South Africa

JOHANNESBURG - South Africa is weathering the global recession and credit crunch "quite well" compared with its rating peers, says Fitch Ratings. This is despite the ratings agency's predictions that the country's gross domestic product (GDP) will fall by 1% to 2% this year. While political risk has eased since April's smooth transfer of power to President Jacob Zuma, Fitch says that the "postelection political landscape and its implications for policy are still unfolding, at a time when the budget deficit is rising sharply and the current account deficit, while diminished, remains large and presents continuing financing challenges". Fitch Ratings has affirmed South Africa as 'BBB+' (lower medium grade) but says that the outlook remains negative. The country's ratings have been on negative outlook since November 2008 when Fitch took negative rating action on a number of major emerging markets as the global economy turned. South Africa has been affected mainly through trade and capital flow channels. Fitch predicts that the budget deficit could approach 6% of GDP in the current fiscal year and remain high, albeit declining, in the next two years.

JOHANNESBURG - The Congress of the People (Cope) has condemned the rise of violent service delivery protests witnessed countrywide and has called for urgent public debate on the matter. Cope Parliamentary leader Mvume Dandala has also condemned government's response to the protests with "increased police brutality and suggestions that a third force is at play". The opposition party sees government's failure to communicate effectively with its citizens as the cause of the protests. Dandala says that the African National Congress government should look no further than the auditor-general's report to deal with corruption in municipalities, instead of sending high-level delegations on visits to affected protest areas. Cope proposes an urgent genuine public debate to save local government from collapse. The debate will cover what the government should be doing to deliver the required services, "instead of using undermining "superficial izimbizo and PR gimmicks," says Dandala.

JOHANNESBURG - The government hopes to produce a draft Bill on a proposed scheme to combine the public and private health sectors by December. It is hoped that legislation establishing a National Health Insurance scheme will be approved by Parliament next year, says Deputy Health Minister Molefi Sefularo. According to an African National Congress (ANC) document outlining the system, those who can afford to pay for healthcare will subsidise those who cannot afford healthcare - in what the ANC calls "social solidarity". Among the proposals contained in the report are the following: anyone will be able to attend a private or public hospital without having to pay; and public health funding and medical aid contributions will go into a pool from which government will allocate money to doctors, clinics and hospitals.

Africa & the World

PRETORIA - Although Africa has been hit by the current global recession, the continent is riding out this crisis much better than in previous downturns. Antoinette Batumubwira, external relations and communications unit head at the African Development Bank (AfDB), says that Africa would have been much harder hit had it not undertaken economic reforms in the years before the crisis, which have strengthened the continent. These reforms include: a greater focus on the private sector, capacity building in economic management areas in African States, and governance reforms. African banks have also been more conservative in their policies than those in the US and Europe, says Batumubwira. Still, the continent has not escaped the effects of the crisis. AfDB economist Iza Lejarraga explains that the past seven years, have seen an average growth rate of 7%. The AfDB predicts growth for 2009 to be 2,8%, she says, but expects a rebound in 2010, to 4,5% growth. However, the deceleration is bad for budget balances. The 'African Economic Outlook 2009' report, jointly published by the AfDB and the Development Centre of the Organisation for Economic Cooperation and Development, predicts a regional budget deficit for 2009 of about 5,5%. Prior to the crisis, says Lejarraga, the AfDB predicted a surplus of 3,5% for 2009. The effects of the crisis have not been uniform across the continent.