Good news about its economy is rare these days, but South Africa’s unexpectedly large bump in growth numbers this week catapulted it out of its longest recession in more than a quarter of a century.
Quarterly gross domestic product figures showed that the economy grew by 66 per cent in the third quarter. The upside was driven mostly by a rebound in manufacturing, trade and mining. A weaker domestic currency also helped.
“We are out of a recession but getting back to pre-Covid levels might take five years or so,” said Makwe Masilela, chief investment officer at Makwe Fund Managers in Johannesburg.
Compared to the same quarter last year, GDP is expected to be in negative territory, at minus 6 per cent.
The lifting of stringent lockdowns that were in place during the second quarter played a significant part in the recovery.
“Our economy is 60 per cent driven by household spending, and now that people are out shopping again, we have seen a big improvement in economic activity,” said Mr Masilela.
Although most analysts expected a sizeable jump in GDP as the country moved beyond lockdown, none expected it to improve as much as it did.
“There was a general expectation of a significant recovery in GDP growth, but 66 per cent was better than the best forecasts,” said Azar Jammine, chief economist at Econometrix in Johannesburg.
However, the fact that growth was consumer-led also pointed to an underlying problem – a lack of investment spending.
“The economy improved on people spending more rather than investing into the longer-term future,” Mr Jammine said.
This is a long-standing problem, one that contributed to the latest recession and the general lacklustre performance of the economy.
“This is a structural feature of the economy that has contributed to the decline in performance over the past decade. We are not investing in the goods and services we need, and are just consuming a lot.”
Economists in South Africa generally agree that the past 10 years have eroded investor confidence. Rampant corruption has cost the country almost 1 trillion rand ($66.2 billion), according to figures presented to parliament by President Cyril Ramaphosa.
Alongside this, the mismanagement of state enterprises such as utility Eskom resulted in intermittent power cuts that disrupted operations at mines and factories.
Since taking office two years ago, Mr Ramaphosa has rebuilt anti-corruption investigation and prosecuting units that his predecessor Jacob Zuma had systematically dismantled. Managers of most state-owned companies have also been replaced.
“There are some very positive things happening on the ground,” said Maarten Ackerman, chief economist at Citadel Investment Services in Cape Town.
“We are definitely sorting out corruption. There is also some very good progress on some of the state-owned enterprises, especially Eskom.”
Mr Ackerman said that if Mr Ramaphosa’s administration continues to push through reforms and investors are convinced that these will be lasting features, money may once again flow into the economy.
Encouraging developments in recent months include the arrests of senior members of the ruling African National Congress on corruption charges. Among these are previously untouchable figures such as Ace Magashule, the ANC’s secretary general and the country’s most powerful politician after Mr Ramaphosa.
At the same time, Mr Ramaphosa appointed a seasoned industry technocrat, Andre de Ruyter, to lead Eskom. Since taking office earlier this year, Mr de Ruyter has ended suspicious supplier contracts and fired or forced out hundreds of managers suspected of incompetence, corruption or both.
“There are already reforms in the pipeline – it is just not enough, and quick enough yet,” said Mr Ackerman. “But if we can at least continue with these kinds of changes, that will at least start to address the negative sentiment and create an environment where economic growth can be positive.”
In the meantime, the country will also benefit from the increase in demand for its primary export – minerals. Demand for gold, iron ore and platinum is growing as economies around the world improve. Good rains that ended a decade-long drought also brought a bumper wheat crop, which also boosted exports.
Mr Jammine said these actions vindicate optimists who forecast a strong year in 2021 for the South African economy. In particular, Treasury officials forecast modest growth next year and an associated increase in tax revenue.
Many economists had scoffed at this, but now it appears this optimism was justified.
“Treasury’s forecast of a pickup in 2021 of 3.3 per cent is very much on the cards,” said Mr Jammine.
“It may suggest too much pessimism around tax collection this year, and things are not quite as bad as some pessimists were suggesting.”
UAE Tour 2020
Stage 1: The Pointe Palm Jumeirah - Dubai Silicon Oasis, 148km
Stage 2: Hatta - Hatta Dam, 168km
Stage 3: Al Qudra Cycle Track - Jebel Hafeet, 184km
Stage 4: Zabeel Park - Dubai City Walk, 173km
Stage 5: Al Ain - Jebel Hafeet, 162km
Stage 6: Al Ruwais - Al Mirfa, 158km
Stage 7: Al Maryah Island - Abu Dhabi Breakwater, 127km
MATCH INFO
Champions League quarter-final, first leg
Ajax v Juventus, Wednesday, 11pm (UAE)
Match on BeIN Sports
The bio
Favourite vegetable: Broccoli
Favourite food: Seafood
Favourite thing to cook: Duck l'orange
Favourite book: Give and Take by Adam Grant, one of his professors at University of Pennsylvania
Favourite place to travel: Home in Kuwait.
Favourite place in the UAE: Al Qudra lakes
Five films to watch
Castle in the Sky (1986)
Grave of the Fireflies (1988)
Only Yesterday (1991)
Pom Poki (1994)
The Tale of Princess Kaguya (2013)
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
A Long Way Home by Peter Carey
Faber & Faber
Another way to earn air miles
In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.
An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.
“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.
MATCH INFO
Sheffield United 0 Wolves 2 (Jimenez 3', Saiss 6)
Man of the Match Romain Saiss (Wolves)
LA LIGA FIXTURES
Friday (UAE kick-off times)
Real Sociedad v Leganes (midnight)
Saturday
Alaves v Real Valladolid (4pm)
Valencia v Granada (7pm)
Eibar v Real Madrid (9.30pm)
Barcelona v Celta Vigo (midnight)
Sunday
Real Mallorca v Villarreal (3pm)
Athletic Bilbao v Levante (5pm)
Atletico Madrid v Espanyol (7pm)
Getafe v Osasuna (9.30pm)
Real Betis v Sevilla (midnight)
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
What is graphene?
Graphene is a single layer of carbon atoms arranged like honeycomb.
It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were "playing about" with sticky tape and graphite - the material used as "lead" in pencils.
Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But as they repeated the process many times, the flakes got thinner.
By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment had led to graphene being isolated for the very first time.
At the time, many believed it was impossible for such thin crystalline materials to be stable. But examined under a microscope, the material remained stable, and when tested was found to have incredible properties.
It is many times times stronger than steel, yet incredibly lightweight and flexible. It is electrically and thermally conductive but also transparent. The world's first 2D material, it is one million times thinner than the diameter of a single human hair.
But the 'sticky tape' method would not work on an industrial scale. Since then, scientists have been working on manufacturing graphene, to make use of its incredible properties.
In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. Their discovery meant physicists could study a new class of two-dimensional materials with unique properties.
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
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
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
Killing of Qassem Suleimani
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3EKinetic%207%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202018%3Cbr%3E%3Cstrong%3EFounder%3A%3C%2Fstrong%3E%20Rick%20Parish%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Abu%20Dhabi%2C%20UAE%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Clean%20cooking%3Cbr%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%2410%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Self-funded%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
