JOHANNESBURG (Reuters) &#8211; South Africa’s economy will contract by more than initially projected, likely shrinking 6.9% in 2020 compared to an earlier forecast of a 4.5% contraction, ratings agency S&amp;P Global Ratings said on Monday in a report.



South Africa has the highest number of confirmed coronavirus cases in Africa, with more than 270,000 infections, and 4,000 deaths, and is now recording the fourth-largest daily increase in new cases worldwide at more than 12,000 per day.



“The pandemic situation in the country has worsened since our previous macroeconomic update, leading to a further hit to confidence, which was already low before the pandemic, amid lack of growth and concerns about the fiscal trajectory,” the firm said.



S&amp;P along with the other two main ratings firms, Moody’s and Fitch, already rate the country’s debt at below investment status, or junk. S&amp;P cut its rating one notch to the third tier of non-investment grade, BB-, in April, with a stable outlook.



S&amp;P’s growth forecast is however more optimistic than National Treasury’s prediction of a 7.2% contraction this year. Treasury predicts debt to gross domestic product will breach 80% as government borrows more to fund its response to the pandemic.



To cushion the economic blow of the pandemic on the economy, President Cyril Ramaphosa announced a 500 billion rand ($28.86 billion) relief package in April, equivalent to 10% of South Africa’s GDP.



“The sizeable fiscal package will only partially mitigate the economic toll, but coupled with lower revenues, will lead to a significant increase in government debt, further impairing public finances,” the ratings agency said.

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South Africa’s economy to shrink 6.9% in 2020 – S&P Global Ratings

JOHANNESBURG (Reuters) &#8211; South Africa’s rand firmed early on Monday, helped by increased risk appetite as investors bet again on a global economic recovery.



The rand was 0.36% stronger at 16.7100 against the dollar at 0645 GMT, its best level since June 11, having gained steadily since opening above the 17.00 mark last Monday.



The gains have been driven mainly by global sentiment rather than domestic factors, with investors searching for high yields on hopes for a quick economic recovery despite a global surge in COVID-19 infections.



Emerging market currencies rose in unison, taking advantage of a dollar weighed down by the United States’ battle to contain the spread of the coronavirus as well as some investor caution ahead of data releases due in the world’s top economy.



Traders, however, expect the rand to face to some selling pressure later in the week, with power utility Eskom announcing that nationwide controlled blackouts would continue on Monday.



“The rand juggled cautious sentiment &#8211; as coronavirus infections are surging across the globe and frustration hit as South African power utility Eskom switched off the lights &#8211; against a soft U.S. PPI (producer price index) release,” said analysts at NKC African Economics in a note.



Bonds also firmed, with the yield on the benchmark 2030 government issue down 2 basis points at 9.475%.

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South African rand firms as dollar wobble lifts emerging currencies

Why the Covid-19 crisis proves the power and promise of the AfCFTA







The African Continental Free Trade Agreement was ratified last year but this year’s onset of the covid-19 pandemic forced African Union leaders to postpone its taking effect. The disease has had a serious impact on the continent, having claimed prominent leaders and infecting 578,207 in confirmed cases as of July 12th according to the Africa CDC, Johns Hopkins and government data. The economic fallout has probably been even more severe; lockdowns and supply chain seizures to import dependent African nations have severely impacted incomes and livelihoods for Africa’s largely informal workforce. However, the crisis has focused the minds of African policy makers around the necessity to create a more resilient healthcare system and the need to manufacture more of its critical needs at home. This renewed focus on productive self sufficiency can be assisted significantly by implementing the AfCFTA.



Covid-19 has provided the previously missing urgency amongst leaders around developing the sort of coherent industrial policy necessary to get any benefit from a continental free trade zone. Africa manufactures very little at the moment and many critics rightly questioned the wisdom of liberalizing internal borders without having African produced goods to sell across them. There is still great risk that creating this internal free market gets exploited by existing low-cost producers in Asia and Europe, limiting the job-creating potential its architects intend. But the recent response to the novel coronavirus may offer a blueprint on how to ensure the realization of the AfCFTA dream.



The vast market created by AfCFTA will provide an immediate boon to nascent plans being guided by the African CDC, NEPAD and others to produce various critical healthcare items such as pharmaceutical compounds, PPE and ventilators in countries such as Nigeria, South Africa and Kenya. The sudden demand for these life saving products and the enormous logistical challenges African nations suffered attempting to secure supplies from East Asia and Western Europe has left a lasting impression. During the initial frenzy of procurement countries around the globe raced to stockpile PPE and ventilators, in many cases shutting individual African nations who lacked the financial firepower and sufficient order quantities to elbow into global queues for scarce supplies at mainly Chinese manufacturers.



In response, the African Union launched a pooled procurement online market place to aggregate the orders of African nations. Now leaders and businessmen are going a step further – setting up supply for this local demand on African soil. A range of textile firms, diaper manufacturers and equipment makers are adding additional lines and re-purposing existing capacity to produce PPE, medical equipment and ventilators. A surfeit of concessional finance, international donors and grants from African philanthropists such as Aliko Dangote and Mike Adenuga has bolstered the purchasing power of African health ministries, jump starting demand for new output.



AfCFTA’s implementation can help sustain the opportunity for new production capacity and demonstrate the power of the shared market to would-be entrepreneurs in other sectors. The key deciding factor for the success of the continental free zone will be Africa’s indigenous business community rising to the occasion – manufacturing for the needs of Africa’s 1.2 billion consumers. To encourage those entrepreneurs and investors African governments and supranational indigenous bodies like the African Union should build on the lessons they have learned in rapidly coordinating to intervene in the covid-19 response. The same tools and institutional structures being pulled together to rapidly promote the production of healthcare items and vaccine delivery should immediately be expanded and adapted to FMCG, automotive assembly, apparel and other heavily consumed items across the African continent. It is only with this emphasis on local production that Africa will enjoy the dividends of the AfCFTA: jobs for its young, growing population and meaningful wealth creation for its business community and their investors. Franklin Olakunle Amoo is the managing partner of Baylis Emerging Markets, an investment firm focused on African industry and manufacturing. Baylis is a founding partner of the Africa Pandemic Response Alliance, an African led initiative coordinating the response to the covid-19 pandemic on the continent

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COMMENT: AfCFTA  is economic medicine Africa needs to recover from the covid-19 pandemic

Reuters) &#8211; Tesla Inc (<a href="https://www.reuters.com/companies/TSLA.O">TSLA.O</a>) cut the price of its sport utility vehicle Model Y by $3,000, just four months after its launch, as the U.S. electric carmaker seeks to maintain sales momentum in the COVID-19 pandemic.



The reduction follows price cuts in May on Tesla’s Model 3, Model X and Model S.



The company headed by Elon Musk this month posted a smaller-than-expected fall in car deliveries in the second quarter, resilient results despite the pandemic that hit the global auto industry.



The Model Y now starts at $49,990, down nearly 6% from its previous price of $52,990, according to the carmaker’s website.









Tesla did not immediately respond to a Reuters request for comment.



The company started deliveries of the Model Y in March, promising a much-awaited crossover that will face competition from European carmakers like Volkswagen AG (<a href="https://www.reuters.com/companies/VOWG_p.DE">VOWG_p.DE</a>) rolling out their own electric rivals.



In April, Tesla had said the Model Y was already profitable, marking the first time in the company’s 17-year history that one of its new vehicles turned a profit in its first quarter.

Elon Musk At SpaceX Headquarters

African born tycoon Elon Musk Tesla slashes prices as pandemic weighs heavily

Booze manufacturers are likely to be fuming as President Cyril Ramaphosa shut down South Africa&#8217;s lucrative alcohol sales for the second time this year.



President Ramaphosa is under pressure to take decisive action as the COVID-19 pandemic is expected to kill up to 50,000 South Africans and ismonths away from its peak. Already it has seen 276,242 cases &#8211; with more than 100,000 in Gauteng alone and 80,000 in the Eastern Cape &#8211; with 4079 people losing their lives.



In his address to the nation from the Union Buildings in Pretoria, President Ramaphosa said many of the cases that came into hospitals were related to the consumption of alchohol that justified a ban on sales forthwith. He said this would also be strengthened by a curfew between 9 PM and 4 AM daily. as the state of national disaster was extended to August 15.



&#8220;We have to make sure there are sufficient beds in hospital and they are not occupied by people who are there because of alcohol,&#8221;says Ramaphosa. 



It is only a matter of weeks that the ban on the sale of alcohol was lifted after the national lockdown of the entire economy in March.



The ban not only gave rise to a thriving black market, but also cost the drinks companies billions that it was starting to recoup with the resumption of sales. 



Distell, the maker of the Savanna, Hunter’s Dry and Nederburg brands, says it saw a spike in demand as restrictions on selling of alcohol have eased. Even then volumes were down a bout a quarter year on year.



From July 1 2019 to the end of June 2020, its South African revenue was down by 18.3% and volumes by 25.6%, the liquor group said in a trading statement.



Many more losses are likely for the drinks companies in the months ahead as South Africa battles with a pandemic that looks far from over.

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COVID-19: No more booze for now says Ramaphosa

KHARTOUM (Reuters) &#8211; Sudan will permit non-Muslims to consume alcohol and strengthen women’s rights, including banning female genital mutilation (FGM), its justice minister said late on Saturday, in a reversal of almost four decades of hardline Islamist policies



About 3% of Sudan’s population is non-Muslim, according to the United Nations.



Alcoholic drinks have been banned since former President Jaafar Nimeiri introduced Islamic law in 1983, throwing bottles of whisky into the Nile in the capital Khartoum.



The transition government which took over after autocrat Omar al-Bashir was toppled last year has vowed to lead Sudan to democracy, end discrimination and make peace with rebels.



Non-Muslims will no longer be criminalised for drinking alcohol in private, Justice Minister Nasredeen Abdulbari told state television. For Muslims, the ban will remain. Offenders are typically flogged under Islamic law.



Sudan will also decriminalise apostasy and ban FGM, a practice which typically involves the partial or total removal of the external genitalia of girls and women, he said.



Women will also no longer need a permit from male members of their families to travel with their children.



Bashir extended Islamic law after he took power in 1989.



Sudanese Christians live mainly in Khartoum and in the Nuba mountains near the South Sudan border. Some Sudanese also follow traditional African beliefs.



The transition government led by Abdalla Hamdok runs the country in an uneasy coalition with the military which helped remove Bashir after months of mass protests.

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Sudan’s 37 dry years are over for its non-Muslims

Veteran Zimbabwe farmer Ben Freeth poured cold water on a plan that’ll see trainers from the former Soviet republic of Belarus train a thousand farmers to till the soil in the former breadbasket of Africa.



This month a huge load of farm machinery is on its way across the Indian Ocean, in the bowels of a transport ship, on its way to Zimbabwe. A $58 million deal six grain harvesters, 100 tractors, 16 seed drills, five fifth wheel trucks, five semi-trailers are on their way from Belarus to the ports of Beira in Mozambique and Durban in South Africa. The shipment is expected by the end of July. Fourteen grain harvesters and 36 units of seed drills are already in Harare. Ships will bring another 20 grain harvester, 340 tractors and 138 seed drills to Zimbabwe by December 2020.



“Belarus is not known for its agricultural productivity.&nbsp; Their climate, soils, crops, pests and diseases and systems of production are different to ours.&nbsp; It’s difficult to believe how effective they will be in teaching us to farm,” says Freeth, &nbsp;the &nbsp;executive director of the Mike Campbell Foundation and a former regional executive officer of the Commercial Farmers’ Union, in Zimbabwe.



“Belarus tractors have never been known for their quality or power.&nbsp; They were never bought by Zimbabwe farmers in the past. Training up 1000 Zimbabwe farmers isn’t the answer.&nbsp;&nbsp; There are thousands of brilliant Zimbabwe farmers already.&nbsp; What we need is property rights and the rule of law.&nbsp; Sadly this Belarus scheme will fail the same as every other scheme has failed because property rights and the rule of law are so insecure and tenuous.”&nbsp;



The idea has been nurtured by the consul general for Zimbabwe in Belarus &#8211; Alexander Zingman. He is the head of AFTRADE DMCC and spends much time travelling between Zimbabwe and the country of his birth. The project is being financed through the Development Bank of Belarus supported by The Eastern and Southern African Trade and Development Bank. The export credit facility has been provided on a long-term basis with competitive interest rates.



&#8220;The aim is to totally mechanize agriculture in Zimbabwe using a comprehensive set of machinery &#8211; tractors, planters, harvesters and trucks &#8211; to cultivate and harvest maize and wheat. This will prevent the harvest losses that Zimbabwe normally faces. It will boost Zimbabwe&#8217;s food security and save the country valuable foreign currency. We will train each farmer who uses this modern equipment. More than 1,000 farmers will get special training courses in Zimbabwe. 10 specialists from Zimbabwe will also be sent to Belarus for two months for training at our manufacturing plants, “he says.



Ten trainers from Belarus are also in Harare, with five more on the way, in a year of training of farmers in Zimbabwe that is hoped will kick start a struggling industry that was once the pride of Africa.



The irony is that 30 years ago such a programme would have been looked upon as an agricultural equivalent of teaching your grandmother to suck eggs. In the 1980s and for most of the 90s Zimbabwe was the breadbasket of Africa with a small, efficient, band of mostly white farmers who fed Southern African and exported food to Europe. It couldn’t last amid the lack of a clear plan for organised land reform and growing political pressure.&nbsp; &nbsp;



When the farm invasions were unleashed by the people in power in 2000, it led to bloodshed and random confiscation that reaped a bitter harvest of lost production and exports that persists until this day. That year, with all of its fumbling fury, fuelled with the idea that to get rich you merely had to own a farm, is always seen as a turning point for the industry. It created a large slice of the country’s GDP and as it fell, so did the fortunes of Zimbabwe.



The World Bank Zimbabwe production figures for maize – that used to feed the region – tell the story. In 1996 Zimbabwe was growing more than 2.5 million mt of maize; by 2016 that figure had dropped to a mere 500,000 mt of maize. A further sign of lean times, according the World Bank, is that the fertilizer industry was at 75% capacity before 2000 and as low as 30% now. In the halcyon days of 1996, many Zimbabweans would have been incredulous at the idea of trainers and combine harvesters making their way half round the world to teach them farming. In difficult times for the Zimbabwe and its economy almost anything is worth a try.

Belarus equipment reaches Zimbabwe 1

Veteran Zimbabwe farmer pours cold water on $58 million mission from Belarus with love.

(Reuters) &#8211; The Democratic Republic of Congo’s central bank kept its 2020 economic growth forecast unchanged at -2.4% because of the uncertainty over the COVID-19 pandemic.



“This situation has contributed to weakening growth prospects both globally and regionally,” the central bank said in a statement.

congo franc

Congo central bank keeps 2020 economic growth forecast at -2.4%

JOHANNESBURG (Reuters) &#8211; South Africa’s rand recovered in afternoon trade on Friday, after sliding earlier due to concerns about rising COVID-19 cases both at home and abroad.



At 1505 GMT the rand was 0.42% firmer at 16.7800 per dollar, bouncing back from a session low of 16.9725 hit earlier.



“Given all the uncertainty surrounding the coronavirus pandemic and global economic recovery prospects, market sentiment continues to switch between risk-on and risk-off in a matter of seconds,” said market economists at ETM Analytics.



“If the market really bought into the economic growth optimism and recovery narrative, it wouldn’t be hedging its bets with gold purchases. Markets may well be positioning for additional monetary and fiscal stimulus measures in the months ahead.”



The United States on Thursday reported the largest one-day increase in coronavirus cases by any country since the start of the pandemic, while cases have jumped in major cities such as Melbourne, Tokyo and Hong Kong.



Locally, confirmed COVID-19 cases are also on the rise.



The Johannesburg Stock Exchange (JSE) slipped as investor optimism about a market recovery was overshadowed by continued worry over coronavirus.



The benchmark FTSE/JSE All Share Index dropped by 0.64% to close the week at 55,431 points while the FTSE/JSE Top 40 Companies’ Index closed down 0.74% to 51,154 points.



The benchmark index rose 1.67% this week.



Bonds firmed, with the yield on the benchmark 2030 government issue dropping 15.5 basis points to 9.495%.

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South Africa’s rand recovers but caution remains, stocks slip

LONDON (Reuters) &#8211; British health and beauty retailer Boots plans to cut 4,000 jobs and close 48 optician stores, in the latest major blow to the country’s retail sector from the COVID-19 crisis.



British brands including John Lewis and Harrods have announced thousands of job cuts in the last two weeks after the pandemic forced customers to shop online and many remained reluctant to return to the high street even as restrictions eased.



Walgreens Boots Alliance (<a href="https://www.reuters.com/companies/WBA.O">WBA.O</a>), the owner of the retailer, said on Thursday its most significant COVID-19 impact had come in Britain, with footfall down 85% in April, forcing it to take an impairment charge of $2 billion.

boots

One of the biggest name in the British High Street  takes a heavy blow

SHANGHAI/BEIJING (Reuters) &#8211; U.S. electric vehicle maker Tesla Inc (<a href="https://www.reuters.com/companies/TSLA.O">TSLA.O</a>) is “very close” to achieving level 5 autonomous driving technology, Chief Executive Elon Musk said on Thursday, referring to the capability to navigate roads without any driver input.



“I’m extremely confident that level 5 or essentially complete autonomy will happen and I think will happen very quickly,” Musk said in remarks made via a video message at the opening of Shanghai’s annual World Artificial Intelligence Conference (WAIC).



“I remain confident that we will have the basic functionality for level 5 autonomy complete this year.”



Automakers and tech companies including Alphabet Inc (<a href="https://www.reuters.com/companies/GOOGL.O">GOOGL.O</a>) Waymo and Uber Technologies (<a href="https://www.reuters.com/companies/UBER.N">UBER.N</a>) are investing billions in the autonomous driving industry.



However industry insiders have said it would take time for the technology to get ready and public to trust autonomous vehicles fully.



The California-based automaker currently builds cars with an Autopilot driver-assistance system.



Tesla is also developing new heat-projection or cooling systems to enable more advanced computers in cars, Musk said.



Industry data showed Tesla sold nearly 15,000 China-made Model 3 sedans last month.



Tesla has become the highest-valued automaker as its shares surged to record highs and its market capitalisation overtook that of former front-runner Toyota Motors Corp (<a href="https://www.reuters.com/companies/7203.T">7203.T</a>).



Reporting by Brenda Goh in Shanghai, Yilei Sun and Yingzhi Yang in Beijing; Editing by Clarence Fernandez and Stephen Coates

African-born Elon Musk says he is very close to making cars that can drive themselves.

KAMPALA (Reuters) &#8211; Ugandan economic growth is set to plunge to as low as 0.4% in 2020 from 5.6% last year as the coronavirus crisis batters the east African economy ahead of presidential elections set for 2021, the World Bank found.



The pandemic is expected to hit tourism, exports, and remittances, a report released on Wednesday said. It is also likely to damage investments in the country where long-awaited oil production could commence by 2022.



The fiscal deficit would rise to between 7% to 8.9% of GDP next year from pre COVID-19 levels of 5.8%, fuelled by a steep drop in tax revenues, the report found.



COVID-19, the report said, was resulting in “lower exports, tourism, remittances, as well as a sizable deceleration in Foreign Direct Investment (FDI) inflows and government project financing”.



Ugandan President Yoweri Museveni in early March announced strict lockdown measures to contain the spread of the novel coronavirus, including shutting borders, schools and nearly all businesses and banning the use of private and public transportation.



In early May, authorities started to relax some of the measures.



Uganda is due to hold a general election between Jan. 10 and Feb. 8 2021. Museveni is widely expected to seek re-election although he has not explicitly stated he will stand again.



The heightened uncertainty around the 2021 elections added to the pressure on the economy, the World Bank said, as do crop-damaging invasions of locusts and army worms.

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Uganda growth to sink as low as 0.4% this year – World Bank

BEIJING (Reuters) &#8211; Orders for infrastructure materials and equipment have helped industrial output recover faster in China than most places emerging from COVID-19 lockdowns, but further expansion will be hard to attain without stronger broad-based demand and exports.



Prices of copper SCFcv1 and steel SRBcv1 have surged and share prices for Chinese blue chips struck five-year highs, as state-funded infrastructure projects drove up production of cement, steel and non-ferrous metals.



Railway investment, for example, soared 11.4% in April-June from a year earlier versus a 21% drop in the first quarter.



Industries also gained from pent-up demand for autos and electronics. The property sector, a pillar of growth, also showed signs of rebounding, with real estate investment expanding and sales quickening.



China’s factory-gate prices, still in deflation territory this year, may have turned positive on a monthly basis in June, said Yating Xu, senior economist at IHS Markit, in a sign of recovering demand for manufactured goods.



The optimism also led investment bank ING to forecast no more policy interest rate cuts from the central bank for the rest of the year.



“We started to return to thin profit in May and became a bit better in June,” said an official at a state-owned steel mill in central China, declining to be named due to company policy.



“Our demand mainly come from infrastructure so far this year, especially for steel rebar and medium plates,” he said. Steel rebars are mostly used in construction, and medium steel plates in ships and excavators.



Underpinned by robust infrastructure demand from China, the Baltic dry index, which tracks rates for ships ferrying dry bulk commodities and reflects rates for capesize, surged about 257% in June from a low struck in May due to the freeze in global trade as a result of the lockdowns.



The rosy outlook stands in stark contrast to the dismal industrial landscapes of other economies still fighting COVID-19. Factory output plunged further in May from a year earlier in Japan, South Korea and the United States. Euro zone manufacturing output fell by a record 28% in April.



MINI-BOOM



The industrial recovery is expected to help China’s economy post a positive growth rate in the second quarter after contracting for the first time in decades due to COVID-19.



But analysts warn that factories could struggle to keep up momentum even as early as this quarter as pent-up demand wanes, exports struggle and heavy floods take their toll on industries and businesses in the Yangtze Delta.



The pent-up demand for automobiles has been released by now and the auto market entered a traditional lull in June, said the China Passenger Car Association (CPCA) last week. China’s passenger car retail sales fell 8% in June from a year earlier.



In May auto sales rose for the first time after a two-year slump, fanning expectations of a strong V-shaped recovery in a pillar industry, supporting the broader economy. Auto deliveries to dealers also rose for the second straight month in May.



Exports, a sector that provides about 200 million urban jobs, are forecast to come under pressure in the third quarter, analysts say, as sales of COVID-19-related medical supplies slow and global demand stays soft.



Xia Xiaokang, who runs a faucet factory in the eastern city of Wenzhou, shares the same concerns.



After a 10-day production hiatus in May, his factory reopened after receiving the go-ahead from European customers to send suspended shipments and fulfil delayed orders.Slideshow&nbsp;(2 Images)



“June was better than May, but I’m concerned about July, August and September when countries reopen but orders are so few,” said Xia, adding that his company failed to get any new customers at the online Canton Fair &#8211; China’s biggest.

china

Chinese factories to face headwinds in next phase of post-lockdown recovery

JOHANNESBURG (Reuters) &#8211; South Africa has a poor track record of implementing debt and spending reductions plans, ratings firm Fitch said on Tuesday, adding that consolidation plans announced in last months supplementary would be difficult to implement due to low growth.



“They have had previous plans to achieve a primary balance which would have required smaller adjustments, and those have been abandoned. So the track record of following up on such plans isn’t really there,” said Fitch’s head of Africa sovereign ratings Jan Friederich during a webinar.

Fitch Ratings

South Africa has bad record on keeping budget promises: Fitch

(Reuters) &#8211; Direct cash payments can improve financial security, boost consumer spending and may speed up the recovery, according to a letter from a group of economists calling on U.S. policymakers to keep providing direct cash payments to Americans until the economy is stronger.



The stimulus payments should be issued automatically, based on certain economic indicators such as the unemployment rate, until there is enough evidence that the economy is recovering, the group of mostly left-leaning economists said in an open letter organized by the Economic Security Project and The Justice Collaborative.



“The first round of economic impact payments were a lifeline that helped some get by for a few weeks,” the economists wrote. “Even after businesses start to re-open and jobs begin to come back, there will be significant economic fallout, and demand will continue to lag if people don’t have money to spend.”



The letter was signed by 153 economists, including Jason Furman, who chaired the Council of Economic Advisers during the Obama Administration; Claudia Sahm, a former Fed economist; Darrick Hamilton from the Kirwan Institute for the Study of Race and Ethnicity at The Ohio State University; and Indivar Dutta-Gupta, co-executive director at the Georgetown Center on Poverty and Inequality. Some of the signatories are advising the campaign of presumptive Democratic presidential nominee Joe Biden.



The stimulus payments issued in April under the $2.3 trillion CARES Act helped lift spending for lower income households faster than higher income households, with much of the cash going to essentials, according to an analysis by Harvard University’s Opportunity Insights.



The $600 supplement Congress added to weekly unemployment benefits are set to expire at the end of the month, leaving jobless Americans at risk of facing a cash cliff while jobs are still scarce.



Congressional lawmakers are on a two-week recess and will face pressure to make decisions when they reconvene in late July.

Administrators propose sales plan for SA retailer Edcon, see potential job cuts

Economists call for more direct cash payments tied to the health of the economy

JOHANNESBURG (Reuters) &#8211; The South African central bank reduced its government bond purchases to 5 billion rand ($292.64 million) in June, half the monthly average, bringing its bond holdings to 35.9 billion rand, data showed on Tuesday.



The Reserve Bank began a series of emergency liquidity measures in late March to ease the stress on banks and capital markets caused by the coronavirus pandemic. Among them were extra repo auctions and 275 basis points worth of lending rate cuts.



The bank has since slowed those support measures as local financial markets recovered, resisting calls from labour and some economists to resort to full-blown quantitative-easing-style funding of government’s gaping budget deficit.



The bank’s June statement of assets and liabilities showed its accommodation to commercial banks via repurchase, or repo agreements, had fallen to 60 billion rand in June from 73.5 billion in the previous month.



In May, the central bank reduced overnight repo auctions to one per day from the two it implemented to pump liquidity to commercial banks.



Bond yields have returned to near pre-COVID-19 levels and the rand has recovered from record lows, although that recovery remains fragile with the economy contracting for the consecutive time in the first quarter.



($1 = 17.0626 rand)

South African Reserve Bank Governor Lesetja Kganyago Interview

South African central bank reduces bond purchases to 5 bln rand in June

On the day Kenya Airways announced it was to shed staff, the skies darkened further with the findings of a gloomy International Air Transport Association report on the on the state of aviation in Africa.



The report laid bare the business case for running an airline in Africa painting it as a loss maker as COVID-19 has closed borders and discouraged travellers. There are quarantine restrictions in 36 countries across Africa and the Middle East. The numbers are depressing. The IATA report says &nbsp;East Africa has lost 56% of its revenue and 53% of its passengers; West Africa 60% and 58%; North Africa 58% and 56% and Southern Africa 60% and 58%.



IATA says it is so bad that African airlines actually pay $42 to transport every passenger they carry in 2020. CNBC Africa asked the man behind the report how long can African airlines last in the face of these losses.



“Not long, not long. Our estimates have already shown that airlines have already burned through their cash reserves. We don’t expect any airlines in Africa to survive these kind of losses,” says&nbsp;&nbsp; Muhammed Albakri, the regional vice-president for Africa and the Middle East for IATA, told CNBC Africa.&nbsp;



“The impact of COVID-19 has been devastating all over the world but particularly for the African continent where the demand from passengers has fallen by 58% in 2020 compared to 2019. Airlines are supposed to post a loss of $2 billion that is because the decrease in the passenger numbers and $6 billion from passenger revenues that is something that has not been seen before.”



Albakri believes the only hope for survival for African airlines is for governments to give bail out packages and to open up borders to help kick start the travel industry.



Airlines should play a key role in the revival of African economies in the post-COVID-19 world by providing cheap and abundant air travel in aid of growth. Sadly, many of them are tottering amid falling revenue and grounded planes.



Kenya Airways is the next to take the pain. It has announced job losses will be made – even though the airline is not saying how many – will happened to keep the airline afloat. The airline has 4,000 workers and operates a fleet 36 planes flying to 54 global destinations.



Prior to the pandemic, the airline faced financial difficulties in its operations, owing to losses and debt.&nbsp; In December 2019, the airline issued a profit warning, signalling that its losses widened to $129.7 million from $75.8 million in 2018.

Economy

South Africa’s economy to shrink 6.9% in 2020 – S&P Global Ratings

South African rand firms as dollar wobble lifts emerging currencies

COMMENT: AfCFTA is economic medicine Africa needs to recover from the covid-19 pandemic

African born tycoon Elon Musk Tesla slashes prices as pandemic weighs heavily

COVID-19: No more booze for now says Ramaphosa

Sudan’s 37 dry years are over for its non-Muslims

Veteran Zimbabwe farmer pours cold water on $58 million mission from Belarus with love.

Congo central bank keeps 2020 economic growth forecast at -2.4%

South Africa’s rand recovers but caution remains, stocks slip

One of the biggest name in the British High Street takes a heavy blow

African-born Elon Musk says he is very close to making cars that can drive themselves.

Uganda growth to sink as low as 0.4% this year – World Bank

Chinese factories to face headwinds in next phase of post-lockdown recovery

South Africa has bad record on keeping budget promises: Fitch

Economists call for more direct cash payments tied to the health of the economy

South African central bank reduces bond purchases to 5 bln rand in June

Loss making in COVID-19 -Why it costs African airlines $42 every time you fly

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Economy

South Africa’s economy to shrink 6.9% in 2020 – S&P Global Ratings

South African rand firms as dollar wobble lifts emerging currencies

COMMENT: AfCFTA is economic medicine Africa needs to recover from the covid-19 pandemic

African born tycoon Elon Musk Tesla slashes prices as pandemic weighs heavily

COVID-19: No more booze for now says Ramaphosa

Sudan’s 37 dry years are over for its non-Muslims

Veteran Zimbabwe farmer pours cold water on $58 million mission from Belarus with love.

Congo central bank keeps 2020 economic growth forecast at -2.4%

South Africa’s rand recovers but caution remains, stocks slip

One of the biggest name in the British High Street takes a heavy blow

African-born Elon Musk says he is very close to making cars that can drive themselves.

Uganda growth to sink as low as 0.4% this year – World Bank

Chinese factories to face headwinds in next phase of post-lockdown recovery

South Africa has bad record on keeping budget promises: Fitch

Economists call for more direct cash payments tied to the health of the economy

South African central bank reduces bond purchases to 5 bln rand in June

Loss making in COVID-19 -Why it costs African airlines $42 every time you fly

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