The 2010s began on a positive note for the South African economy, with the country hosting the Fifa World Cup. Ten years on, it is in tatters following a decade of disaster that Covid-19 is merely exacerbating.
Ten years ago, the joyful blare of vuvuzelas emerging from football stadiums set a backdrop to overall economic exuberance and a gross domestic product growth of 4.5 per cent. Cape Town was climbing the list of the world’s favourite travel destinations and the ‘big five’ construction firms were paying handsome dividends to shareholders.
By the end of 2020, the country will be fortunate if it achieves even 1 per cent growth, with GDP predicted to reach $295 billion (Dh1 trillion) – a level last seen prior to 2010. The construction industry is in survival mode and two out of three young people are out of work.
Tell me if this is not a depression
“We are back to the second quarter 2007 GDP level and all post-2008 financial crisis growth has been wiped out,” says Isaah Mhlanga, chief economist at Alexander Forbes Investments in Johannesburg. “Tell me if this is not a depression.”
Last week, second quarter figures showed the economy shrank 51 per cent compared to the same period in 2019. The coronavirus-related lockdown – one of the strictest in the world – is partially responsible for these dismal figures. The government is working on a plan to revive the economy as conditions ease but funding will be a major obstacle.
“Where will the money come from?” President Cyril Ramaphosa said during a webcast. “The government has largely run out of money. We’ll have to cobble the money together.”
The reality is that South Africa was broke even before Covid-19 struck, entering into a technical recession in March. Ratings agency Moody’s downgraded the country’s sovereign credit rating to junk status in late March, in spite of frantic lobbying efforts by the finance ministry and Mr Ramaphosa himself.
The lockdown that followed included a ban on international arrivals, the shutdown of most businesses including the mining sector and a prohibition of cigarettes and alcohol sales, which further choked off revenue.
On September 10, Moody’s said that state tax revenue had fallen to catastrophic levels.
“The loss in revenue will be much more severe than the fall in economic activity. The smaller tax base stemming from lockdown measures, job losses and lower confidence accounts for the vast majority of the revenue shortfall,” Moody’s said.
The all-important construction industry alone suffered its eighth straight quarter of decline, said Sifiso Skenjana, chief economist at IQ Business in Johannesburg. “This is really frightening, because this is one of the sectors that is an employment multiplier and is able to employ a relatively high number of unskilled people.”
Obviously, most countries reported a collapse in GDP growth during the March-July period, but few fared as badly as South Africa. Trading partners such as India and the UK saw contractions of under 25 per cent in the same period.
“We seem to have contracted twice as much as many other countries around the world, which is quite scary,” said Mandla Isaacs, managing director of Zehuti Advisory in Johannesburg. The prohibition of the sale of clothing and e-commerce meant almost no economic activity took place and an already damaged economy simply imploded. “We don’t have the same size commerce and industry as many other countries do.”
The government has largely run out of money
South Africa's current state is to be partially blamed on the corruption-laden administration of Mr Ramaphosa’s predecessor, Jacob Zuma. Although he goes on trial later this year, Mr Zuma is accused among other things of having allowed associates to gain access to state-owned entities and redirecting spending for personal profit. Mr Ramaphosa himself said last year that Mr Zuma may have cost the country 500bn rand (Dh109.7bn) in corruption.
Mr Ramaphosa has pledged to put an end to corruption, but is facing an uphill task. During the lockdown, media reports emerged about political functionaries belonging to his African National Congress (ANC) party inserting themselves into personal protection equipment contracts.
“The government has been talking about rules preventing elected politicians and officials from participating in state contracts,” said Nicky Weimar, chief economist at Nedbank, a financial services group in Johannesburg. “This is a rule all over the world and they need to implement this now.”
To add to its woes, the state-run electricity utility Eskom has once again resumed power cuts. Citizens and industry are growing accustomed to hours of ‘loadshedding’, when the company schedules cuts to take pressure off its ailing fleet of mostly coal-fired stations.
The power cuts are highly damaging to South Africa’s industrial sector, costing up to 118bn rand last year, according to economists' estimates. Analysts have been pleading for the private sector to be allowed into the energy grid, to help alleviate the shortage.
Eskom has perhaps become a symbol of the ANC’s inability to confront urgent reforms. The party itself is fiercely divided over whether private competition should be allowed. In the meantime, the utility limps along under a massive $40bn debt load and is unable to provide a reliable service.
“Government can do a lot to restore confidence, by opening up that market to competition,” Ms Weimar said. “Not just say you are going to do it, but to really go ahead and do it.”
The biog
Family: He is the youngest of five brothers, of whom two are dentists.
Celebrities he worked on: Fabio Canavaro, Lojain Omran, RedOne, Saber Al Rabai.
Where he works: Liberty Dental Clinic
MATCH INFO
Uefa Champions League quarter-final, second leg (first-leg score):
Manchester City (0) v Tottenham Hotspur (1), Wednesday, 11pm UAE
Match is on BeIN Sports
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
Killing of Qassem Suleimani
Iftar programme at the Sheikh Mohammed Centre for Cultural Understanding
Established in 1998, the Sheikh Mohammed Centre for Cultural Understanding was created with a vision to teach residents about the traditions and customs of the UAE. Its motto is ‘open doors, open minds’. All year-round, visitors can sign up for a traditional Emirati breakfast, lunch or dinner meal, as well as a range of walking tours, including ones to sites such as the Jumeirah Mosque or Al Fahidi Historical Neighbourhood.
Every year during Ramadan, an iftar programme is rolled out. This allows guests to break their fast with the centre’s presenters, visit a nearby mosque and observe their guides while they pray. These events last for about two hours and are open to the public, or can be booked for a private event.
Until the end of Ramadan, the iftar events take place from 7pm until 9pm, from Saturday to Thursday. Advanced booking is required.
For more details, email openminds@cultures.ae or visit www.cultures.ae
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
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DUBAI CARNIVAL RESULTS
6.30pm Handicap US$135,000 (Turf) 2,410m
Winner Dubai Future, Harry Bentley (jockey), Saeed bin Suroor (trainer).
7.05pm UAE 1000 Guineas Listed $250,000 (Dirt) 1,600m
Winner Dubai Love, Patrick Cosgrave, Saeed bin Suroor.
7.40pm Dubai Dash Listed $175,000 (T) 1,000m
Winner: Equilateral, James Doyle, Charles Hills.
8.15pm Al Bastakiya Trial Conditions $100,000 (D) 1.900m
Winner Laser Show, Kevin Stott, Saeed bin Suroor.
8.50pm Al Fahidi Fort Group Two $250,000 (T) 1,400m
Winner Glorious Journey, James Doyle, Charlie Appleby.
9.25pm Handicap $135,000 (D) 2,000m
Winner George Villiers, Tadhg O’Shea, Satish Seemar.
ENGLAND SQUAD
Joe Root (c), Moeen Ali, Jimmy Anderson, Jonny Bairstow, Stuart Broad, Jos Buttler, Alastair Cook, Sam Curran, Keaton Jennings, Ollie Pope, Adil Rashid, Ben Stokes, James Vince, Chris Woakes
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Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
The specs: 2018 Genesis G70
Price, base / as tested: Dh155,000 / Dh205,000
Engine: 3.3-litre, turbocharged V6
Gearbox: Eight-speed automatic
Power: 370hp @ 6,000rpm
Torque: 510Nm @ 1,300rpm
Fuel economy, combined: 10.6L / 100km
UAE currency: the story behind the money in your pockets
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
Adele: The Stories Behind The Songs
Caroline Sullivan
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Results
Light Flyweight (49kg): Mirzakhmedov Nodirjon (UZB) beat Daniyal Sabit (KAZ) by points 5-0.
Flyweight (52kg): Zoirov Shakhobidin (UZB) beat Amit Panghol (IND) 3-2.
Bantamweight (56kg): Kharkhuu Enkh-Amar (MGL) beat Mirazizbek Mirzahalilov (UZB) 3-2.
Lightweight (60kg): Erdenebat Tsendbaatar (MGL) beat Daniyal Shahbakhsh (IRI) 5-0.
Light Welterweight (64kg): Baatarsukh Chinzorig (MGL) beat Shiva Thapa (IND) 3-2.
Welterweight (69kg): Bobo-Usmon Baturov (UZB) beat Ablaikhan Zhussupov (KAZ) RSC round-1.
Middleweight (75kg): Jafarov Saidjamshid (UZB) beat Abilkhan Amankul (KAZ) 4-1.
Light Heavyweight (81kg): Ruzmetov Dilshodbek (UZB) beat Meysam Gheshlaghi (IRI) 3-2.
Heavyweight (91kg): Sanjeet (IND) beat Vassiliy Levit (KAZ) 4-1.
Super Heavyweight ( 91kg): Jalolov Bakhodir (UZB) beat Kamshibek Kunkabayev (KAZ) 5-0.
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