<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1036436870-820x547.jpg" alt="" class="wp-image-395533" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1036436870-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1036436870-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1036436870-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1036436870-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1036436870-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>The logo of the South African Reserve Bank (SARB) sits on a document during a news conference following a Monetary Policy Committee meeting in Pretoria, South Africa, on Thursday, Sept. 20, 2018. The South African economy entered its first recession since 2009 in the second quarter. Photographer: Waldo Swiegers/Bloomberg via Getty Images</figcaption></figure>



The South African Reserve Bank (SARB) kept its benchmark rate unchanged arguing the risks to its inflation outlook remained balanced.



The repo rate remained at 3.5 percent after the bank last year slashed it by 300 basis points to shield the economy from coronavirus imposed lockdowns that shackled economic activity at home and abroad pushed inflation to the lowest in 16 years.



Economists unpack Kganyago’s rate decision &amp; economic outlook for 2021





“Monetary policy eased financial conditions and improved the resilience of households and firms to the economic implications of Covid-19, and continues to be accommodative,” Governor Lesetja Kganyago told a press briefing after a meeting of the bank’s Monetary Policy Committee.



He added that the Bank has also taken important steps to ensure adequate liquidity in domestic markets and that regulatory capital relief has also been provided, sustaining lending by financial institutions to households and firms.



South Africa’s economy is forecast to have contracted by about 8 percent last year after the lockdowns, power shortages and subdued demand for South African exports due to lower global demand.



The majority of economists surveyed by Reuters had forecast a no change stance though some argued the bank could have been more proactive by cutting rates again to stimulate an economy struggling with record unemployment around 40 percent.



First National Bank Chief Economist Mamello Matikinca-Ngwenya said the bank could have taken advantage of lower inflation to cut and stimulate demand amid a tame inflation outlook.



“While the SARB may have decided to keep the repo rate unchanged at 3.5%, we believe there is room for further easing. The current economic shock has kept demand in the economy very low, and as a result, inflation has remained firmly anchored below the midpoint of the target band.”



&nbsp;“High-frequency data shows that while the economy continued to expand into 4Q20, the recovery trend was losing steam. Importantly, these trends emerged before the implementation of level 3 lockdown restrictions in December,” she said.



However Kganyago said monetary policy needs the support of fiscal policy, in particular around the implementation of structural reforms that have been long promised.



“Such steps will enhance the effectiveness of monetary policy and its transmission to the broader economy,” he said.

South African Reserve Bank Rate Announcement Ahead Of Stimulus Plan

South African central bank holds key rate on low inflation

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1110" height="740" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1131125549-1-1110x740.jpg" alt="" class="wp-image-395422" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1131125549-1-1110x740.jpg 1110w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1131125549-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1131125549-1-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1131125549-1-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1131125549-1-scaled.jpg 2048w" sizes="auto, (max-width: 1110px) 100vw, 1110px" /><figcaption>oMalayitsha (transporters) Charles and his colleagues buy groceries for family which will be transported across the border to Zimbabwe on February 20, 2019. &#8211; Items are loaded in Johannesburg onto trailers attached to minibuses which make the 550 kilometres (340 miles) journey north to the border of Zimbabwe, where economic situation has dramatically deteriorated, pushing inflation above 50 percent, and shortages of household essentials have become widespread. (Photo by GULSHAN KHAN / AFP) (Photo credit should read GULSHAN KHAN/AFP via Getty Images)</figcaption></figure>



South Africa’s annual average consumer inflation&nbsp;slumped to a 16-year low in 2020 as a government shutdown of the economy to stop the spread of the coronavirus extended a six-month recession.&nbsp;&nbsp;



Statistics South Africa said&nbsp;the consumer price index (CPI)&nbsp;averaged 3.3 percent,&nbsp;the&nbsp;lowest&nbsp;annual average rate since 2004,&nbsp;and the second lowest since 1969, dampened by a strong rand&nbsp;and&nbsp;subdued economic activity.&nbsp;



For December,&nbsp;annual inflation&nbsp;came in at 3.3 percent,&nbsp;slightly lower&nbsp;than November’s reading of 3.2 percent.&nbsp;The monthly increase&nbsp;was&nbsp;0.2 percent, up from zero&nbsp;in November, mainly as a result of&nbsp;food and non-alcoholic beverages with&nbsp;monthly increases&nbsp;of&nbsp;6 percent and 0.5 percent respectively.&nbsp;



CPI has remained within the South&nbsp;African&nbsp;Reserve Bank’s 3%-6% target band since July.&nbsp;



The outbreak of Covid-19 forced many governments to shatter economies and close borders as authorities sought to stop&nbsp;its spread following the discovery of the first cases in Wuhan, China. A second wave of infections in December forced President Cyril&nbsp;Ramaphosa&nbsp;to re-impose some restrictions.&nbsp;



Economists are forecasting a contraction of about eight percent in gross domestic product for Africa’s second largest economy and a rebound this year.



But they warn that recovery is now being threatened by continued lockdowns and worsening power shortages.&nbsp;

SAFRICA-ZIMBABWE-ECONOMY-TRADE

South Africa’s consumer inflation neared a 50-year low in 2020

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1110" height="740" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1203632905-1110x740.jpg" alt="" class="wp-image-395373" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1203632905-1110x740.jpg 1110w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1203632905-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1203632905-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1203632905-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1203632905-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1203632905-scaled.jpg 2048w" sizes="auto, (max-width: 1110px) 100vw, 1110px" /><figcaption>Dondo Mogajane, director general of the South African National Treasury, speaks during an interview in Cape Town, South Africa, on Wednesday, Feb. 26, 2020. Moodys Investors Service in November gave Mboweni just under four months to come up with a credible plan to rein in government debt and get the economy growing. Photographer: Dwayne Senior/Bloomberg via Getty Images</figcaption></figure>



South Africa’s National Treasury has suggested that the government raise taxes to fund the rollout of Covid-19 vaccines in Africa’s worst coronavirus hotspot.



Director General of the National Treasury Dondo Mogajane told a local radio station that higher taxes were one option the Treasury was looking at to provide the approximately R15 billion rand ($1 billion) required to fund the vaccines. The final decision will be announced by Finance Minister Tito Mboweni in his budget next month.



“If we have to tax to ensure that we get this money, we will do it. On the Budget Day, we will be detailing what option (we take) and it will be detailed enough to indicate where the money will come from,’’ Mogajane told Radio 702. &#8220;Commitment is there to pay for this.”



South Africa has recorded more than 1.3 million cases of the virus and over 38,000 deaths in the past year, just under half of the total cases registered on the continent. President Cyril Ramaphosa yesterday established an inter-ministerial committee chaired by Deputy David Mabuza to manage the rollout.



South Africa says it has secured some 20 million doses which scheduled to be distributed in the first half of the year. The Serum Institute of India (SII) is expected to be among the first providers with about a million supplied this month and 500,000 doses in February.



Mogajane said there were very few choices for the government to consider in the battle to save lives.



“One way or the other, we will have to bite the bullet, we have to do it for the sake of South Africans and saving lives. We have to do everything in our power to make sure that we buy these vaccines and vaccinate South Africans.”



North West University Business School Professor Raymond Parsons argued against raising taxes in an economy that suffered a recession last year and has seen sub-optimal growth for the past decade.



“…Raising the tax burden may be inevitable but it is the least desirable option, especially if it simply creates a negative &#8216;tax-and-spend&#8217; cycle. It also comes at a time when a &#8216;low trust&#8217; situation prevails in SA about the use of government funds. Tax hikes should be minimized so as not to damage economic recovery,”



He said the ideal solution would be for the funds to be mainly found through additional reprioritisation of state spending, better collection of existing taxes and renewed economic growth which boosts tax revenues.

South African National Treasury General Dondo Mogajane Interview

South Africa moots higher taxes to fund coronavirus vaccine rollout

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="768" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1211759561.jpg" alt="" class="wp-image-395299" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1211759561.jpg 1024w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1211759561-300x225.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1211759561-820x615.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1211759561-768x576.jpg 768w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption>UKRAINE &#8211; 2020/05/04: In this photo illustration a World Economic Forum logo seen displayed on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)</figcaption></figure>



The coronavirus is threatening the ability of the world to fight climate change after it worsened economic inequality and destabilized existing geopolitical structures, the World Economic Forum (WEF) says.



WEF’s Global Risks Report 2021 published today says the Covid-19 pandemic is increasing disparities and social fragmentation and will threaten the global economy.



“The pandemic has not only claimed millions of lives, but it also widened long-standing health, economic and digital disparities,” the Geneva-based organization said in the report which also cited economic, environmental, and societal risks as looming dangers.



The novel virus has killed more 2 million people globally since its outbreak in China’s Wuhan city last year. In Africa, the African Union’s Africa Centres for Disease Control says 3.3 million people have been infected while more than 80,000 have died.



&nbsp;“Environmental risks dominate by impact and likelihood, looking ahead towards the next decade. Societal fractures, uncertainty and anxiety will make it more difficult to achieve the coordination needed to address the planet’s continued degradation,” WEF said.



World Economic Forum Managing Director Saadia Zahidi says as governments, businesses and societies begin to emerge from the pandemic, they must urgently shape new economic and social systems that improve a collective resilience and capacity to respond to shocks while reducing inequality, improving health and protecting the planet.&nbsp;



“We know how difficult it is for governments, business and other stakeholders to address such long-term risks, but the lesson here is for all of us to recognize that ignoring them doesn’t make them less likely to happen.”



She says WEF reports have been warning the world about the dangers of pandemics for the last 15 years and it only became a reality in 2020.



Social Value Committee President Lee Hyung-hee says the pandemic in 2020 was a stress-test that shook the foundations of economies and societies worldwide.



“Rebuilding resilience to systemic shocks will require significant funding, international cooperation and greater social cohesion. Resilience will also hinge on the continued growth in connectivity worldwide, as we know that economies that digitized early performed relatively better in 2020.”



Head of Global Risk and Geopolitical Agenda at WEF, Emilio Granados Franco told CNBC Africa that globally, the pandemic has tested the political systems, governments’ capacity, supply chain resilience, cultures and geographies.



“The important objective now is to draw lessons from how different countries responded to the challenges.”

In this photo illustration a World Economic Forum logo seen

WEF says Coronavirus tested global resilience, climate change defence

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1110" height="740" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1222832010-1110x740.jpg" alt="" class="wp-image-395149" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1222832010-1110x740.jpg 1110w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1222832010-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1222832010-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1222832010-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1222832010-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-1222832010-scaled.jpg 2048w" sizes="auto, (max-width: 1110px) 100vw, 1110px" /><figcaption>Health visitor and a senior woman during home visit &#8211; using digital tablet</figcaption></figure>



South Africa’s AfroCentric says it is ready to help the government vaccinate frontline health workers in the fight against COVID-19.



The diversified health solutions business provider is offering its 3,000 nurses to travel around country to vaccinate about 150,000 workers per day as part of its contribution to sight the pandemic which has killed more than 37&nbsp;105 South Africans since last year.



&nbsp;“Afrocentric is working closely with Government to procure COVID-19 vaccines as soon as they are approved by the South African Health Products Regulatory Authority SAHPRA and has the infrastructure to rapidly distribute the vaccines, maintaining the cold chain to all corners of South Africa,’’ AfroCentric’s CEO Ahmed Banderker said in a statement. &#8220;We have already dispensed more than 10 million prescriptions in 2020.’’



This comes after President Cyril Ramaphosa recently announced that South Africa has secured 20 million vaccine doses to combat the coronavirus, which are to be delivered mainly in the first half of the year. Health Minister Dr Zweli Mkhize says the country is expected to receive one million doses of a Covid-19 vaccine from the Serum Institute of India (SII) in January, and 500,000 doses in February.



Afrocentric says this will help meet the National Department of Health’s phased approach for delivery, in partnership with the private sector for 1.25 million frontline healthcare workers prioritised for Phase 1 and 16 million essential workers and high-risk people, prioritised for Phase 2.



AfroCentric’s membership base of over 3.8 million lives includes members of medical schemes Government Employees Medical Scheme&nbsp;(GEMS), Polmed, Bonitas, MediPos and other medical schemes that support South Africa’s frontline workers. Bandeker says these include doctors, nurses, policemen and women.



&nbsp;“These nurses will provide services on an appointment basis at AfroCentric and Medscheme branches, occupational health and primary health clinics nationwide, onsite at the members’ place of work and will follow-up with members afterwards to monitor their response to the vaccine” he added.



The extensive network of international suppliers Afrocentric has will source WHO-prescribed PPE for healthcare workers to enable them to administer vaccines safely without risk to themselves or our members.

Health visitor and a senior woman during home visit – using digital tablet

Afrocentric steps up to help in Covid-19 battle

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1110" height="788" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-538889138-1110x788.jpg" alt="" class="wp-image-395126" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-538889138-1110x788.jpg 1110w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-538889138-300x213.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-538889138-820x582.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-538889138-768x546.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-538889138-1536x1091.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-538889138-scaled.jpg 2048w" sizes="auto, (max-width: 1110px) 100vw, 1110px" /></figure>



Rwanda on Friday became one of the first African countries to declare readiness to trade under the African Continental Free Trade Area (AfCFTA), a landmark trade block that seeks to boost intra-African trade.



Rwanda Minister of Trade and Industry Soraya Hakuzitaremye told CNBC Africa she hopes the agreement will boost Rwandan exports to the rest of the continent and facilitate greater trade opportunities for micro, small and medium size businesses for women and youth.



<h3 class="wp-block-heading" id="h-rwanda-launches-trading-under-the-afcfta">Rwanda launches trading under the AfCFTA</h3>





&nbsp;“It is our hope that the business community has understood that the continental free trade agreement is ready (for them) to start exporting made in Rwanda products to African countries,’’ she said. &#8220;It is also an opportunity to secure and source raw materials and inputs from all the African state countries which can support local manufacturing here in Rwanda.’’



Trading under the continent-wide agreement which has been ratified by 34 countries and approved by 54 of the continent’s 55 territories, was formally launched on January 1 this year, opening a market with a combined gross domestic product (GDP) of $3.4 trillion and 1.3 billion people.



The World Bank estimates that if implemented properly, the agreement has the potential to lift up to 30 million Africans out of extreme poverty. However analysts say poor infrastructure, corruption and low manufacturing capacity will prevent the continent from seeing larger trade volumes in the early years.



The Johannesburg-based Daily Maverick Maverick newspaper says while South Africa, Ghana and Egypt have said they are ready to trade, no goods have officially been exchanged under its provision of reduced tariffs.



The deal seeks to eliminate up to 90 percent of tariffs on goods which qualify under its rules of origin. The rules determine the level of local raw materials used in making a product for it to qualify.



Rwanda’s Revenue Authority deputy chairperson Jean-Louis Kaliningondo said the authority ready to implement trading under the agreement, which the founding leaders hope will eventually result in the creation of a common market similar to the European model.



 “All the requirements documentation and information that may be needed are available on our trade portal. You will find it at rwandatrade.rw.”

African woman laughing

Rwanda declares readiness to trade under African Continent Free Trade Agreement

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1110" height="624" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-984879432-1110x624.jpg" alt="" class="wp-image-394944" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-984879432-1110x624.jpg 1110w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-984879432-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-984879432-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-984879432-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-984879432-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/01/GettyImages-984879432-scaled.jpg 2048w" sizes="auto, (max-width: 1110px) 100vw, 1110px" /><figcaption>Lekki-Ikoyi bridge &#8211; stock photo</figcaption></figure>



The African Union (AU)’s High Representative for Infrastructure Development, Raila Odinga has called for the creation of an Africa-wide infrastructure fund to cut a funding gap estimated at as much as $90 billion.



Odinga, a former Kenyan Prime Minister, told African ministers of infrastructure the fund would be a long-term solution to Africa’s continuous underfunding of infrastructure which he estimated at between $60 and $90 billion annually.



“Such a fund would focus on a combination of domestic sources and private sector financiers,” Odinga told the virtual meeting. &nbsp;“We need effective and efficient plans to mobilize resources to fund the identified PIDA (Programme for Infrastructure Development in Africa) projects.’’



PIDA is a continent-wide program to develop a vision, policies, strategies and a programme for the development of priority regional and continental infrastructure in transport, energy, trans-boundary water and Information Communication Technology.&nbsp;&nbsp;



Africa has the fewest road and rail networks of any region in the world because of colonial planning and chronic shortages of funds. The Covid-19 pandemic has exacerbated the underfunding as governments scrambled to protect incomes and source funds to buy vaccines.



The African Union estimates the continent needs $12 billion to buy enough vaccines to cover about 60 percent of its 1.3 billion people.



Egypt’s Minister of Electricity and Renewable Energy Mohamed Shaker El Markabi said the AU was determined move Africa’s infrastructure development agenda forward despite the challenges posed by the ongoing COVID-19 pandemic.



Addressing the same meeting, the AU Infrastructure and Energy Commissioner Abou-Zeid said the post-COVID-19 recovery strategy requires the fast-tracking of Africa’s infrastructure development to improve resilience and improve livelihoods and economies.



&nbsp;“The COVID-19 pandemic also accelerated digitalization, exposed gaps in energy in rural areas and highlighted the need to develop infrastructure that is smart, inclusive and sustainable.”



The African Development Bank’s Infrastructure and Partnerships Division Manager Mike Salawou highlighted the $7 billion the bank has spent on African infrastructure projects in the past ten years to spur economic development.

Chuma Mxo

South African central bank holds key rate on low inflation

South Africa’s consumer inflation neared a 50-year low in 2020

South Africa moots higher taxes to fund coronavirus vaccine rollout

WEF says Coronavirus tested global resilience, climate change defence

Afrocentric steps up to help in Covid-19 battle

Rwanda declares readiness to trade under African Continent Free Trade Agreement

AU SAYS AFRICA NEEDS INFRASTRUCTURE FUND TO PUSH DEVELOPMENT

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Chuma Mxo

South African central bank holds key rate on low inflation

South Africa’s consumer inflation neared a 50-year low in 2020

South Africa moots higher taxes to fund coronavirus vaccine rollout

WEF says Coronavirus tested global resilience, climate change defence

Afrocentric steps up to help in Covid-19 battle

Rwanda declares readiness to trade under African Continent Free Trade Agreement

AU SAYS AFRICA NEEDS INFRASTRUCTURE FUND TO PUSH DEVELOPMENT

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