The number of visitors to Cape Town this year is running more than 25 per cent up on a year ago.
Airlines report record demand for seats as the peak summer season gets under way. New hotels are going up across the city and are booked out almost before they open. Game parks are full and every tourist facility is bursting at the seams.
Yet the South African economy is in a mess and diving deeper by the day. On Monday the rating agency Moody’s savagely criticised the finance minister Malusi Gigaba’s recent budget statement, almost certainly heralding a further down-grade of the country’s foreign and local currency – already given junk status by two of the three big rating agencies.
Just when it seemed it couldn’t get worse, it did. Mr Gigaba’s budget statement owned up to a string of disasters – a colossal 51 billion rand (Dh13.32bn) shortfall in tax revenue (and this after a tax increase in 2016), a steep climb in the budget deficit to 4.3 per cent of GDP, a fall in February’s economic growth forecast from 1.3 per cent to 0.7 per cent, and a forecast that government debt would rise to 60 per cent of GDP by 2022 (from less than 30 per cent when Jacob Zuma became president in 2009).
Most unnerving of all is the acknowledgement that Mr Gigaba hasn’t a clue what to do about it and has more or less given up even trying. Economists have focused on his abandonment of the policy of “fiscal consolidation” he promised to pursue when he took over after the sacking of Pravin Gordhan last April. The movement away from fiscal prudence, says the rating agency Fitch, is “occurring faster than we had expected”, while Zuzana Brixiova, Moody’s well-respected sovereign analyst for South Africa, said the statement signalled “a marked credit-negative departure from earlier fiscal consolidation efforts”. South Africa's debt sustainability, he warned, is at risk because revenue collection is under-performing and expenditure will be hard to reduce in the run-up to the 2019 general elections.
South Africa is already paying a penal 9 per cent for its borrowing yet the debt burden is projected to increase by almost 7 per cent a year, raising the interest burden to 15 per cent of revenue by 2020. It is already the single biggest item of governments spending, well ahead of education, health or pensions, all of which are in dire need of more funding.
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Read more:
Rising illegal outflows stoke anger across Africa
South Africa's test case made for cryptocurrency
Eskom’s chief is a cause for concern in South Africa
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Nowhere is the serious state of the country’s finances more visible than in South Africa’s mining industry, traditionally the engine room for what used to be the continent’s strongest economy. A proposed mining charter, which requires higher levels of black ownership than ever before, is seen as so penal that investment in new mines has almost come to a halt. Corruption and favouritism in the awarding of new licences has persuaded the big international mining companies that they have no future in the country, causing them to switch their focus to more friendly climes.
Even more worrying, however, is the plight of the state-owned industries, many of them big loss-makers. South African Airways (SAA) is a basket case, requiring a series of government bail-outs that have simply staved off the crisis for another few months. Successive changes of management and board, driven personally by Mr Zuma who has insisted on installing his friends and cronies into plum jobs, have basically destroyed it as a functioning entity. As with the rest of the economy, no one knows how to resolve it. Mr Gigaba last week said SAA should be retained “in our national interest” rather than “rely exclusively on the profit and scheduling considerations of global airlines”.
His statement that only a state airline can sell “SA’s economy, tourism and culture to every one of its passengers” has met with howls of outrage. “Balderdash,” thundered the veteran commentator Steve Mulholland; “utter nonsense”, said Peter Bruce, perhaps the country’s most respected financial columnist.
Like many other international travellers, I no longer fly SAA, preferring to use the Middle East operators, such as Emirates, Etihad and others who are increasing their share of the market. Any of these airlines would be happy to take on the job of selling South Africa as a tourist destination – and already do.
The national electricity provider, Eskom, is in a more parlous state even than the bankrupt SAA. Its debts now amount to 9.3 per cent of GDP and go on mounting at a terrifying rate. No one knows what to do about that either. The country may be able to manage without a national carrier but it does need to keep the lights on – and no international or private company is prepared to take that on.
The real message of the budget is that the country is rudderless, run – or not run – by a president who seems to care about nothing more than his own personal survival. The ruling ANC is sharply divided as it heads into its electoral conference in December when Mr Zuma’s successor will be decided (the front-runners are the deputy president Cyril Ramaphosa and Nkosazana Dlamini Zuma, the president’s ex-wife), but Mr Zuma still has another two years to serve as president.
Nothing much is going to change in that time.
And the markets, if they weren’t fully aware of it before Mr Gigaba’s budget statement, certainly know it now.
Company%20Profile
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The specs: 2019 GMC Yukon Denali
Price, base: Dh306,500
Engine: 6.2-litre V8
Transmission: 10-speed automatic
Power: 420hp @ 5,600rpm
Torque: 621Nm @ 4,100rpm
Fuel economy, combined: 12.9L / 100km
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Biog
Age: 50
Known as the UAE’s strongest man
Favourite dish: “Everything and sea food”
Hobbies: Drawing, basketball and poetry
Favourite car: Any classic car
Favourite superhero: The Hulk original
Abu Dhabi World Pro 2019 remaining schedule:
Wednesday April 24: Abu Dhabi World Professional Jiu-Jitsu Championship, 11am-6pm
Thursday April 25: Abu Dhabi World Professional Jiu-Jitsu Championship, 11am-5pm
Friday April 26: Finals, 3-6pm
Saturday April 27: Awards ceremony, 4pm and 8pm
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Singham Again
Director: Rohit Shetty
Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone
Rating: 3/5
Related
Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
Tips to keep your car cool
- Place a sun reflector in your windshield when not driving
- Park in shaded or covered areas
- Add tint to windows
- Wrap your car to change the exterior colour
- Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
- Avoid leather interiors as these absorb more heat
Company%20Profile
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Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
COMPANY%20PROFILE
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COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Company%20profile
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Company%20Profile
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COMPANY%20PROFILE
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COMPANY%20PROFILE
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LA LIGA FIXTURES
Thursday (All UAE kick-off times)
Sevilla v Real Betis (midnight)
Friday
Granada v Real Betis (9.30pm)
Valencia v Levante (midnight)
Saturday
Espanyol v Alaves (4pm)
Celta Vigo v Villarreal (7pm)
Leganes v Real Valladolid (9.30pm)
Mallorca v Barcelona (midnight)
Sunday
Atletic Bilbao v Atletico Madrid (4pm)
Real Madrid v Eibar (9.30pm)
Real Sociedad v Osasuna (midnight)
The specs: 2018 Mazda CX-5
Price, base / as tested: Dh89,000 / Dh130,000
Engine: 2.5-litre four-cylinder
Power: 188hp @ 6,000rpm
Torque: 251Nm @ 4,000rpm
Transmission: Six-speed automatic
Fuel consumption, combined: 7.1L / 100km
A%20QUIET%20PLACE
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Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
Britain's travel restrictions
- A negative test 2 days before flying
- Complete passenger locator form
- Book a post-arrival PCR test
- Double-vaccinated must self-isolate
- 11 countries on red list quarantine
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Company%20profile
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
SPECS
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Super%20Mario%20Bros%20Wonder
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The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
Naga
%3Cp%3E%3Cstrong%3EDirector%3A%C2%A0%3C%2Fstrong%3EMeshal%20Al%20Jaser%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%C2%A0%3C%2Fstrong%3EAdwa%20Bader%2C%20Yazeed%20Almajyul%2C%20Khalid%20Bin%20Shaddad%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E4%2F5%3C%2Fp%3E%0A
Under-21 European Championship Final
Germany 1 Spain 0
Weiser (40')
