The Nation Newspaper

Tag: South African

  • Barclays sees headwinds for South African bonds as losses mount

    South African bonds, enduring the longest monthly losing streak in two years, have some way to fall before enticing buyers, according to Barclays Plc.

    The debt lost 0.9 percent in May, the fourth straight month of declines, according to Bank of America Merrill Lynch indexes. Yields on benchmark South African securities have climbed 119 basis points to 8.23 percent since hitting a 20-month low in January, and may have to rise as high as 8.5 percent to compensate investors for the risks, said Barclays strategist Michael Keenan.

    New taxes on gasoline, government wage increases above the inflation rate, a weak rand and the prospect of higher electricity tariffs are fueling inflation in South Africa at a time when the Federal Reserve is preparing to raise borrowing costs, drawing money to dollar assets. A looming credit rating review by Fitch Ratings and a hawkish central bank are adding to the headwinds for South African debt.

    “I wouldn’t be rushing out and buying bonds,” Keenan said by phone from Johannesburg on May 28. “Bonds remain vulnerable to mounting domestic and U.S. policy rate-hike fears.”

    While the central bank has kept its benchmark repurchase rate unchanged at 5.75 per cent since July to support the economy, rising gasoline, electricity and food costs are putting pressure on prices. An application by Eskom Holdings SOC Ltd. to raise electricity tariffs by as much as 25 percent could add 0.5 percentage points to inflation over the next year, according to central bank Governor Lesetja Kganyago.

    Inflation jumped to 4.5 percent in April and the central bank forecasts it will peak at 6.8 percent in the first quarter of next year, also spurred by a weak rand that’s boosting import costs and rising food prices. The five-year break-even rate, which measures expectations for consumer-price growth, climbed 25 basis points in May to 6.57 percent, the highest since July.

    Forward-rate agreements starting in six months, used to speculate on borrowing costs, show investors expect 62 basis points of interest rate increases this year, 22 basis points more than at the start of May.

    “I would really look for serious pull-backs to start adding again,” Abri du Plessis, a portfolio manager at Cape Town-based Gryphon Asset Management Ltd., which oversees the equivalent of about $330 million, said by phone on May 28. “This pullback is only maybe the beginning. I can see it going to 8.50 on the bond side.”

    Foreign-investor purchases of South African bonds dwindled to 128 million rand ($10 million) in May from 15.2 billion rand in April as the Fed moves closer raising interest rates. Economists forecast the Federal Reserve will increase borrowing costs in September.

  • Factories struggle as power cuts threaten South African growth

    Rolling power blackouts in South Africa and the risk of strikes are weighing on manufacturing output, threatening already anemic economic expansion and clouding the central bank’s task as it seeks to tackle inflation.

    A government report will probably show factory output increased one percent in March after two months of contraction, according to the median estimate of 17 economists surveyed by Bloomberg. The industry shrunk for seven of the last 12 months and the purchasing managers’ index signals a decline in April. While investors are pricing in a 25 basis-point rate increase by September, four-month forward-rate agreements have retreated over the past two weeks.

    Regular blackouts have limited production just as Africa’s most-industrialized economy seeks to recover from the slowest growth since a recession in 2009. The slow growth from an industry that makes up 13 percent of gross domestic product may test the resolve of policy makers to act to curb inflation, seen accelerating through the top end of the Reserve Bank’s three percent to six percent target range.

    The PMI, an indicator of factory activity, fell to the lowest level in 11 months in April, signaling a slide in production. That may put at risk the government’s forecast of economic growth quickening to two percent this year from 1.5 percent in 2014.

    A five-month work stoppage at platinum producers, followed by a strike at engineering companies cut one percentage point off economic growth last year, according to the central bank. While the biggest unions have yet to table demands before gold-industry wage talks that are due to start next month, National Union of Mineworkers General Secretary Frans Baleni said in March he may ask for a doubling of entry-level basic wages. Gold producers have said any pay increase must be linked to productivity.

    “The risk of a mining-sector strike in the middle parts of this year is quite high,” Jeffrey Schultz, an economist at BNP Paribas Cadiz Securities in Johannesburg, said by phone on May 8. “Should we see a large strike in the gold sector similar to what we saw in the platinum sector last year, that will undoubtedly have a negative impact on manufacturing prospects.”

    Yields on government rand bonds due December 2026 rose three basis points to 8.09 percent as of 5:20 p.m. in Johannesburg. The rand lost 1.1 percent against the dollar to 12.0474, taking the drop this year to 4 percent.

    While the central bank left its benchmark repurchase rate unchanged at 5.75 percent since July to help support the economy, rising gasoline, electricity and food costs are putting pres

  • Nigeria protests to South African ambassador

    Nigeria protests to South African ambassador

    THROUGH its Foreign Affairs Ministry, the Federal Government has explained why it  summoned South Africa’s High Commissioner in Nigeria Lulu Louis Mnguni.

    The ministry said it was to register Nigeria’s protest over the xenophobic attacks against fellow Africans.

    At least, seven lives have been lost since the anti-immigrant violence broke out last week in the former apartheid enclave.

    The South African government deployed soldiers on Tuesday to quell the unrest.

    The deployment followed criticisms from the international community, including China and Zimbabwe, that the President Jacob Zuma-led government was not doing enough to protect foreigners from armed mobs.

    “The essence of the invitation was to register Nigeria’s protest over the on-going xenophobic attacks against fellow Africans in South Africa,” the ministry said in a statement yesterday.

    According to the statement, the Minister of State, Foreign Affairs II, Musiliu Obanikoro met with Mnguni on Monday and registered the country’s protest.

    It reads: “In the meeting, Obanikoro condemned the attacks on foreigners in South Africa, expressing concern on the fate of Nigerians and indeed of other nationals who are migrants in the country.”

    South Africa needed to take “concrete steps to quell the unrest and bring the culprits involved to book” to act as a deterrent and prevent further violence, the statement added.

    “He also called on the South African authorities to compensate the victims of these attacks,” the statement said.

    The soldiers who were deployed to tackle gangs hunting down and killing foreigners arrested 11 suspects in a raid in Johannesburg.

    On Tuesday, four men, aged between 18 and 22, were charged with the murder and robbery of a Mozambican Mr. Emmanuel Sithole, whose death was captured by a newspaper photographer and published on the front page of a newspaper, shocking the nation.

    Isolated counter-protests involving a few dozen people have occurred in Nigeria, an economy in which South African firms such as mobile phone giant MTN and supermarket chain, Shoprite have large stakes.

    Diplomats from several African countries have urged their citizens back home not to seek vengeance.

    “We are appealing to our countries not to retaliate,” Democratic Republic of the Congo Ambassador, Bene M’Poko, told a news conference in Johannesburg.

    He stressed that South African firms in the rest of the continent were “working peacefully”.

  • South African inflation may push up interest

    South Africa has less flexibility on interest rates because the outlook for inflation has deteriorated, a deputy central bank governor said.

    Daniel Mminele said several trends are stoking inflation, including this year’s increase in oil prices, a weakening in the rand and the likelihood the state power company will raise tariffs.

    “Earlier this year we felt that short-term dynamics allowed for a pause on the interest rate normalisation path,” Mminele told a JPMorgan investor seminar on Sunday. “There is now reduced flexibility in this regard.”

    As a result, the central bank’s monetary committee will have to “carefully assess when it will be appropriate to adjust the policy rate further.”

    A copy of the speech was posted on the South African Reserve Bank’s website.

    Already in late March, Governor Lesetja Kganyago ruled out cutting borrowing costs and said there was no more scope to pause “in the cycle of interest-rate normalisation.” The bank kept the benchmark interest rate unchanged at 5.75 per cent.

    The central bank last month raised its inflation forecast for this year to an average 4.8 per cent from 3.8 per cent.

    South Africa has been hit by a drought that has slashed its corn crop, the country’s biggest staple.

  • South African, labour fail to reach agreement on pay

    South African, labour fail to reach agreement on pay

    South Africa’s public service unions and the government failed to reach agreement in pay talks, increasing the risk of a strike.

    “Our analysis is very simple: The government want a strike so they can unilaterally implement the offer that is on the table and that won’t be accepted,” Mugwena Maluleke, general secretary for the South African Democratic Teachers Union, said by phone from Johannesburg. “An amicable solution is the best for everyone, including the people of South Africa who make use of public services. A strike must be the last resort,” he said.

    Labor unions representing 1.3 million public-service employees are demanding a 10 percent pay increase this year, while the government has offered half that, setting the stage for possible strikes. The inflation rate was 3.9 per cent last month.

    Brent Simons, a spokesman for the Department of Public Service and Administration, wasn’t available for comment.

  • Will Bafana break Eagles jinx?

    Will Bafana break Eagles jinx?

    Nigeria will look to bounce back from a disappointing defeat in midweek when they lock horns with a buoyant South African side in an international friendly at the Mbombela Stadium today. Kick-off is at 3:30pm.

    The Super Eagles suffered a shock 1-0 defeat to Uganda in an international friendly in Uyo on Wednesday night courtesy of a 81st minute striker from Miya Faruku, and will be looking to bounce back against Bafana Bafana.

    The South African side, though, come into this game high in confidence after goals from Thulani Hlatshwayo, debutant Thabo Mnyamane and Mandla Masango handed them a 3-1 win over Swaziland at the Somhlolo Stadium in Mbabane on Wednesday evening.

    Nigerian midfielder John Ogu admits his side is not in the best form at the moment, but they will be looking to prove a point against South Africa on Sunday.

    “We as a team are lacking confidence and not in the right shape after we failed to qualify for the last AFCON (African Cup of Nations),” said Ogu.

    “We hope to redeem ourselves in South Africa after we lost to Uganda on Wednesday.

    “It will not be easy, but we are confident we can bounce back.”

    If statistics are anything to go by then Nigeria certainly have the upper hand as they have won seven of their 11 official meetings over the years.

    Bafana have a mountain to climb, having only beaten the Super Eagles once in their history while the other three matches have ended in draws.

    Their last outing against each other was as recent as the November 2014 and saw the two countries play to a 2-2 draw in a second leg Africa Cup of Nations qualifier in Uyo which was preceded by a 0-0 draw in Cape Town – the result seeing Bafana through to the tournament on the away goals rule.

    Speaking ahead of the game, Bafana midfielder Ayanda Patosi said he is confident his side can get one over the Super Eagles today.

    “If you look closely at the matches in the 2015 qualifiers, we played very well against Nigeria,” said Patosi.

    “We actually dominated in some stages and were on the brink of victory, but could not finish them off.

    “We have to beat them this time because we had so many chances in our last two matches against them.

    “I was in Cape Town watching the match and was very impressed by our players. This time I am part of the team and would like nothing but victory over them.”

     

    WHAT THEY SAID

    “There is history between the two nations and a great rivalry. In our recent matches against Nigeria we drew in both matches. In the second qualifier we came close to securing a victory. The players are hungry but we need supporters to pack Mbombela and really make it difficult for them.” – Bafana coach Shakes Mashaba.

    “The Nigeria clash is going to be very interesting. You must remember we were the ones who denied them a chance to defend their AFCON title so they will be coming here with guns blazing and wanting to prove a point. But the good thing is that lately we enjoy playing against them, they are very arrogant and that is only because they are confident.” – Thulani Hlatshwayo

    “South Africa deprived us of appearance at the last Africa Cup of Nations in Equatorial Guinea and have been improving in leaps and bounds while the reverse is true for the Super Eagles. I believe if we send the Samson Siasia-tutored Under-23 side to South Africa we’ll get a better result.” – Former Nigerian coach Christian Chukwu

     

    WHAT THE STATS SAY

    South Africa v Nigeria – previous meetings

    P    W  D L   GF  GA

    11  1   3    7    5    20

    1994 World Cup qualifier, 10/10/1992, Lagos – Nigeria 4-0 South Africa

    1994 World Cup qualifier, 16/01/1993, Johannesburg – South Africa 0-0 Nigeria

    2000 Afcon second round, 10/02/2000, Lagos – South Africa 0-2 Nigeria

    2004 Afcon first round, 31/01/2004, Monastir – Nigeria 4-0 South Africa

    2004 Friendly, 17/11/2004, Johannesburg – South Africa 2-1 Nigeria

    2010 World Cup/Afcon qualifier, 01/06/2008, Abuja – Nigeria 2-0 South Africa

    2010 World Cup/Afcon qualifier, 06/09/2008, Port Elizabeth – South Africa 0-1 Nigeria

    2013 Friendly, 14/08/2013, Durban – South Africa 0-2 Nigeria

    2014 Chan first round, 19/01/2014, Cape Town – Nigeria 3-1 South Africa

    2015 Afcon qualifier, 10/09/2014, Cape Town – South Africa 0-0 Nigeria

    2015 Afcon qualifier, 19/11/2014, Uyo – Nigeria 2-2 South Africa

    •Culled from supersport.com

  • Dead South Africans flown home

    Dead South Africans flown home

    THE bodies of South Africans that died in the September 12 collapsed guest house belonging to the Synagogue Church of All Nations (SCOAN) were flown to Johannesburg aboard two cargo planes yesterday.

    The planes took off at the presidential wing of the Murtala Muhammed International Airport, Lagos.

    The two aircraft, Russian Antonov, arrived the airport last Friday.

    It was parked at the tarmac of the airport.

    The airlift of the bodies, due to have commenced around midday yesterday, was delayed due to clearance and diplomatic issues at the morgue.

    It was learnt that South African officials had to put necessary measures in place to ensure the bodies were intact before they were ferried into the aircraft.

    As early as 4.00pm, the luggage of the victims arrived the presidential wing of the Lagos Airport for onward carriage into the aircraft.

    Some officials of South African government were on hand to ensure the pre- flight activities for the dead bodies went on unhindered.

    Apart from officials of South African government, personnel belonging to the National Emergency Management Agency (NEMA) as well as the Lagos State Emergency Management Authority (LASEMA) were also on hand to facilitate the process.

    At a hotel in Ikeja, scores of journalists waited for hours for a briefing by a South African minister, Mr. Jeff Radebe, which did not hold as at the time of writing this report.

    Some officials on hand said they will get back to reporters with a statement updating them on the modalities for the airlift of the dead bodies.

     

  • The $5.7m arms deal

    The $5.7m arms deal

    Coming on the heels of the $9.3m similar scandal, calls for caution in taking reprisal actions against S/Africa

    The Jonathan presidency appears very prone to scandals. The frequency has now become so casual that historians in years to come, referencing Nigeria of this era, may refer to it as one of ‘one week, one trouble’. Last week, just as Nigerians were trying to make sense of the senseless hauling of humongous $9.3 million cash, illegally into South Africa, for so-called arms deal, in a private citizen’s aircraft, another scandal broke that South Africa has again seized another $5.7 million, also paid under questionable circumstances to a South African firm, for arms. While the Nigerian government is fretting and threatening retaliatory measures, the South African government is subjecting the monies to investigation.

    Just like in the first instance, there have been babbles of official reaction. But, why has Nigeria, which was once respected as the undisputed leader of Africa, become an object of international ridicule, even in Africa? While South Africa is invoking its laws, which allegedly have been broken by the alleged arms transaction, Nigeria on its part is threatening to deal with South Africa’s economic interests in Nigeria, for what it considers orchestrated diplomatic embarrassment by South Africa. Without equivocation, these developments go to confirm that Nigeria’s diplomatic standing in the comity of nations has fallen very low, for the status of a nation determines how she is treated by others under international relations. To stem the tide, those who are in charge of our country must rise up to reclaiming our international glory.

    Even while awaiting findings from South Africa, the two alleged arms transactions unfortunately show that our government officials have been very tardy over the so-called arms purchase transactions. While the ugly side of Nigeria was clearly exposed by the handlers of the $9.3 million, who illegally moved into South Africa such amount of money without any diplomatic cover, the second transaction shows tardiness, if as claimed by officials of the Federal Government that the company which was paid to supply the arms, shortly after lost the capacity to deliver. From the reports in the press it appears Nigerian officials who packaged the alleged arms transaction did not do a due diligence over the South African firm before entering into such an important contract, as they claimed.

    Before blaming South Africa for adding to our woes, our officials should note that the proximity of the two incidents also raises a legitimate alarm on the part of the South Africans, which entitles them to call for thorough investigation. While how and when their country turned to a haven for shady arms deals should be a source of worry to them, the fact that the Nigerian government in two quick successions has become a subject of investigation over arms transaction should worry our government, with regards to efficiency. What Nigeria is entitled to is to demand the application of the rule of law in the two cases and where applicable, international standards in the investigations. We think it would be unfair for Nigeria to demand that South Africa should ignore their local laws, or exercise them in a manner that is untoward, merely to cover Nigeria’s own shortcomings. The fact that we do many things with impunity in our country does not mean we should be angry with another country that believes in the sanctity of its own laws.

    We also disagree with the threat made by the National Security Adviser, Colonel Sambo Dasuki, that Nigeria would resort to strong arm tactics against South Africans’ economic interests in Nigeria, in retaliation for the monies seized by South Africa. While such tactics fall into what is referred to as real- politik in international relations, such a threat can only be legitimate where it is established that South Africa is extending similar unfavourable diplomatic standards to Nigerian companies doing business in that country. But, if as in the current imbroglio, Nigeria through her own inefficiencies or through unlawful conducts exposes herself to losses; it should bow its head in regret and work against a repeat of such tardiness the next time. That is the honourable thing to do, not bare-knuckle diplomacy, which may further ridicule the country in the comity of nations.

    As we have always argued, the Jonathan presidency must show by its conduct that it deserves the high office it occupies. While it should work hard to overcome the security challenges facing our country, we doubt whether in pursuit of that, it should resort to all manner of tactics. Indeed, if our reputation is secure as it should be, we fail to understand how any decent country would deny Nigeria access to arms, if we sought to buy. After all Nigeria has been always at the behest of the United Nations in quelling crisis across the world. So, why would South Africa, which Nigeria spent huge material and diplomatic resources to rescue from apartheid, refuse us arms, if we make a legitimate demand?

  • Synagogue: ‘South African families still waiting for bodies’

    Synagogue: ‘South African families still waiting for bodies’

    Families of South Africans who died in the Synagogue Church of All Nations (SCOAN) collapse have an indefinite wait for the return of the bodies – which continue to decompose, the South Africa government said.

    “We wish we had (a timeline). We are entirely at the mercy of the Nigerians,” said government spokesperson Phumla Williams.

    She said that the SA government had decided that it needed to have a frank discussion with the families about the state the bodies would be in when they were returned.

    She said the families were told: “We are appealing to you that you expect the worst. I don’t think you want to see your relative in the state that they are in…The majority of them – I don’t think that they are looking good”.

    Earlier the Sunday Independent reported that in some mortuaries, bodies were being kept cool with fans and no refrigeration, a claim the Nigerian government denied.

    On Friday, it was announced that the post-mortems of all the 116 victims had been completed. Eighty South Africans were among those killed when the multi-storey guest house attached to the Synagogue Church of All Nations in Lagos collapsed on 12 September.

    Williams said that they believed three or four of the bodies from South Africans killed were in a better state because they had been embalmed quickly.

    The  government had hoped that the process of repatriation would move quickly after the post-mortems.

    However, this process had been frustrated by the fact that Nigerian officials had insisted on doing DNA testing themselves.

    “They don’t have the technology.”

    She said that South Africans had hoped “at least to assist” in the process since.

    Nevertheless, the government was still waiting to hear if the bodies had been transported to a service provider for the testing.

    “We don’t know when they are going to finish.”

    She said the government had also learned that “because of the state in which the bodies are in, the DNA testing is not going to be a quick process”.

    This left the government reluctant to estimate a date for the return of the bodies as it did not want to create unnecessary expectations.

    However, Williams asserted that “at any stage; we [the SA government] are ready to go and fetch (the bodies)”.

  • South African court okays seizure of Nigeria’s $9.3m

    South African court okays seizure of Nigeria’s $9.3m

    South Africa has seized the $9.3 million Nigerian cash flown abroad a private jet into its capital, Johannesburg, from Abuja early this month.

     Two Nigerians and an Israeli were travelling with the plane’s crew at the time the cash, which was not declared,  was found on the plane.

    South African security and Nigeria have launched an investigation into what transpired.

    The explanation from Nigeria that the money was meant for arms purchase for the Nigeria intelligence agencies, has been rejected by South Africa’s Asset Forfeiture Unit (AFU) and the National Prosecuting Authority of South Africa (NPA).

    The NPA, in a statement, according to online publication  Premium Times, said the manner in which the money was brought into the country breached the laws that deal with the transfer of foreign exchange of such proportion. “The money was initially detained by the South African Revenue Service (SARS) as it was not disclosed or declared at customs, and was above the prescribed legal limit for the amount of cash that may be brought into the country,” it said in a statement.

    The NPA, according to the medium, said its investigation showed that Tier One Services Group, the firm the Nigerian government claimed it wanted to procure the arms from, is not authorised to sell or rent military hardware.

    “In court papers, the NPA submitted evidence that Tier One is not registered with the National Conventional Arms Control Committee and is thus not authorised to enter into any agreements regarding the sale and/or rental of military equipment,” the statement read.

    Tier One has apparently issued an invoice to a Cyprus based company, ESD International Group Ltd, ESD, in respect of the procurement of armaments and helicopters to be delivered to Nigeria.

    However, South African investigators said the time when the invoice was prepared and the time the money was brought in threw up some serious issues of its true intent.

    The money was ferried to South Africa less than a week from the date the invoice was prepared (September 8, 2014). The involvement of a Cyprus based company also heightens the suspicion that this may be a case of classical money laundering. Cyprus is known for its secretive banking system.

    The NPA added that the transaction did not follow normal procedure in the procurement of the kind of equipment it was alleged to have been meant for.

    The Senate yesterday summoned National Security Adviser (NSA) Col. Sambo Dasuki (rtd), Chief of Defence Staff, Air Chief Marshall Alex Badeh and Chief of Army Staff Lt.-Gen. Kenneth Minimah over the smuggled $9.3 million cash.

    Chairman, Senate Committee on Defence, Senator George Sekibo, said those invited to appear before his committee on Tuesday would brief members on the incident.

    He said: “ I don’t want to pre-empt issues because I have not heard details about the issue but they will be here on Tuesday.”

    On the soldiers sentenced to death, Sekibo said he was not surprised that death sentence was passed on the 12 soldiers because before they joined military, they were aware of the implication of being involved in mutiny.

    He added that before the judgment was passed, the army must have carried out their investigation on the matter.