<h3 class="wp-block-heading">KEY POINTS</h3>



<ul class="wp-block-list"><li>The global spread of the coronavirus pandemic sent investors flocking to the greenback in March and hammered emerging market currencies, but the dollar is now down more than 4% against the rand since the start of June.</li><li>“A cross-continental easing in restrictions on economic activity — in some cases spurred by protests, as in Senegal — furthered the recovery in currencies this week from South Africa to Kenya,” Michael Nderitu, head of trading at pan-African currency broker AZA, said in a note Friday.</li></ul>



The South African rand hit an 11-week high on Monday morning following a broad rally in African currencies last week, fueled by the reopening of economies on the continent and an uptick in global risk sentiment.



As of late Monday morning, the rand was trading at 16.8012 to the dollar, slightly retreating after hitting its strongest price since March 18 earlier in the day, at 16.7762.



The global spread of the coronavirus pandemic sent investors flocking to the greenback in March and hammered emerging market currencies. However, the dollar is now down more than 4% against the rand since the beginning of June.



The move comes despite a steep incline in confirmed coronavirus cases in South Africa, which has now recorded more than 48,000 cases as it tries to relax lockdown measures.



While acknowledging that the spread will likely continue, President Cyril Ramaphosa has suggested that the lockdowns bought valuable time to prepare health services for an expected surge.



Despite South Africa expecting a 7% contraction in gross domestic product this year — which will be its worst since World War II — analysts now believe there are a combination of factors that indicate the rand, and a host of currencies in sub-Saharan Africa, could have further to go.



“A cross-continental easing in restrictions on economic activity — in some cases spurred by protests, as in Senegal — furthered the recovery in currencies this week from South Africa to Kenya,” Michael Nderitu, head of trading at pan-African currency broker AZA, said in a note Friday.



“While a heavy economic toll continues, we see the reopening of businesses and markets, helped by easing of monetary and fiscal policies, steadying or strengthening currencies near term.”



The South African Reserve Bank has cut its main lending rate four times this year to a record low of 3.75%, with further cuts widely expected as it looks to mitigate the coronavirus fallout.



Luis Costa, CEEMEA head of FX and rates strategy at Citi, told CNBC on Monday that the broad dollar depreciation and euro rally seen in recent days was historically a “very important relief for EM (emerging market) high yielding currencies.”



“That, in a way, makes the bond trade even more interesting in these economies, where you still have some degree of steepness in the (yield) curve and you could argue that central banks still have some space to cut rates, so there is a very interesting positive link between international flows into bonds and currency appreciation in these economies,” Costa told CNBC’s “Street Signs Europe.”



<h2 class="wp-block-heading">Nigeria and Kenya</h2>



Nigeria’s central bank-controlled naira came under pressure in the black market as importers looked to snap up dollars from unofficial vendors, owing to a broad slump in supply from official sources and the resumption of business activity.



Despite this, the Central Bank of Nigeria (CBN) has held the official spot rate around the 361 mark since the end of March. In live foreign exchange markets, the naira was trading at 388 to the dollar on Monday, around where it has been since the beginning of the month.



“With support from the IMF’s $3.4 billion rapid finance instrument, Nigeria’s dollar reserves have climbed to $36.57 billion, adequate to support the local currency from current pressures,” said AZA Trading Desk Manager Murega Mungai.



“With the recovery in oil prices as a continued positive indicator for the economy, we foresee sustained levels in the coming days.”



Africa’s largest economy agreed on Sunday to extend oil production cuts until the end of July as&nbsp;<a href="https://www.cnbc.com/2020/06/08/brent-crude-needs-to-work-through-oversupply-issues-despite-opec-cuts.html">part of the OPEC+ deal</a>&nbsp;which has helped bolster crude prices over the last two months. The group of oil-producing countries has also demanded that Nigeria compensate for exceeding May and June’s quotas by implementing extra cuts up until September.



Kenya’s shilling benefited last week from anticipation that the government would announce an easing of its curfew and travel restrictions on Saturday, but President Uhuru Kenyatta instead extended the measures as the country continues to battle Covid-19.



Despite the setback, the shilling held firm at just above 106 to the dollar on Monday morning, which AZA analysts attributed mainly to dollar inflows from agricultural exports. AZA Treasury Associate Terry Karanja projected in Friday’s note that increased export activity would likely drive further positive momentum for the currency in the coming days.

101416618-rand

Rallying rand leads African currency resurgence

By Chris Bishop



It is only 10 years ago? Isn’t it 100, or 1000 years ago? Surely, it seems a, far off, distant world.



On June 11it will be exactly 10 years since Siphiwe Tshabalala sprinted down the left like a dreadlocked gazelle and smacked in one of the sweetest goals in the history of African football. People remember where they were at that split second of the first ever world cup goal in Africa and will tell their grandchildren about it. I know I will.



This was the opening game of the 2010 FIFA World Cup; Tshabalala had the world at his feet and so it seemed did South Africa. For years we had been hearing about the billions that were coming with the world’s finest players and it looked good. Analysts predicted it would be billions in investment.



On that sunny winter afternoon we had got as right and perfectly timed as the Kagisho Dikgacoi &nbsp;&nbsp;through ball to Tshabalala. My fellow journalists and I had fought our way home, through the gridlocked streets, with meat and drink for the masses at my house. Amid the whiff of charcoal and wood the whole house was cooking along with the steaks; people of all creeds and colours hugged and wept as Tshabalala’s goal rattled into the net. I saw my first game at the age of seven, at my grandfather’s knee, and always had this romantic idea that the game could heal the troubles of the world. On that day I believed it.



As night fell all people seemed to think about was getting together. At four the following morning people were still arriving wearily at the party that had steadily acquired the energy of a Brazilian midfield. Many were fresh from the stadium with vuvuzela in hand; horns which they blasted out into the starry African skies from the balcony until their lips went blue. It was late, but few people were sleeping; even people who didn’t like football were swept up in it.



Weeks later, my wife and I drove to Bloemfontein and found ourselves behind the South African team coach. It was a touching drive; at every village and small dot on the map teachers led crowds of children from school to the side of the road to wave and cheer their national team on. I smiled behind the wheel, in the slipstream of the coach, with the thought of how many of those children would be inspired to do something with their lives in that moment. &nbsp;&nbsp;&nbsp;



The other day, in lockdown, I watched a documentary on the world cup portraying &nbsp;a nation confident and free and multi-coloured and proud. I shed a few tears for lost days of promise and splendour. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



It is a shame that, a decade on, a deadlier striker than Tshabalala – COVID who wears number 19 – is causing as much disappointment &nbsp;as the goal that cancelled out his stunning effort against Mexico on that sunny winter’s afternoon. &nbsp;



For a start COVID-19 has stopped football and the good feeling that comes with it, dead in its tracks. In 2010, people in football shirts were waltzing through the streets and shopping malls like Lionel Messi; ten years on those same people are shuffling through lockdown restrictions with the gloom of a wet Sunday. &nbsp;Millions of jobs will go and the majority of companies are set to collapse. The flow of tourism income that flowed from publicity around the world has dried to a trickle. &nbsp;



Yet, where there is life there is hope and history teaches us this. In 1964, Nelson Mandela shuffled in chains and short trousers, through the cold, to his cell on Robben Island with the prospect of dying behind bars. Forty years later he smiled and held the golden world cup trophy high before the eyes of the world &nbsp;as South Africa won the bid to stage Africa’s first ever tournament. Who would have thought it? &nbsp;&nbsp;&nbsp;



Newsflash – It is 2030 and the South African economy turns itself around to prosperity with nerve, steel, hard work and concord between government and private business. Who would believe it? We have to.

REPETITION – HIGHER RESOLUTIONSouth Afr

THE WEEKEND READ : Where did our golden world cup wonder go?

The South African manufacturing negative supply shocks will cause demand shortages, while South Africa will be expected to be dependent on imports for the next half a decade.



South Africa&#8217;s manufacturing production fell 2.1% from a year ago in February of 2020, following a downwardly revised 1.8% decrease and almost in line with market expectations of a 2.2% slump. Covid19 has made it worse. Demand and supply is disrupted and raw materials are expected to be too expensive in the future, while backlogs caused by the lockdown are starting to hurt manufacturers.



&nbsp;Manufacturing is very prone to COVID-19, with many small businesses closing without &nbsp;credit to sustain them. Many had problems as far back as 2015 as they faced changing in markets and also disruptions from electricity and less investment confidence in the South African economy.



A rapid response survey, conducted by Stats SA has the following key findings for the manufacturing industry: About 4% of business turnover was above the normal range, about 88% of business turnover below the normal range and 8% of business turnover was within the normal range; The manufacturing trading status of businesses are, about 10% continuing to trade with full capacity, 26% continues to trade partially, 6% has permanently ceased to trading and about 58% has temporarily closed or paused trading; The majority of responding businesses (85,4%) reported turnover below the normal range.;46,4% indicated temporary closure or paused trading activity; 50,4% expected their workforce size to stay the same in the two weeks after the survey, while 36,8% reported that their workforce size is expected to decrease; 28,3% indicated that their workforce has decreased working hours and 19,6% reported laying off of staff in the short term; 19,1% indicated that prices of materials, goods or services purchased increased more than normal.



There is no doubt large manufacturing companies are in trouble and about &nbsp;50 percent of companies in financial distress, which can lead to South Africa experiencing the highest number of manufacturing business rescue and acquisitions by new shareholders as a result of Covid19 and South African recession..



New technologies are an enabler, not merely a goal in themselves, and more than the reported 10 percent should have continued to operate when adoption to manufacturing technologies was higher than it is currently. We believe that the senior leaders of many manufacturing organizations need to start asking different questions as they think about the investments and changes they will make in the coming years.



It is likely that advanced technologies will be part of the answer to that question, but ensuring that people have the skills, stunning mind-set, and behaviours to use those technologies effectively will be equally important. The South African manufacturing industry needs to improve on the skills development for it to be competitive to the global economy.



The implementation of African Continental Free Trade Area (AfCFTA)&nbsp;&nbsp;are to create a continental market for goods and services that &nbsp;can boost continental trade and inspire growth post Covid19.



&nbsp;What we think is very exciting is not only can you think about utilizing existing assets in a new way—but that goes for the workforce as well. How can we utilize an existing workforce and&nbsp;upskill or reskill&nbsp;them to be successful in the new technologies? What we’re seeing around the world is that some of the most advanced Industry 4.0 plants not only are using brownfield assets but they’re also using their same workforce. The people are learning new skills and working in a new way. The implementation of the South African special economic zones must be aligned with the evolution of the global manufacturing technologies and the human centred approach for its sustainability.



Most businesses (65,0%) anticipate that the COVID-19 pandemic will impact their business substantially worse than the 2008/09 global financial crisis. Revised strategic planning in manufacturing operations management will add value for new affordable solutions to turnaround businesses and deliver the expected needs of the customer’s.



Miyelani Mkhabela is an Executive Director of Antswisa Transaction Advisory Services.

miyelani mkhabela

COVID-19: Economic meltdown the price – skills and trade the answer

<h3 class="wp-block-heading">Key Points:</h3>



<ul class="wp-block-list"><li>The Dubai government announced new measures to lift restrictions on businesses, allowing gyms, movie theaters, leisure venues, educational and training institutes, child learning centers and all retail and wholesale establishments to reopen at varying limited capacities.</li><li>The emirate of 3.3 million, the UAE’s commercial capital, is pushing ahead with reopening its economy after a grueling two months of lockdown that included a three-week stretch in April of some of the strictest measures imposed anywhere in the world</li></ul>



<figure class="wp-block-image"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/106525111-1588843933032gettyimages-1211240246.jpeg?v=1588909311&amp;w=678&amp;h=381" alt="Women wearing masks for protection against the coronavirus, walk in the Mall of Dubai on April 28, 2020, after the shopping center was reopened as part of moves in the Gulf emirate to ease lockdown restrictions imposed last month."/></figure>



Women wearing masks for protection against the coronavirus, walk in the Mall of Dubai on April 28, 2020, after the shopping center was reopened as part of moves in the Gulf emirate to ease lockdown restrictions imposed last month.Karim Sahib | AFP | Getty Images



DUBAI, United Arab Emirates&nbsp;— The Dubai government announced new measures to lift restrictions on businesses, allowing gyms, movie theaters, leisure venues, educational and training institutes, child learning centers and all retail and wholesale establishments to reopen at varying limited capacities.



The emirate of 3.3 million, the UAE’s commercial capital, is pushing ahead with reopening its economy after a grueling two months of lockdown that included a three-week stretch in April of&nbsp;<a href="https://www.cnbc.com/2020/04/07/coronavirus-lockdown-dubai-requires-police-permits-for-leaving-the-house.html">some of the strictest measures imposed anywhere</a>&nbsp;in the world, requiring residents to&nbsp;<a href="https://www.cnbc.com/2020/04/07/coronavirus-lockdown-dubai-requires-police-permits-for-leaving-the-house.html">apply for a police permit</a>&nbsp;in order to leave their homes. Since late April, the restrictions have eased, allowing malls, restaurants and hotels to reopen at reduced capacity and under stringent sanitation and social-distancing rules.&nbsp;



“Under the directives of&nbsp;@HHShkMohd,&nbsp;@HamdanMohammed&nbsp;announces the gradual reopening of business activities in Dubai from Wednesday, 27 May. There will be no restrictions on movement between 6.00 am and 11.00 pm,” the Dubai Media Office tweeted this week, citing Dubai’s ruler and crown prince.&nbsp;



People above the age of 60 and below the age of 12 aren’t allowed to enter malls, sports facilities, educational institutes and movie theaters, and mask-wearing and the maintenance of two meters of social distancing are mandatory.



<iframe width=700 height=349 src=https://player.cnbc.com/p/gZWlPC/cnbc_global?playertype=synd&#038;byGuid=7000137354 frameborder=0 scrolling=no allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen ></iframe>



Curfew across the emirate had expanded from a 10 p.m. start for much of May to an 8 p.m. start during the last week of the Muslim holy month of Ramadan and Eid, the multi-day celebration to commemorate Ramadan’s ending. The two-hour curfew expansion coincided with an uptick in coronavirus infections to around 800 new cases per day, and was believed to be aimed at stopping people from gathering to celebrate what is traditionally one of the most important holidays for the Muslim world.



The UAE has had just over 32,500 confirmed coronavirus cases, with 258 deaths. <a href="https://twitter.com/DXBMediaOffice/status/1265727893470093330"></a>











“IT’S GAME TIME&nbsp;— WE ARE REOPENING!” an email from one popular Dubai gym read on Wednesday. The robust sports community in the emirate,&nbsp; which has attracted celebrity athletes, fitness influencers and high-end gym franchises from around the world, is gearing up to serve customers again, but will be doing so under strict new safety guidelines.&nbsp;



“A physical distance of at least 2 meters must be maintained, and separators/partitions (e.g. acrylic dividers) shall be installed between sports equipment, if the nature of the sports activity requires it, to ensure protection of people,” a memo from the Dubai Sports Council read. It outlined regular sanitization procedures for equipment and workout areas, as well as a no more than 50% capacity in gyms and sports centers. Enclosed areas like locker rooms, showers, changing areas and saunas are to be closed off.&nbsp;



Entertainment and leisure venues like the Dubai Ice Rink and Dolphinarium are able to reopen as well.<a href="https://twitter.com/DXBMediaOffice/status/1265275100955176962"></a>











Dubai’s public beaches remain closed, likely helping boost hotel bookings over the holiday weekend as residents flocked to local resorts for “staycations” as the only legal means of getting beach time.&nbsp;



<h2 class="wp-block-heading">Dubai relaxing measures faster than Abu Dhabi</h2>



It’s worth noting the reopenings so far do not apply across the UAE: neighboring Abu Dhabi, the country’s oil-rich capital, remains largely shut down in terms of business and leisure venues. Some local analysts attribute this to Abu Dhabi having stronger financial means to support its companies, most of which are owned by locals who won’t leave the country in a prolonged downturn.



Dubai, by contrast, has a higher expatriate population, and economists have forecast a potential population contraction of more than 10% by the end of this year if business fails to sufficiently rebound. During Dubai’s strictest lockdown period in April, a survey of roughly 1,200 businesses found that 70% of them expected to close within six months if the lockdown persisted.<a href="https://twitter.com/DXBMediaOffice/status/1265323692734787584"></a>







<figure class="wp-block-image"><a href="https://twitter.com/DXBMediaOffice/status/1265323692734787584/photo/1"><img decoding="async" src="https://pbs.twimg.com/media/EY9VJKGX0AAaIIA?format=jpg&amp;name=small" alt="View image on Twitter" title="View image on Twitter"/></a><figcaption>During the holy month of Ramadan and Eid Al Fitr, <a href="https://twitter.com/DMunicipality">@DMunicipality</a> conducted 48,299 inspection visits related to various activities, a number of shops were shut down for major violations of the precautionary measures.</figcaption></figure>







Dubai’s leadership also announced that 50% of government employees could work from the office starting Sunday&nbsp;— an increase from the previous 30%. From June 14, 100% of government employees will be able to return to work.

106525111-1588843933032gettyimages-1211240246

Dubai gives the green light to reopen gyms, movie theaters and other non-essential businesses as lockdown lifting continues

<h3 class="wp-block-heading">Key Points:</h3>



<ul class="wp-block-list"><li>The AfCFTA, which was due to be implemented on July 1, will be the largest free trade area in the world, uniting 1.3 billion people in a $3.4 trillion economic bloc.</li><li>Given the impact of the outbreak on Africa’s traditional intercontinental trade routes, intra-Africa trade will be key to economic recovery, according to Thomas Birgen, Nairobi-based Treasury Manager for AZA.</li><li>Executive Director of the International Trade Centre, Dorothy Tembo, told CNBC Africa that despite the risks to the AfCFTA’s implementation, African leaders had a unique opportunity to spur greater collaboration.</li></ul>



<figure class="wp-block-image alignwide"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/105314733-1530885025991gettyimages-992361246.jpg?v=1530890377&amp;w=678&amp;h=381" alt="A container truck passes the main gate of Djibouti International Free Trade Zone after an inauguration ceremony in Djibouti on July 5, 2018."/><figcaption>A container truck passes the main gate of Djibouti International Free Trade Zone after an inauguration ceremony in Djibouti on July 5, 2018.Yasuyoshi Chiba | AFP | Getty Images</figcaption></figure>







The&nbsp;<a href="https://www.cnbc.com/2019/07/11/africa-free-trade-what-is-the-afcfta.html">African Continental Free Trade Area (AfCFTA)</a>&nbsp;must not be allowed to fall by the wayside, according to experts, after its launch was postponed by the coronavirus pandemic.



The AfCFTA, which was due to be implemented on July 1, will be the largest free trade area in the world, uniting 1.3 billion people in a $3.4 trillion economic bloc, and came after protracted negotiations between the leaders of 54 African nations.



However, it was postponed in late April, with AfCFTA Secretary-General Wamkele Mene telling Reuters it was the “responsible thing to do” to avoid distracting leaders during the pandemic, adding that he was confident the deal will go through eventually.



The continent’s key trading partners, such as China, and now to a greater extent Europe and the U.S., have been blighted by the pandemic, while&nbsp;<a href="https://www.cnbc.com/2020/04/02/lockdowns-curfews-and-doorstep-testing-africas-crackdown-on-the-coronavirus.html">Africa has for the most part managed to avoid</a>&nbsp;an exponential spread of Covid-19.



<h2 class="wp-block-heading">An opportunity amid the crisis</h2>



Given the impact of the outbreak on Africa’s traditional intercontinental trade routes, intra-Africa trade will be key to getting the region’s nations back up and running, according to Thomas Birgen, Nairobi-based Treasury Manager for AZA, Africa’s largest non-bank currency broker.



“We need to see a situation where your cargo isn’t returned at the port because you don’t belong to a certain economic bloc,” Birgen said in a recent webinar.



“Here in Kenya, we killed our textile industry because we import second-hand clothes from China and everywhere else. Now with the closure of borders, we cannot live without these products that we have become used to importing.”



Birgen noted the manufacturing of protective masks in Kenya and Nigeria as an example of the opportunities available for African nations to produce their own products and trade within the continent.



<figure class="wp-block-image alignwide"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/104385107-GettyImages-534435412.jpg?v=1529474721&amp;w=678&amp;h=381" alt="A truck carries rocks extracted from a cobalt mine at a copper quarry and cobalt pit in Lubumbashi, Democratic Republic of the Congo, on May 23, 2016."/><figcaption>A truck carries rocks extracted from a cobalt mine at a copper quarry and cobalt pit in Lubumbashi, Democratic Republic of the Congo, on May 23, 2016.Junior Kannah | AFP | Getty Images</figcaption></figure>







Executive Director of the International Trade Centre, Dorothy Tembo,&nbsp;<a href="https://www.cnbcafrica.com/videos/2020/05/17/afcfta-why-covid-19-presents-the-best-opportunity-to-spur-intra-africa-trade/" target="_blank" rel="noreferrer noopener">told CNBC Africa</a>&nbsp;that despite the risks to the AfCFTA’s implementation, African leaders had a unique opportunity to spur greater collaboration if specific policies were fast-tracked.



“This is a time for Africa to rethink and reposition itself. Part of what we are seeing is that there is a shift in the demand in the context of the different value chains that African companies and businesses are involved in,” Tembo said.



Like Birgen, she noted the shift in demand from textiles and garments to masks and health-related products, and suggested that other opportunities will also arise.



“It is a dark moment for Africa in terms of the public health impact, but it is also one that demands that on the economic side, we are not losing truck on the efforts that have been made, particularly with respect to the continental free trade area,” Tembo added.



<h2 class="wp-block-heading">AfCFTA will take time to fulfill its promise</h2>



Jeff Gable, chief economist at African banking group Absa, told CNBC that Africa should be “applauded and supported” for moving towards collaboration, while the rest of the world moves towards isolationism.



However, he cautioned that the necessary integration will take much longer than two or three years, with smaller economies unlikely to see any early benefit as businesses will need to be created from scratch to participate in core value chains.



“For manufacturers in Ghana, this is great news — for Kenya, South Africa,” he said. “But this doesn’t suddenly unleash a manufacturing boom in the DRC (Democratic Republic of the Congo).”



A common qualm with intercontinental trade is that African nations extract and export raw materials, which are then manufactured into products elsewhere and shipped back with a substantial value addition.



<figure class="wp-block-image alignwide"><img decoding="async" src="https://image.cnbcfm.com/api/v1/image/106546102-15900040332020-05-20t092112z_1754615962_rc28sg9qx880_rtrmadp_0_health-coronavirus-safrica-hungry.jpeg?v=1590004145&amp;w=678&amp;h=381" alt="People stand in a queue to receive food aid amid the spread of the coronavirus disease (COVID-19), at the Itireleng informal settlement, near Laudium suburb in Pretoria, South Africa, May 20, 2020."/><figcaption>People stand in a queue to receive food aid amid the spread of the coronavirus disease (COVID-19), at the Itireleng informal settlement, near Laudium suburb in Pretoria, South Africa, May 20, 2020.Siphiwe Sibeko | Reuters</figcaption></figure>







Gable said that AfCFTA “does not change that very quickly” due to massive discrepancies in the industrialization of component economies.



“There are very few examples of economies on the (African) continent that capture enough of a value chain that you can really call it a manufacturing sector. South Africa runs a huge trade surplus with the rest of the continent because we trade in consumer goods, we trade in investment goods, and so on, but that is not true for Botswana,” Gable said.



Botswana’s economic output, he added, had not been “constrained by the lack of an African continental free trade agreement, vis-a-vis its relations with its neighboring countries.”



Gable also highlighted the logistical challenges faced by Africa’s existing regional economic communities, such as the East African Community (EAC).



“What you expect is that those borders are freed up to goods, and you should expect to see an export intensification between those countries. We’re now more than 10 years later and we’re not seeing much of that,” Gable said.



Trade frictions at borders between neighboring states have also become commonplace in recent years, creating logjams. Nigeria, Africa’s largest economy, for example, has been a regular purveyor of protectionist trade policies with its neighbors.

105314733-1530885025991gettyimages-992361246

Africa’s free trade area is delayed by the coronavirus, but experts say it’s vital to recovery

By Chris Bishop



Slender and snappily dressed Fortune Mojapelo was bent on living up to his first name when I met him at the Mining Indaba in Cape Town; his optimism left you feeling that fate, as well as fortune, would favour the brave. The young mining entrepreneur had a dream to capture a tenth of the multi-billion dollar world market for battery metals, his only concern was that Africa would not be able to keep up with demand. Weeks later, a bolt struck from the blue – COVID-19.



There is no doubt that the disruption of COVID-19 has set back the dream, but Mojapelo is far from giving up.He says his vanadium open cast operation at Bushveld Minerals, just outside Brits west of Johannesburg, has ramped back up to full production ahead of a multi-million dollar investment to supply more battery metals to the world.



More than 90% of the world’s vanadium is used in reinforced steel, but a growing percentage is used to make batteries for electric cars and energy storage. Bushveld Minerals, which listed on AIM in London in 2017, exports to the United States, China and Europe in a market that is likely to expand rapidly over the next few years. The rush for battery metals is expected to see the world market increase 122 times in the next 20 years. An expansion likely to attract $660 billion in capital expenditure to unearth cobalt, lithium and vanadium &nbsp;



“I can say, do we have a good business: yes. Are we in distress? No. We have a lot of work to do things are going to get worse before they get better,” says Mojapelo who will appear on CNBC Africa’s Business Tomorrow virtual web discussion at 1400 CAT on May 26.



“We are bullish, yet we are cautious and realistic about the short term, but we think the world will revive and still need reinforced steel. In the post- COVID-19 world we believe it will be moving even faster towards a de carbonised future and renewable energy and we think this is fairly positive.”&nbsp;&nbsp;&nbsp;



&nbsp;Mojapelo, who grew up in a township near Kwe Kwe in Zimbabwe before studying actuarial science at the University of Cape Town, wants his company to spend at least $100 million over the next four years in increasing his vanadium output through cash, debt instruments and borrowing on the money markets. The plan is to treble production to 8400 mt in the next five years to capture more of the world battery metals market. The company currently supplies 3% of world demand and hopes to expand this to 10% even in the face of COVID-19.



“The only caution is, are we going to do it in the same five year ramp up? Is this going to happen? I think it is going to be impacted especially when it comes to fund raising. We are going to go to the market at a certain point, when you need money, but you can’t bank on when it is going to return to normal. Some projects we have pushed out by up to a year.”



It is a brave man who will put his money into long term investments in the world of COVID-19. Clearly, Fortune favours the brave.

Fortune Mojapelo

How Africa can corner a tenth of the world battery metals market – if being brave favours Fortune!

JOHANNESBURG (Reuters) &#8211; S&amp;P Global Ratings on Friday said it projects South Africa’s economy to shrink by 4.5% this year as a result of the COVID-19 pandemic that has impacted production and consumption.



In April, S&amp;P downgraded South Africa’s credit rating further into non-investment-grade territory, saying COVID-19-related pressures would have significant adverse implications for the country’s already-ailing economy and for tax revenues.



<figure class="wp-block-image alignwide size-large"><img loading="lazy" decoding="async" width="1110" height="740" src="https://www.cnbcafrica.com/wp-content/uploads/2020/05/GettyImages-1090697446-1110x740.jpg" alt="" class="wp-image-372050" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/05/GettyImages-1090697446-1110x740.jpg 1110w, https://cms.cnbcafrica.com/wp-content/uploads/2020/05/GettyImages-1090697446-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2020/05/GettyImages-1090697446-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2020/05/GettyImages-1090697446-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2020/05/GettyImages-1090697446-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2020/05/GettyImages-1090697446-scaled.jpg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2020/05/GettyImages-1090697446-696x464.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2020/05/GettyImages-1090697446-1068x712.jpg 1068w, https://cms.cnbcafrica.com/wp-content/uploads/2020/05/GettyImages-1090697446-1920x1280.jpg 1920w" sizes="auto, (max-width: 1110px) 100vw, 1110px" /><figcaption>Cape Town, South Africa, apple factory | Getty Images</figcaption></figure>



It lowered its long-term foreign-currency rating on South Africa to “BB-minus” from “BB” and its long-term local-currency rating to “BB” from “BB-plus,” with a stable outlook.



“COVID-19 will weigh heavily on GDP growth given the strict domestic lockdown that has shut down much of the economy, the markedly weaker external demand outlook, and tighter credit conditions,” S&amp;P said. “As a result, we now project the economy to shrink by 4.5% this year.”



The ratings agency projects growth of 3.5% for 2021.



South Africa’s lockdown has entered its ninth week, leaving many businesses and individuals struggling without income in the recession-hit economy.



S&amp;P said the weaker macroeconomic environment would also weigh heavily on fiscal revenues, projecting that the fiscal deficit would widen to 13.3% of gross domestic product in 2020 —the widest in the country’s democratic history.



S&amp;P estimates net debt levels would rise to over 75% of GDP by the end of 2020.



“Our anticipation of an only tepid economic recovery means that public financing needs will likely remain elevated throughout the forecast period,” S&amp;P said. “As a result, the net debt-to-GDP ratio is unlikely to stabilize within this timeframe, rising to 85% by 2023, raising questions around debt sustainability.”



Reporting by Olivia Kumwenda-Mtambo; Editing by Leslie Adler

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