AMID the instability of South African markets, a positive outlook in South Africa’s macroeconomic indicators has pulled the country up the ranks of the World Economic Forum’s global competitiveness report, rising from a low base of 44 to 42. More notable, however, is an assessment of South Africa’s micro indicators, which show dramatic competitive advantages over many other countries.
In terms of a new measure introduced to the WEF’s annual study of international competitiveness, South Africa has leapt in as the 25th most competitive country, outdoing countries such as Italy, Malaysia, Korea and Turkey. The new measure focuses on the national microeconomic business environment — including criteria such as local conditions, local rivalry and information infrastructure.
The survey rates South Africa highly in terms of its overall position for infrastructure, government, finances, technology and management, but gives it a lower rating for “openness”, its labour market, and its institutions.
South Africa scored low for its institutional measure, which is linked to the lack of an effective police force, the category in which SA scored last, and the existence of organised crime, in which SA scored second lowest.
South Africa’s low ranking for its labour market was as a result of low levels of schooling and poor industrial relations, while a poor score on “openness” related to the country’s export policy, access to foreign capital markets, foreign investment protection, and cross-border ventures.
GOVT FINANCING FALLS
FINANCING of government’s borrowing requirements slowed to R1,7-billion in the second month of the financial year, after R7,8-billion was borrowed in the first month, the Finance Department said on Tuesday. Should the department be able to spread its financing evenly through the year, monthly amounts of R3,2-billion should cover the annual borrowing requirement of R39,5-billion.
SAB TO SELL LION MATCH
SOUTH African Breweries on Tuesday confirmed it is currently negotiating selling its 70,5% stake in Lion Match to Durban-based empowerment group Fasic Investment Corporation. The deal is expected to be priced between R378,5-million and R386,6-million, based on an offer of between R11,75 and R12 per Lion Match share. Business Day reports that the announcement of the deal has been delayed as Fasic is experiencing problems closing a funding deal with the Industrial Development Corporation.
BILL CUTS JSE TRADING COSTS
AN amendment to the Companies Second Amendment Bill approved by Parliament on Tuesday will see shareholders protected from paying additional costs under the new Share Transactions Totally Electronic (Strate) system on the Johannesburg Stock Exchange. Commenting on the decision, the JSE’s legal adviser, Nicky Newton-King, stressed that it is necessary to distinguish between direct shareholders and a nominee company, on whose behalf participants in the new system are likely to incur costs.
TENDER MAY BE REVIEWED
A CONTROVERSIAL R800-million tender for a national identification system may be reassessed following accusations of incompetence in the selection procedures by the Department of Home Affairs, a state tender board spokesman announced on Tuesday. According to the accusations, three bidders regarded as leaders in fingerprint identification technology, ICL, Lockheed Martin and TRW, were eliminated by the evaluation committee before the testing stage. The evaluation committee is now assessing allegedly inferior systems offered by Q Data Consulting’s consortium, and a consortium of Unisys, National Empowerment Consortium and Plessey. The tender board confirmed that home affairs on Tuesday failed to respond to TRW’s request for clarification on why it was prematurely eliminated.
AMALIA PROBE CALLED
LIQUIDATORS of bankrupt gold mining group Amalia announced on Tuesday that they are applying for a forensic audit of the company, and an investigation into its affairs after muddling through a web of cross holdings and loans within the group. In accounting firm Coopers & Lybrand’s second report to creditors, it reveals a parlous balance sheet and a tangled web of inter-company loans. Amalia was suspended from the JSE and liquidated in March after its share value collapsed more than 90%.
UIF ‘NEARLY BROKE’
THE Unemployment Insurance Fund may be depleted as soon as next year, unemployment insurance commissioner Shadrack Mkhonto warned on Tuesday. The fund’s 1997 report records a deficit of R254-million on outlay of R2793-million, while the deficit in 1996 was R158-million, after a R36-million surplus in 1995. Mkhonto said the fund has sufficient information to show that an increase in unemployment, rather than fraud, is the real cause. Joblessness figures for 1997 were up 71 000 over 1996, and in the first half of this year alone the formal sector shed 62000 jobs. These figures are “not really encouraging”, he said.