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South African economy declines by 3.2 per cent in the first quarter

SA’s GDP contracted by 3.2 percent in the first three months of the year compared with the previous quarter

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South Africa’s economy declined sharply in the first quarter of 2019, the National Statistics Authority said Tuesday, piling pressure on President Cyril Ramaphosa’s newly elected administration. According to Stats SA, gross domestic product (GDP) for Africa’s most developed economy contracted by 3.2 percent in the first three months of the year compared with the previous quarter, the largest quarterly drop in about 10 years.

The slump came in contrast to 1.4 percent growth seen in the fourth quarter of 2018 and was far below the average 1.6 percent decline predicted by analysts. The slip was driven mainly by declines in the agriculture, manufacturing and mining sectors which reported drops of 13 percent, 8.8 percent and 10.8 percent respectively.

Depressing economic activity further was electricity rationing, infamously known as load-shedding. Cash-strapped power monopoly Eskom, which generates 90 percent of the nation’s energy, sporadically imposed the rotational power rationing in February, plunging swathes of the country into darkness for long hours and sparking public anger at the ANC-led government.

The head of the North West University’s Business School, Professor Raymond Parsons, said rolling electricity power cuts had been grossly underestimated as the main culprits in the first quarter and had “probably shaved about 0.6 percent off expected growth for this year.”

The weak economy coupled with low wage increases was reflected by a 12.7 percent drop in the amount South Africans spent on clothing and footwear. Exports fell 26.4 percent in the quarter, while imports were down by 4.8 percent.

Ramaphosa, who held onto office in May when the ANC party won the national election, has vowed to revive the economy by attracting $100 billion in foreign investment and by fighting corruption. South Africa’s economy grew by less than one percent last year and even slipped into a brief recession during the third quarter.

Parsons warned that the poor first quarter performance signalled a “higher risk of the South African economy drifting into a technical recession in the first half of 2019.” Main opposition Democratic Alliance leader Mmusi Maimane said the contraction was proof the country “continues to move backwards and there is a need for reform”.

South African main opposition party Democratic Alliance (DA) leader Mmusi Maimane
South African main opposition party Democratic Alliance (DA) leader Mmusi Maimane (L) arrives at the Independent Electoral Commission (IEC) Results Operations Centre on May 9, 2019 in Pretoria, South Africa. – South African President’s ruling ANC will retain its parliamentary majority after polls but with diminished support, complicating efforts to revive the embattled party and the country’s flagging economy, results showed on May 9, 2019. The African National Congress (ANC), in power since 1994, surged into the lead with nearly 57 percent after more than half the voting districts were officially tallied following May 8 vote. (Photo by Phill Magakoe / AFP)

Peregrine Treasury Solutions’ corporate manager Bianca Botes said it was “the biggest decline in GDP since the 2008 financial crisis” and a sign of the “dire state of the South African economy.” After the data was released, the rand weakened by as much as 1.32 percent against the dollar to 14.64 rands per dollar.

Ramaphosa is to deliver his State of the Nation address later this month as South Africans and investors focus on soaring fuel prices and stubbornly high unemployment.

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Forbes lists South Africa’s Trevor Noah as world’s 4th-richest comedian

Noah, whose ranking makes him the richest comedian in Africa, earned a whopping $28m in the period between June 2018 and June 2019

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Forbes lists South Africa's Trevor Noah as world's 4th-richest comedian
U.S-based South African comedian, Trevor Noah. (Comedy Central/AFP)

South African comedian, Trevor Noah is the fourth-highest paid comedian in the world, according to the Forbes Rich List 2019.

This is the first time the 35-year-old star has made it into the magazine’s top 10 since he began his work.

Noah, whose ranking makes him the richest comedian in Africa, earned a whopping $28m in the period between June 2018 and June 2019 from various projects, including his day job as the TV host of Comedy Central’s “The Daily Show”.

Most of his income, however, came from his 70-stop world tour as a stand-up comedian, making him eligible for the list of richest stand-ups.

In the 2019 list, the South African came behind Kevin Hart ($59m), Jerry Seinfeld ($41), Jim Gaffigan ($30m).

Other than his tour, sources of Noah’s 2018 income were his two shows on Netflix, and book sales from his bestselling autobiography “Born A Crime”, which is still ranked No. 1 on the New York Times’ bestseller list for paperback nonfiction.

Forbes lists South Africa's Trevor Noah as world's 4th-richest comedian
Frederick M. Brown/Getty Images/AFP

As a group, the top 10 best-paid comedians raked in $272m, that’s $20m less than the previous period.

The reduction in earnings among the top comedians has been attributed to reduced action among some, including Chris Rock and Dave Chappelle, who came in at $30m and $35m last year, respectively.

Trevor Noah’s ‘The Daily Show’ has become quite popular, with the South African inspiring laughter from topics ranging from politics to daily life events.

Noah joined the show in 2014 as a contributor, some two years after making his U.S. television debut on “The Tonight Show With Jay Leno.”

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Zimbabwe to issue new currency notes to counter cash shortage

Zimbabwe abandoned the Zimbabwe dollar in 2009, after a bout of hyperinflation in favour of currencies like the dollar and rand

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Zimbabwe to issue new currency notes to counter cash shortage

Zimbabwe will issue new notes and coins soon to replace the country’s quasi-currency that was introduced three years ago in a failed attempt to counter a crippling shortage of cash.

The return to a fully-fledged local currency exchangeable outside the country’s borders will be backed by an undisclosed amount of foreign-exchange reserves, gold and loans, according to the country’s finance minister, Mthuli Ncube.

Zimbabwe abandoned the Zimbabwe dollar in 2009, after a bout of hyperinflation in favour of a basket of currencies including the US dollar and the South African rand.

In a bid to deal with the subsequent cash shortages, it introduced so-called bond notes and RTGS dollars in their electronic form, which are not accepted outside the country.

Ncube re-introduced the Zimbabwe dollar in June, accompanied by a ban on the use of foreign currencies-leading to a rapid erosion of spending power with the local dollar trading at almost 10 to the greenback.

Bond notes were officially said to be at parity as recently as February.

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South Africa plans “affordable” nuclear energy approach

Economists say a large-scale nuclear new build is something South Africa cannot afford

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South Africa plans "affordable" nuclear energy approach
South Africa's Energy and Mineral Resources Minister, Gwede Mantashe. (File photo)

South Africa has made a decision to add energy capacity in an affordable way, according to its Energy and Mineral Resources Minister, Gwede Mantashe.

Former South African President, Jacob Zuma championed a massive nuclear expansion project with Russia, but his successor, Cyril Ramaphosa put those plans on hold in one of his first moves after becoming leader of the governing African National Congress (ANC) in late 2017.

Economists say a large-scale nuclear new build is something South Africa, whose last investment-grade credit rating is hanging by a thread, cannot afford.

A clear timeline for new nuclear capacity has not been disclosed as the government’s energy plan will require approval first.

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