By Monique Vanek
Despite an economy on the ropes, evident by slower than expected growth, South Africans can breathe a sigh of relief as forecasted increases in value added tax (VAT) and other anticipated tax hikes are not expected. The Medium Term Budget Policy Statement (MTBPS) states that “increases in major tax instruments will be avoided unless the economic environment requires it.
“At this stage, revenue projections assume no changes to tax rates, but provide for annual adjustments to personal income tax brackets, levies and excise duties in line with inflation”. 
Despite hopes that chicken would be made VAT free, no mention was made of this, instead the MTBPS states that as per the recommendations of a panel of experts which were commissioned to investigate mitigating the effect of the VAT rate increase introduced in April on low-income households, government proposes to zero-rate white bread flour, cake flour and sanitary pads from 1 April 2019.

SA’s #MTBPS2018: These are the tax changes government is warning of

By Monique Vanek
The Medium Term Budget Policy Statement (MTBPS) has confirmed that the South African Revenue Service (SARS) under its former Commissioner Tom Moyane delayed paying tax refunds, which is now hurting revenue.
According to its current Commissioner Mark Kingon, whether this was intentional or not is up for debate but he believes it was not intentional.
Kingon in a closed media briefing said SARS is currently evaluating why refund payments slowed.
The MTBPS points a negative picture of what happened to tax revenues under Moyane’s tenure and the aftermath: “A backlog of VAT refunds at SARS, and an underestimation of refunds due, has led to an overly optimistic view of revenue growth. Net VAT collections account for about R20 billion of the in-year revenue shortfall. Two factors account for the revision in net VAT. The VAT refund estimate has been revised upwards by R9 billion, and about R11 billion will be paid out to clear the backlog in the VAT credit book (see table).
“The remaining R7.4 billion of the shortfall in the current year mostly reflects slower corporate income tax collections due to weak growth in wholesale and retail trade, manufacturing and transport. Personal income tax continues to be negatively affected by job losses, moderate wage settlements, lower bonus payments and a slower expansion of publicsector employment”.
The MTBPS also states: “In 2017/18, for the first time since the 2008 global financial crisis, tax revenue growth did not exceed GDP growth. Revenue shortfalls have widened over the past four years, with under-collections rising from R7.4 billion in 2014/15 to R49 billion in 2017/18. These shortfalls would have been larger were it not for increases in personal income, dividend withholding, capital gains and other taxes. Revenue collections in 2017/18 were R0.8 billion lower than estimated in the 2018 Budget. Revenue collection for the first six months of 2018/19 grew by 10.7 per cent compared with the same period last year. However, the technical recession experienced in the first half of the year has begun to feed through to revenue collection, which has slowed. Weaker economic growth, alongside a once-off payment of overdue VAT refunds, will result in an in-year revenue shortfall now estimated at R27.4 billion, relative to the 2018 Budget estimate.”

#MTBPS2018: SARS withheld tax refunds under former Commissioner Moyane, these are the consequences…

#MTBPS2018: A look at SA Finmin Tito Mboweni’s Medium-Term Budget Policy Statement

JOHANNESBURG (Reuters) &#8211; The South African rand was little changed early on Wednesday, as investor caution reigned ahead of a closely watched budget speech by the country’s finance minister.
At 0550 GMT, the rand traded at 14.2700 versus the dollar, a shade weaker from its close of 14.2625 on Tuesday.
Recently appointed Finance Minister Tito Mboweni is expected to announce revised budget deficit targets and growth forecasts, as well as measures to boost the economy and shore up struggling state-owned companies.
The tone of his medium-term budget speech will influence whether Moody’s strips South Africa of its last investment grade credit rating at a review expected after the speech.
“South Africa’s new finance minister will probably announce further fiscal tightening,” John Ashbourne at Capital Economics said in a note.
“This will likely placate ratings agencies, but supports our view that economic growth will remain weak.”
Government bonds were slightly stronger in early deals, with the yield on the benchmark instrument due in 2026 down 4 basis points to 9.125 percent.
Reporting by Alexander Winning; Editing by Sunil Nair

How is the South African rand performing ahead of finmin Mboweni’s mini budget speech?

JOHANNESBURG (Reuters) &#8211; South Africa’s state-run power firm Eskom said on Tuesday it is planning its first major battery storage project as President Cyril Ramaphosa seeks to boost renewable energy usage and reduce the country’s reliance on coal.
Prince Moyo, general manager for power delivery engineering at Eskom, told Reuters that the battery storage project would be rolled out in phases across 90 sites, with a tender for the first phase pencilled in for early next year.
“At this stage the focus is on storing energy for the benefit of all our customers. The aim is to ensure security of power supply,” Moyo said.
Although the 1,440 megawatt hour per day battery project would be able to store less than one percent of Eskom’s total generating capacity, it is a sign the utility is following through on promises to prioritise renewable energy ventures.
The project should also help smooth relations with the World Bank, which had become frustrated over the slow progress made on renewable power plans since it approved a more than $3 billion loan in 2010 to support green energy.
Eskom, which joins global firms like oil major BP and General Electric in investing in battery storage, is working on a new long-term strategy to assess whether its business model is sustainable.
The utility’s new management, appointed soon after Ramaphosa replaced scandal-plagued Jacob Zuma as leader of the ruling African National Congress last December, is fighting to rescue the firm after a period of steep financial decline.
It reported a 2.3 billion rand ($160 million) loss for the latest financial year, after which it said it was considering selling non-core assets and job cuts.
($1 = 14.3534 rand)
Reporting by Alexander Winning; Editing by Joe Brock

First major battery storage project in works for South Africa’s Eskom, what you need to know

JOHANNESBURG (Reuters) &#8211; Telecoms firm MTN said on Tuesday that it was continuing to hold talks with Nigerian officials to find a mutually acceptable solution to a dispute over the alleged transfer of $8.1 billion of funds.
“Shareholders are advised to continue to exercise caution when dealing in the company’s securities until a further announcement is made,” MTN said in a statement on the Johannesburg Stock Exchange, where its shares are listed.
Reporting by Alexander Winning; Editing by Sunil Nair

MTN continues talks with Nigeria over $8.1 billion dispute

By <a href="https://theconversation.com/profiles/yohannes-gedamu-432503">Yohannes Gedamu</a>, <a href="http://theconversation.com/institutions/georgia-gwinnett-college-2416">Georgia Gwinnett College</a>
Ethiopia’s ruling coalition has <a href="https://ethsat.com/2018/10/ethiopia-re-elected-as-chairman-of-ruling-party-abiy-ahmed-garners-vote-of-confidence-to-continue-reforms/">re-elected Prime Minister Abiy Ahmed as its chairman</a>. This means that Ahmed will continue as prime minister until the next party congress. It is with this certainty that he has taken the opportunity to <a href="https://www.apnews.com/93bc411f2c68438db25b31b3d68943ef">reassemble his cabinet</a> for the second time this year.
The latest reshuffle has downsized cabinet departments from 28 to 20. Ten of the new ministerial appointments are women, meaning that Ahmed has <a href="http://www.africanews.com/2018/10/16/female-appointees-form-half-of-ethiopia-s-new-cabinet-reports//">achieved a 50% gender balance</a> in his new team.
This is a significant milestone. But perhaps of more importance is the creation of a ministry of peace. Ahmed has made it clear that peace is central to his reforms agenda. The new peace ministry is therefore an effort to ensure that this agenda remains on course. The question is: how effective can it be in the long run?
<h2>National security</h2>
The <a href="https://twitter.com/fitsumaregaa/status/1052477095518064640">new peace ministry will oversee</a> intelligence and security related agencies, federal affairs, immigration and others. It has been created with the hope that it will improve ethnic relations in the country, and work towards reconciliation among communities <a href="https://theconversation.com/how-ethnic-violence-is-destabilising-ethiopias-reform-gains-103928">ravaged by unprecedented levels of ethnic violence</a> over the last two decades.
This is a broad mandate, which one single ministry might not be able to achieve. Ahmed’s intent, nonetheless, is to show his administration’s desire to pursue a peace agenda with the view to building a stable and more tolerant nation state.
But his ‘peace ministry’ approach might prove problematic.
Firstly, it will need to recognise the root causes of ethnic tension in Ethiopia. So far, Ahmed’s administration has continued to prioritise ethnic politics and the furthering of the rights of groups over the rights of individual citizens. This approach has historically pitted ethnic groups against each other, often resulting in inter-ethnic violence.
Secondly, the power structure in Ethiopia has not changed. The ruling Ethiopian People’s Revolutionary Democratic Front remains the <a href="https://www.aljazeera.com/indepth/opinion/ethiopia-abiy-ahmed-survival-ruling-eprdf-180528082306152.html">most powerful political force</a> in the country. If Ahmed wants to transform Ethiopia, he must also take strides to create democratic change within the coalition. The front must embrace internal, ideological reforms for peace and security to be achieved in Ethiopia at large.
<a href="https://www.tandfonline.com/doi/abs/10.1080/17531055.2011.642522">Revolutionary democracy</a>, or the idea that the enlightened élites should lead the unconscious masses to the revolution, has been the ruling coalition’s main political and economic ideology. In Ethiopia, it has prioritised the party agenda over the sanctity of the country’s constitution, which is also problematic. If the coalition refuses to expand its democratic space, Ethiopia’s history of exclusion and oppression may continue uninterrupted.
<h2>Peace priorities</h2>
The creation of a ministry to work exclusively on peace and security matters is admirable. However, Ahmed’s administration must also attempt to reform the country’s ethnic federal system of government, which is built around regional administrations.
Disparities between these administrative regions pose serious challenges to Ethiopian unity. Some regions like Oromia, Amhara, Tigray and the south are considered developed. While others, like Gambella, Benishangul Gumuz, Somali and far flung regions, are still developing. This economic inequity has precipitated ethnic competition, a race for resources and evictions of people from certain areas.
The ruling coalition must also look beyond the demands of survivalist politics. Ahmed and his peers in leadership therefore need to focus on legacy, rather than short-term gains.
An important legacy would be the peaceful co-existence of ethnic groups, and the re-imagining of Ethiopian nationalism. This can be achieved by encouraging citizens to participate in politics, not by constraining their rights to associate freely. Thus, if Ahmed’s administration maintains a clear focus on the rights of every Ethiopian, it could end up being one of the most consequential political administrations in Ethiopia’s modern political era.
All eyes are now trained on the new peace ministry, <a href="http://www.africanews.com/2018/10/17/muferiat-kamil-ethiopia-s-historic-speaker-now-first-peace-minister//">headed by Muferiyat Kamil</a>. The former speaker of the house has a hefty job on her hands, given the high expectations that have been placed on her ministry. She is privileged, however, to have a self-professed reformist as an ally at the helm of government.
The creation of the ministry <a href="https://worldview.stratfor.com/article/ethiopias-ambitious-leader-reaches-stars?utm_source=Twitter&amp;utm_medium=social&amp;utm_campaign=article">has been lauded</a> but it has also been criticised for concentrating political power in Kamil’s hands. She is one of Ahmed’s most loyal allies in the ruling coalition.
<h2>A time for reform</h2>
Since Ahmed <a href="https://www.aljazeera.com/news/2018/04/abiye-ahmed-sworn-ethiopia-prime-minister-180402082621161.html">became prime minister</a> he has taken great strides to transform Ethiopia’s politics.
The <a href="https://www.economist.com/the-economist-explains/2018/07/17/how-ethiopia-and-eritrea-made-peace">historic peace agreement</a> signed with Eritrea has also had a transformational effect on the greater East Africa region. Regional peace discussions are slowly being replaced with <a href="https://qz.com/africa/1398502/ethiopia-eritrea-somalia-djibouti-peace-deals-bring-hope-to-horn-of-africa/">talks of economic integration</a>.
Unfortunately, Ahmed’s reform agenda has been threatened by <a href="https://www.pri.org/stories/2017-12-15/hundreds-thousands-displaced-ethiopians-are-caught-between-ethnic-violence-and">flurries of ethnic conflict</a> in his own backyard. Hundreds of thousands of poeple have been evicted from their homes <a href="https://theconversation.com/persecution-of-ethnic-amharas-will-harm-ethiopias-reform-agenda-98201">because of their ethnicity</a>. Going forward, this could challenge the stability of the Ethiopian state.
Moreover, questions are beginning to arise about Ahmed’s sincerity and commitment to genuine political change. When <a href="https://ethsat.com/2018/09/ethiopia-at-least-25-killed-in-burayu-in-ethnic-attacks-police-killed-5-in-addis-ababa/">25 people were killed</a> in Addis Ababa a few weeks ago, the city’s youth staged demonstrations to call for better security. The government responded with undue force; <a href="http://www.theeastafrican.co.ke/news/ea/Scores-killed-and-others-arrested-after-Addis-clashes/4552908-4775844-9jd60az/index.html">scores were killed</a> and thousands stayed in unlawful detention for over a month.
<a href="http://www.africanews.com/2018/10/18/ethiopia-to-free-over-1000-youth-detained-over-sept-violence/">After their release</a> some of those who spoke up for them were arrested by the security forces. Among those arrested was <a href="http://www.africanews.com/2018/10/18/ethiopia-activists-knock-police-over-arrest-of-top-rights-lawyer/">Henok Aklilu</a>, a young lawyer and human rights defender. International organisations like Amnesty International <a href="https://www.amnesty.org/en/latest/news/2018/10/ethiopia-release-immediately-and-unconditionally-human-rights-defender-arrested-for-exercising-freedom-of-expression/">demanded and successfully secured his release</a> but others remain in detention. Amnesty released a statement saying that his arrest
<blockquote>… highlights the difficulties human rights defenders continue to face despite the Ethiopian government’s stated commitment to open up space for dissenting voices.</blockquote>
It’s safe to say that Ahmed’s push for political change is now under scrutiny. He must regroup with haste and address the injustices that have been meted out by the state infrastructure for decades.<img loading="lazy" decoding="async" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/105231/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />
<a href="https://theconversation.com/profiles/yohannes-gedamu-432503">Yohannes Gedamu</a>, Lecturer of Political Science, <a href="http://theconversation.com/institutions/georgia-gwinnett-college-2416">Georgia Gwinnett College</a>
This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/how-ethiopias-new-cabinet-fits-into-ahmeds-reform-agenda-105231">original article</a>.

Here’s how Ethiopia’s new cabinet aligns with Prime Minister’s reform plans

NAIROBI (Reuters) &#8211; Kenya’s Capital Markets Authority (CMA) warned Kenyans on Monday against online foreign exchange trading through unlicensed entities, saying they risked losing their investments.
Paul Muthaura, CMA Chief Executive, said he observed several individuals and entities carrying on or purporting to carry on the business of an online foreign exchange broker or a money manager without the relevant licence by the Authority.
“The Capital Markets Authority (CMA) has issued only one license to EGM Securities Limited (formerly Execution Point Limited) to operate as a Non – Dealing Online Foreign Exchange Broker,” Muthaura said in a statement.
CMA said it planned to take appropriate action against any persons illegally conducting online foreign exchange trade. It asked anyone affected by the activity to report to the CMA.
It said all online foreign exchange brokers or money managers not licensed by the Authority should cease trading immediately.
Writing by Clement Uwiringiyimana, Editing by William Maclean

Kenyans warned against online forex trading through unlicensed entities, what you need to know

ABUJA (Reuters) &#8211; Nigerian trade unions may resume a nationwide strike if the government fails to publicly agree to a proposed increase in the minimum wage and to set about putting it into law, three union federations said on Sunday.
Unions suspended a national strike on its fourth day last month, saying the government had agreed to hold talks to discuss raising the minimum wage.
Three union umbrella groups said on Sunday they would resume the strike next month if the government did not meet certain demands.
Unions had called for a rise in the monthly minimum wage to as much as 50,000 naira ($164) from 18,000 naira.
President Muhammadu Buhari has previously promised to review the minimum wage. His handling of the economy and the cost of living since he took office in 2015 has become a campaign issue used by his critics in the build-up to a presidential election scheduled for next February.
The Nigerian Labour Congress (NLC), Trade Union Congress (TUC), and United Labour Congress (ULC) said in a joint statement they had agreed to a compromise of a 30,000 naira minimum wage in talks with the government since halting the strike.
They accused the government of failing to disclose the agreement on a new minimum wage and said procedures should be launched to put the commitment into law.
“If nothing is responsibly done by the federal government to meet our demands, on &#8230; the 6th day of November, we shall embark on a nationwide strike to compel this government to show more sensitivity to the plight of Nigerians,” they said.
“We cannot continue discussing a figure that has already been agreed procedurally within the committee,” the unions said about the possibility of further talks.
NLC General Secretary Peter Ozo-Eson told Reuters in a later telephone interview that if unions resumed the strike, it would be indefinite until their demands were met.
A spokesman for the ministry of labour did not immediately respond to a text message and phone calls requesting comment.
Evidence suggested patchy adherence to last month’s strike, and its impact on one of Africa’s largest economies was difficult to calculate. There were no signs that oil production was affected in the continent’s top crude producer.
Buhari’s vow to review the minimum wage followed a fuel price hike and currency devaluation in the last two years. Those measures were aimed at countering the effects of a global oil price plunge which in 2016 pushed Nigeria into its first recession in 25 years from which it emerged in 2017.
Reporting by Camillus Eboh; Writing by Alexis Akwagyiram; Editing by Adrian Croft

Why Nigerian trade unions are threatening to resume nationwide strike

JOHANNESBURG (Reuters) &#8211; The board of directors of South African state-owned logistics firm Transnet said it had removed Chief Executive Siyabonga Gama, who has been accused of misconduct in a multi-million-dollar deal.
Transnet, which operates nearly three-quarters of the African rail network, the bulk of which is in South Africa, has been investigating allegations of corruption in the procurement of diesel and electric locomotives.
The board said late Sunday that it had lost confidence in Gama and that his last day as CEO would be Monday.
Gama was not immediately available for comment.
“We value and require transparency, accountability and expenditure that is cost-effective &#8230; But we have found Gama’s conduct – particularly during the investigation into the tender for new locomotives, with an inexplicable increase in excess of 9 billion rand ($627 million) in costs &#8211; to be incompatible with that culture,” Transnet’s board said.
Transnet is one of a handful of South African state firms that became embroiled in corruption scandals under former President Jacob Zuma.
However, Zuma has denied any wrongdoing and says he is the victim of a politically motivated witch-hunt, but new President Cyril Ramaphosa has launched an inquiry into allegations that tenders were awarded illegally during his predecessor’s time in office.
($1 = 14.3462 rand)
Reporting by Alexander Winning, Editing by Sherry Jacob-Phillips

What you need to know about the removal of South Africa’s Transnet CEO

By Gary van Staden – Senior Political Analyst, NKC African Economics.
Official results of Mozambique’s local authority elections announced on October 14 provided a boost to the prospects of the ruling Mozambique Liberation Front (Frelimo) ahead of national and presidential elections scheduled for 2019. The scale of the victory suggests Frelimo and President Filipe Nyusi face no serious electoral threat next year.
Ossufo Momade acting leader of the Mozambican National Resistance (Renamo), an opposition party cum rebel movement, was not happy after the comprehensive defeat. As was the habit of his late predecessor Afonso Dhlakama, Mr Momade threatened to suspend peace talks.
However, there is little prospect of that threat materialising as Renamo is currently too weak politically and militarily to make good.
Elections in Mozambique always produce two main headlines – Frelimo Wins and Renamo Complains. Allegations of fraud in the wake of last week’s (October 10) vote follow a well-trodden path of fraud and rigging allegations that may contain elements of truth but never enough to alter the scale of Frelimo’s electoral successes and which tend to be exaggerated.
The most recent local results were no exception, with Frelimo winning 44 local authorities against the eight councils won by Renamo while the Mozambique Democratic Movement (MDM) took one of the 53 local councils. Frelimo won 49 councils in 2013 while Renamo boycotted that poll.
There is some evidence for Renamo making gains in the central and northern regions of the country, but not enough with just a year to go to suggest it poses a credible electoral threat. Renamo won several major cities in Zambezia and Nampula provinces, its traditional stronghold, and came close in several others, but the results seem to confirm its regional rather than national power base.
Faced with the prospect of an electoral disappointment following the release of early results, Mr Momade told AFP that the ruling party had falsified results in several areas and he threatened to abandon the peace talks that have made considerable progress since Dhlakama’s death.
The latest phase of the peace talks between Frelimo and Renamo began in 2016 to end three years of violence between government troops and Renamo rebels that had created instability and impacted investment and logistics in the country.
Mr Nyusi and Mr Momade have made progress on the disarmament and integration of former Renamo rebels into the police and army and the decentralisation of powers to local and regional authorities.
“We do not want war, but we also do not accept any attempt to change the popular will,” Mr Momade told AFP, suggesting the “popular will” favoured Renamo while all other indications suggest otherwise.
The local authority elections cleared up several factors ahead of the national polls scheduled for next year. First, with barely a year to go, Renamo will be hard pressed to mount a serious challenge that dents Frelimo’s support. That will allow some continuity in the country that faces several major economic and financial crises that demand urgent and focused attention.
On the upside for Renamo, the outcome strengthened its position as the major (only, really) opposition after the MDM failed to make any headway.
While we accept that elections in Mozambique have seldom been in the same room as perfect, there has over several years been no credible evidence of large scale state-sponsored rigging or fraud and this election is likely to be no different.
Renamo may make threats and puff out its political chest, but it has little politically or militarily to back a withdrawal from the peace process for anything but a token period and we expect the talks to resume when the dust settles.
Gary van Staden – Senior Political Analyst

OpEd: Will Frelimo’s local poll victory boost party in Mozambique’s 2019 elections ?

By <a href="https://theconversation.com/profiles/alf-gunvald-nilsen-573050">Alf Gunvald Nilsen</a>, <a href="http://theconversation.com/institutions/university-of-agder-3690">University of Agder</a>
The World Bank’s latest annual report on <a href="http://www.worldbank.org/en/publication/poverty-and-shared-prosperity?cid=EXT_WBSocialShare_EXT&amp;ogImage=http%3A%2F%2Fwww.worldbank.org%2Fcontent%2Fdam%2Fphotos%2F780x439%2F2018%2Foct-1%2FEPD2.png">poverty and shared prosperity</a> has an unsurprisingly positive message that only 10% of the world’s population lived in extreme poverty in 2015, which is the most recent year that available data allows for global poverty estimates to be made.
As World Bank President Jim Yong Kim points out in the foreword to the report, this is “the lowest poverty rate in recorded history”.
This is a story that we have become accustomed to hearing from the Bank, and other significant participants in the debate about poverty and development in the global South (Asia, Africa, and Latin America). But does the story actually hold true? For example, the World Bank measures extreme poverty in terms of the number of people who live on less than USD$1.90 a day. But is this in fact a meaningful measurement of poverty?
World Bank poverty estimates have come in for a lot of criticism. For example, Jason Hickel, an anthropologist at the London School of Economics, <a href="https://www.penguin.co.uk/books/111/1113531/the-divide/9781786090034.html">has pointed out</a> that there’s often a large gap between national poverty lines and the international poverty line stipulated by the bank.
For example, more than 55% of South Africa’s population lives below the country’s upper poverty line, of R1,138 (USD$80) a month. But, according to the World Bank, only 18.85% of the South African population lives in poverty. This suggests that the international poverty lined touted by the World Bank systematically underestimates the extent of global poverty.
This point is partially acknowledged in this year’s report. Accordingly, the World Bank proposes new and higher poverty lines &#8211; USD$3.20 and USD$5.50 a day, respectively. According to the report, almost half the world’s population lives below the USD $5.50 a day poverty line. However, we need to go further than this – indeed, the World Bank’s widely touted story of historically low poverty levels must be rejected.
If we are to have a serious debate about world poverty on <a href="http://www.un.org/en/events/povertyday/">End Poverty Day</a>, we have to start by acknowledging that the global problem of poverty is far more extensive than World Bank rhetoric would have us believe. Two big factors need to be confronted. The first is that the majority of the world’s poor live in countries that have experienced strong economic growth. The second is that the growth strategies these countries have practised create and reproduce poverty.
<h2>Unequal distribution</h2>
The World Bank attributes the supposed historical decline in poverty in large part to the rising wealth of several Asian countries. But, this is a problematic argument. In his recent book <a href="https://global.oup.com/academic/product/global-poverty-9780198703525?cc=za&amp;lang=en&amp;">Global Poverty</a>, development economist Andy Sumner shows how a new geography of poverty has emerged in the global South.
Whether we use monetary estimates – Sumner uses a poverty line of $2.50 a day – or estimates of multidimensional poverty; that is, poverty measured according to health indicators, education levels, and economic standards of living – as many as 70% of the world’s poor currently live in what the World Bank refers to as middle-income countries.
As Sumner points out, poverty in middle-income countries cannot be attributed to an absolute lack of resources. These are countries that have experienced strong economic growth since the 1990s. What it boils down to in middle-income countries like <a href="https://edition.cnn.com/2018/06/26/africa/nigeria-overtakes-india-extreme-poverty-intl/index.html">India</a>,<a href="https://theconversation.com/beating-poverty-needs-partnerships-and-collaboration-not-just-money-101145">Nigeria</a>, and <a href="https://www.theglobeandmail.com/news/world/the-illusion-of-brazils-incomeequality/article37536515/">Brazil</a> is the issue of distribution.
The economic growth that has lifted countries from low-income status to middle-income status is profoundly unequally distributed. As a result, large parts of the populations in these countries are excluded from the benefits that accrue from this growth.
This in turn has implications for how we think about growth strategies and poverty reduction in the global South.
<h2>Global growth and development</h2>
Much of the economic growth that has lifted countries from low-income status to middle-income status has resulted from the emergence of global production networks and global value chains since the late 1970s. Poorer countries have been integrated into these networks in large part due to their large reservoirs of cheap labour. It is this process of industrialisation that has turned low-income countries into middle-income countries.
But if global production networks come with so many developmental benefits, why is it that world poverty is concentrated in countries that have experienced economic growth precisely because they are integrated in these networks? To understand this paradox, it is important to remember that global production networks are comprised of different value tiers, and that different countries and different groups capture different amounts of the value that is created in these networks.
This obviously leads to a <a href="https://www.cambridge.org/core/journals/review-of-international-studies/article/poverty-reduction-through-liberalisation-neoliberalism-and-the-myth-of-global-convergence/FAC3F9EDA9C6B87938804D260B795412">reproduction of inequality</a> – countries in the global South tend to be integrated in lower value tiers.
This is evident in the fact that the distribution of national incomes and wealth at a world scale is still characterised by a pronounced North-South hierarchy. But it is more important still to be aware that countries in the global South that have witnessed strong economic growth have also experienced marked escalations in national levels of inequality. In India in 2016, for example, the richest 10% of the population received 55% of all income. This is an increase of <a href="https://www.aljazeera.com/indepth/opinion/india-wealth-inequality-growing-rapidly-180125084201143.html">more than 20% since 1980</a>.
This pattern of development clearly shows how poverty is a matter of distribution that is related to the kind of employment opportunities that are created when southern countries are embedded in global value chains. The factory jobs that are established when transnational corporations set up shop in countries like Mexico or Vietnam are fundamentally precarious. And it is precarious workers who capture the least of the value that is created in global production networks. This is why <a href="https://www.plutobooks.com/9780745335995/southern-insurgency/">precarious workers live in poverty</a> in middle-income countries in the global South.
What’s clear from this is that we have to ask ourselves what a development policy based on redistribution in favour of the working classes in the global South might look like – because that, ultimately, is the key to ending poverty in an unequal world.<img loading="lazy" decoding="async" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/104963/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />
<a href="https://theconversation.com/profiles/alf-gunvald-nilsen-573050">Alf Gunvald Nilsen</a>, Associate Professor of Development Studies, <a href="http://theconversation.com/institutions/university-of-agder-3690">University of Agder</a>
This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-the-world-banks-optimism-about-global-poverty-misses-the-point-104963">original article</a>.

Is the World Bank missing the point about global poverty?

JOHANNESBURG (Reuters) &#8211; South Africa’s President Cyril Ramaphosa on Wednesday appointed a judicial inquiry into the 2 trillion rand ($142 billion) state pension fund, a government gazette said, following corruption allegations.
The PIC is Africa’s biggest pension fund and the biggest investor in South Africa’s economy holding a large volume of bonds issued by government and state-owned firms.
The gazette notice said it will investigate “persistent and continued negative reports about alleged improprieties regarding investments” by the Public Investment Corporation (PIC), which manages assets on behalf of the government employees.
Ramaphosa said the inquiry should issue a final report by latest April next year.
In May, opposition parties called for an investigation into the pension fund’s chief executive Dan Matjila, accusing him of misuse of funds and careless investment decisions.
Matjila has denied the allegations and was also backed by the Treasury, which oversees the PIC.
The PIC’s spokesman could not immediately comment and referred any questions to the Treasury.
In 2017, Matjila was cleared of any wrongdoing by an internal audit committee that looked into the allegations.
But the collapse of VBS Mutual Bank early this year, where the fund has a 25 percent stake, and the resignations of two PIC employees linked to the fraud have raised new questions.
The PIC also has stakes in blue-chip companies across various sectors such as miner Anglo American Platinum, lender Barclays Africa and retailer Shoprite.
($1 = 14.0966 rand)
Reporting by Mfuneko Toyana; Editing by James Macharia

South Africa’s Ramaphosa appoints judicial inquiry into $142 billion state pension fund, here’s why…

By Nnamdi Oranye, Fintech Author and International Remittances Lead at Standard Bank Group
African economies are well positioned to benefit from rapidly accelerating technological change if they can harness the current open landscape for innovation.
East Africa is already a global leader in mobile payments, while mobile money accounts in sub-Saharan Africa are on an upward charge. Apart from being able to leapfrog the limitations and costs of physical infrastructure, the continent stands to benefit from having the youngest, tech-savvy workforce in the world in the next decade.
Africa’s working age population is expected to grow by 450 million people by 2035, according to the World Bank and the continent is projected to have the largest working population of 1.1 billion by 2034, notes the World Economic Forum on Africa. Recent GSMA data shows that mobile money accounts in sub-Saharan Africa are up 18.4% between 2016-17 to 33.8m registered accounts.
However, we cannot wait 12-15 years before adequate job creating initiatives and policies are unlocked. The answer lies in harnessing the power of the digital economy today to create African solutions for African problems. An important part of this will require promoting and partnering with African innovators to unlock sustainable growth.
We are already witnessing the significant potential of digital innovation in the remittance and mobile wallet space. Penetration of smart phones is expected to hit at least the 50% mark in 2020 from only 2% in 2010, according to the World Economic Forum, offering the continent a clean canvas for tech-based innovation. It is an opportunity we must not miss. These are exciting times and are forcing us to think differently to come up with true Pan African innovation and development.
MFS Africa is a good example of how carefully harnessed and supported technological innovation can have ripple effects through the continent. It now operates the largest digital payments network in Africa and connects over 170m mobile wallets through 100+ partners, including Airtel, Ecobank, MTN, Orange and Vodafone across 55 markets. It has about 15% of the African population connected to a platform.
M-Pesa, launched in Kenya in 2007, is an often-touted example of African technology making waves even outside its own borders. After capturing the local market for cash transfers it has spread to three continents and 10 countries
MicroEnsure, meanwhile continues on the path of developing pioneering insurance solutions for low-income people like micro-health, crop and mobile insurance. These are solutions directly aimed at emerging customers and it is little surprise the company continues new customers by cleverly partnering with telcos.
Access.mobile is another major success story, testing and growing its health innovation offerings for seven years in East Africa. The company works with health systems to hone their communications with patients in lower-income but also in growing areas and it hopped the pond in the opposite direction from most smaller startups and landed one of its first American clients. Adventist Health White Memorial Hospital, a Los Angeles facility that works largely with lower-income Hispanics, was looking for ways to use health data to achieve better outcomes within its population.
These are examples of the role models that will inspire our next generation of innovators. We need more and tech-savvy banks need to continue supporting them as they grasp future opportunities.
Just consider that Findex data shows that sub-Saharan Africa is home to all eight economies where 20 percent or more of adults use only a mobile money account: Burkina Faso, Côte d&#8217;Ivoire, Gabon, Kenya, Senegal, Tanzania, Uganda, and Zimbabwe. Opportunities therefore abound to increase account ownership: up to 95 million unbanked adults in the region receive cash payments for agricultural products, and roughly 65 million save using semiformal methods.
Standard Bank, as Africa’s largest bank by assets, hopes to support even more start-up and tech initiatives across the continent to ensure these opportunities are not lost. We are therefore innovating ourselves at a rapid pace to harness the benefits of the digital age to drive financial services inclusion. Mobile payment solutions like Snapscan is now available at over 25,000 merchants and a vast user network across South Africa. We are setting a new standard in digital payments with the launch of Africa’s first prepaid virtual cards ecosystem, among many other digital innovations.
The future will be about solving genuine customer problems rather than putting a band aid on them. One area in urgent need of change, for instance, is remittances, where Africa is still one of the costliest places in the world to remit payments – fees as high as 10% to 20% are still endured. We need to harness technology to genuinely solve this problem.
Sometimes when we talk about banking in cashless society we look too far out – but we don’t have luxury of time. Knowing your customer (KYC) is about understanding what they need today based on their culture and context and then unlocking the already available data to provide the solution.
Technology, for instance, can solve the unbanked problem on the continent. However, this does not mean you can “plug and play” by taking something that works in one country and expecting it to work in another. Success will increasingly be centred on having a Pan African view of the problem, but local implementation.
The future is certainly bright for Africa as exponential innovation continues to drive change across the continent we call home, disrupts industries and replace legacy technology. It is now time to grasp this opportunity with both hands before the innovation wave passes us by.

Why banking in a cashless society will require African solutions for African problems

JOHANNESBURG (Reuters) &#8211; An inquiry reviewing evidence on Tom Moyane, the suspended head of South Africa’s Revenue Service (SARS), issued an interim report on Tuesday urging President Cyril Ramaphosa to fire the tax official.
The agency has been plagued by infighting over the last three years and is subject to ongoing government investigations.
Judge Robert Nugent, who is heading the inquiry into Moyane, says the suspended tax chief should be removed from office for the “reckless mismanagement of SARS” under his tenure.
“We consider it imperative that a new commissioner be appointed without delay to remove the uncertainty at SARS and enable it to be set on a firm course of recovery so as to arrest ongoing loss of revenue,” Nugent said in the report.
In March, Ramaphosa suspended Moyane, saying he had failed as commissioner of the revenue service and had lost the confidence of taxpayers.
Moyane was not available for comment on Tuesday. He has repeatedly defended his record and denied any wrongdoing.
The president’s office said Ramaphosa was weighing up the contents of the interim report and its recommendations.
As part of that process, Ramaphosa had given a copy of the interim report to Moyane, and invited him to make any submissions on its recommendations.
Moyane, who was appointed in 2014, had been criticised by SARS employees and members of the ruling African National Congress after the tax agency missed revenue collection targets and faced allegations of corruption and mismanagement.
Reporting by James Macharia; Editing by Gareth Jones

South Africa’s Ramaphosa urged to fire suspended tax head, what you need to know…

&nbsp;
<div id="attachment_320323" style="width: 540px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-320323" class=" wp-image-320323" src="http://cnbc.africa/wp-content/uploads/2018/10/HeForShe_b.jpg" alt="" width="530" height="353" />UN Women&#8217;s &#8216;HeForShe&#8217; initiative</div>
Johannesburg – 9 October 2018 – Gender equality is a fundamental human right but remains a distant dream for many women worldwide. The United Nations’ HeforShe is a solidarity campaign for the advancement of gender equality. Its goal is to achieve equality by encouraging both genders to partake as agents of change and take action against negative stereotypes and behaviors, faced by people with feminine personalities/genders. Grounded in the idea that gender inequality is an issue that affects all people—socially, economically and politically—it seeks to actively involve men and boys in a movement that was originally conceived as &#8220;a struggle for women by women&#8221;.
The HeForShe movement is gathering momentum globally as a cohort of select leaders from both the public and private sectors join the drive and stand out as visionaries on gender equality. On behalf of Standard Bank Group, Chief Executive Sim Tshabalala, has become one of the global “Thematic Champions” in the HeForShe movement. These leaders have committed to implement game-changing policies and concrete actions towards gender parity.
<img loading="lazy" decoding="async" class="wp-image-320322 size-medium alignleft" src="http://cnbc.africa/wp-content/uploads/2018/10/HeForShe_Sim-copy-2-copy-225x300.jpg" alt="" width="225" height="300" />
“Achieving gender equity is a moral duty, a business imperative, and just plain common sense. Women embody half the world’s talent, skill and energy &#8211; and more than half of its purchasing power. So every sensible business leader must be committed to achieving gender equity in their company and to contributing to gender equity in the societies in which we operate,” says Tshabalala.
In the World Economic Forum’s latest Global Gender Gap report, it is estimated that it will take more the 217 years to achieve workplace equality after gender parity took a step backwards in the past year.
Concrete commitments made by Standard Bank Group in order to bring about tangible change include reaching parity in executive positions and to improve the representation of women in executive positions from its current 32% to 40% by 2023. Another is to lift the representation of women on the Board from 22% to 33% by 2021.
Standard Bank is also committed to increasing the representation of women Chief Executives in its Africa Regions network from 10% to 20% by 2021, while Standard Bank South Africa will improve the representation of women in executive positions from the current 35% to 40% by 2021.
While progress has been made in certain countries in Africa to close gender gaps, others remain behind the curve. Namibia and South Africa both score in the Top 20 in the WEF global report on gender equality &#8211; after closing 78% to 76% of their gender gaps &#8211; but Sub-Saharan Africa still displays a wider range of gender gap outcomes than practically any other region.
Launched by Emma Watson and the U.N. Secretary-General Ban Ki-moon in 2014, HeForShe represented the first global effort to actively include men and boys as change agents for gender equality at a time when most gender programs were only targeting women.
It was the beginning of a trend that only seems more relevant as stories emerge of sexual abuse and harassment suffered by women in the workplace.
The Sustainable Development Goals call for gender equality and the empowerment of all women and girls, but campaigns such as last weekend’s International Day for the Elimination of Violence against Women highlight that there is much work to be done. The U.N. recently reported that nearly 20 percent of women surveyed said they had experienced physical and/or sexual violence by an intimate partner in the previous year.
Originally conceived as a one-year media campaign to raise awareness about the role of men and boys in gender equality, the HeForShe website garnered more than 100,000 male supporters in its first three days. These males affirmed their commitment to the cause by declaring themselves “HeForShe” and saying that gender equality is not just a women’s issue. Early adopters included a clutch of celebrities and politicians, including former U.S. President Barack Obama, Canadian Prime Minister Justin Trudeau, and actor Matt Damon.
Since then, 1.6 million men have signed up online, including at least one man in every country of the world, and its “Impact Champions” include the presidents of Rwanda, Ghana, Malawi, and Indonesia, among several other heads of state. The issue has also been the subject of 2 billion conversations on social media.
But HeForShe is not without its critics. Many in the gender equality community say they would like to see the movement make more concrete demands of its male champions, and have called for civil society to play a greater role in developing and monitoring the movement.
“Now is a good moment for reflection and discussion about HeForShe, which has achieved high visibility, clear successes, and also drawbacks,” said Gary Barker, co-founder of Promundo, an NGO working to engage men and boys for gender equality, which has advised the HeForShe campaign since its launch three years ago.
“Having that amount of reach and star power on board means there’s huge potential, but we need to harness it before the movement loses momentum … [and] we need to push UN Women to go further and ask more of men,” he added.
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How UN Women’s global ‘HeforShe’ initiative seeks to drive gender equality

CAPE TOWN (Reuters) &#8211; South Africa expects Moody’s to release its ratings review after next week’s medium term budget policy statement (MTBPS), Dondo Mogajane, the director general of the National Treasury said on Tuesday.
Mogajane said he met Moody’s representatives at an international financial conference in Bali last week and told Reuters that the ratings agency “will obviously get back to us after the MTBPS.”
Moody’s, the last of the top three agencies to still rate the country investment grade, did not publish the review on Friday as was widely expected.
Reporting by Wendell Roelf; Writing by Mfuneko Toyana; Editing by James Macharia

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Special Report

SA’s #MTBPS2018: These are the tax changes government is warning of

#MTBPS2018: SARS withheld tax refunds under former Commissioner Moyane, these are the consequences…

#MTBPS2018: A look at SA Finmin Tito Mboweni’s Medium-Term Budget Policy Statement

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Kenyans warned against online forex trading through unlicensed entities, what you need to know

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Is the World Bank missing the point about global poverty?

South Africa’s Ramaphosa appoints judicial inquiry into $142 billion state pension fund, here’s why…

Why banking in a cashless society will require African solutions for African problems

South Africa’s Ramaphosa urged to fire suspended tax head, what you need to know…

How UN Women’s global ‘HeforShe’ initiative seeks to drive gender equality

South Africa’s ratings review to be released by Moody’s after Medium term budget

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