South Africa

JOHANNESBURG – South Africa's ruling African National Congress (ANC) denys a bid by its Youth League leader Julius Malema to have disciplinary charges against him dropped, allowing a hearing to proceed that could derail the career of the populist firebrand. The hearing is seen as a showdown between President Jacob Zuma and Malema, who has galvanised the support of the country's poor black majority with his calls for a State takeover of mines, white-owned farms and the redistribution of wealth. "The National Disciplinary Committee dismissed comrade Julius Malema's application to have the charges quashed," the ANC says in a statement, adding the hearing will resume on Monday. Malema, 30, seen as a potential future ANC leader, faces possible suspension from the party. But, if he is exonerated, Zuma could be fighting for his political survival. Zuma faces a major ANC meeting in late 2012 when the party that dominates the country's politics elects its leaders. He will be in a strong position for re-election if Malema is sidelined but could be a lame duck if Malema stays in the ANC and supports Zuma's rivals for the top job. The ANC began a disciplinary hearing this week on charges Malema for bringing the ANC into disrepute and sowing dissension in its ranks.

PRETORIA – The uncertainties in the global economy remain a risk to South Africa's prospects and the country needs to increase its competitiveness to compete with its counterparts in the Brics group, says Finance Minister Pravin Gordhan. "The global economy is going through an uncertain time and extremely risky period," he says. "The clouds of instability in European banks, the sovereign debt crisis and the weakening prospects cast a long shadow across the globe and this includes a shadow over the South African economy." South Africa's economic growth slowed sharply in the second quarter to 1.3% from 4.5% in the first quarter. Gordhan says that, although the second-quarter GDP growth numbers were disappointing, he is still hopeful the economy will grow by over 3.0% this year, from last year's 2.8%. In case of "extreme crisis", the government will use foreign exchange reserves, which are currently above $50-billion. Gordhan says South Africa's business cycle is closely linked with the developed world and a slowdown there will impact the country. South Africa exited its first recession in almost two decades in the third quarter of 2009 but continues to shed jobs. The government has said the economy needs to grow by 7% a year on a sustained basis to decrease the unemployment rate, which is currently at over 25% of the labour force.

CAPE TOWN – President Jacob Zuma does not hold any personal or financial interest in any business or corporate entity, his spokesperson, Mac Maharaj says. “He makes his annual declaration of interests to the Secretary of Cabinet. The declaration is designed to ensure that a conflict of interest does not arise in the performance of his executive office,” he says. He was reacting to the Democratic Alliance’s (DA’s) call for a law change to ensure scrutiny of government business deals involving family members of the President. DA Parliamentary leader Athol Trollip says it is necessary because the number of Zuma’s family members benefiting from “mega tenders” without proper procurement procedures, or having the necessary experience, is hampering service delivery. “Many people linked to the President are securing contracts, but are too inexperienced to deliver. The lack of experience ultimately undermines service delivery,” Trollip says. He singled out a controversial recommendation that the Billion Group – linked to Zuma’s son-in-law, Lonwabo Sambudla – be awarded a R1-billion contract from the Department of Public Service and Administration. He says the department has put the tender to build a new headquarters on hold because of a lack of funding, but the Minister pushed for the deal to go ahead regardless.

JOHANNESBURG – South Africa’s electricity prices, which have more or less doubled from an average real level of 25c/kWh in 2008 to the current level of 50c/kWh, are approaching an affordability “tipping point”, the Energy Intensive User Group (EIUG) cautions. Chairperson Mike Rossouw says regulatory, policy and investment efforts are required to moderate the price path to mitigate further deindustrialisation and to ensure that the policy aspiration of extracting further value from the country’s minerals ahead of export is achieved. Some smelters have already closed partly as a result of rising administrative prices, while the margins at others are becoming increasingly unattractive. The EIUG is conducting a survey of industrial and mining firms to improve visibility of the level of vulnerability. Current and possible future tariff increases could lead prices to rise beyond 110c/kWh by 2020, which will result in disinvestments by firms dependent on competitively priced power.

PRETORIA – The Competition Commission wants the Constitutional Court to clarify the competition body’s powers to investigate allegations of anti-competitive behaviour submitted by third parties. The commission filed an application for direct access to the Constitutional Court to appeal a decision of the Competition Appeal Court, it says. The Competition Appeal Court’s decision related to allegations of a cartel in the fertiliser industry involving Yara South Africa, Omnia Fertiliser and Sasol Chemical Industries. Sasol settled with the Competition Commission, paying an administrative penalty amounting to R250-million in 2009. Following this settlement, the commission wants to amend its complaint against Omnia and Yara by introducing information apparently obtained from Sasol. Omnia and Yara challenged the commission’s investigation. The Competition Appeal Court found the referral against the two companies invalid because the complainant did not intend to complain about the anticompetitive behaviour uncovered in the investigation.

Africa & the world

MOGADISHU – Food will be increasingly scarce in famine-struck southern Somalia until next year's harvest, the head of the United Nations refugee agency (UNHCR) says. "We have not yet reached the peak of the crisis," UNHCR chief Antonio Guterres says in Kenya, after visiting southern Somalia and the country's capital, Mogadishu. "From the point of view of the food security of the people, obviously, as time goes by, until the next harvest is possible, the situation will become worse and worse," he says. Rains are not due in rebel-controlled southern Somalia, the worst affected area where close to three-million people are at risk of starving, until October, meaning harvest will be in early 2012. The UN has declared famine in five zones in southern Somalia where the al-Qaeda-affiliated al-Shabaab militants will not allow the UN's World Food Programme to deliver food aid. However, the International Committee of the Red Cross and other agencies like the UN children's fund and Islamic organisations do have access to al-Shabaab areas, Guterres says. Somalia has been without a central government since it descended into civil war 20 years ago. Insecurity and donor fatigue have hampered the supply of emergency aid, some charities say.

TRIPOLI – Muammar Gaddafi, driven into hiding by his foes, has urged his supporters to fight on, even as Libya's new interim rulers met world leaders to discuss reshaping a nation torn by 42 years of one-man rule and six months of war. "Let it be a long battle. We will fight from place to place, from town to town, from valley to valley, from mountain to mountain," Gaddafi says in a message broadcast on Arab satellite television channels. "If Libya goes up in flames, who will be able to govern it? Let it burn. They don't want to rule Libya. They cannot rule it as long as we are armed. We are still armed. We will fight in every valley, in every street, in every oasis, and every town." He adds: "How can we give ourselves up again? Are we women surrendering ourselves to our husbands or what?" The fugitive leader was speaking on the anniversary of the military coup that toppled King Idris and brought him to power in 1969 when he was a 27-year-old army captain. There have been conflicting reports about Gaddafi's location since his Tripoli compound was overrun on August 23. A senior military commander of the interim National Transitional Council says that Gaddafi is in a desert town outside Tripoli, along with his son Saif al-Islam and intelligence chief Abdullah al-Senussi, planning a fightback.

WASHINGTON – Steps should be taken to create an international currency to replace the dollar as the world’s sole reserve currency, developmental economist Meghnad Desai says. According to a report in Business Day, Desai says special drawing rights (SDRs) could be reconfigured for use as the new currency. “The world needs a better monetary arrangement. We can have an international currency which will take the burden off the dollar as the sole reserve currency,” he said at a dialogue in Johannesburg organised by the newspaper. There have been mounting calls for a global reserve currency, which will give more weight to developing countries, reflecting their growing importance in the world economy. Desai says the new SDR should include currencies from the Brics group of emerging economies, of which South Africa is a member.