South Africa loses 355,000 jobs, Unemployment rises to 26.7%

South Africa’s UNEMPLOYMENT accelerated sharply in the first three months of this year to 26.7% from 24.5% in the fourth quarter of last year, Statistics SA data showed on Monday.

This indicates that 5.7-million people who are actively looking for jobs are unable to find any, as opposed to 5.2-million people in the fourth quarter of last year.

ECONOMY: China's Economy slows to 6.7% in first quarter

China's economy grew at an annual rate of 6.7% in the first quarter of the year, says the government. 

It is the slowest quarterly growth in the Chinese economy in seven years, but in line with expectations and China's own growth targets.

In the final quarter of last year, the economy expanded by 6.8%.

Friday's figures confirm the slowing trend in the world's second largest economy.

Moody's cuts China outlook to negative

US ratings agency Moody's has cut its outlook for China from "stable" to "negative".

While reaffirming its current debt rating, the agency warned that reforms were needed to avoid a downgrade. 

Moody's said the change in outlook was based on expectations that Beijing's fiscal strength would continue to decline.

The negative outlook comes on the heels of fresh data suggesting China's economy is continuing to lose steam.

Nigeria Economy: Naira gains 17%, Sells for 310/dollar

The naira rose by 17.3 per cent on Tuesday against the dollar at the parallel market to 310 from 375, which it traded on Monday.

 

The naira had been on a free fall in the last two weeks, peaking at 391 against the greenback at the parallel market last week Thursday. The local currency, however, began a gradual recovery on Friday.

Foreign exchange dealers told our correspondent on Tuesday that the naira’s recovery could be linked to the gradual inflows of foreign exchange into the forex market.

FG, IOCs, Banks in Talks over $4bn Debt

Nigeria is in talks with oil majo rs and banks to raise capital for new drilling and to repay up to $4bn in debt that the Nigerian National Petroleum Corporation has accumulated over years of mismanagement.

Minister of State for Petroleum Resources, Dr. Ibe Kachikwu

The Minister of State for Petroleum, Dr. Ibe Kachikwu, told Reuters that he wanted to increase crude oil output to 2.5 million barrels per day by the end of this year. Currently, the country pumps 2.3 million bpd.

PMI shows private sector business confidence remains weak

ONFIDENCE levels among private-sector business people remains weak amid muted demand and sharp increases in input costs due to rand weakness, forcing job losses.

 

This is according to the latest seasonally adjusted Markit/Standard Bank SA purchasing managers index (PMI) which rose from 49.1 in December to 49.6 last month, but remained below the critical 50 points level.

A level below 50 signalled deterioration in business conditions, although the slight improvement in the index suggested that conditions deteriorated at a slower pace.

Both demand and supply side PMI indicators implied sustained weakness in SA’s economy, Standard Bank economist Kuvasha Naidoo said.

Bifocal economy at the root of South Africa’s Structural Inequality

The travails SA is experiencing are part cyclical, part structural. The former are mostly a reflection of what is happening globally and are well known.

The structural issues assailing SA are mostly internally derived and are either misunderstood or unacknowledged. In large part, they arise from the peculiar structure of the economy. This is characterised by a first-world veneer — consumer-led, service-oriented and debt-dependent — concealing within it a developing African economy struggling to find its economic feet.
The rand’s value is largely still geared to the very visible outer shell; indeed, most economic commentators estimate the "fair" value of the currency by focusing solely on this skin-deep cover. In my experience, few economists even acknowledge the existence — let alone the ordeals — of the remaining part of the economy.
The developing part of SA remains economically stranded, unable to connect financially to the outside world. This is, in large part, because the currency value that would allow it to work is far below the level it is forced to live with. The result? One third of the workforce remains lost in a labyrinth of unemployment, 18-million citizens get by only by receiving government grants, and the overall economy remains trapped in a low-growth rut.

The rand is trying to get down to a more competitive level, one where the second part of the economy might just begin to function — specifically where wages paid in SA measured in dollars can compete with those of earners with equivalent skills in countries such as Colombia, the Philippines, Mexico or even the likes of Ethiopia. This tug-of-war between the exchange rates that would "work" for each of the two differing economies will not be easily resolved: in the good times, the exchange rate is pulled towards the first-world component; in the hard times, as now, it slips back towards the developing country component.

Entrepreneurship and Banking in the Nigerian Economy Growth.

Entrepreneurs occupy a central position in any market economy. They serve as the spark plug in the economy’s engine, activating and stimulating all economic activities. The economic success of nations worldwide is the result of encouraging and rewarding the entrepreneurial instinct.

economy

A society is prosperous only to the degree to which it rewards and encourages entrepreneurial activities because it is the entrepreneurs and their activities that are the critical determinant of the level of success, prosperity, growth and opportunities in any economy.

“The most dynamic societies in the world are the ones that have the most entrepreneurs, plus the economic and legal structure to encourage and motivate entrepreneurs to greater activities”, said an analyst.

Countries go to great lengths to promote entrepreneurs because they realize that the best way to tell the story of their business environment competitiveness is by using the entrepreneurs themselves to tell the story.

UK Economy Growth Estimate revised down to 0.4% for third quarter

The rate was revised down from 0.5% because the key services sector, which accounts for well over 70% of UK economic activity, grew more slowly than had been thought.

It is the third estimate for the quarter from the Office for National Statistics (ONS).

The ONS also cut its estimate of second quarter GDP growth from 0.7% to 0.5%.

In annual terms, growth in the third quarter of the year was revised down to 2.1% from the previous estimate of 2.3%.

 

The UK economy has been growing for 11 consecutive quarters.

A Treasury spokesman said in a statement that the figures highlighted that risks to the UK economy remained despite it being "the fastest growing economy in the G7 last year".

"We're leading the pack with the US this year, we have a record high employment rate and the deficit is down," the Treasury said.

Slow

CBN: Godwin Emefiele Promises robust economy, stable currency in 2016

Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele says the apex bank is evolving additional measures to boost the nation’s economy and stabilise the naira.

Emefiele made the remark at an Interactive Session with Media Editors in Abuja.

 

He declined to give details of the measures and modalities for their implementation.

Don’t ask me because I will not disclose our strategy for now’’, adding that doing so would be counter-productive and pre-emptive.

The CBN boss explained that the Nigerian economy was not as bad as being portrayed when compared with other economies in Africa.

Eskom: Ailing Entities Pose Major Risks- EDITORIAL

State-owned enterprises have lurched from crisis to crisis in recent years. Anyone who doubted the damage their instability could do to the economy should take a look at the report Standard & Poor’s (S&P) released on Friday.

 
S&P already had SA’s sovereign credit rating at the lowest notch on the investment grade table. Now it has put the rating on "negative watch", an indication that it is looking to downgrade into subinvestment grade or "junk" bond territory within the next year or two.
Problems at state-owned enterprises are one of the main reasons that might cause S&P to do that. Its comments note the need for an urgent review of the role, ownership structure and operations of the state-owned enterprises.

South Africa Indices show business’s bad mood is getting worse

Business confidence has plunged to a 15-year low, providing a further indication that the country is in a recessionary state.
Persisting pessimism among businesses normally translates into less investment in the economy and raises the likelihood of job losses.

The South African Chamber of Commerce and Industry (Sacci) Business Confidence index, the Markit/Standard Bank Purchasing Managers’ index (PMI), and the Bureau for Economic Research (BER) Manufacturing Business Confidence index were all under pressure last month, data showed on Thursday.

Geopolitical Tension Lifts Gold

SINGAPORE — Gold added to overnight gains on Wednesday on a softer dollar and heightened tension after Turkey shot down a Russian warplane, but the rally was capped on the expectation of a US rate hike in December.

 

Turkey shot down the Russian jet near the Syrian border on Tuesday, saying the plane had violated its air space, in one of the most serious publicly acknowledged clashes between a North Atlantic Treaty Organisation (Nato) member country and Russia for half a century. US President Barack Obama and French President François Hollande, meeting in Washington, urged against an escalation, while Nato secretary-general Jens Stoltenberg said the military alliance stood in solidarity with Turkey. The tension triggered a sell-off in equities and the dollar, while boosting the safe-haven yen, gold and government debt.

Businesses Nigerian Worsening Macro Environment

Nigerian Business owners and other professionals are groaning under the current economic crunch the country is witnessing since the fall in global oil prices started over a year ago.

Despite the Central Bank of Nigeria’s (CBN) attempt to stabilise the naira exchange with the dollar, commodity prices are on the increase with people complaining bitterly about the situation.

Speaking on the economy, Magdalene Anajamba, a cloth dealer in Lawanson Market, Lagos, noted that the failure of the President Muhammadu Buhari’s administration to name his minister has left the country at a standstill.

She added that prices of the clothes has increased so much that some of her regular customers have deserted her.

“In the last three months, items are on a high price. In fact the increase of items has made me lose a lot of customers. People cannot buy anymore because of the increase,” Anajamba said.

“Election made it worse, the cloth we buy for 10,000 per bag, during the period of the election we bought it for 13,000. I was thinking the prices would reduce after the election, instead it keeps increasing.”

Inflation in Nigeria still unchanged at 9.2%, - Report

 

Nigeria’s headline inflation held steady at 9.2 percent in July, same as the previous month, on account of muted price rises in the Food and Non Alcoholic Beverages, Housing, Water, Electricity, Gas and Other Fuel, and Furnishings and Household Equipment Maintenance divisions, among others.

Nigeria Elevated Risk, AS Economic Storms from US to China

Nigeria is currently facing elevated risks to its economy from the twin prospects of a rate hike in the United States (U.S) and further slowdown in Chinese economic output.

A U.S Federal Reserve (Fed) rate rise is likely to exacerbate global financial market volatility and add to currency pressures in Sub Sahara Africa, according to Bismarck Rewane, CEO of consulting firm Financial Derivatives Company (FDC).

 

“An interest rate hike in developed economies will trigger capital flow reversals from emerging economies such as Nigeria,” Rewane said in a presentation he made at the Lagos Business School.

Inflation increases to 9.2%, Fuel Crisis takes toll on Food Prices......

Nigeria’s inflation advanced 0.2 percentage points to 9.2 percent in June, the highest level in over 24 months, as irregularity in fuel supply across the country continued to weigh on local consumer prices, according to the National Bureau of Statistics (NBS).

The NBS in a new report said fuel sold at N112.13 per litre on the average across the country in June, much higher than the N87 official price.

The Nigerian government last year cut fuel pump price to N87 per litre to reflect reduced landing costs of petroleum products, but figures from the NBS show that none of the 36 states, including the Federal Capital Territory sells the product at that rate.

 

In June, average pump price of fuel was costliest in Bayelsa at N155 per litre, followed by Niger at N138.33 and then Kogi at N128.33. The product sold the cheapest in Zamfara at N93, followed by Edo at N94.45. In Lagos, the nation’s commercial centre, fuel sold N102.63 per litre last month.

Federal Internal Revenue Service (FIRS) Generates N1.85trn in 6months

Insecurity, policy somersault, business uncertainty, contradictory legislation, undue political interference, among others, have been attributed as factors militating against revenue generation in the non-oil sector of the Nigerian economy.

Nigeria’s economy in bad shape, lament APC governors

Governors elected on the platform of the All Progressives Congress (APC) have decried the state of the country’s economy as they advised the incoming administration of Muhammadu Buhari to set up a strong economic team that will upturn the economy for good.

IFC lends Zenith Bank $100m for power,infrastructure projects financing

 

International Finance Corp (IFC) has lent Nigeria’s Zenith Bank $100 million to expand lending in Africa’s biggest economy, the private arm of the World Bank said on Tuesday.