FRIDAY, 9.30PM:
SOUTH Africa’s foreign currency debt, foreign currency bank deposit and rand-denominated debt ratings have been put on review for a possible downgrade by United States credit rating agency Moody’s.
“The major structural dilemma of the South African economy is its inability to generate new jobs in an environment already characterised by extremely high unemployment,” say Moody’s analysts.
It said job creation has actually been depressed by real wages rising more quickly than productivity.
Moody’s is also worried by the Reserve Bank’s increased liabilities since its losing battle to defend the rand since May.
“… The recent build-up in foreign exchange liabilities, as well as renewed questions about the thrust of monetary policy, creates additional uncertainties that render the exchange and financial markets … vulnerable.”
BUSINESS BRIEFS
METAL PAY DEAL CLOSE
EMPLOYERS’ body the Steel and Engineering Industries’ Federation of South Africa (Seifsa) on Thursday said it believes wage negotiations in the metal and engineering industry are nearing a settlement. Seifsa’s optimism comes after three of the negotiating unions — the National Union of Metalworkers of South Africa, the Steel, Engineering and Allied Workers’ Union of South Africa and the Radio, Television, Electronic and Allied Workers’ Union — accepted a final settlement wage agreement.
IBA SHUTS RADIO CHRISTIANA
THE Independent Broadcasting Authority on Thursday refused to renew Radio Christiana FM’s temporary community broadcasting licence after it found that the community the station is supposed to serve has no say in it. IBA spokesman Pekwane Mashilwane said the broadcaster’s management had refused to involve the community in its activities. The station has been given 30 days to shut down.
AIR TANZANIA UP FOR SALE
AIR Tanzania Corporation, its country’s national carrier, will be privatised to save it from collapse said the head of a government privatisation commission on Friday. George Mbowe said an investment advisor will soon begin independent studies on the planned privatisation. The government will ensure that agreements with other airlines are not compromised by the sale. Air Tanzania is 31 years old, but has declined to running a fleet of three planes: two Boeings and one Fokker. South African Airways might be one of the first bidders, having acquired majority shares in the Dar es Salaam Airport Handling Company, and being an investor in the African Joint Airline Services, operating as Alliance Air between Johannesburg and London via Dar es Salaam and Entebbe in Uganda.
SWAZIS TO UP IMPORT LEVIES
SWAZILAND’S National Agricultural Marketing Board announced on Thursday that it plans to increase levies and border inspections on agricultural imports as its agricultural industry struggles to cope with the flood of cheaper food products crossing the border from South Africa. Namboard CEO Magalela Ngwenya claims that South African agricultural goods are being dumped in Swaziland. He estimates that South African products dumped in Swaziland late last year caused local industry to lose R1,5-million a month in the last quarter of 1997. In some instances, Ngwenya said, Swazi hawkers drove across the border into South Africa to buy goods at cheaper prices, leaving Swazi produce to rot. Namboard is planning to ask the Swazi agriculture ministry to set stiff levies on food imports.
TOBACCO BILL CONDEMNED
DIRECTOR of the Freedom of Commercial Speech Trust Piet Delport has joined opposition politicians in condemning government’s proposed tobacco law, calling unconstitutional. The Bill would ban tobacco advertising, promotion and sponsorship. “These proposals are in direct contravention of the fundamental right of freedom of expression, and the rights of the consumer to receive information, as in Section 16 of the Constitution,” said Delport. “The ban on tobacco sponsorships will cause problems in the case of contracts for the broadcasting of sports, and we should at least, like the proposals in Canada, consider a phasing-in period.” He said studies showed advertising bans increase consumption, rather than reducing it.
RAND SLIPS ON FRIDAY
THE rand slipped sharply to R6,2950 to the dollar by 9.30am on Friday after trading between R6,08 and R6,22 to the dollar on Thursday. Concern over an unfavourable report on South Africa by rating agency Standard & Poors released on Wednesday night, pushed the rand down to R6,22 to the dollar in afternoon trade. The Johannesburg Stock Exchange is likely to come under pressure if the currency falls, after a week of rand stability started showing positive results in domestic stock.