Bolsonaro Administration – economists react with optimism

Economic agents reacted with optimism on the first day of President Jair Bolsonaro’s administration. The positive signs of the new management in relation to measures to control public spending and the political movements that may favor the adoption of important reforms, such as the Pension Reform, caused an energetic reaction from the market. The Ibovespa (the benchmark index of the São Paulo Stock Exchange) surpassed the mark of 91,000 points on Wednesday (January 3rd), a historical high.

Economists heard by the Brazilian Government portal assessed that the initial statements by Economy Minister Paulo Guedes and the government team buoyed the financial market, mainly because they reinforced the need for Pension Reform and the adoption of the concessions program. They also said that the political environment is initially favorable to the approval of economic measures by the National Congress.

“There was excitement in the markets because the government endorsed the economic message he defended during the election campaign, that it will adopt an austere stance on spending controls and the issue of concessions. That had a positive impact,” said Austin Ratings chief economist Alex Agostini.

“There is also a positive expectation that the Bolsonaro administration and its economic team can succeed in approving pension reform in the first half of the year,” he said. “The markets have been encouraged by signaling to the government itself that it is on the right track,” he said.


Although pension reform is a controversial issue, analysts have gauged Bolsonaro’s popular support, which may have positive effects on the adoption of the economic agenda. “We say receptiveness not only in the statements by Paulo Guedes [Minister of the Economy], but also from a set of news, such as the possibility of privatizing Eletrobras,” explained Silvio Campos Neto, an economist at Tendências Consultoria.



China-US re-engage in new batch of trade talks

Chinese and US delegates are meeting in Beijing to hash out some of their trade difference and possibly put an end in the trade war. The Trade War between the world two biggest economies has entered a new year and 2019 both countries are aiming to come to some real agreement.

US president Trump and Chinese president Xi Jinping announced in December that the two super economies came to a truce. So far both sides have praised the talks as positive and constructive and both sides are actively engaged and are working to come to a resolution.

According to Asian financial markets have reacted positively to the meeting and discussion between the countries.

The talks will come to close tomorrow with both countries expected to refrain from issuing new tariffs and mitigate any further disruption to global financial market as well as the global economy.

By Mokgethi Mtezuka

New Development Bank has financed South Africa with more than R9 Billion

Financial Minister Tito Mboweni revealed that South Africa has received R9.8 Billion from the BRICS New Development Bank. The reveal stemmed from a parliamentary question on South Africa’s benefits from the New Development Bank membership.

Many critics believe that South Africa doesn’t equally gain as much as it’s  BRICS counterparts, when it comes to the BRICS bank. The bank has pledged to offer equal financing for projects in all BRICS member states.

Minister Mboweni also pointed out that there are 18 South African professionals who are employed by the bank at the South African office, as well as the Chinese office. Some of the projects funded by the NDB were a loan to Transnet of R2.8 Billion for a container terminal, the other R2.6 Billion to Eskom for transmission lines and a substation for Soweto.






The year 2018 was the third full year of the NDB’s operation and it was marked by the approval of USD 4.8 billion in loans — a 167 % increase over that of 2017, which brings the Bank’s total lending volume since its establishment in 2015 to approximately USD 8 billion. Till date, the NDB has approved 30 infrastructure and sustainable development projects. In 2018 alone, the Bank has approved 17 projects. This is a clear demonstration of the NDB’s strong commitment to its mandate of supporting infrastructure and sustainable development of its member countries.

In 2018, the NDB has continued to focus its efforts on the most pressing needs of infrastructure development in its member countries, covering the sectors of transport, energy, urban, environment, and water. The Bank’s 2018 lending portfolio is well balanced across the five sectors, with eight projects in transport sector, three projects in energy sector, two projects in environment sector, three projects in urban sector and one project in water sector.

The Bank’s infrastructure and sustainable development operations also highlight value addition apart from providing financing. For example, the NDB provided an international expertise pool of offshore wind power to advise technical solutions and to share successful country lessons to the Guangdong Offshore Wind Power Project.

The NDB also supported member country’s efforts aimed at the preservation of cultural heritage assets. Through the Small Historic Cities Development Project, the Bank supported infrastructure development in nine competitively selected Russian small historic cities with a focus on the preservation and development of cultural heritage.

Through the Mumbai Metro Project, the NDB is helping the second most densely populated city in the world to tackle the most pressing challenges of traffic congestions and pollutions in the transport sector and to sustain Mumbai’s economic and social development momentum.


Projects approved by the NDB Board of Directors in 2017:

Development of Water Supply and Sanitation Systems Project (Russia) USD 320 million
Small Historic Cities Development Project (Russia) USD 220 million
Durban Container Terminal Berth Reconstruction Project (South Africa) USD 200 million
Pará Sustainable Municipalities Project (Brazil) USD 50 million
Maranhão Road Corridor – South North Integration (Brazil) USD 71 million
Chongqing Small Cities Sustainable Development Project (China) USD 300 million
Bihar Rural Roads Project (India) USD 350 million
Luoyang Metro Project (China) USD 300 million
Greenhouse Gas Emissions Reduction and Energy Sector Development Project

(South Africa)

USD 300 million
Environmental Protection Project (Brazil) USD 200 million
Madhya Pradesh Bridges Project (India) USD 175 million
Madhya Pradesh Major District Roads II Project (India) USD 350 million
Sustainable Infrastructure in relation to “ZapSibNefteKhim” Project (Russia) USD 300 million
Guangdong Yudean Yangjiang Shapa Offshore Wind Power Project (China) RMB 2 billion
Hohhot New Airport Project (China) RMB 4.2 billion
Jiangxi Natural Gas Transmission System Development Project (China) USD 400 million
Mumbai Metro Rail Project (India) USD 260 million




The importance for South Africa SMEs to adopt technology

3D rendered concept of the state of the economic and finance markets in South Africa.

A thriving Small and medium enterprise (SME) environment is needed for South Africa to grow, develop and solve issues like unemployment and poverty. The small business landscape in South Africa can be a jungle with only the fittest surviving as 90% of small businesses fail in their first 2 years of operating.

The fourth Industrial revolution is upon us and with it comes a variety of disruptive technologies that SMEs need to utilising. For South Africa to produce more SMEs and for those to go on to survive, South African business people will have to look into new technologies and how it can advance their businesses, product and services not only for their benefit but to sustain them in this new digital age. 

The physical is moving towards the digital which is effecting employment, laws, politics and Industries that once looked self sustained and secured for years. SMEs are now required to find ways of innovating to further their growth and capitalised on the disruptive technology. The SMEs that take advantage of  new technology will become leaders in their industry and possibly shape the direction of business in the years to come. 

By Mokgethi Mtezuka’

Brazil created over 790 thousand formal vacancies in 2018

The Brazilian labour market continues to show clear signs of recovery. In the first ten months of the year, 790,579 formal jobs were created in the country, the best result for the period since 2015. The data comes from the General Register of Employed and Unemployed Persons (Caged), released on Tuesday (21) by the Ministry of Labour.

In October, the labour market’s positive balance was of 57,733 formal jobs, a 0.15% growth in relation to the previous month. In last-twelve-month terms, the balance shows that 444,483 vacancies were created.


Six of the country’s eight economic sectors registered an increase in the number of formal jobs in October. Retail stood out, creating 34,133 vacancies. Then, we have the service sector, with 28,759 jobs created and the manufacturing industry, with 7,048 formal positions.


Four of Brazil’s five regions recorded a positive balance in relation to formal jobs in October this year. The labour market recorded growth in the South (25,999 jobs), Southeast (15,988), Northeast (13,426) and North (2,379) regions. In the Midwest, there was a slight drop of 59 jobs.


Out of the country’s 27 federated units, 23 experienced a hike in the number of formal jobs. The best results fell to São Paulo (13,088 jobs), Santa Catarina (9,743), Rio Grande do Sul (9,319), Paraná (6,937) and Ceará (3,669).


South Africa’s formal non-agricultural sector sheds 16 000 jobs

The Quarterly Employment Survey (QES) for the third quarter of 2018, shows a decrease of 16 000 jobs. Job losses occurred in the manufacturing (-7 000), construction (-5 000), mining  (-2 000), trade (-2 000), transport (-1 000), and community services (-1 000) industries.

The manufacturing and construction industries accounted for about three-quarters of the decline in employment over the quarter. Whilst both these industries have recorded quarterly job losses, when looking at the annual job levels, they continue to trend downwards since December 2017.

Total employment was up by 17 000 over the year, bringing the total in the formal non-agricultural sector to 9 733 000.

Business services employment changed little in September (+2 000) whilst employment in the electricity industry remained unchanged in the quarter.

Total earnings paid to employees increased by R26 billion to R653 billion over the quarter and were up by R35 billion over the year. Quarterly increases in gross earnings were recorded in the community services (+R15 billion), business services (+R7,8 billion), mining (+R1,8 billion), trade (+R796 million), manufacturing (+R711 million), electricity (+R92 million), and transport (+R74 million) industries.

The increase in gross earnings was driven by community services and business services collectively, contributing almost 88% to the increase.

There was a decrease in gross earnings in the construction industry (-R392 million).

Average monthly earnings for all formal non-agricultural sector employees rose by R697 in August to R20 860 .Over the past twelve months, average monthly earnings have increased by 5,0%.


Issued by: Statistics South Africa

China’s core AI industry to exceed 145 bln USD by 2030: report

The value of China’s core Artificial Intelligence (AI) industries could exceed 1 trillion yuan (145.47 billion U.S. dollars) by 2030, with that of AI-enabled industries more than 10 trillion yuan, a latest report by Bloomberg Intelligence (BI) said.

Titled “China’s great tech leap forward”, the report said that China’s push to commercialise AI technologies, supported by the rollout of the world’s biggest 5G network, could position the country as a global leader for technology and innovation.

“Based on the growth trajectory in the past decade, China may overtake the U.S. in global technology-patents share by 2025,” said the report. AI-related industries may exceed 6 percent of China’s GDP by 2030, according to the report. In the report, BI analysts said the country’s abundance of data may fuel the acceleration of the industry.

China’s breakneck pace of consumer-lifestyle digitisation potentially gives researchers unique access to Chinese-language data generated by its 1.4 billion people as they go about their daily activities both online and offline.

Vey-Sern Ling, senior industry analyst at Bloomberg intelligence, said China may overtake global peers in the commercialisation of AI technologies, as large amount of capital is likely to continue pouring into the industry.

According to Tsinghua University, private funding for Chinese AI-related companies in 2017 totalled 27.7 billion dollars, equivalent to 70 percent of global investments in the industry. Data showed China’s cumulative venture-capital investments in AI startups had already caught up with the United States by 2016.

Ling, also the lead analyst of the report, said the top-down support is an important factor apart from the multi-faceted user data and the funding available in China to the industry’s fast development.

“I don’t think anywhere else in the world you have the government so strongly behind, identifying the technology pillar and bearing full weight,” said Ling.

He added that China’s potential dominance in AI by 2030 may be led by developments in transportation, corporate services, health care and finance.


– Xinhua



Magashule applauds success stories of BRICS countries on agrarian revolution

ANC secretary-general Ace Magashule in his closing address at the BRICS political parties plus dialogue applauded the land reform process mainly land expropriation without compensation, as recently passed by the South African government.

According to Magashule, the African National congress (ANC) is committed to tackle inequalities in South African society. “ Some of the magnificent and successful stories of the Brics countries on agrarian revolution is a testimony to the strategic objectives we want to achieve,” Magashule said.

The secretary-general said that the Freedom Charter contains a very important message, one of land redistribution.  The Freedom Charter was the statement of core principles of the South African Congress Alliance, which consisted of the African National Congress (ANC) and its allies – the South African Indian Congress, the South African Congress of Democrats and the Coloured People’s Congress.

The political dialogue closed up deliberations with an adoption of a 25 point plan, titled the Tshwane 2018 Communique on Addressing Inclusive Economic Development Growth, Peace and Stability, Multilateralism and the Fourth Industrial Revolution.


Source: The Citizen

South Africa exits technical recession

This is the good news we’ve had to wait months for. After being dumped into the doldrums of a recession back in September, South Africa has rallied after a quarter of positive growth.

GDP Stats: South Africa is officially out of recession
The country’s GDP has improved by 2.2% over the last three months, as recorded by StatsSA.  Things are looking a little more positive for Mzansi, but there are still red flags to acknowledge.

The mining industry has taken a huge 8.8% hit over the Autumn, with output decreasing dramatically. When a cornerstone of the economy decreases by this much, it usually means long-term pain is on the horizon. The electricity (-0.9%) and construction (-2.7%) economies also shrunk.

There’s a long road ahead, and the situation can deteriorate just as fast as it can improve. But the recovery in the agricultural section is vital. Down 29% in Q2, the green shoots of recovery appear to be growing as the industry marked a noticeable turnaround, rising by 6.5% in Q3.

But what has helped South Africa launch this impressive comeback? We’re looking at the main facts and figures which were instrumental in this quarterly improvement.

What has lead the GDP recovery?

Factors influencing the rand
Behind every successful economy is a strong currency, and the 2.2% rise for our GDP seems to mirror the performance of the rand. After plummeting in September due to recession fears, ZAR has strengthened on the back of key economical developments.

With the interest rate going up 0.25% last month, it helped the currency shore up and take advantage against big international markets such as the dollar and the pound.

Agriculture revived
We’ve touched on this earlier, but it really is one of the most influential factors on the performance of the SA economy. It’s shocking, near-30% decline between July – September was mainly responsible for the unexpected slip into the red.

It’s 6.5% growth was driven by an increase in field crops, and a spike in the amount of horticultural and animal products that have been purchased. However, this is another example of SA not being out of the woods just yet. The industry is R6 billion worse off than it was 12 months ago.

External and internal investment
President Cyril Ramaphosa began his global investment drive just as Q2 was ending. So the billions of rands he manage to secure from foreign donors has only come into effect from August onwards.

With additional deals struck with the Gulf States and China, Ramaphosa has been able to raise the stakes in secure business deals. However, the president didn’t rest on his laurels with his friends from overseas. The introduction of a R400 million stimulus package seems to have done the trick, too.

Manufacturing rallies
It’s been a bit of an inconsistent year for the manufacturing industry. Production has been down and demand has slowed. Well, that’s until the third quarter came along. Manufacturing is the most-improved industry of the lot, reaching a 7.5% increase at the start of December.

Despite the challenges, manufacturing is R14 billion better off than it was 12 months ago: And it’s due to the strengthened performance of the iron and steel industry, as well as positive developments regarding petroleum, wood and motor vehicles.

– The South African