractory materials to the local steel industry, which is itself in a growth phase. Globally, the group produces some 1,6-million tons of refractory materials yearly from 28 production centres worldwide.

“This project is set to change materially our import-export dynamic as we will soon be exporting some 35 000 t of refractory materials and importing around 23 000 t,” Williams concludes

Powertech's R525m investment aligned to SA's R372bn infrastructure push
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Technologygroup Altron plans to spend R525-million over the next three years on capacity expansion and efficiency improvement, in a bid to gear up subsidiary Powertech to take full advantage of government's infrastructure spending.

Government and its State-owned enterprises plan to spend some R372-billion over the next four to five years on power, water and transport developments. In addition, there is a range of other projects planned to prepare South Africa for the 2010 soccer World Cup.

Delivering the group's interim results to August 31, on Tuesday, Altron CEO Robert Venter said that the company planned to increase the capacity of Powertech, which boasted key brands in the cables and accessories, transformers, batteries and electrical-accessories sectors, by as much as 25% over the next three years.

Powertech CEO Norbert Claussen told a presentation in Johannesburg that some R250-million would be spent on the Aberdare Cables business over the next three years, primarily earmarked to lift the division's capacity by 30%. Some R85-million, over the same period, was allocated to the ABB Powertech Transformer business to increase capacity by 25%. He added that R30-million would be used on new product development for the industrial group.

Altron also planned to spend around R160-million, over three years, on the battery group, which would be used to improve efficiency. Commenting on the planned capital expenditure on the battery group, Claussen said that it was gearing up the business to take advantage of the anticipated growth of the automotive industry's replacement market. Almost 85% of the battery group's business came from replacements and the growth in new-vehicle sales boded well for a big uptick in this sector over the next three years.

In the first six months of 2006, Altron had spent R101-million on capacity expansion, which was mainly focused on the power electronics sector. The company also said it foresees big future demand from Eskom, which is in the process of significantly expanding its power generation capacity. Altron reported that it had already secured the cable contracts for both the open-cycle gas-turbine projects that the utility was building in Mossel Bay and Atlantis.

Meanwhile, Venter reported that the company had already secured some smaller contracts for the R21-billion Gautrain and that local municipalities' upgrade of infrastructure also boded well for Altron's growth prospects.

Although Altron was upbeat about South Africa's capital investment plans, it said that rising interest rates could cool down growth in the building industry, which was one of key drivers for the group's earnings growth over the six-month period.

Altron reported a 52% rise in headline earnings a share for the six months to August 31, on the back of a 20% increase in revenue to R8,3-billion and a 42% rise in operating profit to R711-million.

First Hummer rolls off PE plant's production line
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The first left-hand-drive Hummer H3 rolled off the production line at General Motors South Africa's (GMSA's) Port Elizabeth manufacturing facility on Monday.

GMSA is responsible for the production of the H3 for export markets in the Middle East, Europe, the UK, Australia, New Zealand, Japan and Israel, and expects to rampup to a production rate of 10 000 units a year.

The project has created 500 new jobs.

“Since General Motors' return to South Africa in 2004, we have invested R2-billion in our operations. This is related to various facility upgrade initiatives at our Struandale and Kempston Road plants," said GMSA MD Robert Socia.

“In fact, since the Struandale plant first opened over 10 years ago, we have doubled the size of the facility.”

He said that in the year ahead, GMSA would be spending a further R620-million on new product development and further expansions and enhancements to the company's facilities.

In addition to celebrating the first H3 rolling of the production line, GMSA also unveiled its off-road track, which had been built on site at the company's Struandale plant.

The track will be used for product-testing purposes and also to demonstrate the capabilities of the vehicle to external and internal audiences.

Right-hand-drive versions of the H3 will be available for sale in South Africa in the second quarter of 2007.

Dubai's Istithmar mulls more investments in South Africa
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Dubai's government-owned Istithmar investment agency said it was mulling more ventures in South Africa, adding to its joint R7,01-billion purchase last year of Cape Town's V&A Waterfront.

Istithmar, which last week spent $1-billion on a stake in Standard Chartered Plc, is considering as many as three projects in Cape Town and Johannesburg, and may make an investment as early as the first quarter of next year, David Jackson, the agency's chief executive officer, told Reuters on Monday.

"South Africa's economy is performing very well and there are lots of opportunities," Jackson said, declining to be more specific about the planned investments. South Africa, the continent's largest economy, is hosting the soccer World Cup in 2010.

Istithmar in September bought the V&A Waterfront, South Africa's top tourist spot with 22-million visitors a year, with a group of investors including British-based London & Regional Properties. Istithmar put up half the money.

Dubai, benefiting from record oil revenue to its Gulf Arab petroleum-producing neighbours, has spent more than $12,5 billion on foreign purchases this year, including $6.8 billion on British ports and ferries group P&O.

Istithmar alone expects to spend 60 percent more on acquisitions this year, or as much as $4-billion, compared with last year, Jackson said.

South African gross domestic product grew 4,9% in 2005, the fastest pace since 1984, and may expand by around 4% a year for the next 2 years, according to Moody's Investors Service.

Fabulous darlings, Fabulous! I could almost wet meself. With these guys around, Kaapstad won't be Slaapstad (sleepy town) anymore!!

:tongue4:

im not sure if i read correctly but the new waterfront owners plan to spend at least another 5-7 billion rand in the first part of their plans to develop the waterfront

but they didnt give a time frame for that spending so could be over a long period

V&A Waterfront to get R7bn pizazz boost


By Tom Robbins

Cape Town - The V&A Waterfront, one of Cape Town's top tourist attractions, is set to get a cash injection of R7 billion that will place the already swanky centre firmly in the upper-class bracket.

Nakheel Hotels & Resorts chief executive James Wilson said the money would be in addition to the R7 billion that the new owners had paid to Transnet and its pension funds.

In September Nakheel sibling company Istithmar, UK property company London & Regional Properties and local black empowerment partners bought the V&A, announcing that they would bring an element of "pizazz" to the property. Only about half of the 603 000m2 property had been developed by Transnet.

Wilson did not say over what period the R7 billion investment would be made.

Nakheel and Istithmar are both owned by Dubai World, the developers of the 300 artificial islands, The World development, off the coast of Dubai.

Wilson said yesterday that Nakheel and London & Regional had begun updating the waterfront's master plan, following changes to travel and living trends. Nakheel had a vision of the V&A as an overall resort but that within this vision, two new resort hotels would probably be built.

Wilson said traditional resort hotels were sea-facing, and offered "fantastic" swimming pools and entertainment for young children, teenagers and adults. These resorts were vital to enticing tourists into longer stays than the present V&A average of two nights.

In total, Wilson expected an additional "five to 10 hotels" to be built, with the aim of having at least "one or two" ready for the 2010 soccer World Cup. This event was a "once in a lifetime" opportunity to market the country and connectivity between the V&A and the stadium in Green Point would be improved to take full advantage.

Wilson saw new markets for the V&A from the Middle East and new members of the black middle class who lived in Johannesburg.

Referring to empowerment, he said that as an outsider, "it is tremendous to see wealth moving into new hands".

He said the Clock Tower precinct at the city-side entrance of the V&A was a weak point in the complex. This precinct needed to make a statement, but instead, "you don't even know you are in the Waterfront when you enter it".

The new owners were looking at developing boutique hotels, as well as loft apartments and restaurants for Capetonians who wanted to live and work in the city. The linkage between the city and the Waterfront was poor and water transport along the existing canal and terrestrial transport, such as open trams, were needed, Wilson said.

Andre Stadler, the managing director of Catalyst Fund Managers, said the Dubai owners could generate additional revenue from the V&A by developing individual businesses, as opposed to simply "collecting the rent" as traditional property companies did.

wow I am so excited by his reference to trams from the waterfront to the CBD. That would be superb. With this happening in the V+A and the new mandela rhodes place at the top of the CBD cape town is going to be truly superb in a few years time. This added to the stuff going on in somerset road/de waterkant is just so so so exciting for our city.

wow I am so excited by his reference to trams from the waterfront to the CBD. That would be superb. With this happening in the V+A and the new mandela rhodes place at the top of the CBD cape town is going to be truly superb in a few years time. This added to the stuff going on in somerset road/de waterkant is just so so so exciting for our city.

and a new stadium :) and urban park

--these guys would definitely bring some order to the city's inefficient planning and structural layout. Now move in the cranes guys!

Exports to the US soar to $4.9bn
October 23, 2006

Johannesburg - Growth in South Africa's exports to the US continues to accelerate.

Figures released this month by the US International Trade Commission show that in the year to August, South Africa exported goods to the value of $4.9 billion (R37 billion) to the US. This represents growth of 29 percent from the same period last year, up from growth of 25 percent in the year to June.

Of South Africa's total exports in the first eight months, $1.2 billion was exported under the African Growth and Opportunities Act (Agoa) trade programme launched in February 2003. This compares with $989 million last year.

Sub-Saharan Africa's total Agoa exports in the period were worth $30 billion, compared with $23 billion in the previous year.

The programme was designed to liberalise trade between the US and 37 designated sub-Saharan countries. Some of the benefits come from the generalised system of preferences programme, which gives duty-free access to the US market for certain products. It was originally intended to run until September 2008, but has been extended to 2015.

South Africa is the third-largest sub-Saharan exporter to the US. It was outstripped only by Angola, with exports of $7.4 billion over the eight months, and Nigeria, with exports worth $19.7 billion.

Angola's Agoa-related exports were worth $7.3 billion and Nigeria's $18.3 billion. These were almost exclusively energy-related products, including oil and natural gas, according to the Agoa information website.

Mainly through its oil exports, Nigeria accounted for more than half the exports under Agoa, said the website.


The value of exports has been boosted by the rise in international crude oil prices, from about $50 a barrel at the start of this year to recent highs of more than $78. Recently it has traded at about $60.

Significant Agoa exports have also been recorded by Lesotho, Madagascar and Kenya. "However, only a dozen or so of the Agoa-eligible sub-Saharan countries have recorded any significant exports to the US and many recorded less than $1 million worth of US-bound exports in 2005," said the website.

SA Revenue Service figures show that South Africa's exports to the US last year, at R29.2 billion, were about 9 percent of total exports.

Research by the Industrial Development Corporation for the first half showed about one-third of South Africa's exports to the US were platinum group metals, 7 percent were diamonds and 5 percent were cars.

The sharp rise in platinum group metals prices would have contributed to the stronger growth in South Africa's exports. The platinum price began the year at less than $1 000 an ounce, rose to $1 300 in May and fell to close to $1 000 after August.

The recent slide in commodity prices makes it unlikely that the acceleration in export values will be maintained in the rest of the year.

exports work best when the rand sits at R7.50 to the greenback

We're cash-flush....

-----------------------

SA scales up public infrastructure plan to R409bn

The South African government plans to materially scale-up its already ambitious public-infrastructure spend to R409-billion over its medium-term expenditure cycle from 2007 through to 2010 - previously the expenditure plan was set at around R372-billion.

Yearly expenditure on public investment was now set to climb to R150-billion by 2010.

In releasing the Medium Term Budget Policy Statement (MTBPS) in Cape Town on Wednesday, Finance Minister Trevor Manuel indicated that additional funding of R28-billion, spread across all three levels of government, would further strengthen plans for power infrastructure, roads, commuter rail, housing, bulk infrastructure and research and development.

“Infrastructure investment over the next few years will provide a strong platform for accelerated future growth. It forms part of government's broader capital-investment programme, focused on creating economic opportunities for businesses and individuals, and progressive improvements in household living conditions,” the statement said.

Manual also revised Treasury's definition of public infrastructure to exclude machinery and equipment, such as police and emergency vehicles, which had been included in the initial R372-billion infrastructure projection. Had such equipment been excluded from the initial figures, the public-infrastructure spend would have been closer to R351-billion.

Football fever

However, arguably the most significant aspect of the increase related to preparations for the Fifa World Cup, scheduled to kick off in South Africa in June 2010. Some R12-billion was proposed for stadiums and related infrastructure against a previous projection of around R5,4-billion.

“Hosting the 2010 Fifa World Cup provides a catalyst for investment in economic infrastructure,” the statement asserted, adding that the 2007 Budget would provide for significant funding for stadiums and supporting infrastructure.

“Funding will also contribute to addressing backlogs in infrastructure and sports facilities to be used as practice grounds in several disadvantaged communities,” Manuel announced.

An overall amount of R14,9-billion has been allocated for major capital projects, including the construction or upgrading of stadiums and the development of the surrounding precincts.

Five new stadiums would be built and five existing facilities upgraded to meet Fifa requirements. A protocol had been developed to guide the flow of funds from the national fiscus to the municipalities and provinces that would execute projects.

Manuel also announced tax exemptions for Fifa officials, the Local Organising Committee and the South African Football Association. In addition, goods imported specifically for hosting the tournament, such as broadcasting equipment, would enter duty-free, while souvenirs associated with the event would not attract taxes.

Expenditure Estimates

In 2007/8, infrastructure spending across government was expected to come in at R119,7-billion, rising to R139-billion in 2008/9, and R150,9-billion in 2009/10.

Infrastructure development by State-owned enterprises would account for about 37,1% of overall infrastructure estimates over the medium term. Revised nominal estimates over the next three years by both Eskom and Transnet were almost R108-billion combined. Major investments by these entities include power generation, the expansion of the rail-freight network and the new multiproduct pipeline.

The MTBPS acknowledged that accelerated economic growth had highlighted deficiencies in transport systems, which were now constraining development and industrial progress, as well as hampering urban and residential development.

Manuel indicated that major funding proposals to economic infrastructure included additions to rail rolling stock and signalling equipment totalling R1,1-billion. “These additional resources aim to provide further support to South Africa's commuter rail turnaround strategy,” the MTBPS revealed.

An additional R1,1-billion would be set aside for roads infrastructure, while R1-billion was proposed for the national electrification programme.

A further R2,7-billion is earmarked for integrated housing and human settlements to provide improved housing units.

Also included in the infrastructure drive would be social infrastructure proposals, including a hospital-revitalisation programme, amounting to R1-billion over the three-year period.

A further R4,2-billion was proposed for the provincial infrastructure grant, which funds school buildings, provincial roads, clinics and other infrastructure. The increase in the grant is mostly driven by the government's initiative to further support the expanded public works programme using labour-intensive methods on the maintenance of low-volume roads, stormwater drains and sidewalks.

Bulk infrastructure, meanwhile, was supported through an allocation of R1,4-billion to the Department of Water Affairs and Forestry to fast-track delivery on water and sanitation projects.

Additional allocations of R80bn proposed for 2007 Budget

The infrastructure scale-up is central to proposed revisions to three-year baseline estimates for the 2007 Budget, where additional allocations of R80-billion have been proposed.

The provinces and municipalities would receive the largest share of additional resources, receiving R28,2-billion and R18,9-billion respectively.

Included in this figure is R18,6-billion for the provincial equitable share; R3,7-billion for higher education, teacher development and further education; R3,1-billion for hospitals and social welfare services; R12,1-billion for infrastructure associated with the 2010 World Cup; R16,3-billion for housing, municipal services and community development; R10,5-billion for economic infrastructure and State-owned enterprises; R2,3-billion for industrial incentives and technology; R3,5-billion for justice and crime prevention; and R5,9-billion for defence and foreign affairs.

http://www.miningweekly.co.za/?show=96428

This is good, I hope with next year's main budget he will allocate more to the host cities.

Great news for the country's future. Now we just need all the wisemen to spend those monies wisely, and not to piss it away or let it gather dust, due to incompentence and corruption. We should also be hoping for the next president to be of Manuel's calliber (if not the man himself), to keep the ball rolling.

Good description. We are....

-----------------

King of bling

Nic Dawes

26 October 2006 01:59

Trevor Manuel is spoilt for choice. Booming tax revenues, aggressive debt repayments and 10 years of fiscal prudence have set him up with an unprecedented range of options.

On the 10th anniversary of his first medium-term budget policy statement he reminded journalists of what he said then: “To govern is to choose.”

“We can now choose,” he added, “the kinds of choices we make are important.”

But the minister of finance is also hemmed in on all sides: spending increases are constrained by capacity weakness across government, personal income tax cuts are off-limits because they would fuel the consumption fire that Reserve Bank Governor Tito Mboweni is trying so hard to contain, and a bigger budget surplus would be politically untenable. Under these circumstances, it is not surprising that the treasury is approving some spending that it might once have balked at.

Budget bling?
The planned taxpayer contribution to preparations for the 2010 World Cup has tripled from just over five billion in February’s budget to R15billion in this week’s statement. R8,4billion of that goes to new and upgraded stadiums, the rest on related transport and bulk infrastructure needs.

Another major beneficiary was Minister Alec Erwin’s department of public enterprises, which received substantial spending increases for the Pebble Bed Modular Reactor, the broadband company Infraco and defence parastatal Denel.

The reactor will get R462million to add to the R580million it has already received from government this year: “Progress on the project from basic design to requiring long-lead materials and hardware necessitates funds in excess of those committed by existing shareholders,” the adjusted estimates of national expenditure explain.

Denel, which last week announced losses of R1,3billion, gets R847million on top of the R2billion announced in February to provide working capital and ward off insolvency.

Infraco gets R627-million to buy the “full service network” owned by Transtel and Eskom, and to compete with Telkom in the resale of long-distance connectivity and broadband internet services.

“Stop smiling Alec,” Manuel told a plainly delighted Erwin as he read out the list of allocations in Parliament.

Other big infrastructure projects, notably the Gautrain, the De Hoop Dam, the R2,5billion Vaal River augmentation scheme and Durban’s new King Shaka Airport are also moving ahead. Substantial additional resources on public transport, including an additional R1,1billion for commuter rail, are also provided for.

Add that to more money for hospitals, police and municipal infrastructure, and spending is up just more than 9% this year, even after factoring in inflation. It is set to increase at an average rate of more than 7% over the next three years.

Still hanging tough
Treasury officials acknowledge that there is a risk of over-capitalising on projects that will not deliver economic benefits commensurate with their cost. But Director General Lesetja Kganyago is adamant that the department is not condoning splurges on prestige projects to satisfy their powerful patrons, or to push the budget into a deficit position that is more politically acceptable.

“You still have the same mean guys in the treasury. You still have govern­ment departments screaming,” he insisted. “If people see money they think it must be spent, but we have a responsible executive. The minister’s budget committee is a group of competent, politically sound ministers.” One example is the treasury’s role in planning for 2010, which he says was to “get the madness out of the system” introduced by municipalities who want to build showpiece stadiums.

“We view the R15billion [for the World Cup] as being catalytic in the overall infrastructure development programme,” says acting deputy director general in the budget office Taz Chaponda.

Tight-fisted big spender?
Chaponda points out that the R80billion in new spending envisaged by the statement comes on top of already steep increases in February’s budget: “This is not a spending story, it is a revenue story.”

Indeed. The massive new spending alone is not enough to push the budgets of the next three years into deficit. Large unallocated contingency reserves, rising from R2,2billion next year to R10billion by 2009 are included in the numbers.

All this means the budget framework is extremely well protected from economic shock, but makes it vulnerable to the criticism regularly voiced by trade unions that Manuel should permit higher deficits.

In response, Manuel and Kganyago insist that they were taking care to cushion the budget against a correction in the global economy that could take the glow off South Africa’s prospects. It would be imprudent, Manuel told journalists, to commit money to long-term spending programmes if there was a risk it might not be available when falling commodity prices and declining corporate profits cut into the tax take.

Of tax and spending
There is clear evidence now that government departments can’t spend money fast enough to keep up with revenue brought in by the taxman. (See accompanying story.) Under these circumstances one policy option might be to cut taxes and return money to consumers and companies who can decide for themselves how to allocate it, but there are limited options for doing that. The most obvious option is to reduce personal income tax, however this would dilute the impact of interest rate increases designed to control borrowing and hold back inflation.

Corporate tax cuts would probably be more palatable, but only if they lead to expanded investment, rather than big dividend payouts. Taxation now accounts for 28% of GDP and shows little sign of declining, with GDP set to reach R2trillion in 2008. That means government is taking substantially more than the 25% it has previously targeted out of the economy.

It is possible that February’s budget will contain new tax measures that adjust that ratio a little, but officials are tight-lipped about the possibility at present, urging less of a focus on ratios and more on outcomes.

“These are the choices we make”, said Manuel. “These are the choices we believe are durable.”

The big spend



R80-billion in new spending over three years

R15-billion on World Cup infrastructure, including R8,4billion for
stadiums

R627-million for a new, partially state-owned telecoms company to buy its communications backbone

R2,9-billion this year alone to get Denel out of the woods -- R847million up on February’s estimate

R1,1-billion this year for the Pebble Bed Modular Reactor, R462million up on February

A possible 10% stake in R5-billion Square Kilometer Array telescope

R2,3billion for industrial incentives and technology



And the basics



R16,3-billion for housing, municipal services and community development

R3,5-billion for justice and crime prevention

R3,1-billion more for hospitals and social welfare

R1,1-billion in new money for passenger rail

R10,5-billion for economic infrastructure and parastatals

http://www.mg.co.za/articlePage.aspx?articleid=287879&area=/insight/insight__national/

R3,5 billion for justice and crime prevention? To be honest, it should be more like R35 billion.

exports work best when the rand sits at R7.50 to the greenback

im not exactly an economics major after two years of economics, but ive always thought that there was some logical equilibrium e.g. R7.50 to the dollar that would result in the best overall benefits for everyone, keep foreigners happy, keep local exporters happy..a whole range of things

the 3.5 billion is just the increase not the whole budget which is around R35 Billion. A 10% increase in spending is pretty good. esp to be able to do that and be looking at a budget surplus next year.You have to give Mbeki and co great credit for the way they have run public finances.

Rand, gold, JSE shine. Is the worst (already) over?
RENÉE BONORCHIS

If South Africans can show some caution and curb their spending, the picture of economic prosperity may become even rosier, writes RENÉE BONORCHIS


JSE madness continued on Friday, with the all share kicking its way to a new record high of 23337 points. Not only that, but the rand strengthened against the dollar, gold poked its head above the $600/oz mark for the first time in a month and the oil price remained pleasingly subdued.

It was the first time in five months that the markets had come together to offer up a picture of economic prosperity.

The question on everybody’s lips was, is it all a cruel joke or are the good times back to stay?

“It appears that the bull may be back," says Tshepo Ntsimane, CE of Legae Securities, “but it’s a good time to be cautious."

The JSE has slapped on 7% this month alone, which in itself is a strange and spooky fact. October is the month that markets have come to dread: it is the month that markets crash. In every year of this century, the all share dipped in October. But not so this year.

“Just be cautiously optimistic and temper consumption," warns Jeremy Gardiner, a director at Investec Asset Management.

“At the beginning of the year, we predicted equities would run 25%. It’s now gone further. We don’t want 40%-plus returns again. That’s unsustainable. There is still reasonable value in our market but it’s not cheap."

The recent rise in the stock market, which lost a whopping 17% from May to June, has been attributed to the fact that the central bank raised interest rates by only 50 basis points this month rather than the feared 100 points. Another factor in local markets’ favour has been the strength in commodity prices.

When gold dropped below $570 two weeks ago, traders gasped and said it could go to $530. By Friday it had hit the $600 mark.

“If you were a technical expert you would say that if it gains another $10 or $20 it will break to $650 or $660, but gold is driven by fundamentals. If people believe the US rates cycle is at an end, then it’s good for gold. But it will be another month or so before we know," says Ntsimane.

Of course, it is not just gold that is important in all of our lives — oil has an unfortunately large influence on our pockets.

As Noelani King Conradie, head of NKC Independent Economists, reported on Friday, the Organisation of Petroleum Exporting Countries (Opec) cut the world’s production of oil by 1,2-million barrels a day and hinted at further slowdowns. It was the deepest cut in production since January 2002.

The spectre of reduced supply should have boosted the price but instead, the price of a barrel of Brent crude (the type of oil that SA imports) was still hovering near $60,50 on Friday.

“The Opec cuts may not have been significant enough," says Ntsimane. “If the Chinese economy had to slow down and there were big production cuts, that would be a serious threat to SA."

These scenarios are not yet playing out and the rand has also been kind recently. While many pundits expected it to punch its way through to R8 to the dollar and worse, it has remained demurely below those levels.

“People got overly pessimistic," says Gardiner. “The glass suddenly went half empty but without any big reasons for it.

“Sure, there’s crime, but there always has been, oil always spikes, the rand was overdone. The rand was always predicted to be at R7,50 from 2004. Now it is. It’s the whiplash effect that South Africans don’t like."


It looks like the rand may end the year at about R7,80 to the dollar, says Ntsimane.

And a rand at R7,80 would not prove an inflationary threat. While the market is divided, and some expect more hikes rather than fewer, Ntsimane feels an increase of 50 basis points in December might be the last in this cycle.

Annabel Bishop, the South African economist at Investec, said after the last rate hike that the inflation outlook appeared to have improved slightly.

“Should the rand continue to strengthen to the extent that it is fairly flat on a trade-weighted basis year on year, the chance of a December interest rate hike will reduce substantially," she wrote.

But from the rand to oil to gold and the stock market, the biggest threat to our rediscovered sweet spot is, in reality, us. Consumer spending, being as intertwined as it is with inflation and the current account deficit, remains one of the biggest hazards facing our market.

“The credit spree cannot be left unchecked. Firstly it pushes up inflation, and then it hurts the rand because much of what is being bought is imported," says Ntsimane. Asking people to hold back on buying that new car and installing that new fridge is no easy task, though.

Ntsimane says he would welcome another rate hike just to rein in the spending.

Nonetheless, most agree small amounts of glee at our present position would be acceptable. “There are no clouds on the horizon that look like rain," says Gardiner.

I don't understand why the market would fret over $500 gold. Just 4 years ago, gold traded under $300. In fact from 1998 - 2001, gold traded in the $270 - $290/ounce range. Gold prices have more than doubled in the last 4 years. Does it not make sense that there would be some profit taking among investors after such a ride?

Investors Pour Rbns Into New Malls


Email Article
Despite a growing perception that urban South Africa is fast becoming over-shopped, developers and investors continue to pour billions into building new malls.

Latest figures from the South African Council of Shopping Centres (SACSC) show that more than 1m sq m of new shopping centre space is currently either under construction or on the drawing board. That's roughly eight times the floor space of Sandton City, one of SA's largest shopping centres. It also exceeds the 900 000sq m of shopping space built between 2000 and 2004.

If all the proposed centres listed in SACSC's 2006/2007 Shopping Centre Directory go ahead, it will add 24 malls to an already vast pool of shopping centres in Gauteng alone. Eight of those centres exceed 25?000sq m, with four being regional centres of more than 40?000sq m (see table).

They include Sasol Pension Fund's Greenstone Mall (Edenvale), Hyprop/Abland's Greenstone Lifestyle Centre (Edenvale), Greenwold Property/Resilient's Jabulani Mall (Soweto) and Zenprop/Richard Maponya's Maponya Mall (Soweto).

The general view is that national retailers, which want to continue to roll out new stores and expand existing ones, are driving SA's ongoing shopping centre development frenzy. National retailers have been on an aggressive expansion drive over the past year or so, no doubt supported by lower interest rates and a rapidly growing black middle class.

Latest figures from Statistics SA confirm that developers continue to plan new shopping centres, with building plans passed for retail property up 34% in second quarter 2006. But the addition of so many new malls raises renewed questions concerning the long-term viability of some of those projects, particularly now that SA has entered a higher interest rate environment. Though the latest figures from Statistics SA show that retail sales still increased by 9,8% in the second quarter 2006 (year-on-year), economists expect consumer demand to slow over the coming months, particularly on the back of possible further interest rate hikes.

However, SACSC executive chairman George Skinner dismisses the notion that SA already has too many shopping centres, despite expectations that higher rates will put somewhat of a damper on consumer spending.

Skinner says if you compare the shopping centre space per capita in SA to that in the US, Britain and Europe, SA still has plenty of room for growth. The US has roughly 2sq m of shopping space per capita compared with SA's 0,3sq m per capita. By Joan Muller

Tata mulls ramp-up of SA vehicle manufacture ahead of 2010
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India-based vehicle manufacturer Tata Motors was looking to ramping up its South African vehicle-manufacturing activities in the build up to the local hosting of the soccer World Cup in 2010, MD Ravi Kant said at Auto Africa on Friday.

“We are considering manufacturing in South Africa on a larger scale,” he said, but did not give further details.

He added that the company was looking forward to meeting the opportunities that the World Cup would present.

Tata Motors currently had a South African bus-body manufacturing plant, which started operating in February last year.

The bus bodies, with a 95% South African content, were mounted on Tata chassis imported from India.

With an investment of R9-billion so far, Tata Motors was the sixth-largest investor in South Africa, and by far the largest Indian investor in the local economy.

The company had previously indicated that it planned to increase the South African content in the cars and trucks that it marketed in the country.

The company was also focusing on reducing the operating costs of its vehicles for the benefit its customers.

“We have made sure that our vehicles operating costs are the lowest, or near the lowest, in the industry,” Kant highlighted.

At the motor show on Friday, Tata Motors unveiled its new Cliff Rider all-terrain vehicle, which would be available locally in 2009.

Have you ever seen a TATA car, I'm not sure if you want to have a TATA on your drive way.

yup TATA cars are quite popular down here in SA. They are very good value for money and are not bad little run abouts. My aunt has one and so does my sister.

Crazy, here in Europe the Korean Cars are gaining market share rapidly, Brands like Kia,Hyundai and formwer Daewoo which has been taken over by Chevrolet. Another price fighter is a Romanian brand of which I forgot the name. Cheap cars but are they really safe, the Chinese came here with a 4X4, it is called "Landwind" but with a crach by 60km an hour de driver would not survive ; here's a picture
http://www.autoblog.nl/images/landwind_crash_test.jpg

the tata is actually quite safe. Just because its made in india does not mean its crap. and they are going to start making them here soon.

where would TATA build their factory?

$800m for 1.1% of Anglo
12/11/2006 13:54

Hong Kong - One of China's wealthiest tycoons has bought an $800m stake in Anglo-American, a landmark deal in China's pursuit of African resources, the Financial Times said on Saturday.
CITIC Pacific chairperson Larry Yung, China's third richest man, also known as Rong Zhijian, bought 17 million shares from the Oppenheimer dynasty, Anglo-American's founding family, the newspaper said.

The surprise purchase of the mining group stake reflected China's thirst for resources in Africa to fuel its economic expansion, the paper said.

Last week Beijing hosted a summit for 48 African leaders focusing mainly on trade and resources.

The newspaper said Yung's acquisition came two weeks after London and Johannesburg-listed Anglo appointed a new chief executive, American Cynthia Carroll.

The appointment led to fresh speculation that Anglo, the world's third biggest mining group by market capitalisation, could be the target of a takeover.

The Oppenheimers will retain more than 2% of Anglo American, the world's third largest mining company as well as their 40% stake in De Beers, a company in which Anglo holds a 45% stake.

where would TATA build their factory?

According to initial reports it is to be in Richards Bay near their other development there with direct access to the port and rail.

However they are in talks with fiat to develop a combined facility since nissan and fiat are ending their agreement to produce fiats in nissans rosslyn plant in pretoria. so at this stage it seems R bay, but talks with fiat may lead to an alternate location

EU, SA to cut car export tarriffs
15/11/2006 09:05

The European Union and South Africa said on Tuesday they had cleared up the last details in the way of long-planned cuts to tariffs on cars exports to each other's markets.

The plan was previously agreed and EU countries had now backed its details, an EU official said, adding both sides would seek to implement it by Dec. 1.

South Africa will cut the duties it applies on European car imports to 18% by 2012 from 25% now and also reduce duties on components and trucks.

In return, the EU's executive Commission has agreed to phase down the import duty it applies on cars from South Africa to zero in 2008.

South African Foreign Minister Nkosazana Dlamini-Zuma noted her country would be required to open its markets by less than the EU, due to the different levels of development.

"The reduction will be asymmetrical because the EU is more powerful economically than we are," Dlamini-Zuma said after talks in Brussels with Erkki Tuomioja, the foreign minister of current EU president Finland.

Automotive goods represent more than 20% of EU exports to South Africa.

A senior official from the South African department for trade and industry said delays in implementing the deal struck last year had hampered his country's car industry.

Iqbal Meer Sharma, deputy director-general at the department, said EU duties for South African car imports had risen to 10% earlier this year from 6.5%.

The EU official said the increase was due to South Africa moving out of the bloc's Generalised System of Preferences, which offers poor countries trade advantages, but the tariff was now returning to 6.5% before being phased out.

The EU and South Africa said on Tuesday they would start negotiations to review their trade and development agreement.

The EU is South Africa's biggest trade partner.

South Africa's minister for agriculture and land affairs, Lulama Xingwana, urged the EU and the United States to work for resumption of talks over a stalled global trade deal.

"The sooner we finalise the (World Trade Organisation's) Doha round, the better for all of us, in particular for the developing countries," she said after the talks with the EU.

I have been working on the shoprite deal which will not only be the largest private equity transaction in SA history but also one of the largest FDIs into the republic. That along with the other deals going on at the moment is superb news for SA as private equity investors have a herd mentality so as soon as the big boys start investing here other funds will start flowing into the country too. It seems that we might start to get the FDI inflows we so badly need. Also Vodafone is looking to invest more in SA in the next few years as it is the best performing of all their markets according to the financial times this morning. This alongside the new CNBC africa TV station that is opening in the next few years shows that we are becoming a major economic player and that foreign interest in SA is growing by the day.





The grab

By Stuart Theobald, Heather Formby and Sven Lünsche
Foreign private equity firms are swooping on SA in search of deals. Within weeks, a significant clutch of SA companies will fall into private hands.


Deals now being thrashed out in Johannesburg, London and New York should make SA corporate history. Some may founder on price; others will set records for sheer financial firepower. Transactions of more than R20bn are likely as buy out consortia take over companies that are owned by investors through the JSE.


What has made it possible is the arrival in SA of some of the world's largest private equity firms.


The firms involved read like the who's who of global private equity, romanticised in movies and books for their deal-making prowess. They take companies with potential and wring returns out of them, loading them up with debt to do it.


WHAT IT MEANS
Another huge vote of confidence in SA
Spin-offs for smaller SA industries




Topping the list is Kohlberg Kravis Roberts (KKR), which made leveraged buyouts famous with the US$13,8bn takeover of RJR Nabisco in 1988, since immortalised in the book Barbarians at the Gate.


Fellow US-based giant Blackstone has also been courting SA opportunities. The Europeans are not being left behind - Permira and Apax Partners are also grabbing deals. The four are both competitors and friends - they want to keep the juiciest deals for themselves but often club together to share the risk. In SA, they are also working with local private equity players like Brait and Ethos.


Weighed down with billions of dollars - more than ever before - they are scouring the globe for opportunities. The amount of capital flowing to private equity has reached its highest level ever, attracted by returns that beat other assets. Around 8% of investment assets globally are in the domain of private equity, twice the level of five years ago. And SA has become a serious port of call for that cash.


JSE-listed companies are being targeted alongside US, European and other emerging-market opportunities. The financial power is awesome: Blackstone and KKR alone have more than $30bn to spend on equity around the world. The industry as a whole has $320bn. KKR and Blackstone's purse can be leveraged up to $120bn when the typical amounts of debt are thrown into the mix - about half the size of SA's gross domestic product.


For the industry as a whole, research firm Private Equity Intelligence estimates that almost $1,3 trillion in equity and debt is waiting to find a target - almost twice the market cap of the entire JSE. It's tough to find opportunities to spend that sort of money. Nine of the 10 biggest deals in history have taken place in the past two years - $500bn worth so far this year (see graphs on page 38).


Midsized SA corporates will be among the targets, particularly in retail and infrastructure-linked industries such as construction. Edcon - the highly successful owner of Edgars, Jet, Boardmans and other retail outlets - is up for grabs as part of a deal involving KKR, Blackstone, Permira and Apax. Shoprite is probably a target of Apax and others as part of a consortium le d by local private equity major Brait. Diversified logistics group Super Group is being targeted, as is financial services and risk adviser Alexander Forbes.


Global investors say they are particularly interested in the impact of the emerging black middle class, which will drive growth in the retail sector. They also buy into government's infrastructure spending objectives, buoyed by developments for the 2010 soccer World Cup.


The investment firms are tight lipped about their targets, not wanting to undermine their negotiating positions. But information is leaking out. With so many deals on the go, a wide range of lawyers, accountants, bankers, public relations firms and other advisers are working long hours. The fees are juicy, to say the least.


It is reminiscent of the glory days of the bull market five years ago. The big difference is that now, rather than dumping companies on the JSE, the deals are about pulling them off.


Six companies, each likely to go for at least R5bn, are in various stages of negotiations with private equity firms (see "The prey" over the page).


If the deals happen, they will represent R45bn worth of new investment, of which a significant amount will be foreign direct investment. It will be another huge vote of confidence in the SA economy, on the heels of Barclays' R30bn investment in Absa. And it could be just the beginning. SA's biggest companies are not out of reach of the global private equity spending spree and may well be next.


Why SA?


"It's a relative play," says a local investment banker who is advising on some of the deals. "They look at what retailers are trading at in SA against what retailers are trading at elsewhere."


KKR recently walked away from a deal for Australasian retail group Coles Myer. It offered A$16bn, valuing the group at 18 times its last annual earnings. Edcon is now trading at a price:earnings (p:e) ratio of 12. That's a hefty difference in price.


"There is more political risk in SA than in countries in Europe, and there's probably more currency risk. So I think people will be looking for slightly higher projected returns on deals to compensate for those risks," says Adrian Beecroft, chief investment officer of Apax Partners in London. But, he adds, " There is currently a much better growth rate in the [SA] economy [compared with the US and Europe]."


Beecroft says Apax performed an exercise comparing SA with India, where it is also scouting for deals. "The growth rates in India are higher. The political risk is just as high, maybe higher. The currency is also hard to predict," he says. But on the other hand, in SA "there are some substantial companies that are well run. The governance and legal systems are similar to what we're used to in America, the UK and Europe. The language makes things much easier, so it's an obvious place to do business for a lot of us."


But the foreigners have been cautious in their approach. The first move was to talk to local private equity groups which could become local partners. "We've had a number of international guys talking to us," says one local private equity operator. "The British come to talk and find out how things work, the Americans are far more brash." One encounter took place in a smoke-filled bar in New York. But now the deal-makers are on regular flights from Europe, usually the London office.


"What you've got here is a sort of club on tour," says an SA investment banker. "All these guys have invested with each other at some stage." He is alluding to a common piece of jargon in the industry - "club deals" - where firms get together to do a deal, each putting some funding into the mix and sharing the risk. Alexander Forbes is being chased by UK-based Actis, which is leading a club involving three Canadian institutions.


The other deals in SA will be similar, with local operators like Brait and Ethos brought into the club. Ethos CEO Andre Roux says the firm has been a "madhouse" while it assesses the opportunities. Roux estimates that SA firms have around R30bn to invest at the moment, a handy fillip to the money brought in by the foreigners.


And it won't just be equity they'll try to source locally - "they will tap the local market for everything they can", says a local banker. That means raising debt locally, too, though some will raise debt offshore to take advantage of lower offshore interest rates. They then hedge the currency risk.


Some of the local firms are also taking the lead in deals, approaching foreign firms to become partners. John van Wyk, a partner at the Johannesburg office of Actis, says the size of the deals is too large for SA firms alone, so they generally need partners. The international players, on the other hand, recognise that they need locals who understand the market and the companies better than they do.


Says Brait CEO Antony Ball : "They have to understand the nuances of the market. And there needs to be chemistry between management and investors." That chemistry can be modulated best by local private equity operators. One foreign deal-maker describes his local counterparts as being of "great quality". "It's not just about money - it's about local knowledge and local know-how."


Just when the first deal will close is difficult to predict. Both Edcon and Alexander Forbes are said to be close. Sources in the fund management industry, who hold significant chunks of the companies being targeted, say they haven't been approached by the foreigners yet. For now, the firms are still trying to get management and the boards on their side. But expect the sales pitch to shareholders to start soon.

Its great to start the morning with this king of news. Free State, Eastern Cape, Limpopo, North West Taxi Operators don't have a problem with Taxi Recap. I hope that other provinces, mainly KZN will come to terms with the fact that we need to move forward as a country and help the government to help us.

Long-distance taxi operators take delivery of new vehicles
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Ten taxi owners recently took delivery of the first batch of twenty-five Mercedes-Benz Sprinter Commuter mini-buses from the Mercedes-Benz commercial vehicle dealership in Centurion.

A statement released on Wednesday said that the delivery formed part of an initial 35-vehicle order, which endorsed the Simunye Long Distance Taxi Association efforts to ensure safer, more comfortable transport for their commuters.

“We have placed an order for a further 20 Sprinter 416 CDI commuter mini buses,” said taxi association chairperson David Fayilani.

The taxi association operated on routes from Tshwane to Limpopo and Mpumalanga.

All the taxi drivers received special training on the Sprinters. “Our vehicles are technologically advanced, and the correct use of ABS and maintenance of turbo-charged engines with diesel injection needed to be explained,” said LCV sales manager Morris Maile.

The Mercedes-Benz Sprinter bus has been officially certified compliant by the SABS, and formed part of the official vehicle list specified by government’s recapitalisation programme.

we are getting closer to investing in SA and Im back next week to see how to structure the whole thing

Even better SA BOY, South Africa is really going places. Provinces like Mpumalanga and Free State need to wake up to the occasion and lure investments so that people can get employed. I'm sure even the labour costs there are far way less that the Jhb/Pta/Dbn and CT ones.

Waterfront buyers eye financial services




DUBAI — Dubai World, part of a consortium that has already committed $2bn to the purchase and development of Cape Town’s Victoria & Alfred (V&A) Waterfront, is looking at further potential investments in the financial services industry, says chairman Sultan Ahmed bin Sulayem.

He said the investment could be in either creating a mortgage- financing vehicle to cover future property developments at the V&A, or Dubai World finding another takeover target.



This commitment is in line with government’s policy of increasing and attracting further direct foreign investment from the Arab and Middle Eastern states.



Sulayem did not want to elaborate on the scheme, saying the V&A consortium was concentrating “on what they had in hand”, which is the V&A development.


He was speaking at a press conference after a closed-door briefing given to Western Cape premier Ebrahim Rasool, who is leading a high-powered provincial government delegation to view projects so far undertaken by Dubai World — the Emirate’s government business arm.


On growth of the V&A, Sulayem said “much emphasis” would be placed on further exploring its entertainment potential, marina developments, a possible cruise liner terminal, residential and retail developments, and at least four new hotels.


So far only half of the 600000m² property which Transnet sold in September to the consortium, which includes Dubai World, London & Regional Properties and a 5% black economic empowerment consortium headed by Cape Town businessman Hassen Adams, has been developed.


An initial six-month “cleaning up” phase to spruce up aspects of the V&A is expected to be completed in six months.

The V&A consortium has a three-year plan in place, during which much development in anticipation of the 2010 World Cup will be undertaken.


James Wilson, CE of Nakheel Hotels and Resorts, the subsidiary of Dubai World that is undertaking the V&A development, said additional five- and 10-year strategy plans were in place to improve business.


Wilson said Dubai World saw Cape Town as the gateway to developments elsewhere in Africa. The city had some of the highest rates for residential property in Africa, he said.

The selling price for apartments at the V&A was comparable with those of Dubai’s unique Palm development, which required that an island be built in the sea, he said.


Wilson said the V&A transaction had attracted interest from Middle East competitors “within weeks” after the purchase, with many firms now also looking at potential business in Cape Town and the rest of the country.


Wilson said SA was an easy place to do business in as it had “clear” property ownership and land title legislation.

Sulayem said through Dubai World’s investment arm, Istithmar, it already had interests in other African countries such as Morocco and would be considering further investments in Africa “when the time is right”.

VIVA PRESIDENT MBEKI


He has proved himself. He did say that he willl lure investment into South Africa so that people can get employed and the past 2 years have been posetive for South Africa. The critics ahev called him a President of foreign affairs as he is always outsode the country forgetting that he was on a mission to show the world that South Africa and Africa as a whole have got capability and they must never forget us when coming to business.


In the bag! Alcan to sign deal next week

By Patrick Cull and Sipho Masondo

CHAMPAGNE corks were popping yesterday as Alcan announced it would sign the final papers for its R20-billion Coega aluminium smelter next week, paving the way for the creation of thousands of jobs and changing the face of industry across the Eastern and Southern Cape.

After almost five years of negotiations and amid great anticipation by the business community, the Canadian company announced yesterday that the historic signing would take place in Port Elizabeth next Friday.

It is understood Deputy President Phumzile Mlambo-Ngcuka will attend the milestone event.

The smelter will create some 6 000 jobs during the construction phase and 1 000 when it becomes operational, in addition to a host of downstream opportunities. Construction is likely to start at the beginning of 2008.

An excited Nelson Mandela Bay Development Agency chief executive Pierre Voges said the smelter would be the “most significant economic development in Port Elizabeth in more than 20 years”.

“It will bring an increase in office, retail, leisure and tourism property investment. And that‘s our job – to increase the level of property investment and development in the city.”

PE Regional Chamber of Commerce and Industry president Dave Coffey said the deal would be a “massive occasion to be celebrated in anticipation of a brighter future for this region”.

“We just don‘t begin to understand the impact Alcan will have on the economy of our area. It will make a sustainable difference and create employment. It will be a vital milestone in the Coega project. As former trade and industry minister Alec Erwin said, ‘Alcan is worth the wait‘,” he said. Alcan will sign a “landlord agreement” with the CDC and an electricity supply contract with Eskom that Trade and Industry Minister Mandisi Mpahlwa will gazette before the end of next week. Alcan is to be given a developmental electricity tariff.

Mpahlwa told a parliamentary briefing that he had been in close contact with Alcan over the past two weeks to sort out the final outstanding issues over electricity supply, adding that the Canadian company was “very upbeat about the process”.

The CDC yesterday welcomed the announcement of a date for the signing, saying it was yet another “bold step” towards making the Coega aluminium smelter a reality. Spokesman Vuyelwa Qinga-Vika said the supply of reliable and cost-effective energy had always been “a critical component of the project” and the CDC was “delighted to hear about recent developments around energy and this will surely communicate a positive message to foreign investors about the competitiveness of the Coega IDZ”.

Among outstanding issues that will still have to be finalised after next Friday is the financing of the project.

Alcan is reported to want a 30 per cent stake in the project with the Industrial Development Corporation (IDC) taking 15 per cent.

Businessman Khusta Jack said CDC chief executive Pepi Silinga and his team had worked under extremely difficult conditions to try to secure Alcan.

“I have always been confident in the team driving the project. This is great news. The Eastern Cape is now poised for unprecedented growth. The economy can only grow when the government spends large (amounts) on public development, which investors take advantage of.”

He said a massive skills shortage could result, but proper planning could offset any negative spin-offs.

Nelson Mandela Bay Nafcoc president Kutloano Headbush said: “This is a major confidence-booster. Other investors will now realise the Eastern Cape is a viable investment destination. Our infrastructure will also receive a major boost, especially in light of the 2010 Soccer World Cup.” pcull@johnnicec.co.za

Lack of skilled labour in region could hamper big new projects

By Max Matavire Metro Editor

NELSON Mandela Bay is bracing itself for a massive demand for skilled labour when the construction of several major projects in the region gets under way next year.

Researchers have sounded a warning that key projects planned “are in serious jeopardy of not becoming a reality due to skills shortages”.

The major developments include:

� The R711-million 2010 World Cup stadium;

� The R20-billion Alcan aluminium smelter at Coega;

� Transnet‘s R6-billion Coega harbour project, involving the construction of additional berths, container terminals and acquisition of special cranes;

� The Straits Group‘s proposed R5,8-billion chlorine plant at Coega; and

� The R10-billion Eskom 12 000MW power station.

For the Coega IDZ alone, employment projections show that more than 9 000 operational jobs and 24 000 construction jobs will have to filled.

A study commissioned by the municipality to look at the skills requirements of Nelson Mandela Bay in view of these pending projects has recommended they should be staggered.

“The challenge that the region needs to address is the timing of the phases of construction. It is not likely that the region will be able to supply the required skills for all the projects to be undertaken simultaneously,” said a report by the Coega CDC.

The shortage was compounded by large-scale capital projects in other provinces, such as the multi-billion rand Gautrain project, a multi-million rand Eskom project in Tshwane and the Mossgas project in Mossel Bay. These projects needed highly qualified artisans, meaning they would be competing for scarce skills.

In a bid to address the issue, the Nelson Mandela Bay Investment Council, an investment arm of the municipality, has commissioned the Coega CDC to identify the region‘s skills requirements, shortages, critical areas and training needs. Tertiary institutions are also involved in the project.

The first phase of the study, which has been completed, was to develop a demand analysis for skills for the short-term economic projects planned for Nelson Mandela Bay. The second phase, currently under way, will determine the availability of the required skills and the region‘s capacity to deliver.

“The construction programme for the four largest projects to materialise in the region indicates that over the next 41 months about 13 000 construction personnel will be required,” said Duncan Grenfell, project manager of the research team.

Grenfell said there was currently no strategy for human resource development interventions to address the unavailability of human resources in Nelson Mandela Bay or the region‘s capacity to supply these skills. The study recommended the creation of a human resource development strategy.

I met a chap party a dinner party the other day who is an engineer who returned to SA this year and he had 5 job offers to choose from and could virtually name his salary due to the skills shortage. He said that he felt there were more mega engineering projects going on in SA in the next 5 years than in the UK and that many of his friends who were engineers in the UK kept getting job offers back home from head-hunters.

I met a chap party a dinner party the other day who is an engineer who returned to SA this year and he had 5 job offers to choose from and could virtually name his salary due to the skills shortage. He said that he felt there were more mega engineering projects going on in SA in the next 5 years than in the UK and that many of his friends who were engineers in the UK kept getting job offers back home from head-hunters.

true..UCT engineering students are in high demand...good students definitely have great scholarship and job opportunities

I met a chap party a dinner party the other day who is an engineer who returned to SA this year and he had 5 job offers to choose from and could virtually name his salary due to the skills shortage. He said that he felt there were more mega engineering projects going on in SA in the next 5 years than in the UK and that many of his friends who were engineers in the UK kept getting job offers back home from head-hunters.

Is this just civil engineering though? cant imagine Mech, Chem, Agri, Elec, etc would have the same demand.

Johannesburg - Moody's Economy.com says while the rand could remain vulnerable to further bouts of weakness and volatility in the coming months, its medium-term outlook is for a stronger rand amid rising foreign reserves and strong inflows of foreign direct investment.
"The rand has been on a strengthening run against the buck for well over a month now. Strong flows of foreign funds have provided solid support for the rand in recent weeks and have also helped to push the domestic stock market to record high levels," say Moody's Economy.com economists Paul Guest and Dr Ruth Stroppiana.

"As the stability of the rand and the domestic stock market is heavily dependent on international capital flows, there is a risk a slowdown in overseas investment activity will undermine the value of South African assets.

Nevertheless as the country continues to build its foreign exchange reserves, temporary slowdowns in the flow of funds, such as occurred early this year, will become less of a threat to the stability of the nation's financial markets," conclude the researchers.

While the rand regained traction against the majors to hit a series of 11-week best levels against the greenback this week (testing R7.10/US$), the currency was last slightly weaker at R7.2750/$ from an overnight close of R7.2346.

A rand trader told I-Net Bridge the rand had weakened due to a big euro-rand order that went through late London time on Thursday in an illiquid market. This resulted in stop losses being triggered through R7.20/$.

everything incl chemical, and electrical but esp civil.

^^ Well no kidding, there's mad construction going on all over the country.

yeah...esp civil...construction studies at UCT and cape tech are also handing out scholarships..from what i hear 500 scholarships have been made available...for civil and construction studies..of which 250 will go to UCT...with females in particular having a very good chance of being awarded a scholarship

I can confirm this. My little sister just completed her BTech at Cape Tech and she told me she has already been offered a scholarship to do a masters programme but she already received 2 job offers (one from her former employer who she worked for a year after completing her under grad and the other from the company that had offered her a scholarship to do the BTech).

VIVA PRESIDENT MBEKI


He has proved himself. He did say that he willl lure investment into South Africa so that people can get employed and the past 2 years have been posetive for South Africa. The critics ahev called him a President of foreign affairs as he is always outsode the country forgetting that he was on a mission to show the world that South Africa and Africa as a whole have got capability and they must never forget us when coming to business.


In the bag! Alcan to sign deal next week

By Patrick Cull and Sipho Masondo

CHAMPAGNE corks were popping yesterday as Alcan announced it would sign the final papers for its R20-billion Coega aluminium smelter next week, paving the way for the creation of thousands of jobs and changing the face of industry across the Eastern and Southern Cape.

After almost five years of negotiations and amid great anticipation by the business community, the Canadian company announced yesterday that the historic signing would take place in Port Elizabeth next Friday.

It is understood Deputy President Phumzile Mlambo-Ngcuka will attend the milestone event.

The smelter will create some 6 000 jobs during the construction phase and 1 000 when it becomes operational, in addition to a host of downstream opportunities. Construction is likely to start at the beginning of 2008.

An excited Nelson Mandela Bay Development Agency chief executive Pierre Voges said the smelter would be the “most significant economic development in Port Elizabeth in more than 20 years”.

“It will bring an increase in office, retail, leisure and tourism property investment. And that‘s our job – to increase the level of property investment and development in the city.”

PE Regional Chamber of Commerce and Industry president Dave Coffey said the deal would be a “massive occasion to be celebrated in anticipation of a brighter future for this region”.

“We just don‘t begin to understand the impact Alcan will have on the economy of our area. It will make a sustainable difference and create employment. It will be a vital milestone in the Coega project. As former trade and industry minister Alec Erwin said, ‘Alcan is worth the wait‘,” he said. Alcan will sign a “landlord agreement” with the CDC and an electricity supply contract with Eskom that Trade and Industry Minister Mandisi Mpahlwa will gazette before the end of next week. Alcan is to be given a developmental electricity tariff.

Mpahlwa told a parliamentary briefing that he had been in close contact with Alcan over the past two weeks to sort out the final outstanding issues over electricity supply, adding that the Canadian company was “very upbeat about the process”.

The CDC yesterday welcomed the announcement of a date for the signing, saying it was yet another “bold step” towards making the Coega aluminium smelter a reality. Spokesman Vuyelwa Qinga-Vika said the supply of reliable and cost-effective energy had always been “a critical component of the project” and the CDC was “delighted to hear about recent developments around energy and this will surely communicate a positive message to foreign investors about the competitiveness of the Coega IDZ”.

Among outstanding issues that will still have to be finalised after next Friday is the financing of the project.

Alcan is reported to want a 30 per cent stake in the project with the Industrial Development Corporation (IDC) taking 15 per cent.

Businessman Khusta Jack said CDC chief executive Pepi Silinga and his team had worked under extremely difficult conditions to try to secure Alcan.

“I have always been confident in the team driving the project. This is great news. The Eastern Cape is now poised for unprecedented growth. The economy can only grow when the government spends large (amounts) on public development, which investors take advantage of.”

He said a massive skills shortage could result, but proper planning could offset any negative spin-offs.

Nelson Mandela Bay Nafcoc president Kutloano Headbush said: “This is a major confidence-booster. Other investors will now realise the Eastern Cape is a viable investment destination. Our infrastructure will also receive a major boost, especially in light of the 2010 Soccer World Cup.” pcull@johnnicec.co.za

Great news for PE and the Eastern Cape Pule! I agree with your assesment of President Mbeki. I've never really understood why the South African press (and international press for that matter) has such an issue with him. Even if they don't agree with all his policies painting him as some sort of uncaring ineffectual leader is really ridiculous. Sometimes it seems they just want a great show - bread and circuses, but without the bread! But anyway....

I'm guessing this article was from the Eastern Province Herald. I haven't seen anything on www.southafrica.info yet so I hope no one is jumping the gun.
It seems that project hinged mostly on Electricity price and reliability. Like South Africa Canada also has fairly cheap power so I guess they are used to cheap power. It's a great project for PE, the Eastern Cape and South Africa. Apart from the jobs there's also tax revenue and the fact that other companies would view Alcan's decision as a vote of confidence in the country.

Lack of skilled labour in region could hamper big new projects

By Max Matavire Metro Editor

NELSON Mandela Bay is bracing itself for a massive demand for skilled labour when the construction of several major projects in the region gets under way next year.

Researchers have sounded a warning that key projects planned “are in serious jeopardy of not becoming a reality due to skills shortages”.

The major developments include:

� The R711-million 2010 World Cup stadium;

� The R20-billion Alcan aluminium smelter at Coega;

� Transnet‘s R6-billion Coega harbour project, involving the construction of additional berths, container terminals and acquisition of special cranes;

� The Straits Group‘s proposed R5,8-billion chlorine plant at Coega; and

� The R10-billion Eskom 12 000MW power station.

For the Coega IDZ alone, employment projections show that more than 9 000 operational jobs and 24 000 construction jobs will have to filled.

A study commissioned by the municipality to look at the skills requirements of Nelson Mandela Bay in view of these pending projects has recommended they should be staggered.

“The challenge that the region needs to address is the timing of the phases of construction. It is not likely that the region will be able to supply the required skills for all the projects to be undertaken simultaneously,” said a report by the Coega CDC.

The shortage was compounded by large-scale capital projects in other provinces, such as the multi-billion rand Gautrain project, a multi-million rand Eskom project in Tshwane and the Mossgas project in Mossel Bay. These projects needed highly qualified artisans, meaning they would be competing for scarce skills.

In a bid to address the issue, the Nelson Mandela Bay Investment Council, an investment arm of the municipality, has commissioned the Coega CDC to identify the region‘s skills requirements, shortages, critical areas and training needs. Tertiary institutions are also involved in the project.

The first phase of the study, which has been completed, was to develop a demand analysis for skills for the short-term economic projects planned for Nelson Mandela Bay. The second phase, currently under way, will determine the availability of the required skills and the region‘s capacity to deliver.

“The construction programme for the four largest projects to materialise in the region indicates that over the next 41 months about 13 000 construction personnel will be required,” said Duncan Grenfell, project manager of the research team.

Grenfell said there was currently no strategy for human resource development interventions to address the unavailability of human resources in Nelson Mandela Bay or the region‘s capacity to supply these skills. The study recommended the creation of a human resource development strategy.


Great summary of mega projects in PE. I think the 12,000MW power station might be a typo though. Isn't Koeberg a bit less than 2,000MW? Maybe it's 1,200MW.

As for the skills issues. In the shorter term they will have to look at bringing back the South african diaspora as many have mentioned above, or fast track work permits for skilled foreign staff that local companies want to hire.

Great summary of mega projects in PE. I think the 12,000MW power station might be a typo though. Isn't Koeberg a bit less than 2,000MW? Maybe it's 1,200MW.

As for the skills issues. In the shorter term they will have to look at bringing back the South african diaspora as many have mentioned above, or fast track work permits for skilled foreign staff that local companies want to hire.

I agree it must be 1200. The biggest stations in the world are only in the 4000 odd range.

I would imagine that once it looks like the boom is going to smooth out into long term growth it will attract back a lot of skilled people looking to start a new life in SA. I guess people want to make sure its not going to just stop all of a sudden. Once it looks long term the building industry can fully recapitalise in people, skills and equipment and you wont get these huge cost rises due to lack of capacity.

Hopefully if the government is smart they will delay some big projects until the edge of the boom drops off so costs are lower, and to extend the cash flow of the building industry into the next decade.

PE might explode and become a major in SA. It has the potential of even overtaking Cape Town.

easy tiger , wake up now and smell the coffee. This is PE we are talking about

harberk, you have good wishes for PE, let me see if i can ask them to make you a mayor over there. LOL, but i think PE can certainly grow into a significant city, maybe past Pretoria, i am not sure about being bigger than CT

Cape Town R1,930bn [NEW]
Durban R1.8bn [NEW]
Soccer City R1.530bn [MAJOR UPGRADE]
Nelson Mandela R0.895bn [NEW]
Mbombela R0.855bn [NEW]
Peter Mokaba R0.696bn [NEW]
Ellis Park R229m [MINOR UPGRADE]
Free State R219m [MINOR UPGRADE]
Royal Bafokeng R147m [MINOR UPGRADE]
Loftus R97m [MINOR UPGRADE]

Sticking with all the big foreign investment. Dad's firm is in final stages of a JV with a large US investment fund for a $1,1 billion property development on the upper south coast. Involves a waterfront, marina, residential, commercial and an icon (no idea what it is yet). Times are very good. more detail when i am allowed to and when i know.

how would zille as the new DA leader affect the economy of south africa?....or would it not?

I doubt it will have much effect, at the very best it will probably only have a minute effect on the economy. However, i do believe that DA will probably get stronger under a new leader. Especially one who can make the party more relevant to today's political landscape as opposed to just whinging about anything and everything. SA needs a strong opposition urgently that is credible and has the ability to woe significant support. A mature democracy in my view is one that has at least 2 opposing parties that are capable of winning elections as it will help to keep the other in check and on its feet.

Personally I would like to see Helen Zille stay in Cape Town as she has done a good job running the city but still has only been mayor for eight months and she would be better off remaining in Cape Town than going back to Parliament where her influence would be limited as the DA only had 50 MPS out of 400. Maybe Joe Seremane will become the next DA leader, that might not be bad as he is black and the DA needs a black at the top.

Latest (Nov 2006) economic indicators, indicating an advanced secondary economy.
http://www.statssa.gov.za/keyindicators/GDP/FactSheet1_2006-11.pdf

and the economy has performed better than perceived, with GDP in access of 5%
http://www.statssa.gov.za/keyindicators/GDP/FactSheet%203_2006-11.pdf

theres this youtube video.."i am an african" which we have all seen on tv...
thought i'd add it here...

http://www.youtube.com/watch?v=rDJs4WgrCvw

'Tourism growth in SA double that of world'

By Dominique Herman

South Africa's growth in the number of international visitors was almost double that of the rest of the world in 2005 and the Western Cape experienced the highest-ever number of tourists in its traditionally off-season, according to the 2005/6 annual report of destination tourism agency Cape Town Routes Unlimited (CTRU).

Globally, international arrivals reached 808 million in 2005, representing a 5,5 percent growth from 766m in 2004.

South Africa attained a 10,3 percent growth rate in international arrivals in 2005 - from 6,7m in 2004 to 7,4m in 2005.

There was a 25,6 percent increase in total foreign direct spend, from R31,4 billion between January and September 2004 to R39,4bn during the same period in 2005, exceeding the global, Africa and regional average growth rates in receipts.

The Western Cape reflected a similarly high 7,43 percent growth rate in international arrivals between January and September 2005. The highest growth, of 13,1 percent, was recorded in the third quarter (July-September).

"Very encouraging was the above average growth (6,37 percent) in international arrivals within the low season months of April-May-June between 2004 and 2005," said outgoing CTRU chief executive Noki Dube.

She added that full annual figures for 2005 were not available yet from SA Tourism, but it was expected that the province would have received about 1,6m international arrivals for the year, attaining 6,9 percent growth over 2004. October, November and December were traditionally high performing months.

CTRU identified potential growth opportunities for the region emerging from the African market - Nigeria and Kenya, in particular. Namibia remained a core African source market. Internationally, India, China and the Middle East were where the new market opportunities lay.

"The major drivers of international arrivals in the Western Cape are different to the national ones. While SA's international arrivals are driven by the region - mainly Lesotho, Swaziland, Botswana and Zimbabwe - the Western Cape international arrivals are driven mainly by the UK, Germany and the US," the annual report said.

The Western Cape achieved R8,9bn in foreign spend in 2004 and was expected to achieve R9,8bn in 2005, representing 10 percent growth. The province's domestic tourism relied heavily on its own residents: 68 percent of the 2,4m trips produced by the Western Cape in that year remained in the province.

CTRU chief operating officer Barry Ackers said at a festive season briefing recently that the domestic market was the backbone of the tourism economy, as it was characterised by more frequent, repeat business.

He attributed the agency's rosy festive outlook to the overall depreciation of the rand since December last year by 20 percent, which would lead to greater international tourism spend and also discourage locals from going overseas.

Airlines were adding international flights to Cape Town over the summer season (from 81 to 107 a week) - particularly British Airways, Lufthansa and Virgin - and there was a SA delegation to the Emirates planned to encourage its airline to apply for a licence to fly into Cape Town, Ackers said.

The tourist season, which spans a six-month period from October to March with most tourists beginning to arrive from December, was expected to generate 2,8m visitors this year - 1,8m of them domestic - he said.

# South Africa's medical tourism industry has skyrocketed, with the number of overseas patients drawn by "scalpel safari" packages more than doubling in three years, an expert said.

The booming sector now rakes in $37-million (about R260-million) annually, Martin Kelly, president of the Association for Plastic and Reconstructive Surgeons, said, underlining that this was a fraction of the potential.

Industry estimates predict that about 20 000 medical tourists will visit South Africa in 2006, up from around 8 000 in 2003.

Florence tops the list of World’s Best Cities for a second time this year and is joined again by some lovely perennials—Rome, New York, and Sydney. But this year, Travel + Leisure readers prove that they’re also intrepid and curious, giving high marks to far-flung cities like Beirut and Kathmandu.

Top 10 Cities Overall
Rank Last Year Name 2006
Score
1 4 Florence 87.09
2 3 Rome 86.15
3 2 Bangkok** 86.11
4 1 Sydney 85.94
5 5 Chiang Mai, Thailand** 85.62
6 8 Cape Town 85.39
7 n/a Buenos Aires 85.03
8 6 New York 84.75
9 n/a Beirut** 84.38
10 10 San Francisco 84.29

Top 5 Cities Africa and the Middle East
Rank Last Year Name 2006
Score
1 1 Cape Town 85.39
2 n/a Beirut** 84.38
3 4 Jerusalem 83.40
4 2 Marrakesh 82.33
5 3 Fez, Morocco 80.50

Western Cape - SA's fastest growing provincial economy
01/12/2006 19:06
By: Garth Theunissen
Cape Town - Statistics South Africa?s latest revised GDP figures for 2005 show that the Western Cape was once again SA's fastest growing provincial economy. The Western Cape recorded a real GDP growth rate of 57% year-on-year in 2005 with Gauteng coming a close second with a real GDP growth rate of 5,4% year-on-year. This marks the third successive year that the Western Cape's growth rate has outpaced that of Gauteng.

In fact, the last time the Gauteng economy grew at a faster rate than the Western Cape was 2002 when Gauteng recorded a real GDP growth rate of 5% compared to the Western Cape's 4,3%. Since then the Western Cape's economy has outpaced Gauteng every year.

Interestingly, Gauteng and the Western Cape were the only two provinces whose economic growth performance in 2005 was slower than that recorded in 2004 while the growth performances of all the remaining provinces improved on their 2004 growth rates.

The only other provinces in SA to record growth rates in excess of 5% were KwaZulu-Natal with a real GDP growth rate of 5.3% year-on-year and the North West province with 5.1% year-on-year.

The economies of the remaining five provinces all grew at a less impressive rate: Eastern Cape (4.8%), Mpumalanga (4.3%), Free State (4.2%), Limpopo (4.1%) and the Northern Cape (3.9%).