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13 May ’21 Wrap: SA’s economy is ready to party again

OUR TAKE: WRONG MOVE, ACE

By now you know the ANC’s secretary-general Ace Magashule has finally been suspended and is, of course, fighting back. Naturally, he posted a photo of himself playing chess. So much symbolism! The cunning! The strategy! The… technical error? That’s right: the shot shows Magashule about to move a pawn that literally couldn’t go anywhere: it was stuck in terms of the game’s rules and where the other pieces were laid out. It was so ridiculous that one of the game’s greatest living players, Russian chess grandmaster Garry Kasparov, made fun of him on Twitter. 

We like to think Magashule is showing things exactly as they are: the man has no moves left and, unlike his ally Jacob Zuma, he can’t even PLAY chess. After he laughably tried to counter-suspend party leader President Cyril Ramaphosa last week he has until tomorrow to apologise. If he doesn’t, the party will probably bring disciplinary charges against him and use that as grounds for dismissal. If they don’t they’re going to need to think up another process – fast. SA’s labour laws are pretty strict and the ANC as an employer has to abide by it. When their employees refuse to “step aside”, the party will have to deal with the full disciplinary process. That means paid suspension, and that’s costing them over R130K a month for Ace while the party is considering retrenching half its workers, and still others go unpaid – senior figures have bloated the party’s salary bill for years. 

The ANC has linked Magashule’s suspension to the criminal trial he’s facing but that could last for years before a guilty sentence would allow them to finally dismiss him. So they’ll use his attempted Ramaphosa suspension and his other antics to get him out faster. But the party needs to think about how it’s going to deal with other ANC members who refuse to “step aside” going forward without bankrupting themselves: a way that is in keeping with labour law, and answers the public’s demands for greater accountability. 

THE BIG STORY: SA ECONOMY’S RAPID RECOVERY TO PRE-COVID LEVELS

Experts are impressed at how fast our economy is bouncing back. Two developments you need to know about: 

1. South Africa recorded its “highest and fastest growth level ever” in April when it grew 25.9% in real terms on a year-on-year basis, according to Beti, an index that measures South African transactions. This was off a very low base, though, as our transactions had fallen so badly with the pandemic and lockdown. So in context it’s a bit like an F student becoming a C student again, after taking a knock. But what makes it remarkable is how fast it happened. Beti credits those low, low interest rates that have you spending less on loan repayments, (explainer here) plus government spending money to get it flowing through the economy. (It’s called stimulus.)

2. This week, it cost you less than R14 to buy one dollar – for the first time since January 2020. When the pandemic hit, it would have cost you R19, so this is a GREAT recovery. A weaker rand increases the price of importing goods, which in turn increases the price we pay for them. (On the plus side it makes exporting pretty good business.) The rand, along with other emerging market currencies, is also pretty volatile, which means it’s quite responsive to market shifts and global events. Traders sell their rands when things are looking bad, but thanks to some good local developments over the past week the rand was able to gain some steam: Ramaphosa gained political support for his decision to suspend Magashule, and rating agency Moody’s decided to keep SA’s credit rating unchanged at two rungs below investment grade. (See here for our explainer on credit ratings.) It all means traders are gaining confidence in South Africa. 

P.S. Nomvula Mokonyane, THAT’S how you “pick up the rand”. * drops mic *. 😉

BRIEFS

The Zulu kingdom’s Game of Thrones

The news has been abuzz with drama over the new Zulu monarch. In case you missed it, the death of the long-reigning King Goodwill Zwelithini in March this year created a power vacuum. It set the stage for developments that wouldn’t be out of place on a season of Game of Thrones. Queen Mantfombi MaDlamini, his 3rd and only wife of royal blood, got the coveted spot to take his place as regent – only to also die seven weeks later. 

Rumours of poisoning added to the drama. Then, on Friday, her will was read out on live TV, naming her eldest son as the next king. Cue even MORE drama, with court battles over his legitimacy as king, other royal men objecting to the reading of the Queen’s will and gun-wielding security guards whisking him away to safety, while Zulu warriors pledged to defend their new monarch. 

What’s with all the interest? Well, it doesn’t hurt that the new king, Misuzulu kaZwelithini, has a growing fan club for his dishy looks. But why you should REALLY care is because he now becomes the sole trustee to the controversial Ingonyama Trust. As we’ve told you before, it was set up on the eve of the 1994 elections to help secure the previous King and the IFP’s political participation – the party had threatened to boycott the process. The Trust administers nearly a third of KZN’s land and is accused of being unconstitutional and treating millions of rural people, particularly women, unfairly. Two government panels have recommended that it be dissolved. 

Over to you, King Misuzulu. 

Hollywood drags itself into the 21st century

If being out of touch was an organisation it would be the Golden Globes, organised by the Hollywood Foreign Press Association (HFPA). We’ve ranted about this body before here

Its all-white membership is tightly controlled, has no oversight and many of its about 90 members are semi-retired individuals working for obscure foreign publications. There are allegations of discrimination and vote-buying within its ranks. 

For years, major actors have grimaced their way through offensive interviews by this lot. Tom Cruise even returned three of his Golden Globes to the HFPA to protest its lack of diversity. Now major networks and studios have also piled on the pressure. Warner Bros revealed the HFPA wasn’t exactly obliging when it came to press conferences for black performers and artists. In response to all this, the association released a half-hearted list of reforms; this was criticised for lacking in detail and its slow timeline.

Netflix and Amazon Studio said they would not work with HFPA until it makes more meaningful changes. Now the Globes’ broadcasting partner, NBC, announced this week it will NOT air the awards on its channel next year, till there’s more meaningful change. This is a huge blow for the ceremony, which gets a $60m payment from NBC. It’s kind of incredible that public pressure has managed to achieve this outcome for such an established institution – it’s been running since 1944. 

It shows how traditional strangleholds on power are being challenged everywhere. We’re slowly winning the fight for a more transparent, inclusive world. 

Variants explained

Last week we told you that three travellers from India tested positive for Covid-19. Fortunately, they did not carry the variant that is spreading like wildfire in India. But over the weekend and to our dismay, it was reported that four cases of the B.1.617 variant had been detected in South Africa: two in Kwa-Zulu Natal and two in Gauteng. The individuals had recently travelled to India. All cases have been isolated and managed according to Covid-19 case management guidelines and contact tracing has been done to limit the spread of the variant, so that’s a relief. Some background: there are loads of variants, because that’s how evolution works, but anything the World Health Organisation (WHO) labels “a variant of concern” is more dangerous because it spreads so rapidly. As it stands, there are four variants of concern globally: the B.1.1.7 detected in the UK, P1 from Brazil, B.1.351 from South Africa and now the B.1.617 from India. 

The best defence is vaccines. On that front, South Africa is due to begin phase two of our rollout on Monday. First in line are people aged 60 and older, followed by around 2.5 million essential workers including police, teachers and social workers. Phase two also extends to people over the age of 18 who suffer from comorbidities. A reminder that the government is hoping to have enough people vaccinated for herd immunity by February next year

Adulting 101

Welcome to our new section, #adulting 101, where we bring you the latest news you need to know as an adult. Not the xxx type 🤭, but rather admin-related news that affects your life and your pocket. This week there’s vaccine registration and bank fees. 

  • Phase 2 registration 

If you are over 60 and haven’t yet registered for your vaccine, you can do so via the government’s Electronic Vaccination Data System (EVDS), via WhatsApp by sending the word ‘register’ to 0600 123 465, or you can send an SMS by dialling *134*832* and your ID number to complete your registration. 

  • Irregular bank charges

Do you find real-time clearing (RTC) payments more convenient and quicker than electronic fund transfers (EFTs)? Then you’re probably getting charged a little – or a lot – extra, depending on who you bank with. A close look at bank charges found a significant difference in the fees that banks charge to process RTC payments. The prices vary from R10 to as much as R50.  Banks said that immediate payments increase the risk of fraud and fees are charged for risk monitoring and the new technology to enable RTCs.

Here’s a breakdown of fees at SA’s top five banks courtesy of Business Insider: 

  • Capitec: R7.40 flat rate
  • Absa: R10 for under R1000, R49 thereafter
  • Nedbank: R10 for under R2000, R49 thereafter
  • Standard Bank: R10 for under R3000, R50 thereafter
  • FNB: R8 for PAYU and R45 for others.

The Financial Sector Conduct Authority (FSCA) is looking into the matter. 

AKA and Anele Tembe’s relationship in the spotlight

South African rapper Kiernan Forbes, stage name AKA, has come under public scrutiny after leaks and counter-leaks emerged following his fiancée’s dramatic death. Anele Tembe fell to her death from the 10th floor of the Pepper Club in Cape Town on 11 April. It has not been confirmed if her death was suicide or homicide, but as you can imagine, social media has been aflame with speculation. Now videos leaked by a concerned friend of Tembe’s show him breaking through a door with his hands to get into a room that she had allegedly locked herself in. 

Another video shows Tembe in a ransacked room, holding her head and rocking on the floor while Forbes, believed to be recording the video, narrates the situation, saying he wants evidence in case things ever go to court. Yet another video also shows Tembe hysterically trying to get away from an unknown man, who is trying to calm her down, while she screams: “Look what he’s doing, you guys don’t know what he’s been doing to me!” 

Forbes came out in defence of the videos. He said he and Tembe shared a “beautiful relationship” that was at times challenging. He said he knows who leaked the footage and claims the intention is to influence the ongoing investigations into Tembe’s death. We’re not making any calls on this as so much is unclear, but you may hear plenty of gossip – so these are the facts for now. 

What’s happening in Palestine

Israeli airstrikes against protesting Palestinians, which began late last week, have killed 69 Palestinians, including 17 children in Gaza, sparking a new uproar over the ongoing conflict in the region. Six Israelis have also been killed.

The protests began on Thursday over an impending court order for the eviction of several Palestinian families from their homes in East Jerusalem. It opened old wounds at a sensitive time: this week both sides remember the complicated history that led to this situation. The violence then rapidly escalated as protests moved to Al Aqsa mosque in Jerusalem. Israeli forces fired rubber bullets and stun grenades at worshippers. Palestinian resistance group Hamas, in turn, fired rockets into Israel on Monday, while Israel launched airstrikes into Gaza on the same day. 

The conflict has been raging since 1948 when the state of Israel was first declared. The background is complex but what you do need to know is that last month saw a landmark report by Human Rights Watch, which found that Israel is committing crimes of apartheid and persecution against Palestinians.

Israel denounced the report, saying that the organisation has a longstanding “anti-Israel agenda”. The Guardian reported that the International Criminal Court is investigating Israel for war crimes. 

The Palestinian struggle has long been paralleled with apartheid in SA. Ramaphosa earlier this week affirmed the governing ANC’s ongoing support “for the people of Palestine and their struggle for freedom and self-determination”, and condemned both the proposed evictions and the “brutal attacks on the Palestinian protestors at al-Aqsa mosque”. Scores of South Africans marched in support of Palestine in Joburg and Cape Town, calling on the government to impose sanctions on Israel. 

Shine bright like a (lab-made) diamond 
The world’s biggest jewellery maker, Pandora, has decided to ditch mining diamonds for lab-manufactured diamonds in an attempt to end the unethical production and human rights abuses at mines and factories that are often associated with mining for diamonds – think “blood diamonds”. Pandora plans to release its first collection of lab-made stones in the UK and will shift to other markets in 2022. It’s also an attempt to become more sustainable: the lab-made diamonds are grown from carbon with more than 60% renewable energy, a ratio that is set to rise to 100% next year. By 2025, its entire production will use only recycled precious metals, Bloomberg reported. Fancy that!?!