Wednesday, August 25, 2010

From Creamer Media in Johannesburg, I'm Petronel Smit.

Making headlines:

The Congress of South African Trade Unions (Cosatu) on Tuesday threatened to expand the State workers' strike next week to all its members, which could deal a heavy blow to South African manufacturing. Cosatu secretary-general Zwelinzima Vavi says that the expanded strike could take place from Thursday, once a seven-day strike notice is officially filed. "This will mean a total shutdown of the public sector until government comes to its senses," he said.
The government has said that it cannot afford the workers' demand of an 8,6% wage rise, more than double the inflation rate, and a R1 000 a month housing allowance. The strike has already taken a heavy toll on the country's poor, but its economic damage has been limited. One newspaper said that it might be costing the country about R1-billion a day, but there are no official figures on the damage.
The strike could add to worries about prospects for growth as Africa's largest economy slowed more than expected in the second quarter of 2010. Any agreement to end the dispute is likely to swell State spending by between 1% and 2%, forcing the government to find new funds just as it tries to bring down a deficit totalling 6,7% of gross domestic product.

The 3,2% gross domestic product (GDP) growth figure for the quarter ended June, released by Statistics South Africa (Stats SA) on Tuesday, was lower than expected, particularly given that a significant part of the FIFA World Cup took place on South African soil during this period.
Investment solutions chief economist Chris Hart says that 3,2% is "disappointing" as economic growth of around 3,6% was anticipated for the second quarter. "One would have expected a stronger recovery by this stage, which may suggest that the authorities might be tempted to put in place additional measures for growth," he said. Investec economist Kgotso Radira agreed, pointing out that the GDP outcome was weak despite the R93-billion that the National Treasury estimated was injected into the economy as a result of the World Cup. "Excluding this, GDP growth would have been much weaker than the 3,2%, showing that conditions remain challenging."
Nevertheless, speaking at the release of the GDP statistics in Pretoria, Stats SA director-general Dr Rashad Cassim said that sectors related to the World Cup event did show stronger growth rates. "This is evidence of some growth generated by the event, and we will see more of it in the next quarter, because the World Cup was spread over two quarters," he said.

Government is considering implementing a carbon dioxide (CO2) vehicle emission tax on all cars, both new and old, said Finance Minister Pravin Gordhan on Tuesday.
Speaking in the National Assembly on the Taxation Laws Amendment Bill and related legislation, he said that this would be implemented by reviewing the approach to vehicle licence fees implemented by the provinces. "All in all, there is a place for all these mechanisms if we want to reduce the emission of greenhouse gases and ensure that we leave our children with a better legacy when it comes to air quality and reducing the risks of climate change," he said.
Gordhan said that he had recently met with the CEOs of South Africa's largest vehicle manufacturers. He had confirmed to them that the CO2 emission tax on new passenger vehicles would come into effect on September 1. However, he had also taken into account some of their concerns, and therefore, the CO2 tax on double-cab bakkies would be delayed.

Also making headlines:

The World Bank says that Botswana should cut its public sector spending by at least 25% to make up for potentially diminishing diamond income.
South Sudan plans to bring home 1,5-million displaced southerners from the north in time to vote in a January 2011 independence referendum.
South African Finance Minister Pravin Gordhan says that government plans to revise its exchange controls for companies and will delay tightening rules that govern crossborder interest taxation until 2013.
And, United Nations secretary-general Ban Ki-moon sends UN peacekeeping deputy head Atul Khare to the Democratic Republic of Congo after a mass rape of women by rebels in the east.

That's a roundup of news making headlines today.