South Africa

PORT ELIZABETH – President Jacob Zuma quashes any hopes that the planned Gauteng e-tolling system will dropped by government. "The Gauteng economy cannot afford any impediment to the traffic flow, since such an impediment will stifle economic growth that leads to job creation," Zuma says at The New Age and SABC business briefing, in Port Elizabeth. Because of increased traffic flow, the roads in general were unable to cope and this had affected road users and economic development. He says the tolling of Gauteng's roads is an issue that has been consulted on and accepted by Cabinet. "The rationale behind the freeways improvement project is that Gauteng, which generates nearly 38% of the total value of South Africa's economic activities, has developed beyond its infrastructural capabilities. "The open tolling system will assist government to obtain revenue that will be utilised in order to improve the road infrastructure, service debt already incurred for the upgraded freeway network in Gauteng and ensure a well-maintained and upgraded road network into the future." He says it is understood that, for people affected by serious poverty and unemployment, it is an additional financial burden; however, the infrastructure development will also create jobs, which will help to eradicate the burden. "But we plead for your understanding because at the end of the day, we have to develop and strengthen the road infrastructure of Gauteng," says Zuma.

PRETORIA –Inflation pressures in South Africa are now likely becoming more generalised, reflecting demand-side pressure rather than only external factors, the central bank warns, seeming to signal an eventual monetary tightening. "In general, monetary policy can do little to combat the impact or first round effects of inflation that is driven by exogenous shocks," South African Reserve Bank Governor (SARB) Gill Marcus says in a statement on the bank's website. "However, the most recent data seem to suggest that inflation is becoming more generalised, and may reflect the emergence of demand pressures. This is something that the Bank will monitor very carefully," she adds. The central bank has kept interest rates unchanged at 30-year lows of 5.5%, after a cumulative 650-basis-point reduction in the two years to November 2010. "Alarm bells went off in my head because this is the first time ever since the crisis that we've had the SARB saying this sort of thing," says Razia Khan, head of Africa Research at Standard Chartered. The bank has consistently said inflation pressures were of a cost-push nature and it would not be appropriate to raise interest rates given the lack of demand-side pressures.
"I am seeing this as significant because the language is meaningfully different to what came before. That could be construed as the SARB potentially preparing the way for a tightening," Khan adds.

JOHANNESBURG – South Africa’s African National Congress (ANC) youth rebel Julius Malema pleads for the ruling party not to expel him and makes a rare public apology to the movement’s senior leadership, which he has frequently criticised as too moderate in their policies. Malema confirms that he will appeal against the ANC decision last month to expel him on charges of sowing divisions within its ranks, which he denies. Striking an unusually contrite figure in an interview broadcast on State TV, the suspended ANC Youth League leader insists he has done nothing wrong by calling for the nationalisation of mines and the seizure of white-owned land in South Africa, the world’s biggest producer of platinum. One of the ANC’s most dramatic orators, his calls for a radical transformation of Africa’s biggest economy had resonated with poor blacks. He frequently mocked President Jacob Zuma. But in an interview on the State of Our Nation programme shown live by State broadcaster SABC, he asks to be allowed to stay on in the ANC, saying membership is “my life” and that he had joined the anti-apartheid movement at the age of nine.

JOHANNESBURG – A South African court has largely dismissed an appeal from government and unions to roll back approval for Wal-Mart’s $2.4-billion acquisition of Massmart, ending months of uncertainty about the status of the deal. The Competition Appeal Court shot down government’s request to have the deal re-examined, although it did rule that about 500 previously fired workers should be reinstated. The ruling is likely to be seen as a victory for Wal-Mart Stores in its plan to expand in fast-growing Africa. It is also likely to soothe local investors, who had feared a retroactive ruling against the deal would tarnish South Africa’s reputation as being open to foreign capital. “Finally, logic prevailed. Questions about how open South Africa is to foreign investment will still be there, but this ruling is a big positive for its image as an investment destination for foreign companies,” says Nic Norman-Smith, a fund manager at Lentus Asset Management, in Johannesburg. “It’s unfortunate that we had to go through all this, but the right decision was made in the end.” The Competition Tribunal in May approved Wal-Mart’s bid for 51% of discounter Massmart Holdings with token conditions.

Africa & the world

KHARTOUM – Sudan and South Sudan have stepped back from the brink of all-out confrontation and the world community should seize on this to win humanitarian access to food-starved regions and press for broader reconciliation, senior US officials say. Princeton Lyman, the top Obama administration official for Sudan, says the announcement that Sudan President Omar al-Bashir will visit South Sudan in coming weeks could signal a new phase between two uneasy neighbours seen at risk of reigniting one of Africa's bloodiest wars. "The two countries decided to step back from the brink. They looked at each other and said we are going in the wrong direction," Lyman says to the Senate Foreign Relations Committee. "We have seen these recommitments before. So, while we take a great deal of hope from them, a lot will depend on what happens over the next several weeks." The testimony also features Hollywood star George Clooney – a long-time activist on the Sudan issue – who says Washington must get tough on Bashir and two other Sudanese officials indicted by the International Criminal Court as part of an investigation into atrocities in Darfur between August 2003 and March 2004.

HARARE – Zimbabwe's government faces a shutdown because projected revenue from the diamond industry has failed to come through, the Finance Minister warns. "Diamonds will have to deliver, otherwise the only thing we have to do will be to pay wages and government will have to close," Tendai Biti says. "We cannot have a situation where 70% of revenue is going towards wage demands. That's not an acceptable position. Wages are crowding out other government expenditures," he says. Biti says that, according to the Mines Ministry, diamond auctions had not taken place in 2012 before March. Biti is a member of the opposition Movement for Democratic Change, which is in an uneasy coalition government with President Robert Mugabe's ZANU-PF party. ZANU-PF controls the Mines Ministry and is, therefore, seen as profiting from the diamond sector. Zimbabwe's economy has been in a tentative recovery after a decade of steep decline but, with unemployment at 80%, its tax and revenue base remains extremely low.

MOSCOW – Russia criticises United Nations (UN) investigators for failing to adequately probe deaths caused by North Atlantic Treaty Organisation (Nato) bombs during the uprising against Libyan leader Muammar Gaddafi last year. Independent investigators for the UN Human Rights Council issued a report saying Nato had caused civilian deaths, but added that the organisation had taken “extensive precautions to ensure civilians were not killed”. Maria Khodynskaya-Golenishcheva, a diplomat at the Russian mission to the UN, in Geneva, says the report omits civilian deaths caused by Nato air strikes in July and August last year, including children and Libyan journalists. “The report should have given an adequate assessment of these acts and the members of the commission should have been more insistent on demanding information from Nato,” she says in a meeting on the report’s findings. “In our view, during the campaign, many violations of international law and human rights were committed, including the most important right, the right to life.

DAMASCUS – UN-Arab League envoy Kofi Annan feels his Syria mediation mission is on track, even though violence still raged as he held talks with President Bashar al-Assad, his spokesperson Ahmad Fawzi says. Annan twice met Assad in Damascus, as well as opposition figures and saw Qatari leaders in Doha before heading for Turkey. Before he went to Syria, he held separate talks with the Arab League chief and the Foreign Ministers of Russia and Saudi Arabia in Cairo, Fawzi says. “This is the beginning of a process and the joint special envoy feels the process is on the right track,” he says. “He has left a set of concrete proposals with Bashar on a cessation of hostilities, humanitarian access and political dialogue, and expects to hear from him shortly. He is concerned that the fighting and the killing seem to be continuing while he is trying to put an end to it and while he is trying to talk to Bashar,” he says.