August 1, 2012
From Creamer Media in Johannesburg, I’m Motshabi Hoaeane.

Making headlines:

South Africa’s government and trade unions agree on a three-year wage deal.

The African Development Bank says that Europe is key to Africa’s growth outlook.

And, US Defense Secretary Leon Panetta praises Egypt’s leader for democratic resolve.

South Africa has agreed to raise wages for public service workers by 7 percent this year. This is a settlement that will add more than 1-billion-dollars to budget spending.

Under the three-year wage deal with unions, the government has also agreed to increase wages in line with the official inflation rate plus 1 percent from 2013 to 2015.

The settlement ends months of talks and should avert major industrial action in Africa's biggest economy. It is well above South Africa's inflation rate of 5 percent.

The African Development Bank’s (or AfDB’s ) chief economist, Professor Mthuli Ncube, has warned that Africa’s 2012 economic growth outlook is facing headwinds from a range of sources, notably owing to the current crisis in Europe.

The bank currently expects continent-wide growth of 4.5 percent in 2012, which will be underpinned by a sub-Saharan Africa economic expansion of 5.3 percent. The rest of the sub region’s growth is estimated at 5.9 percent. However, South Africa’s slow growth is excluded from these figures.

The outlook is highly sensitive to the economic fortunes or misfortunes of Europe, with Ncube indicating that a 1 percent plunge in the territory’s growth will shave 0.5 percent off African economic growth.

US Defense Secretary Leon Panetta said on Tuesday that he was convinced Egypt's new Islamist president was committed to democratic reform. He promised that Washington would continue to provide the country's army with significant financial aid.

Speaking after meeting Mohamed Mursi, as well as Egypt's top general, Field Marshal Hussein Tantawi, Panetta said he had used his meeting with Mursi to discuss issues such as border security and the threat from violent extremism.

Panetta's visit comes amid political uncertainty and a power struggle between the military and the Muslim Brotherhood. This is casting a shadow over the future of a country that remains without a permanent constitution, parliament or government.

Also making headlines:

A new transport plan aims to increase Gauteng’s competitiveness.

The United Nations Security Council renews its Darfur peacekeeping mandate at the displeasure of Sudan.

And, Reserve Bank Governor Gill Marcus reveals that South Africa is constrained in the policy options it needs to deal with the global downturn.

That’s a roundup of news making headlines today