Latest news with #AshleyLechman
The Star
3 days ago
- Business
- The Star
SA Reserve Bank cuts repo rate offering relief to consumers
Ashley Lechman | Published 4 hours ago South Africans repaying vehicle, home loans and other debts received some joy on Thursday as the South African Reserve Bank (Sarb) lowered the repurchase rate (repo rate) for the country. Sarb Governor Lesetja Kganyago announced a cut to the repurchase rate (repo rate) by 25 basis points (BPS). This came after the central bank's Monetary Policy Committee (MPC) met this week and voted to decrease the repo rate from 7.50% to 7.25%. This means that the repo rate will decrease from 7.50% to 7.25% and the prime lending rate will decrease from 11.00% to 10.75%. "In the previous MPC statement, we warned of downside risks to our growth forecast. We have now trimmed our GDP projections and currently expect growth of 1.2% this year. The outlook for structural reforms remains positive, but there are also headwinds," Kganyago said. Dr Andrew Golding, the CEO of the Pam Golding Property, said the cut is welcome relief for consumers. Golding said, "The MPC seized the opportunity to give South Africa's economy a much-needed boost in sentiment. Furthermore, with inflation surprising on the downside in recent months and, with a petrol price cut likely next month, although partially offset by the hike in the fuel levy, price pressures are likely to remain subdued. The consumer inflation rate is currently well anchored below the lower limit of the 3%-6% inflation target." Meanwhile, Samuel Seeff, the chairman of the Seeff Property, said the rate cut was welcomed, but more is needed. Seeff said, "This is the fourth rate cut by Sarb since the latter half of last year. The Bank missed a crucial opportunity to provide a more meaningful cut of at least 50bps as a vital boost for the economy, consumers and the property market. The conditions for a robust rate cut are ideal given the remarkably low inflation which, despite the recent benign increase to 2.8% is still comfortably below the SARB's 3-6% target range. Additionally, despite global volatility, the strengthened Rand poses no risk of igniting an inflationary spiral, given the subdued demand-side pressures." "Even with the latest rate cut, the interest rate is still above pre-Covid levels. This continues to erode any benefits from previous rate adjustments and remains an impediment to real economic growth so vitally needed. The high interest rate has done considerable damage to the economy. Consumers are struggling, and while this rate cut will bring much needed relief," Seeff said. As a result of the 25bps rate cut, mortgage repayments will reduce by (Based on a 20-year repayment period at the prime rate): R750 000 bond – from R7,741 to R7,614 – thus saving R127 R900 000 bond – from R9,290 to R9,137 – thus saving R153 R1 000 000 bond – from R10,322 to R10,152 – thus saving R170 R1 500 000 bond – from R15,483 to R15,228 – thus saving R255 R2 000 000 bond – from R20,644 to R20,305 – thus saving R339 R2 500 000 bond – from R25,805 to R25,381 – thus saving R424 R3 000 000 bond – from R30,966 to R30,457 – thus saving R509 R5 000 000 bond – from R51,609 to R50,761 – thus saving R848 'With inflation at historic lows and household budgets still under pressure from slow economic growth, any easing in the interest rate environment is a meaningful win for consumers. Lower borrowing costs translate directly into more affordable monthly repayments, which can help unlock greater activity in the property market,' regional director and CEO of RE/MAX of Southern Africa , Adrian Goslett said. 'For buyers, it may be a good time to explore opportunities while rates are still trending lower. For sellers, improved affordability could mean a larger pool of potential buyers, which could mean a quicker sale and more competitive offers,' Goslett added.
The Star
3 days ago
- Business
- The Star
SA Reserve Bank cuts interest rates
Ashley Lechman | Published 5 hours ago The South African Reserve Bank (Sarb) Governor Lesetja Kganyago on Thursday announced a cut to the repurchase rate (repo rate) by 25 basis points (BPS). This comes after the central bank's Monetary Policy Committee (MPC) met this week and voted to decrease the repo rate from 7.50% to 7.25%. This means that the p rime lending rate in the country will decrease from 11.00% to 10.75%. The decision come s off the back of Statistics South Africa announcement last week that CPI inflation edged up slightly from 2.7 % in March to 2.8% in April. Kganyago said, "Five members preferred this action, while one member preferred a cut of 50 basis points." The governor said that global economic conditions have been volatile. "A combination of higher trade barriers and elevated uncertainty is likely to weaken the world economy. We have therefore lowered our global growth projections, from 3.1% to to 2.5% for 2025," he said. "In the previous MPC statement, we warned of downside risks to our growth forecast. We have now trimmed our GDP projections and currently expect growth of 1.2% this year. The outlook for structural reforms remains positive, but there are also headwinds," Kganyago said. "We have revised down our inflation forecasts. This reflects the lower starting point, as well as a stronger exchange rate assumption and lower world oil prices. Our previous forecast also included VAT increases, which have since been cancelled," the governor said on Thursday. "The threat of rand depreciation that we warned of at the previous MPC meeting manifested last month, with the currency briefly touching a multi-year low against the US dollar. However, the exchange rate has since recovered, and conditions seem more settled now than they did in March," Kganyago said. "We considered a scenario with a 3% inflation objective, which corresponds to the low end of our target range. This showed a lower path for interest rates, with the policy rate falling below 6%, instead of staying around 7%, as in our baseline forecast," he said. Ahead of today's announcement, Debt experts and economists had widely predicted a cut in the rate. Casey Sprake, an economist at Anchor Capital, said South Africa's headline consumer inflation edged slightly higher in April, rising to 2.8% year-on-year from 2.7% in March. The latest inflation data strengthened the case for monetary easing. 'With core inflation easing, wage growth muted, and consumer demand soft, real interest rates remain in restrictive territory. This means that current monetary policy is still exerting a significant dampening effect on the economy. As such, we expected the South African Reserve Bank (SARB) to cut the repo rate by 25 basis likelihood of a third rate cut later in 2025 remains evenly balanced at this stage,' Sprake said.
The Star
21-05-2025
- Business
- The Star
Cosatu critiques Finance Minister's Budget as insufficient for economic growth
Ashley Lechman | Published 7 hours ago Trade union, The Congress of South African Trade Unions (Cosatu) said on Wednesday that it does not think Finance Minister Enoch Godongwana's third Budget attempt was enough to stimulate growth for the country's economy. "We welcome government's decision to withdraw the proposed VAT hike as it would have been an unnecessary burden to workers struggling to cope with the rising costs of living. I t is a positive moment in our democratic evolution, when government led by the African National Congress, shows the political maturity and humility by responding positively to the concerns of Cosatu and society," Cosatu stated. The union added that it cannot support tax hikes upon the working class and the poor who are already highly indebted. "Whilst appreciating the scrapping of the VAT hike, we remain deeply distressed that for two years in a row, Personal Income Tax brackets have not been adjusted for inflation. This will see workers at the margins of the next tax bracket in danger of paying higher taxes when receiving their annual increases. This trend must be reversed. Whilst regretting the decision not to extend VAT exemptions for additional food items or provide further fuel price relief, we urge government to pursue additional measures to cushion indigent households from poverty, in particular expanding free electricity and water," Cosatu said. "The Federation commends the R4 billion boost to the South African Revenue Service's tax and customs compliance efforts. SARS has shown that it has the capacity to deliver. The R7.5 billion allocated to it over the Medium-Term Expenditure Framework (MTEF) is an important step towards enabling it to ramp up collection of the R800 billion in owed taxes and improving tax compliance by at least R60 billion annually. It is critical that SARS be given every possible support to achieve these tax compliance targets. The tax regime must be reviewed to provide relief for low-income earners and ensure wealthy individuals and companies pay their fair share," Cosatu added. Cosatu said that further discussions must take place on how the Reserve Bank's currency reserves can support the fiscus. "We welcome government's acknowledgment that bleeding the public services working-class communities and businesses depend upon is reckless and harmful to the economy. The 5.4% increase in expenditure over the MTEF and allocations to frontline services, in particular including the rolling out of Early Childhood Education to 700 000 learners and tackling the school infrastructure backlog, refurbishing 660 health facilities, investing in Home Affairs' capacity, Defence and Correctional Services will be a step forward to repair damage inflicted by previous austerity budget cuts. However more must be done," Cosatu said. The minister committed to hiring more teachers (1000 plus allocations to save 5500 existing posts), Home Affairs, police (4000), prosecutors (250) and border management officers, amongst other critical frontline personnel will boost public services. "But we remain deeply dismayed by the reduced low allocations for doctors (800) and nurses. The implementation of the public service wage agreement will help public servants heal financial wounds. We are concerned about the impact the loss of valuable skills and experience by public servants who opt for early retirement, may have upon the state's ability to provide public services. Government must move with speed to identify any ghost posts in the state, as well as boost effort to tackle corruption and wasteful expenditure," Cosatu said. The union said that it applauds the outstanding work done by Eskom and municipal workers to overcome load shedding. "We are pleased that the debt relief package has provided Eskom breathing space to ramp up maintenance. It is critical that Eskom be given more support to tackle corruption, wasteful expenditure, cable theft and bring on board new generation capacity. The allocation of R219bn for energy infrastructure will be an invaluable boost as will the electrification of an additional 300 000 homes. These measures must translate into affordable electricity if the economy, in particular mining and industry are to survive and grow," Cosatu said in a statement. "The turnaround of South African Airways is testimony that state-owned enterprises can be turned around to once again become enablers of economic growth. Whilst government is naturally reluctant to provide further debt relief to SOEs, Transnet should be assisted to settle its debt to free up capital for the modernisation of its port and railway network as these will unlock the mining, manufacturing and agricultural sectors, creating thousands of badly needed jobs and boosting state revenue. We are concerned by the reduction to R12.7 billion for Metro Rail's signal upgrades but hope its total R66 billion allocation will secure its efforts to return to full capacity, thus enabling 10 million workers and commuters travel quickly and save money on transport," the union added. "Treasury needs to honour its court signed business rescue agreement to provide the Post Office with the long delayed R1.8 billion injection. This should not be delayed over the MTEF. We urge government to table the Road Accident Fund (RAF) and Benefits Scheme Bills at Parliament as part of a package of interventions to set the RAF on a sustainable path and ensure its funds are directed to the poor not the wealthy, let alone insatiable ambulance chasing lawyers," Cosatu added. Cosatu said, "We welcome the various progressive provisions in the Budget, which Cosatu campaigned for, including allocating 61% for social wage expenditure. We are, however, disappointed by the failure to show any relief for the 8 million SRD Grants and government's continued shyness to drastically ramp up sufficient resources to support SMMEs, industrialisation and export sectors, as well as public employment programmes." " The Budget does not foresee growth rising beyond 2% over the next decade whilst we desperately need at least 3% growth if we are to turn the corner on unemployment. We dare not normalise a 43.1% unemployment rate. This is a ticking time bomb that will one day explode and the price of picking up the pieces will be far greater than we can afford," Cosatu added. The union said it is calling upon Parliament and Government in the run up to the MTBPS and the 2026 Budget, to initiate a national dialogue on what are our expenditure priorities and what we can live without, and what are the acceptable and unacceptable revenue streams to fund these. "We cannot afford to continue to stumble along a meek path of business as usual and expect better results. A bold and decisive Marshall Plan is needed if we are to capacitate the state, stimulate growth and slash unemployment. We do not have endless time to make the bold changes our many socio-economic crises demand. COSATU will be seeking further engagements with government on these burning matters," the union further stated.
IOL News
15-05-2025
- Business
- IOL News
World Union of Wholesale Markets Conference highlights Africa's role in global food security
Industry leaders and government officials gathered in Johannesburg for the World Union of Wholesale Markets Conference, focusing on Africa's pivotal role in global food security, climate change, and market modernisation. Image: Ashley Lechman / Independent Newspapers. Industry leaders and government officials descended at the Sandton Convention Centre in Johannesburg on Thursday as the World Union of Wholesale Markets (WUWM) Conference kicked off. The event highlighted Africa's growing significance in the global fresh produce industry while addressing critical issues such as food security, climate change, and the modernisation of markets. The conference, themed 'The African Edition: Shaping the Future of Fresh Produce through Sustainability, Innovation and Inclusivity,' was hosted by Joburg Market, the largest fresh produce market on the African continent. Joburg Market plays a central role in South Africa's agricultural economy. In the 2023/24 financial year, it reported sales of R11.3 billion and processed 1.4 million tons of produce. The market holds a 46% share of the national market, surpassing competitors in Tshwane, Durban, and Cape Town. It handles 600 000 transactions monthly, sources produce from over 8 000 producers, and serves 14000 daily buyers, with a registered buyer database of 100 000. Day one of the conference began with MMC for Economic Development for the City of Johannesburg, Nomoya Mnisi, who said it was fitting that the WUWM decided to host its first conference on the African continent during Africa month. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Mbulelo Ntshastha from the Soweto Farmers Market was one of the many exhibitors at the WUWM Conference held at the Sandton Convention Centre that took place from 15 May and ends on 16 May 2025. Image: Ashley Lechman Mnisi said, "Johannesburg is the pulse of Africa and the beating heart of the continent. The world is watching watching as climate change effects are felt around the globe, which highlights the importance of this conference. Climate change has a ripple effect on food security and it is vital that we turn markets onto engines of food security." WUWM chairperson, Stephane Layani conveyed his gratitude to his South African colleagues and leaders for being gracious hosts of the conference. Layani said, "This gives us a great opportunity for a deepening collaboration with Africa and further momentum for international collaboration. Advanced thinking is now needed for food systems as it is the back bone of global food security. Climate change is having an impact on the food chain. It is no longer a distant problem anymore, it is here and the effects can be seen far and wide." Layani added that the entire food value chain is feeling the ripple effect. "In terms of innovation, we will lead the way as fresh markets have been around for centuries. We need to maintain trade between major nations, without tariffs," Layani declared during his address at the conference. Layani said that inclusivity is vital in the sector as well. "There needs to be support for local farmers, they can be engines of employment for young people and women. With meaningful discussions, we can tackle the challenges that lay ahead. Sustainability, innovation, food security and fairness are the foundations that we must build on. By shaping the future of the fresh food markets, we are also securing food security. Executive Mayor of the City of Johannesburg, Dada Morero, was also present at the conference and welcomed dignitaries to the vibrant city in South Africa. Morero said, "It is an honour to welcome the conference to Johannesburg. The themes of the conference directly aligns with our country's National Development Plan. We view food systems central to shaping the livelihoods of our people. Johannesburg is positioning itself for solutions as we cannot ignore the crisis mounting in the agriculture sector. We will step up to the challenge of redesigning our market infrastructure so energy may be conserved and waste minimised." #Welcome2Joburg. The World Union of Wholesale Markets is officially in session. We are honoured to be joined by the Minister of Trade, Industry and Competition, @TauParks, Executive Mayor Councillor @DadaMorero, and Economic Development Councillor @NomoyaMnisi1. Together, we… — City of Joburg (@CityofJoburgZA) May 15, 2025 "The rise of digital in agriculture is also something that we need to keep up with. It reshapes how food moves and is priced. It also needs to be inclusive, something that is a call to action for cities and states so markets can be reimagined,"Morero further added. South African Minister of Trade, Industry and Competition, Parks Tau, also echoed feelings of honour welcoming the global gathering to African soil. Tau said at the conference, "The agriculture sector faces many challenges globally. Food security is at the forefront for many nations. Here in South Africa, households struggle to access nutritious food. Liberating trade agreements, building public and private partnerships, we aim to position South Africa as a major player in stabilising global food security." We are honored to host the World Union of Wholesale Markets in the continent's economic heart at a critical moment for the global food system. — Executive Mayor of the City Of Joburg (@DadaMorero) May 15, 2025 BUSINESS REPORT Visit:
