| SA’s ratings improve - 31/07/2007 |
Fitch Ratings has revised the outlook on SA’s sovereign ratings from stable to positive, attributing the change to improved growth performance, increased investments and sound public finances. South Africa’s ratings for long- and short-term foreign currency issuer default (IDR) were affirmed at ’BBB+’ and ’F3’ respectively. The country’s long-term local currency IDR was affirmed at ’A’, as was the country ceiling. Fitch said South Africa’s growth rate of 5% was sustained between 2004 and 2006 by strong consumer demand, while more recently acceleration of capital investment reflected a massive infrastructure investment by the country’s public corporations - both as part of the government’s general infrastructure programme and for infrastructure related to hosting the 2010 Fifa World Cup.
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Full SouthAFrica.info report
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| 2010 boosts ties with Italy - 27/07/07 |
As South Africa focuses on infrastructure development and refurbishment in preparation for the 2010 World Cup, the South Africa-Italy Business Forum, held in Johannesburg, highlighted significant interest from Italian companies in assisting the country to meet its specified targets. Engineering News reports that the anticipated spend by the public sector preceding 2010 is R400-bil-lion-plus, and the private sector is expected to top this figure. A large portion of this is to be pumped into the construction industry, and this means a multitude of opportunities for foreign companies to invest in and start up joint ventures with South African companies. The Italian Trade Commission is working with both the Department of Trade and Industry (DTI) and Business Unity South Africa to facilitate the search for business partners to make it possi- ble for entrepreneurs to meet.
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Full Engineering News report
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| Why SA is a good investment - 25/7/2007 |
Overseas investors continue to view South Africa as a good place to invest. The country has lost its piranha status and is rapidly become a destination of choice. Compared to major centres elsewhere returns that can be obtained here are attractive to foreign investors who also see future grow to 2010 and beyond. That’s according to Mike Spencer of Platinum Global in Bloemfontein who said: ’We are quickly building up a base of overseas investor companies and individuals who are looking for quality properties. The are afraid to buy using the basic information that is normally used in local sales transactions but are building up a trust in local companies that they deal with. While the 2010 World Cup will boost the local economy, this trend of overseas buyers acquiring local property is just part of a global world trend to multi-country investments for high level international investor who like to spread their risks.
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Full property scout report
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| 2010 forecasts cool down - 23/07/07 |
As 2010 World Cup fever continues to climb, South Africa may be wise to temper its expectations as Germany balances the final books on its own World Cup and discovers the post-match coffers are not quite as full as predicted. Shortly after the announcement in May 2004 that South Africa would host the 2010 FIFA World Cup, it was predicted that the country could expect R21,3 billion to be pumped into the economy. ITNewes reports that the latest predictions place that amount at R30 billion, resulting in an estimated 150.000 new jobs created. The impact that this will have on the South African economy is being touted as “enormous”, spurring economic growth to between 5 and 6%, and everyone — from the tourist trade to the property industry — is breathless in anticipation. ’But are we expecting too much?
One year post the hosting of the last World Cup, Germany is finalising its own balance sheets on the event and finding that — while the event no doubt boosted national pride, PR and patriotism — it has had virtually no impact on the economy as regards short-term growth and employment.’
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Full IT News report
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| Gauteng SA’ s cash cow - 11/07/2007 |
Gauteng, SA’ s smallest province by area, is set to generate 36 percent of national GDP by 2010, a provincial economic review and outlook report showed this week. According to a report on the IoL site, the province outperformed the national economy’ s growth between 1995 and 2005, expanding at a rate of 3.7% compared to 3.3% for the whole economy. Last year, the Gauteng economy grew by 5.1%, contributing about 34% of SA’ s GDP. This amounts to nine percent of Africa’ s output. The Gauteng provincial report said that during 2005 the three biggest sectoral contributions to the province’ s economy were finance, real estate and the business sector, with a combined share of 24%.
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Full report on the IoL site
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| Border crossing ’out of control’ - 10/07/2007 |
Important pillars of the SA economy, namely sustainable tourism and agriculture, as well as the success of the 2010 World Cup, can be seriously jeopardised by SA’s lack of a meaningful response to the desperate plight of the Zimbabwean people and to the security of South African citizens - especially in the northern parts of Limpopo. According to a Zoutnet report, this warning came this week from both local and international sources, with a clear indication that the entire situation is soon going to receive high-profile international media coverage. At a special work session with the SAPS in Pretoria, the TAU SA drew high-level attention to a potentially explosive situation in which the illegal movement of foreigners across the borders with Zimbabwe and Mozambique is totally out of control. The TAU stated bluntly that the SAPS does not demonstrate much success in safeguarding local citizens against the increasing threat of ’illegals’.
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Full Zoutnet report
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| Police applicants to report for physicals – 03/07/2007 |
Selected applicants for the Johannesburg metro police in a recruitment drive for the 2010 World Cup can expect SMS messages to report for physical assessment. According to a report on the News24 site, metro police spokesperson Chief Superintendent Wayne Minnaar said that the tests would take place at four venues, between Wednesday this week and Wednesday next week. The metro police wants to fill 4 000 posts by 2010. ’We have vetted 6 446 out of 15 000 applications,’ said Minnaar.
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Full report on the News24 site
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| New strike action looms – 03/07/2007 |
The two largest trade unions in the metals and engineering industry, Solidarity and the National Union of Metalworkers of South Africa (Numsa), on Monday announced that they were gearing up for strike action and would be handing a strike notice to employers’ organisations on Tuesday to inform them of a planned strike that would start next Monday. Engineering News reports that Solidarity has already begun mobilising its members for a strike, the union said in a statement. Solidarity spokesperson Johan Pieterse said that the demand for 10% was not exorbitant, as ’the industry has experienced massive growth of late, and this will increase in the run-up to the 2010 soccer World Cup’. Last week employers had raised their wage offer for the lowest paid workers in the sector to 7,8%, and to 7,3% for workers in grade A category, but workers were not happy with the new offer Numsa spokesperson Mziwakhe Hlangani had said.
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Full Engineering News report
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| Aveng reports huge profits – 03/07/2007 |
South Africa’s biggest construction company, Aveng, said yesterday that full-year profit more than doubled on accelerating economic growth and building work on infrastructure needed to host the 2010 World Cup. Earnings a share, excluding a R6.4 billion gain from the sale of a stake in Holcim South Africa, was expected to be between 100 percent and 120 percent in the 12 months to June, the company said in a statement. Aveng is scheduled to post more detailed results on September 10. South Africa’s fastest economic growth in close to two decades and the construction of roads, stadiums and railways for the world’s most-watched sports event have sparked the biggest building boom in more than a quarter of a century.
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Full Business Report article
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| Demand tapers off - 26/06/2007 |
It’s beautiful and tranquil but expensive, which is why demand for residential property in Plettenberg Bay is starting to taper off. Plettenberg Bay office manager of Sotheby’s International Realty Steven Neufeld says with prices of property in the town increasing last year by 28%, sales have dropped by 25%. ’As with the rest of the country, there has been a levelling off in the market. The number of days that properties take to sell is increasing, and the gap between asking and selling prices is also widening, which indicates that this cooling off trend will continue, at least until the 2010 World Cup,’ Neufeld said. The total value of all property transfers in the town in 1997 reached R98-million, compared to R846-million last year.
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Full Weekend Post report
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| High demand for services in 2010 - 24/06/2007 |
The SA foreign exchange market is expected to experience high demand for its services when the number of visitors to the country surges during 2009 for the Confederations Cup and even more in 2010 for the World Cup. Kananelo Makhetha, managing director of HRG Connex Travel, explained that there were foreign exchange facilities at all the entry points into SA. ’Even the domestic sections of the airports now have foreign exchange facilities and travellers can change money while they make their domestic air connections,’ he said. The Times reports that the foreign exchange market will boom and existing foreign exchange outlets are expected to be under considerable pressure to meet demand.
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Full report in The Times of Zambia
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| Enterprise to publish regional editions – 14/06/2007 |
Enterprise magazine, published by Mafube Publishing, will publish regional editions of the monthly magazine from its August issue. According to a Media Update report, the move is designed to take advantage of a boost in regional economic activity as 2010 World Cup host cities improve their infrastructure ahead of the global focus on SA. By introducing regional editions, Mafube Publishing hopes to get closer to its target market by reporting on what is happening locally. There will be three separate editions: A Central edition (distributed in Gauteng, Limpopo and North West); an Eastern edition (KwaZulu Natal, Mpumalanga and Free State); and Cape edition (Northern Cape, Eastern Cape and Western Cape).
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Full Media Update report
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| Exhibition industry contributes 3.4% to GDP – 14/06/2007 |
Recent research conducted by Grant Thornton for a joint venture between the Johannesburg Tourism Company (JTC) and the Exhibition Association of SA (EXSA), has revealed that the SA exhibition industry contributes 3.4% to the national GDP. The industry also sustains in total some 908 741 jobs each year, of which 335 516 are sustained by exhibition activity itself and a further 573 225 are sustained by deal/purchase activity facilitated by exhibitions. According to a Bizcommunity.com report, EXSA’s past chairperson Carol Weaving praises the SA exhibition industry, saying that the outcome of the research was a revelation and a positive indicator that the industry was prepared for the 2010 World Cup. ’Our contribution to the business tourism industry is very clear, and I anticipate the industry raising the stakes and increasing these figures before 2010,’ Weaving said.
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Full Bizcommunity.com report
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| 2010 an opportunity to fast-track growth – 13/06/2007 |
The 2010 World Cup was an opportunity for SA to fast-track its ambitions to join the most successful and fastest-growing economies such as Brazil, Russia, India and China, said Western Cape premier Ebrahim Rasool. Rasool spoke at a provincial conference, as well as at a business gathering, and said 2010 was an ideal opportunity for the soccer spectacular to be presented as an African world cup, with SA as an investment destination and a platform for investment into the rest of Africa. Business Day reports that he said SA was attractive for disposable capital, particularly from the Middle East, India and Pakistan, southeast Asia, China and Brazil, because it had a stable democracy, a recognised banking system and an internationally respected judicial legal system. The World Cup allowed SA and the province to fast-track projects such as the upgrading of the rail commuter system in Western Cape, improving facilities and building the stadium at Green Point, all of which would be legacies left to the province after 2010.
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Full Business Day report
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| Additional cranes to assist SA ports - 08/06/2007 |
Shipping company Maritime Carrier Shipping (Macs) acquired the vessel MV Cheyenne last year, which has heavy-lift cranes designed for specialised project tonnage. Engineering News reports that the company hopes that these cranes will assist in SA’s ability to handle projects, inbound and outbound cargoes, as well as forging closer links with its neighbours, says Macs breakbulk manager Lars Greiner. Greiner says that the company foresaw a need for additional crane capacity in most SA ports, and the motivation for buying the cranes was therefore owing to the basic lack of availability of heavy-lift cranes at many ports in Southern Africa, with some ports not having any capacity for cranes at all. Further, he says, the construction requirements of the 2010 World Cup has led to many mobile cranes being taken away from port use, and, hence, the need for additional cranes. Greiner says that Macs is not committed to ’uncontrolled growth’, but to specialisation as required by the SA economy to sustain further growth. He believes that the growth that is currently seen in the SA economy is sustain- able beyond the 2010 World Cup.
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Full Engineering News report
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| High hopes for fan parks - 08/06/2007 |
Government is studying Fifa regulations and selecting sites in various towns and districts for building fan parks. The Witness reports that in Germany, fan parks proved a major draw, with more than 700 000 soccer fans without tickets gathering in Berlin alone to celebrate before, during and after the final. In addition, provincial government has dedicated R300m to upgrade stadiums and build multi-purpose sports facilities to allow other municipalities to make a meaningful contribution to the 2010 World Cup. These will play a strategic role in winning bids to host teams who are looking for base camps and practice venues. ’Government’s Accelerated Shared Growth Initiative for SA (Asgisa) is aimed at ensuring that economic growth is accelerated to at least 4.5% by 2009 and to an average of six percent between 2010 and 2014. Asgisa has identified certain investments — part of this is investment in infrastructure ahead of the 2010 World Cup,’ said KZN MEC for Finance and Economic Development Dr Zweli Mkhize.
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| 2010 a catalyst for growth - 08/06/2007 |
There is a bit of flat-earth-society thinking prevalent around 2010, with many people of the opinion that SA’s economic growth will halt in its tracks after the soccer World Cup, says Absa Capital senior economic strategist Chris Hart. ’Some people think the ship is going to sail off the edge of the earth after 2010. However, the 2010 World Cup is only a catalyst for growth.’ Engineering News reports that Hart says infrastructure spend is still ’very reactive’, owing to the fact that economic growth has been exceeding expectations – which is why he believes SA is going to put infrastructure in place for at least the next 15 to 20 years as it tries to catch up with demand. Hart also highlights that there is not sufficient plant and machinery to carry the boom, and that the country’s current account deficit may well keep on ballooning as companies gear up to import more plant and machinery. He says 2010 is a mere stepping stone for bigger things.
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Full Engineering News report
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| Budget shows city is booming - 06/06/2007 |
Johannesburg’s record R25bn 2007/08 budget shows that the city is booming. Although the 2% surcharge is likely to hit businesses hard, the R67m is expected to go a long way in revitalising the inner city, many parts of which are still bad. The Star reports that the fact that a large portion of this greatly increased budget is from government grants is irrelevant - it is all contributing to improving the city and leaving a legacy long after 2010. Also welcome is the fact that City Power and Joburg Water are getting the largest chunks of the budget. With the huge growth the city is experiencing, these two essential utilities need to accelerate the upgrading of their infrastructure and installing new ones to cope with the burgeoning residential and business developments happening in the city.
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Full report in The Star
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| Durban improving steadily ahead of 2010 - 01/06/2007 |
Continued economic growth and the steady improvement of living and working conditions in the city will ensure that Durban wins the 2010 World Cup even before the whistle blows. Those are the words of eThekwini city manager Dr Michael Sutcliffe, who says that all indications since the start of 2007 are that the city is moving in the right direction. ’Our building and construction sectors have outstripped the national average, and property prices – especially for beachfront properties - are escalating. There has been a huge increase in the number of building plans submitted and even property rentals are going up,’ he says. According to a report on the News24 site, he adds that ’massive’ growth in small businesses, along with a fast-growing tourism industry, are also helping to raise investor confidence in both the city and KwaZulu-Natal as a province. However, there are some major challenges that need to be dealt with if this growth is to continue strongly, he adds. These challenges include cleaning up Durban’s ’crime and grime areas’.
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Full report on the News24 site
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| Gauteng geared for economic ’explosion’ - 29/05/2007 |
Gauteng’s construction and peripheral industries are positioned to experience an ’explosion’ that would see some R1.2trn flowing through the sectors and their extended supply chains, Standard Bank chief economist Goolam Ballim predicated. This would be a sharp contrast to the R700m that was spent during the past three years. The Gauteng Business Barometer (GBB) for April revealed an especially robust construction industry as activity levels remained nearly 20% higher than in the same month last year, he said. ’It also places into perspective the contribution of the 2010 World Cup of between R50bn and R60bn to SA’s GDP.’ Engineering News reports that the R1.2trn represents a composite figure which includes activity in the extended supply chain of the construction industry, in the residential and commercial fields.
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Full Engineering News report
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| Bay business set to boom - 28/05/2007 |
The record economic growth in Nelson Mandela Bay will only get better as thousands of middle- class professionals flock to fill jobs created by major developments around the city and Coega, experts say. Major projects around the Bay are estimated to bring in well over 2 300 working professionals and their families to the city over the next five years, a result of companies bringing in experts as they expand and open up operations in the Bay. And economists say this will have ’very important benefits for the city’. The Herald reports that developments at Coega alone will bring in an estimated 2 000 professionals – or 30% of the permanent workforce to be employed there – as planned industries come on stream leading up to 2010 and shortly thereafter. Major multi-million rand developments set to change the face of the Bay over the next short-to-medium term in the run-up to the 2010 World Cup and before 2020, will further attract scores of professionals.
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| Zimbabwe set to launch 2010 national strategy - 23/05/2007 |
Zimbabwe is set to launch its 2010 World Cup national strategy before end of June when the government is expected to approve it. According to a People’s Daily Online report, Zimbabwe Tourism Authority CE Karikoga Kaseke said this during a media briefing on the country’s participation at the Indaba travel show held earlier this month in Durban, SA. ’Zimbabwe will be launching its national strategy before end of June and we are still waiting for the necessary approval,’ he said. The strategy is meant to guide the country’s activities to derive maximum economic benefits from the World Cup 2010 to be held in SA. Kaseke said Zimbabwe’s chances of benefiting from the tournament were very high as it was the second country in Southern Africa, other than SA, that had good basic infrastructure.
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Full People’s Daily Online report
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| Massive growth expected ahead of 2010 - 23/05/2007 |
Tourism is poised for massive growth in the run-up to the 2010 World Cup, with new business ventures set to take off and existing ones looking to grow. According to First National Bank (FNB), projected figures for potential business coming through the bank ahead of the World Cup rocketed by 300% following the five-day Tourism Indaba held in Durban recently. According to a report on the iafrica.com site, FNB measured the existing and potential tourism business operators that applied for tourism finance packages at the Indaba. ’Businesses are looking at growth in various ways. People who approached us at the Tourism Indaba ranged from those who are looking for commercial property financing to buy or construct new buildings for accommodation, to those businesses looking to finance new assets, such as transport fleets like buses,’ said Pieter de Bruin, head of FNB Solutions for Tourism. De Bruin said the high number of tourists coming to events like the Indaba represents a significant boost for the local economy. These numbers are set to increase in the run-up to the 2010 World Cup, presenting local entrepreneurs with business opportunities in the expanding tourism space.
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| Economy boom puts pressure on skills base - 17/05/2007 |
SA’s economic boom has led to a drop in unemployment rates but was putting pressure on an already depleted pool of skilled workers. FIN24 reports that an economic conference heard in Johannesburg the official unemployment rate had fallen from 31% in 2002 to 25% last year. ’Employment is growing very strongly with over 500 000 nett new jobs recorded consistently in Labour Force Surveys since 2004,’ said Alan Hirsch, deputy director-general for policy co-ordination in the presidency. But a booming construction sector, fuelled by infrastructure development ahead of SA hosting the 2010 World Cup, was among industries suffering a severe lack of skilled workers. ’Just about 98% of construction businesses are already reporting skilled labour shortages of some description,’ said the retired CE of construction company Group Five, Mike Lomas.
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Full FIN24 report
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| 2010 will affect current account - Moleketi - 16/05/2007 |
The government’s infrastructure programme of more than R400bn and the 2010 World Cup preparations would affect the current account of the balance of payments, admitted Deputy Finance Minister Jabu Moleketi. But he said he was confident this would be of only a short- to medium-term nature, and that hosting the event would have huge spin-offs in job creation, marketing SA abroad and a legacy of transport and other infrastructure. Business Day reports that recent surges in the current account deficit raised concern about the effects on the rand, inflation and interest rates. Moleketi said construction inputs such as cement had to be imported. SA companies would also have to import capital goods as a number of economic sectors were already operating at near full capacity, and were lagging growth in demand. This lag between growth in demand and investment in new manufacturing capacity was a worldwide phenomenon.
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Full Business Day report
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| 2010 imports put pressure on SA economy - 15/05/2007 |
Imports of construction equipment and other goods for the 2010 World Cup will further pressure the country’s negative balance of payments, its Deputy Finance Minister, Jabu Moloketi, said. ’Yes, indeed there is going to be an impact on the balance of payments, but it’s a good, healthy one because it’s importing capital goods to expand your economic capacity,’ said Moloketi. It would be ’quite correct’ to assume that in the short term ’we would begin to see these pressures,’ he said via satellite link to Cape Town. SA’s current account deficit rose to 7.8% of GDP in the fourth quarter of 2006, partly on large oil shipments. The government has pledged to spend about R17.4bn on building and upgrading stadiums ahead of the tournament and modernising the country’s ageing transport infrastructure.
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Full FIN24 report
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| 2010 to contribute R51bn to GDP - 14/05/2007 |
The 2010 World Cup will contribute at least R51.1bn to GDP between 2006 and 2010, R21bn more than the estimates published during the bidding phase of the World Cup in 2003. Of this revised amount, R15.6bn will be created by foreign tourists. According to Business Report, the revised estimates are from the World Cup’s economic impact assessment study by Grant Thornton’s tourism, hospitality and leisure consulting division. During the bidding phase it was said that 2.7m tickets would be sold and total ticket revenue was expected to be R4.6bn. Now the ticket number has increased to 3.2m.
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Full story in Business Report
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| Mbeki to attend IIC meeting - 09/05/2007 |
President Thabo Mbeki will on Friday meet members of the International Investment Council (IIC) in the Eastern Cape. ’The three day meeting will discuss, among other things, the current economic developments in SA, the Accelerated and Shared growth Initiative of SA (AsgiSA), Joint Initiative for Priority Skills Acquisition (JIPSA), Job creation and Students Experience Programme (STEP),’ said the president’s office. According to a report on the allAfrica.com site, high on the agenda would be discussions on Small Medium and Micro Enterprises (SMME), the 2010 World Cup and related challenges, the investment climate and key international issues.
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Full allAfrica.com report
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| Tax man set to score from 2010 players - 07/05/2007 |
Foreign soccer stars playing in the 2010 World Cup will be taxed on any income that they earn in the tournament, says tax consultant Eugene Bendel. According to a report on the Net Assets site, the tax laws are not new, and players could easily have been exempted, but ’this clearly is a dispensation which was not required in order to secure the World Cup’, said Bendel. Although the government granted certain tax exemptions, it chose not to exempt foreign players from a 15% withholding tax on income. Certain guarantees were given to Fifa in the bidding process. For example, goods and services suppliers at Fifa sites are exempt from income tax, as are Fifa staff. The taxes to be paid by business and industry far outweigh the concessions that will be granted by the government, with the net inflow to the SA Revenue Service (SARS) expected to top R7bn.
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Full report on the Net Assets site
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| Rising costs a threat to construction industry growth – 01/05/2007 |
Last year’s series of interest rate hikes will put the brakes on the building industry’s economic performance this year after impressive growth of 14.4% in 2006. A report from the Bureau for Economic Research at Stellenbosch University and consultancy Medium-Term Forecast Associates (MFA) says strong growth has led to ’serious bottlenecks’ in labour and materials supplies. The report says that building material prices have risen 62% since 2000. But prices of materials such as steel, timber, copper, bricks and concrete slabs have more than doubled in the past six years. The Financial Mail reports that Carl Grim, CE of construction group Aveng, says government has only itself to blame by precipitating a peak in the building cycle. Grim says it is difficult to understand why the tenders for the 2010 World Cup stadiums were put out at the last minute. It is poor planning that has forced national treasury to triple the budgets for the construction costs of the 2010 stadiums to R9bn over the next three years.
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