Friday, January 29, 2010
From Creamer Media in Johannesburg, I'm Amy Witherden.
Making headlines:
South Africa's Central Bank yesterday defended its inflation targeting framework, arguing that it had helped reduce market uncertainty, boost investment and had not stifled economic growth.
Inflation targets have come under fire from the ruling African National Congress (ANC) and its trade union and communist allies, leading to the Reserve Bank and government setting up a committee to assess the effectiveness and "adequacy" of inflation targeting. The ruling alliance wants the mandate of the bank broadened from a focus on inflation to also look at growth and jobs.
Reserve Bank deputy governor Daniel Mminele said yesterday that the Central Bank's policy committee already takes into account growth and employment when making its decisions, adding that the trend in interest rates would have been the same without an explicit target. He said that critics of the bank's mandate should not merely look at the impact of the target.

The African Union (AU) objects to the imposition of trade sanctions by the US against African countries that it perceives to have violated democratic principles, said AU commissioner for trade and industry Elizabeth Tankeu yesterday. The US recently withdrew benefits under the African Growth and Opportunities Act from Madagascar, Guinea and Niger, citing an "undemocratic" transfer of power in each of the countries. Tankeu said that the AU had tried to explain to Washington that the withdrawal of benefits only hurt investors who spent money to develop exports to the US. Speaking on the sidelines of the annual AU summit, she added that the organisation had asked the US to separate political from economic issues.

The National Treasury is unlikely to make major changes to individual, corporate or indirect tax rates, but it is also unlikely to announce any new tax incentives when Finance Minister Pravin Gordhan tables the national budget next month, says tax advisory firm Ernst & Young (E&Y). The advisory firm expects "more of the same" this year, despite the global economic crisis and the local recession, which has left South Africa with a widening budget deficit and speculation that government could increase taxes to boost its revenue collection. E&Y says, however, that South Africa has the capacity to fund a budget deficit for a few years if it needed to, as it has the capacity to increase its public debt. E&Y pointed out that, globally, there has not been a consistent adoption of increases in individual, corporate or indirect tax rates. However, given the many job losses suffered in South Africa in the past year, personal income tax rates are not likely to increase.
Also making headlines:
International Criminal Court prosecutor Luis Moreno-Ocampo expects genocide to be added to the charges against Sudanese President Omar Hassan al-Bashir.
Special Investigating Unit head Willie Hofmeyr tells Parliament that he is disappointed about inaction over corruption that has been uncovered.
Kenyan legislators recommend scrapping the position of Prime Minister, created under a power-sharing deal after a disputed election in 2008.
And, Zimbabwean Prime Minister Morgan Tsvangirai calls for the return of Western donors and investors, as he believes that the country's power-sharing process is irreversible.
That's a roundup of news making headlines today.