Economists and currency traders played down any role of Nelson Mandela’s health deterioration in the sharp decline in the rand’s value against the dollar yesterday, citing instead a cocktail of domestic and international reasons for its fall.
Nedbank Capital senior currency trader Lynden Reabow acknowledged it was a tough question to answer but Mandela was “pretty much out of action” in the governing and running of the country and he had also suffered a long illness.
“What is driving it [the decline] are more fundamental issues,” Reabow believed. These included the general labour unrest and gross domestic product statistics looking “quite down there”.
There had also been a larger trade deficit reported than expected, and consumer spending levels were down. Internationally, the US Federal Reserve had taken its foot off the quantitative easing pedal. “There is also a bit of a strong dollar and a strong euro coming in,” Reabow noted.
Sanlam Investment Management investment economist Arthur Kamp said he did not believe there was “a strong link” between the former president’s health and the currency decline.
It was “pretty much related” to other factors. One was the persistent current account deficit.
When there were low portfolio investment inflows this also tended to translate into currency weakness.
Standard Bank rand strategist Bruce Donald blamed the rand’s slide on “a cocktail of adverse global and domestic developments”.
South Africa had also entered the wage negotiation season, which had given rise to “considerable anxiety” about production disruptions in key export sectors while there were also concerns about possible electricity outages as temperatures dropped
.
Mining
The portfolio committee on labour meets in Parliament today to carry out its final deliberations on the Labour Relations Amendment Bill. DA labour spokesman Sej Motau said last night that this was an opportunity to find solutions to the current mining sector crisis.
Noting that the committee would be meeting against the backdrop of reports that the Association of Mineworkers and Construction Union (Amcu) planned to embark on another unprotected strike at Lonmin’s Marikana platinum mine, if a union recognition agreement was not reached, Motau argued that interventions by Deputy President Kgalema Motlanthe appeared to have failed to put a stop to the mine unrest.
Motau believed the ANC was giving in to Cosatu’s demands rather than promoting “the best interests of stability” in the mining sector. The ANC government was doing this as “a pre-election gift” to its alliance partner Cosatu, which includes in its umbrella the National Union of Mineworkers, he charged.
What should be done, Motau believed, was to reintroduce the requirement of balloting before a strike.
There should be a repeal of section 18 of the act, which allowed majority unions and employers to agree on thresholds of representativeness for unions to gain organisational rights in a specific workplace or sector. “Amendments should seek to establish a universal minimum threshold of representativeness above which organisational rights and participation in collective bargaining cannot be denied to a union.”
Motau further suggested amendments to the monitoring of provisions to ensure “that no portion of the union membership fees collected under collective bargaining agreements may be used to pay for affiliation to a political party and that these funds may not be applied for any purpose other than the promotion and protection of the socio-economic welfare of employees”.
That seems like a checklist the ANC will not be ticking off today.
Johannesburg
Johannesburg is the most popular destination in Africa, according to the third annual Mastercard global destination city index, with an expected 2.54 million international visitors expected to arrive this year.
Its 53.6 percent growth in international visitors between 2009 and last year has taken the city into the top 20 fastest growing destinations in the world.
It is also top in Africa in terms of visitor spending with $2.7 billion (R27.4bn) expected to be spent there this year.
But this is partly because Johannesburg’s OR Tambo International Airport has been developed as South Africa’s hub airport, from which other cities in South Africa are served. And although it attracts a high proportion of business travellers, most foreign tourists arriving there leave quickly for other destinations, despite new attractions encouraged by the Johannesburg Tourism Company.
Despite the growing importance of tourism from China and India, the largest number of foreign tourists and biggest spenders arrive from London, the second largest from Frankfurt and the third largest from Dubai.
Dismayingly, the index shows that Cape Town, South Africa’s most popular tourist destination, expects a fall of approximately 8 percent in international visitor numbers this year.
The report suggests that this is due to the withdrawal of SAA’s direct flights between the city and London, although a high proportion arrive on the all-year round direct flights by British Airways and from Dubai with Emirates airline.
The report also shows an increase in tourism to Durban, to which Emirates flies directly from Dubai.
Christoph Franz, the chief executive of German airline Lufthansa, a partner of SAA in the Star Alliance of international airlines, advised our national carrier last week that although the new markets opening up were important it was still essential to retain its services to the northern hemisphere.
Edited by Peter DeIonno. With contributions from Donwald Pressly and Audrey D’Angelo.