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Friday, August 02, 2019 / 03:00PM /
United Capital Research / Header Image Credit: Busineestech
Fears
concerning the direction of South Africa’s economy resurfaced as the Q219
unemployment rate published during the week edged higher by 1.4%, to 29.0%, the
worst performance recorded since the global financial crisis in 2008. Further
analysis showed a distinct disparity in the number of persons who secured jobs
compared to individuals who lost employment. Specifically, while those who
secured jobs increased 21,000 q/q, those who lost their jobs grew 455,000 q/q,
more than doubling jobs created during the period.
Youth
unemployment continued to remain the bone of contention, as more than 56.4% of
the young workforce were unemployed. In what seemed to be a contradiction to
the norm, a lower unemployment rate was seen amongst individuals with little
education, as the Agric sector remained the largest employer, requiring mainly
labour-intensive production. On a sectoral level, the Mining, Transport,
Construction and Banking sectors recorded massive lay-offs, as they struggled
to remain profitable, amid a challenging business environment.
This
mounts further pressure on President Cyril Rampahosa’s government, an
administration already saddled with avoiding another recession. In Q1-19, GDP
contracted -3.2% due to weaker consumer demand as well as lower activities in
the Agric, Mining and Manufacturing sectors. Also, the government continues to
battle crisis in the power sector, as the ailing state owned Power utility
company, Eskom, reported a monumental loss (R20.7bn or $1.5bn) in its 2018/2019
integrated annual report, despite recent efforts of the government. The above
is almost similar to that of Nigeria, Africa’s largest economy, also struggling
with high unemployment rate, faltering GDP growth and power sector crisis.
Accordingly, to change this narrative, both economies have to find a way to
rejig their ailing power sector, boost job creation and create an enabling
environment for businesses to thrive. This is critical for faster growth across
the region.
Top African Stories
•Renationalisation
unlikely to fly Kenya Airways back to profit: By taking back full control
of Kenya Airways, lawmakers are banking on Kenya’s ability to replicate the
profitable example of Ethiopia’s state-owned flag carrier Ethiopian Airlines. Reuters
•
South Africa's Absa PMI expands for first time in 7 months: South
Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) moved into
expansion for the first time in seven months in July, as improved demand saw
sales and business activity improve, the survey showed on Thursday. Reuters
•Ghanaian
Govt suspends power concession agreement with PDS:
Government has suspended the concession agreement with Power Distribution
Services (PDS), bringing back the Electricity Company of Ghana (ECG) to be in
full control of power distribution. Energy Mix Report
•SA’s
Eskom records major losses: Power utility Eskom on
Tuesday recorded a net loss after tax of R20.7 billion in the year ended March,
up from a previous loss of R2.3 billion. Energy Mix Report
•Zimbabwe
to defer release of inflation figures, economy to contract in 2019 – finance
minister: Zimbabwe’s economy is expected to contract this year
due to a drought and severe power cuts, Finance Minister Mthuli Ncube said on
Thursday, without providing a figure. CNBC
•Libya’s
Waha Oil Company contracts local firms for field redevelopment: Libya’s Waha Oil Company yesterday announced that it has contracted
locally to redevelop its Dahra and Bahi oilfields. Energy Mix Report
Looking Forward
Angola
Jul-19
(CPI) Inflation - August 12th
Egypt
Jul-19
(CPI) Inflation - August 8th
Ghana
Jul-19
(CPI) Inflation - August 14th
Kenya
Jul-19
Purchasing Managers Index - August 5th
Jul-19
(CPI) Inflation - August 22th
Morocco
Q2-19
Unemployment Report - August 10th
Nigeria
Jul-19
Purchasing Managers Index - August
5th
Jul-19 (CPI) Inflation - August 16th
Senegal
Jul-19
(CPI) Inflation - August 16th
South
Africa
Jul-19
(CPI) Inflation - August 21st
Tunisia
Jul-19
(CPI) Inflation - August 12th
Visit African Markets in Proshare MARKETS
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