Wednesday June 8, 2011

From Creamer Media in Johannesburg, I’m Megan Wait

Making headlines:

The World Bank expects South Africa’s growth rate to recover to 3.5% in 2011, on the back of continued consumer spending and a recovery in private investment spending, which contracted sharply during the recent period of global economic crisis. However, its June 2011 ‘Global Economic Prospects’ report shows a material decoupling of South Africa from the rest of the region, where the rate of economic expansion is expected to be 5.1% this year – or 5.9% if South Africa’s relatively “tepid” performance were to be excluded from the figures. The report notes that growth in Africa’s largest economy is also only expected to return to its precrisis average from 2012, when the economy is expected to expand by 4.1%, followed by growth of 4.4% in 2013.

Access to broadband connectivity is a strong driver of economic growth and new jobs in countries, a recent study by the Broadband Commission for Digital Development showed. The report entitled ‘A Platform for Progress’, argued that broadband should be coordinated on a countrywide basis, promoting facilities-based competition and supported by policies encouraging service providers to offer access on fair market terms. The data showed that 10% a year higher broadband penetration correlated with 1.5% greater labour productivity growth over the following five years.

South Africa's Finance Minister Pravin Gordhan said that it was not easy to come up with solutions that will address the rand's strength on the back of surging capital inflows. The strong rand has been a sore point between the ruling African National Congress party and its leftist allies who want the rand to be weakened to about 8.50 to the dollar. The rand has gained about 30% in the past two-and-a-half years, mainly as investors have flooded emerging markets after ultra-loose monetary policy in developed nations. The rand has weighed on the manufacturing sector, constraining growth in the economy's second biggest sector.

Also making headlines:

The State will continue to pay embattled Western Cape Judge President John Hlophe's legal fees only if he agrees to repay them in full should he lose his Constitutional Court appeals, Justice Minister Jeff Radebe said.

A Russian envoy in rebel-held Benghazi said Moscow wanted to help bridge the rift in Libya, stepping up Kremlin efforts to play a prominent role in resolving the conflict.

And, Finance Minister Pravin Gordhan launched a R9-billion jobs fund aimed at creating 150 000 new jobs over the next three years, as part of the government’s drive to reduce unemployment.

That’s a roundup of news making headlines today.