South Africa

JOHANNESBURG – South Africa needs to build its savings base to decrease reliance on foreign capital, Finance Minister Pravin Gordhan says. Last week Reserve Bank Governor Gill Marcus said Africa's biggest economy, recovering from a recession in 2009, needed to increase investment levels to between 25% and 30% to sustain growth. Gordhan says South Africa has a low savings rate, making it highly dependent on capital flows, which are creating instability and volatility in global markets. "Therefore, it's crucial that we build our savings base, so that we are less reliant on foreign savings," Gordhan says. He adds that, while many global economies are on the mend after a recession, the crisis is not yet over, cautioning fund managers and other investors to take account of both the opportunities available and the prevailing risks. Gordhan reiterates South Africa needs a new growth path to solve its chronic joblessness, with about 25% of the labour force currently unemployed. "The necessity of the growth path rises from a realisation that what we've done so far will not solve acute unemployment and structural unemployment," he says. "For the first 16 years of our democracy, we've done well for ourselves but what we've done to this point is not good enough for the (future)." The government says South Africa's economy, seen expanding by 3,4% for 2011, needs to grow by 7% for 20 years to make a significant dent in unemployment.

JOHNNESBURG – South Africa's Reserve Bank will base its future policy action on its assessment of second round effects of higher oil and food prices on inflation, deputy Governor Daniel Mminele says. He also says any speculation that the bank may currently have a preference for a stronger rand or may have been selling foreign exchange reserves is misplaced. The bank raised its inflation forecasts at its March policy meeting, and said that oil and food prices are the main upside risks to the inflation outlook. "The MPC (Monetary Policy Committee) is committed to achieving the inflation target within the parameters of its mandate," Mminele says. "However, given that inflationary pressures are currently seen to be mainly of a cost-push nature and not demand-driven, any future policy action and its timing will be based on the MPC's assessment of any second-round impacts." Fuel prices have climbed by over 27% in South Africa since the beginning of last year and food price inflation quickened to 3,5% in February. Inflation has been inside the central bank's target of between 3% and 6% since February 2010, and is expected to stay in that band until the end of 2012. Policymakers from the central bank and the National Treasury say a strong rand currency has cushioned the impact of higher oil and food prices on inflation.

JOHANNESBURG – The South African Revenue Service (Sars) has collected more than R6-billion in mining royalties in the first year of their implementation, commissioner Oupa Magashula has said. Levying royalties on the mining industry for the first time was initially planned for the 2009/10 year, but then Finance Minister Trevor Manuel postponed it to give mining companies relief from the recession and to save jobs in the sector. Companies extracting minerals in South Africa are required to pay royalties at a rate of between 0,5% and 7% based on gross sales, less allowable deductions. Magashula said at a briefing to announce the outcome of the country’s 2010/11 revenue collection that Sars had also identified transfer pricing issues as a challenge in the collection of taxes within the mining sector. He explained that most mining companies were multinationals and would often pay tax in other countries in which they operated that had lower tax levies, resulting in South Africa losing out on its fair share of revenues. Sars, together with the African Tax Administration Forum, had identified the issue for further investigation in an effort to curb the outflow of revenue from the continent.

PRETORIA – In implementing the United Nations Security Council (UNSC) Resolution 1975 (2011), South Africa is freezing the assets and other economic resources of the former President of Côte d’Ivoire, Simone Gbagbo, and others in the country’s Presidency. “The South African government is implementing the United Nations Security Council Resolution, which was adopted with immediate effect on Wednesday, March 30, 2011,” Finance Minister Pravin Gordhan says. The resolution requires financial institutions in member countries to freeze the funds and other financial assets of persons who pose a threat to the peace and national reconciliation process in Côte d’Ivoire. The resolution is against Gbagbo, chairperson of the Parliamentary Group of the Ivoirian Popular Front (FPI); Désiré Tagro, the secretary-general in Gbagbo’s Presidency; Pascal Affi N’Guessan, chairperson of the FPI; and Gbagbo’s adviser, Alcide Djédjé. “Financial institutions should note that the resolution applies to the individuals listed in Annex 1 of the resolution and also to the funds, other financial assets and economic resources owned or controlled, directly or indirectly, by the designated persons in an earlier UNSC resolution.

PRETORIA – South Africa’s position regarding Libya remains clear and unambiguous, with President Jacob Zuma calling for a ceasefire and a peaceful solution in that country. In a statement, the Presidency says it has noted comments in a Zimbabwe newspaper, which generated interest relating to South Africa’s position on Libya, particularly on the vote for United Nations Security Council Resolution of 1973. It says that, as a member of the African Union (AU), South Africa is committed to the position of the AU Peace and Security Council, which reaffirms Africa’s strong commitment to respect the unity and territorial integrity of Libya. “President Zuma has called for an immediate ceasefire in Libya and an end to the attacks on civilians. He also stated that only a peaceful solution, based on the will of the people, will guarantee long-term stability in Libya,” says the Presidency. Zuma forms part of the ad hoc High-Level Committee on Libya, comprising five heads of State and government, who have been tasked with finding a political solution to the Libyan crisis. South Africa remains committed to working within the ambit of the AU to find a lasting political solution to the Libyan crisis.

Africa & the world

TRIPOLI – Libyan rebels says five of their fighters were killed when North Atlantic Treaty Organisation (Nato) planes mistakenly bombed a rebel tank column and a top US general says they were unlikely to be able to oust Muammar Gaddafi by force. With daily skirmishes near the contested Port of Brega, in eastern Libya, making little impact on the front line and rebels unable to end a brutal government assault on the western city of Misrata, Nato admits its mission to protect civilians is tough. In rebel-held eastern Libya, wounded rebels being brought to a hospital at Ajdabiyah said their trucks and tanks were hit on Thursday by a Nato air strike outside Brega, where fighting has dragged on for a week. It is the second time in less than a week that rebels have blamed Nato for bombing their comrades by mistake after 13 were killed in an air strike not far from the same spot. At the same time, the rebels have accused Nato of being too slow to order air strikes they have come to depend on in their uprising to end more than four decades of Gaddafi rule. Nato says it is investigating an attack by its aircraft on a tank column in the area along the Mediterranean coast, saying the situation was "unclear and fluid". Asked if a stalemate was emerging in the seven-week-old conflict, the head of US Africa Command General Carter Ham says: "I would agree with that at present, on the ground." He told a Senate hearing in Washington the US should not arm the rebels without a better idea of who they were and, when asked how the war would end, said: "I think it does not end militarily." There is little likelihood that rebels will be able to fight their way to Tripoli and oust Gaddafi by force, Ham says.

KHARTOUM – Sudan's Foreign Ministry says it will report Israel to the United Nations Security Council about a missile attack in the country’s east that killed two people. Israel has declined to comment on Khartoum's accusation that it launched the strike near Port Sudan airport on Tuesday night. It was similar to a 2009 attack on an arms convoy in Sudan's east, for which Israel neither admitted nor denied responsibility. "We have started the process to make an official complaint to the Security Council," says Foreign Ministry spokesperson Khaled Musa. In a written statement the ministry also denies media reports that one of the men killed was a senior official from Palestinian Hamas, saying both men in the car targeted were Sudanese. "This was a desperate Israeli attempt to damage Sudan's image and link it to terrorism and illegal practices to derail an understanding with the US to remove Sudan from the State sponsors of terror list," the statement says. Washington has begun the process of removing Sudan from its State sponsors of terror list after it recognised the result of a southern referendum on secession in January.

HARARE – Zimbabwe’s main official newspaper has attacked South African President Jacob Zuma, labelling him an erratic liability after he called on the Zimbabwe government to end a crackdown on its political rivals. The comments are likely to reflect President Robert Mugabe’s anger with Zuma, who condemned events in Zimbabwe in unusually strong language at a recent regional summit. “President Zuma’s erratic behaviour is the stuff of legends,” the Sunday Mail says. “The problem with Mr Zuma now is that his disconcerting behaviour has become a huge liability, not only to South Africa but also to the rest of the continent.”