South Africa

JOHANNESBURG – The City of Johannesburg will spend over R100-billion on economic and social infrastructure over the next ten years, City of Johannesburg executive mayor Parks Tau says. To enable Johannesburg to facilitate local economic activity and create an enabling environment for growth, the city would focus on, besides others, the upgrading of water reticulation systems, stormwater systems, electricity substations, the road infrastructure network and waste treatment plants. Speaking at his first State of the City address, Tau says Johannesburg accounts for 16% of the country’s gross domestic product and that trade, manufacturing, construction, transport and tourism will be significant drivers for growth. He also points out that many large corporations, financial institutions, law firms and many other organisations based their headquarters in the city centre. The growth in population will also drive the need for urgent socioeconomic infrastructure development. Tau notes that Johannesburg currently had a population of about 3.8-million and, by 2015, it is expected to reach 4.1-million. In 2040, it is forecast to have a population of 8-million. In line with this, infrastructure development should not only support the increased population, but also contribute to sustainable job creation and skills development, he adds. The infrastructure development and refurbishment will be done in collaboration with the private sector and key stakeholders. The city would also reprioritise its expenditure to ensure revenue maximisation. Tau encouraged public–private partnerships for future projects.

JOHANNESBURG – The South African government is considering turning to the private sector to help it close the prevailing funding gap to implement projects to deal with the serious acid mine drainage (AMD) problem being experienced across the Witwatersrand basins, Water and Environmental Affairs Minister Edna Molewa reveals. It is estimated that R924-million is needed to implement a short-term AMD solution for the region, but that even more resources will be required for a comprehensive long-term solution. However, the National Treasury has only made R433-million available. Therefore, the Department of Water Affairs (DWA) and Department of Mineral Resources (DMR) will explore the possibility of testing the “open market” for input in finding a sustainable solution. Molewa expects the responses to address all aspects of AMD including institutional matters, financial matters, technology and the operation and implementation of the treatment plants in the Witwatersrand. “Once we have more clarity on the way forward and on the process that could be followed to speed up the long-term solutions, my department will make further announcements in this regard,” Molewa states, while stressing the need for a “smooth integration” between the short-term and long-term solutions. DWA acting director for water quality management for Gauteng Marius Keet agrees that linking the long- and short-term solutions is crucial in achieving success. “The challenge is to ensure interaction between the short- and long-term solutions to secure business case and, thereby, protect valuable water resources,” he notes.

JOHANNESBURG – The Department of Trade and Industry’s (DTI’s) initiative to create special economic zones (SEZs) may potentially provide significant and sustained economic benefits, but is also fraught with pitfalls that could undermine its efficacy, Free Market Foundation executive director Leon Louw says. Having studied and written about SEZs across the world, Louw says thousands of SEZs, which include special trade zones of all kinds, were failures. Speaking at an Africa Institute of South Africa seminar on SEZs, he says South Africa has already had a number of unsuccessful initiatives over the past 50 years, including the Apartheid-era ‘growth points’ and ‘border industries’, as well as more recent industrial development zone (IDZ) projects at Coega, in the Eastern Cape, Richard’s Bay, in KwaZulu-Natal, and OR Tambo International Airport, in Gauteng. “These projects are all failures, owing to none of them attracting substantial, profitable and sustainable investments, while a common trend among international failed SEZs is that they consumed more investment in infrastructure, subsidies and concessions than what they were able to produce,” Louw says. The DTI recently concluded a 60-day comment period in which it held public hearings, giving organised business, labour and the public an opportunity to voice their views on the SEZ Bill and policy, which was gazetted by Trade and Industry Minister Rob Davies on January 23. The DTI says the purpose of the Bill is to broaden the scope and composition of dedicated industrial areas in South Africa and to support industrial decentralisation.

PRETORIA – The deficit on South Africa’s current account narrowed in the fourth quarter of 2011, helped by lower dividend payments to nonresident investors, but spending by households and government rose, signalling rising import pressures. The current account shortfall edged lower to 3.6% of gross domestic product in the fourth quarter from a revised 4.1% in the third quarter, the Reserve Bank says in its March Quarterly Bulletin. “It looks good . . . The fact that it’s the government is not surprising, as it just keeps spending more and more, but it’s good to see that households are also doing the same,” says Christie Viljoen, an analyst with NKC Independent Economists. The shortfall for the whole of 2011, however, widened to 3.3% of gross domestic product from 2.8% in 2010, largely owing to a sharp deterioration during the second quarter of last year. Analysts polled by Reuters predict a 4.1% gap in the current account for the fourth quarter. The trade balance switched from surpluses at the start of the year to a deficit in the final quarter, as rising domestic demand pushed imports higher. The deficit on the current account was, however, adequately covered by portfolio flows, the Reserve Bank says. Spending growth accelerated to an annualised 5.1% in the fourth quarter from 4.8% in the third quarter.

Africa & the world

BAMAKO – Renegade soldiers say they have seized power in Mali and ordered its borders closed, threatening to reignite instability in a Saharan region shaken by the conflict in Libya. The overnight coup bid was led by low-ranking soldiers angry at the government's failure to stamp out a two-month-old separatist rebellion in the north of the West African State. Heavy weapons fire rang out throughout the night as the presidential palace came under attack. The whereabouts of President Amadou Toumani Toure, who oversaw a decade of relative stability, are unknown. Mali's neighbours, the United Nations and world powers from Paris to Washington have called for a return to constitutional rule. The 7 000-strong army has for weeks sought better weapons to fight northern Tuareg rebels bolstered by heavily armed ethnic allies, who fled Libya after fighting for ousted leader Muammar Gaddafi. Members of the newly formed National Committee for the Return of Democracy and the Restoration of the State (CNRDR) read a statement on State television saying they had taken over. "The CNRDR . . . has decided to assume its responsibilities by putting an end to the incompetent regime of Amadou Toumani Toure," says Lieutenant Amadou Konare, spokesperson for the CNRDR. "We promise to hand power back to a democratically elected president as soon as the country is reunified and its integrity is no longer threatened," said Konare, flanked by about two dozen soldiers, in a statement marred by sound problems.

WASHINGTON – Fresh water supplies are unlikely to keep up with global demand by 2040, increasing political instability, hobbling economic growth and endangering world food markets, according to a US intelligence assessment. The report by the office of the Director of National Intelligence says that areas including South Asia, the Middle East and North Africa will face major challenges in coping with water problems that could hinder the ability to produce food and generate energy. The report says that a "water war" is unlikely in the next ten years, but that the risk of conflict would grow with global water demand likely to outstrip current sustainable supplies by 40% by 2030. "Beyond ten years we did see the risk increasing," a senior US intelligence official says. "It depends upon what individual States do and what actions are taken right now to work water management issues between States." The official declined to discuss the risks for specific countries, but in the past, water disputes have contributed to tensions between rivals including nuclear-armed India and Pakistan, Israel and the Palestinians, and Syria and Iraq. The report, drafted principally by the Defense Intelligence Agency and based on a classified national intelligence estimate, says water in shared basins would increasingly be used by States to pressure their neighbours.

COTONOU – Leaders of eight African Union (AU) countries fail to break a deadlock over the leadership of the 54-member body, highlighting divisions that have repeatedly stymied its decision-making. The talks in the Benin port of Cotonou were called after neither of the two front-runners for the AU commission chairman post – former South African Foreign Minister Nkosazana Dlamini-Zuma and incumbent Jean Ping, of Gabon – managed to secure an outright majority during a voting contest in January. “Consultations will continue . . . notably [between] Gabon and South Africa,” said a statement issued after the Cotonou talks by leaders of those two countries as well as officials from Chad, Côte d’Ivoire, Algeria, Ethiopia, Benin and Angola. They say a further round of talks will be scheduled to try to break the deadlock before a summit in Malawi around the middle of the year. Ping’s mandate has been extended until then. The commission is the AU secretariat’s top administrative unit and the chairperson its public face. South African President Jacob Zuma’s failure to secure a majority for Dlamini-Zuma, his ex-wife, after Ping’s much criticised tenure, was a blow to South Africa, which regards itself as an emerging power championing African causes, but is seen by some other States as out of touch with global affairs. The AU was widely criticised as being behind the curve on events leading up to the Libyan war.