Always on the lookout for permanent work, a job advert on Facebook for general workers at South African energy company Sasol seemed timely. But oddly, the post on the aptly named “Jobs Opportunities” page required those interested in applying to comment on it.

Kalunga posted a comment, and waited hopefully. That was the last he would hear of it, even though the page remained active. 

“There was no response, they have not come back to me. I can just see other people commenting also,” he told us.

What he didn’t know was that the job advert was part of an elaborate online scam targeting South Africa’s unemployed, who according to Stats SA’s most recent data numbered nearly 6.7 million in December 2019. 

That number could rise as the economy flies into Covid-19-induced turbulence, setting up even more jobseekers for pain at the hands of fraudsters. 

False job adverts common but easy to spot

Facebook has changed how we socialise online, but is unfortunately also a home for bad information, which ranges from bogus health cures and everyday hoaxes to rumoured deaths. And then there are the job scams, which from our experience are some of the most resilient, targeting both the most vulnerable and the more guarded.

The platform is littered with pages advertising vacancies that do not exist. One repeat offender has consistently advertised nonexistent jobs, including at the South African Social Security Agency, clothing retailer Mr Price and private hospital network Netcare

Often, these false adverts are easy to spot. They tend to be badly written and the links don’t take you to an official website. But many times, it is not as straightforward to pick them out. 

The “Jobs Opportunities” page that raised Kalunga’s hopes previously masqueraded as “Employment Opportunities” before a rebrand. Created in November 2018, it has 50,000 followers. Each job advert it posts attracts hundreds of comments from people looking for work. For example, the advert for general workers at Sasol had more than 1,000 comments.

But the posts don’t directly ask for an application fee – a sure red flag we’ve seen many timeselsewhere. So what then is the end game? 

‘We’ll help if you share this post in 10 groups’

To understand this, a simple overview of the “application” process helps.

The Sasol advert, for example, asks Facebook users to “pliz comment” on the post, stating which of South Africa’s nine provinces they live in. Once you’ve done this, you get a response asking you to share the post in 10 groups. The post also includes a link to a web page where you can apply online. 

People are told sharing the post gives them a good chance of getting the job.

This is the basic modus operandi of several other Facebook pages, including the “Mzansi Careers” page, and others, with hundreds of thousands of followers. 

How does it all work?

Why are jobseekers told to share the post before they can apply for a job? 

The short and obvious answer is so that the scammers can line their pockets. For this to happen a trinity of sorts is essential. First, the Facebook posts lure the victims. Link aggregators then act as a bridge and, finally, Google AdSense ties it up by bringing in the money.

But how do they do it? Africa Check and the Atlantic Council’s Digital Forensic Research Labinvestigated. 

Facebook pages, and less often groups, are used to entice people to engage with the scammer’s network. The network generally focuses on education funding and employment – reliable magnets for people looking for opportunities 

The Facebook posts do not directly link to a job portal or employment website. Rather, when you click the link on a “Jobs Opportunities” post you are taken to a //manylink.co/@careers24" Manylink.com page with more links. This is a link aggregator, and there are lots of them.

A screenshot of the link aggregator used by the scam network.

Link aggregators have legitimate uses and allow users to share many links (or uniform resource locators – URLs – which are the unique addresses of web pages) at once. For some detail on how Manylink works, click here.

They allow you to customise what you want your readers to see. Clicking the customised link in the Facebook post takes you to a landing page with even more links, each seemingly offering different authentic-looking job or training opportunities. 

The Jobs Opportunities landing page is branded as “@careers24”, which resembles Careers24.com, a legitimate career and jobseeker portal in the Media24 group.

When you click any of these new links, you are taken to a fairly basic web page at www.jobscamp.co.za.

At least 760,000 South Africans fooled in 2020

Contacted about the page, Manylink founder Cruize Delaney told Africa Check he had seen an increase in traffic from South Africa since the beginning of 2020. 

“I wondered why this was. I went deeper into my analytics and saw some job sites and pages similar to how you describe that did look unusual,” he said. “That URL you’ve shown me is where a solid amount of South Africa traffic comes from.”

Delaney said “around 760,000” South Africans had visited Manylink so far in 2020. 

Manylink is free to use. Links are currently not reviewed but Delaney said a new version would include tools to help remove users who violated the terms of service. 

Traffic = $$$

Fake job adverts on the Jobs Camp website.

The text for the many job listings on www.jobscamp.co.za is copied from old genuine job adverts or bursary application calls. The closing dates are either deleted or altered to make them seem current. In some cases, the adverts do not explain how, or where, applications must be submitted. In a nutshell, it is a waste of your time.

The website does not list any contact information or any meaningful way to identify the owners. Even username enumeration, which identifies website authors, only revealed that a user labelled “admin” is the main account for the website.

But records revealed that the website was registered by a man from Thohoyandou in Limpopo on 13 August 2019. His name is known to us.

We contacted the registrant to confirm if he was posting fake job adverts on the website and whether he was earning any money doing so. Although the questions were read and acknowledged, he did not respond despite saying he would. (Note: We will update this report should he do so.)

How much money do they make?

The resulting traffic to the website is monetised using Google AdSense, which allows publishers such as website owners to earn money from their online content. 

AdSense estimates that you can earn as much as US$4,500 from 50,000 page views a month. A page view is logged every time a web page is loaded and viewed by a human visitor.

But it also has a strong caution: there’s no guarantee you’ll earn this amount. Actual revenue depends on factors such as advertiser demand, user location, user device, seasonality, ad size and currency exchange rates.

Depending on the advertising model used by the website, Google will either pay for every 1,000 people who see the advert or for each click. In 2017 South African news website Groundup reported earning $0.61 for each 1,000 views. Substantially more is earned when visitors click on ads, with some users reporting about $0.55 per click.

But it is not possible to determine if, or how much, the owner of www.jobscamp.co.za makes from Google adverts. 

‘I feel like they’re playing with us and that’s not right’

CrowdTangle, a social media monitoring platform, revealed that the @careers24 Manylink page was posted more than 500 times on Facebook, to a total of 28.2 million followers.

Njabulo Khumalo from Johannesburg could have been one of them. 

He had been unemployed for two years when he came across the “Employment Opportunities” page during a job search. “I joined a few groups hoping one day somebody will call me but I guess not. I haven’t got anything so far,” he told Africa Check.

And he won’t. He is just one of hundreds of thousands of people lured into an extensive network designed to make money off advert revenue – and off their hopes.

“Some people really depend on these posts. Then you get these people posting jobs on Facebook and at the end of the day nothing happens. I mean that’s really wasting people’s time. I feel like they’re playing with us and that’s not right.” 

 

Cayley Clifford is a researcher at Africa Check. Jean le Roux is a research associate at the Atlantic Council’s Digital Forensic Research Lab.


 

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South African food producer Tiger Brands said on Monday it is looking at “significant” job cuts and won’t pay an interim dividend as its business is hit by supply disruptions and margin pressures due to the impact of the coronavirus.

The owner of Jungle Oats and Tastic rice said first-half headline earnings fell 35% and it expects coronavirus-related costs of about 500 million rand ($28 million) to hit profit in the second half due to rand weakness, global supply chain disruptions and additional costs incurred during a lockdown in South Africa to curb the spread of the virus.

As a result the company has started looking at cost-cutting measures, including possibly “significant” job cuts, Chief executive Noel Doyle told reporters in a media call.

“Not just in headcount but right across our whole offering and of course we have to look at a couple of the categories where we have been incurring significant losses,” he said.

Tiger Brands employs more than 11,200 people in South Africa, excluding seasonal staff, a company spokesperson said.

Tiger Brands said it had decided not to declare an interim dividend in order to preserve cash, adding that it would re-consider an annual dividend at the end of the year depending on the group’s trading performance.

Headline earnings per share from continuing operations fell to 501 cents in the six months ended March 31, the company said, from 773 cents in the same period last year. Pretax profit from continuing operations fell 65% to 673 million rand.

“The group’s overall performance reflects the difficult trading environment and the challenges faced, particularly within grains, groceries, Value Added Meat Products (VAMP) and exports,” Tiger Brands said in a statement.

Group revenue from continuing operations increased by 2% to 15.7 billion rand. However, group operating income dropped by 29%, with operating profit margins declining to 7%, impacted by lower volumes, raw material and conversion costs rising ahead of inflation and increased marketing investment, it said.

“These costs, together with the effect of government regulations on pricing during the national disaster period, may have an impact in excess of 500 million rand on profitability (in the second half),” the company said.

 

- Reuters

 

The HMS ecosystem is also integrated with Huawei’s EMUI10 operating system which runs on Android 10. It’s described as Huawei’s best interface to date, complete with an intuitive and easy-to-use layout.

What sets the Huawei P40 lite apart from other Android devices is the inclusion of the Huawei Mobile Service (HMS) ecosystem, which replaced the Google Mobile Service (GMS).

While many smartphone users may feel hesitant to invest in a phone that doesn’t support GMS, the truth of the matter is that the P40 series is engineered to deliver a superb and unrivalled entertainment experience. And, Google services will still be accessible via the web browser.

Huawei also made improvements to the AppGallery; it will be easier than ever to set up the P40 lite and download the apps that you love. The App Gallery has exclusive content, region-specific activities and special offers.

Huawei P40 Lite
Huawei P40 lite

The biggest difference is that you will be logging in with your Huawei ID credentials; not your Google account. You will also have the option of migrating the data from your previous Android device, which just makes it so much easier to set up.

WHICH APPS ARE AVAILABLE?

The App Gallery has everything a South African could possibly need: banking apps (Absa, Standard Bank, Nedbank Money) to fast food joints (Steers, Nando’s, McDonald’s, Fishaways, etc.), Telegram, Snapchat, TikTok, and more.

There are several different navigation apps to choose from, as well as the Gautrain app. Shopping will be a breeze with Takealot, Zando, Clicks, Zapper and Woolworths. Stream your favourite shows and films with DSTv Now, Viu, and Showmax, or listen to Radio FM, 947 or Jacaranda FM.

Furthermore, you will be provided with recommendations on how to install an app from the official developer if that app isn’t listed in the gallery. The gallery will also recommend alternative apps for you to try.

WORKING WITH LOCAL DEVELOPERS

Speaking at the Global Analyst Summit earlier this week, Huawei’s head of consumer cloud service, Eric Tan, explained that Huawei wants to “join with partners and developers to provide the apps that customers demand”.

Back in November 2019, when Huawei hosted its first Developer Day (HDD2019ZA), the team expressed their hopes to welcome local developers into the HMS ecosystem to create local, immersive apps.

HUAWEI P40 LITE HIGHLIGHTS

The P40 lite, which is best described as a “flagship lite smartphone”, combines elegant design with powerful performance to keep you connected and entertained for longer and “take you beyond the beauty”.

Let’s start with the most important and interesting aspect of any smartphone, in my opinion: the camera. The Huawei P40 lite will take your mobile photography to the next level.

CAMERA

The P40 lite sports a stylish 48MP quad-camera system that will enable you to capture high-resolution, ultra-wide, macro and portrait photos with the snap of a button, for the ultimate photography and videography experience.

The camera system also includes an 8MP Ultra Wide Angle Lens, a 2MP Macro Lens and a 2MP Bokeh Lens. In addition, it comes equipped with Super Night Mode 2.0 for taking the best photos even in low-light conditions.

huawei p40 lite south africa

DISPLAY AND DESIGN

The Huawei P40 lite packs a punch in its four-sided curved body. Apart from the camera system, the device also features a 6.4-inch FHD+ Punch FullView Display; along with a side-mounted fingerprint power button for easy access with a single touch.

The front camera is located in the upper left corner. Huawei has also done away with the notch; the result is a smooth display that is both beautiful and practical. The phone is perfectly balanced with a big screen-to-body ratio of 90.6%,

PERFORMANCE AND BATTERY

The Huawei P40 lite is equipped with the Kirin 810 chipset to bring your graphics and games to life. The high-end 7nm chipset is also integrated with a Mali G52 customised GPU that will take your gaming to the next level, literally!

The P40 lite’s powerful 4 200 mAh battery coupled with the 40W Huawei SuperCharge support feature will keep you connected for longer. Game, stream and browse to your heart’s content.

 

News The South African

Economic inequality in post-apartheid South Africa has deepened. This is not what was expected.

Firstly, the African National Congress (ANC) won an overwhelming victory in the 1994 elections and promised to significantly reduce inequality in the world’s most unequal country. Secondly, the country’s constitution, adopted in May 1996, foregrounds the promotion of social and economic rights.

This paradoxical outcome has led to a ferocious political-economic debate on the nature of South Africa’s transition to democracy.

On the one hand, there are those who argue that in the 1994 settlement the leaders of the liberation movement sold out their socialist commitments to the white minority, in particular, international and local capital. This conserved the pillars of the apartheid economy, the minerals-energy complex.

On the other hand, there are those who argue that the ANC had no alternative to the Washington consensus approach to the economy in the 1990s. They say it was always a party of a mixed economy, the right to trade freely and the growth of a black business class.

Among the exponents of this view are Thabo Mbeki, the key figure in shaping ANC economic policy as deputy president from 1994 to 1999, and Trevor Manuel, finance minister at the time.

Simply put, the Mbeki camp maintains that a fundamental continuity exists in the economic and social policies developed after 1994. Critics say there has been a policy reversal in post-apartheid South Africa.

Former South African President Thabo Mbeki. AMISOM Photo / Ilyas Ahmed

A new book, Shadow of Liberation, by Vishnu Padayachee and Robert Van Niekerk, respectively Distinguished Professor of Development Economics and Professor of Public Governance at the University of the Witwatersrand, challenges both approaches. It revisits how economic and social policies were made from the late 1980s to the mid-1990s. The authors draw on 35 in-depth interviews with participants in the policy process. This pool of original data is complemented by a rich archive of primary and secondary sources. Together, these data sets reveal a fascinating story about who shaped these policies and how.

The book is the first attempt to comprehensively document and interpret the origins and evolution of the ANC’s economic and social polices.

Evolution of ANC economic policy

The authors argue that the ANC lacked economic expertise – and spurned what little it had. In particular, it rejected the evidence-based analysis and recommendations of the MacroEconomic Research Group, which it had commissioned. They argue that it was less a case of the ANC “selling out” and more one of being outmanoeuvred. Policy makers were, Padayachee and Van Niekerk conclude (p. 135),

Intellectually seduced in comfortable surroundings and eventually outmanoeuvred by the well-resourced apartheid state and by international and local pro-market friendly actors.

The story of the evolution of the ANC’s economic policy is a complex one. The authors take us on a long journey that begins in the 1940s. The rest of the journey is spread over nine chapters. Chapter 2 shows how the party’s economic and social roots lie in social democratic policies. These ideals can be found in the bill of rights in African Claims, developed in 1943.

African Claims was a document with a recognisably social democratic impetus. It argued for state intervention to secure social rights to health, education and welfare for all. This was to be based on universal political and social citizenship. These aspirations can also be traced to what the authors call the “Keynesian, social democratic welfare state, based on the social rights of citizenship” in the Freedom Charter adopted in 1955 (p. 22).

The next chapter connects the past to the dawn of democracy and the formation of the ANC’s economic planning department. The authors argue this consisted of a small group – Trevor Manuel, Alec Erwin, Maria Ramos, Neil Morrison, Moss Ngoasheng, Leslie Maasdorp – who came to believe that there

was no alternative to neo-liberal globalisation (p. 67).

The pace quickens in chapters 4, 5 and 6 – the empirical heart of the book. The authors show how the ANC distanced itself from the post-Keynesian MacroEconomic Research Group in December 1993, and then abruptly dropped the popular “growth through redistribution” Reconstruction and Development Programme in April 1996.

At the centre of the book is a powerful critique, not only of the policy outcomes, but also of the way in which the policies were made. Yet the critiques sometimes feel incomplete.

There is a substantial body of literature on the “politics of economic reform” that could have been drawn on to deepen Padayachee and Van Niekerk’s argument that widespread consultation and negotiation is vital for successful economic reform. In fairness, the refusal to negotiate the Growth, Employment and Redistribution macroeconomic strategy for South Africa in the National Economic Development and Labour Council is rightly criticised and the authors show admirable awareness of the issue.

The late post-Keynesian American economist Hyman Minsky’s famous observation, made over 30 years ago and rightly quoted by the authors, makes the point:

Economic issues must become a serious public matter and the subject of debate if new directions are to be undertaken. Meaningful reforms cannot be put over by an advisory and administrative elite that is itself the architect of the existing situation (quoted on p. xi of the book under review).

Tragically, it is precisely what unfolded in South Africa in the 1990s.

Speaking to the present

Although the book examines events nearly three decades ago, it speaks to the present where the demand for rapid economic reform has become widespread.

The lesson I draw from the book is that economic reform cannot be undertaken by a small group of people. Instead, policies must be formulated and implemented through negotiation and consultation of a social compact beyond the state and parliament to include unions, employers and other interest groups.

What I argued in 1998 remains true today:

Labour retains the power to block the imposition of economic reform – both at the national and workplace level. Any attempt to impose neo-liberal solutions unilaterally is likely to take the country down the path of ungovernability and civil war – it will ensure rather than avert chaos. If, at the same time, socialist solutions seem unfeasible, this conclusion points towards a class compromise between capital and the labouring poor: a Southern version of social democracy.

The insights in Shadow of Liberation complement this claim, while developing new interpretations based on evidence from face-to-face interviews with the key actors as well as new archival material. It is a necessary read for a new generation of policymakers as they confront the challenge of economic reform. Above all, this book is a major contribution to the growing body of literature on the appropriate policies required to reduce inequality in the global South.

This is an edited version of a longer article published in the June issue of the African Review of Economics and Finance.The Conversation

Edward Webster, Distinguished Reserach Professor, Southern Centre for Inequality Studies, University of the Witwatersrand

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Pravin Gordhan, South Africa’s Minister for Public Enterprises, is staking his own credibility and that of President Cyril Ramaphosa’s government on the creation of a new airline out of the ashes of the bankrupt national carrier.

Hit by the loss of the country’s last investment-grade rating on its sovereign debt and the Covid-19 pandemic, Ramaphosa has said hard choices will need to be made as the country restructures its economy. What the state decides to do with South African Airways could be a litmus test for that resolve.

SAA hasn’t made a profit since 2011 and was surviving on state bailouts and government-guaranteed debt even before the coronavirus forced the grounding of almost all its planes. Both Gordhan and the team of business-rescue experts currently running the airline have suggested a strategic investment partner could help restore the airline, but with carriers worldwide expected to burn through $61 billion in the second quarter alone the list of potential buyers looks thin.

And while South Africa’s National Treasury has found money for SAA in the past, the state’s finances have been severely stretched by efforts to contain Covid-19. The economy is forecast to contract as much as 16% this year and lose as many as 7 million jobs, and Ramaphosa last month announced a R500 billion support package to contain the fallout.

“We’ve got our backs totally against the wall,” Cas Coovadia, chief executive officer of Business Unity South Africa, said in an interview. With regard to Gordhan, “we have the greatest respect for him, we just can’t see, given the facts of the matter, how SAA can be saved,” he said.

SAA’s board placed the airline in a local form of bankruptcy protection, known as business rescue, in December. The appointed administrators, led by Siviwe Dongwana and Les Matuson, were expected to propose a recovery plan to creditors by the end of February, but requested an extension due to delays to promised funding. A further postponement was granted after the coronavirus reached South Africa in March, and a final plan still hasn’t been presented.

After a request for further government funding was refused last month, the administrators said the best option was an orderly winding down with severance packages offered to all staff. While the proposal was blocked in court after an appeal by labor groups, it remains the business-rescue team’s preferred course of action, a spokeswoman said, declining to comment further.

SAA’s almost 5 000 workers are currently on unpaid leave. They are receiving some compensation from the Unemployment Insurance Fund.

Gordhan, 71, has criticised the administrators, accusing them of wasting money and lacking transparency. His plan is to create a viable airline that isn’t reliant on state funding, while saving as many jobs as it can, the minister told lawmakers on Friday.

“These aren’t individual decisions,” he said. “It’s government decisions the department is implementing.” A spokesman for the Department of Public Enterprises declined to answer further queries.

Obstacles to Gordhan’s plan, which has the backing of unions, include the lack of state funding. Finance Minister Tito Mboweni has repeatedly made clear he’s reluctant to put more money into SAA and said he isn’t averse to the airline closing. Attracting an equity partner to invest in a perennially loss-making operation is also complicated by the government’s desire to retain control and a law that limits foreign ownership to 25%.

“There are not too many people at the moment that can invest, certainly not too many foreign airlines that can,” said Linden Birns, managing director of Plane Talking, a Cape Town-based aviation advisory service. “Who is going to put money in if they do not have a decent say on the board, or voting rights?”

Gordhan’s insistence on saving the airline comes at the expense of a reputation built on prudence and pragmatism.

Imprisoned and tortured for his role in the struggle against apartheid, Gordhan boosted South Africa’s revenue collection as head of the tax service and twice served as finance minister. In his last stint, during the rule of former President Jacob Zuma, he opposed attempts to interfere with the tax-collection service and embark on a costly nuclear power program.

“It’s very strange to see Pravin Gordhan coming out as dragging his feet. I didn’t think we would be negotiating about an airline that’s already dead,” said Ralph Mathekga, a political analyst and author of books about South African politics. “I thought logic would be dictated by current circumstances.”

 

 

© Bloomberg

Cape Town International has once again won the top spot as the best airport in Africa for the fifth consecutive time.

The airport takes top honours in the prestigious Skytrax World Airport Awards, which are regarded as a quality benchmark for the world airport industry, assessing customer service and facilities across over 550 airports. The awards began in 1999, and are voted for by customers over a six-month survey period.

According to Skytrax, over 100 customer nationalities participated in the 2019-2020 survey. The survey evaluated the customer experience across airport service and product key performance indicators from check-in, arrivals, transfers, shopping, security and immigration through to departure at the gate.

Cape Town International ranked as number one in Africa and came in 23rd place globally.

“During this challenging time, this award is a beacon of hope for all in the tourism industry, signifying that when we are ready to welcome visitors to Cape Town and the Western Cape, we will be ready to once again offer them the excellent service they have become accustomed to receiving,” said Minister of Finance and Economic Opportunities, David Maynier.

CEO of Cape Town International, Deon Cloete proudly welcomed the ranking, saying, “All of this would not be possible without the collaboration of the Provincial and City structures especially Air Access. We’re extremely proud of this accolade. Well done to all involved!”

Wesgro CEO, Tim Harris, adds, “Cape Town International Airport once again proves itself a world-class airport based on a global benchmark for airline excellence. The Cape Town Air Access team is proud of this accolade for the airports industry and is working hard on recovery plans.”

 

CapeTown ETC

The South African wine industry is elated to announce that the South African Government decided to lift transport restrictions on movement, from Friday, May 1, as part of the country’s move from level 5 to level 4 restrictions regarding the Covid-19 lockdown.

This means that transport and export of wine, manufacturing and related services will be able to resume and the industry will be able to fulfill its obligations with regard to wine exports. The industry has expressed its gratitude to the government for this decision.

Minister Dr. Nkosazana Dlamini Zuma announced this during a media briefing on April 29, where the level 4 regulations were released. 

It is the interpretation of the industry’s Export Task Team that the regulations:

  • Permit the wine industry to do essential procurement, manufacturing (bottling, labeling and packaging) of wine under strict health and safety protocols.
  • Permit the transport of wine to port and airport for export and via road for export into neighboring countries.
  • Permit essential support services such as inspection and certification (SAWIS and DAFF). In due course SAWIS will also issue an official statement and practical arrangements.
 

Commenting on the announcement, Siobhan Thompson, CEO of Wines of South Africa, said, “We are grateful to President Ramaphosa and the relevant government departments for the confirmation and providing certainty, and as such we endeavor to be responsible in our actions and messaging to ensure the safety of our people.”

 

“As an industry, we remain fully committed to implementing a safety protocol, which will effectively address transmission risks across our value chain. The safety of our workforce, customers and consumers are of utmost concern to our industry.”

South African wine producers will ensure all safeguarding protocols are respected when production and exports resume. These include: due care with vulnerable employees; wearing of face masks; social and physical distancing during transport, in the workplace and during breaks; handwashing throughout the day; sanitizers available and applied correctly; regular cleaning of working areas, door handles, and all shared facilities; to act swiftly if an infection is identified and follow quarantine regulations.

South Africa begins to gradually loosen its strict coronavirus lockdown on Friday, allowing some industries to reopen after five weeks of restrictions that plunged its struggling economy deeper into turmoil.

The lockdown has had a devastating impact on the economy, but a top government adviser on the pandemic said it has slowed transmissions.

"The lockdown has had quite an effect," infectious disease epidemiologist Salim Abdool Karim told AFP.

"We have got quite clear evidence that we have flattened the curve and that the number of cases we are seeing - and the number of infections probably occurring - has declined quite substantially," he said.

The country's number of confirmed infections has risen to 5 647 since 5 March when the first case was detected. It also has recorded Africa's highest Covid-19 death toll, with 103 fatalities.

The economy of Africa's most industrialised nation was already teetering when the lockdown kicked into gear on 27 March to contain the spread of infections.

To combat the economic destruction, the government has adopted a gradual and phased approach to reopen the country from 1 May.

Around 1.5 million workers in selected industries return to work in the next phase under strict health conditions, according to Trade and Industry Minister Ebrahim Patel.

  • Winter clothing, textile and packaging manufacturing are among the industries permitted to reopen factories.
  • Restaurants will also open, but only for takeaway deliveries.
  • Controversial bans on the sale of cigarettes and alcohol will remain in effect.
  • Some outside activities, such as cycling, walking and running will be allowed  - but for just three hours in the morning.
  • Social distancing and wearing masks in public and at workplaces will be mandatory.

Cooperative Governance Minister Nkosazana Dlamini-Zuma warned "companies that breach regulations will be forced to close".

President Cyril Ramaphosa took the decision to stagger the easing of the lockdown restrictions in a bid to strike a balance between protecting public health and the economy.

"Our people need to eat. They need to earn a living," Ramaphosa said.

"Companies need to be able to produce and to trade, they need to generate revenue and keep their employees in employment."

South Africa's economy was in recession and reeling from low growth and high debts before the pandemic arrived.

On Wednesday S&P downgraded the country's credit rating further into junk.

After shrinking in the second half of 2019 due partly to severe rolling power blackouts, "South Africa's already contracting economy will face a further sharp Covid-19-related downturn in 2020," the ratings agency said.

To help cushion companies and individuals, Ramaphosa last week unveiled an unprecedented R500 billion economic stimulus and social relief package, amounting to about 10 percent of the GDP.

Finance Minister Tito Mboweni said the country will seek coronavirus relief aid from the International Monetary Fund and the World Bank, where it is eligible for up to $4.2 billion.

 

The consequences of the COVID-19 lockdown are yet to be fully determined and understood. But one thing we can be fairly certain of – in South Africa its impact will be shaped by the country’s inequalities.

Our study reveals that half of the adult population survives with near-zero savings, while 3,500 individuals own 15% of the country’s wealth. The response to the crisis must take this into account to help the most vulnerable while still safeguarding fiscal sustainability.

Based on our new study on wealth inequality in South Africa, we propose a progressive solidarity wealth tax. This would allocate the fiscal burden of current interventions on those most capable of paying. It is in line with the recommendations recently made by the International Monetary Fund to equitably attain fiscal sustainability and better position the economy for post-COVID recovery.

We show that a wealth tax on the richest 354,000 individuals could raise at least R143 billion. That equates to 29% of the announced R500bn fiscal cost of the relief package.

Unequal distribution

A lot of studies show how extreme income inequality is in South Africa, but little has been documented about wealth. Net wealth is the sum of all assets less any debts. Assets include cash, bank deposits, pensions, life insurance, property, bonds and stocks. Debt includes mortgages and other loans such as retail store credit accounts or loans from friends, family and money lenders.

In our new paper, we combine national accounts statistics, household surveys and exhaustive tax microdata to assess the reliability of available data sources. We also provide the most comprehensive possible picture of the distribution of wealth. This is the first time this has been done in South Africa.

Better data is needed – about direct ownership, capital income and assets held through trusts. Nevertheless, our results give a good sense of the magnitude of the disparities. Three key results are worth mentioning.

Firstly, in 2017, the 10% richest South Africans (all adults with a net worth over R496,000) owned 86% of wealth, with an average of R2.8 million per adult. In contrast, about 18 million (the poorest 50%) were either in debt or had near-zero savings. With an average net worth of R486 million, the richest 3,500 owned 15% of wealth. This was more than the 32 million poorest altogether.

Secondly, these extreme inequalities extended to all forms of assets. The richest 10% owned 99.8% of bonds and stock – which accounted for 35% of wealth. The top decile also owned 60% of housing wealth and 64% of pension assets. Housing wealth amounted to 29% of wealth and pension assets to 33%.

Thirdly, we show that wealth concentration has remained broadly stable since 1993, and may even have increased within top wealth groups. Wealth inequality remains significantly higher than what could be estimated in Russia, China, India, the US or France.

Why wealth inequality matters now more than ever

Our findings are particularly relevant to the current crisis. South Africans are unequally armed to survive the contraction of the economy produced by the lockdown. Our paper helps get a sense of the size of the population likely to be under intense stress in the very short term.

Before the lockdown, about half of the population was already in debt, or had near-zero net wealth. Therefore, this crisis will at best sink millions of people further into indebtedness or force them to beg, loot or starve. Conversely, our paper shows that a minority of individuals are in a much less vulnerable situation.

The policy solutions needed to absorb the shock and recover fast must be carefully designed to take these factors into account. Principally, they need to reallocate resources to give everybody equal chances to survive the shock.

In this unprecedented crisis, the government announced a relief package with a R500 billion fiscal cost. One key remaining question is how such a plan will be funded.

The possibility of collecting additional tax revenue from those most able to contribute has not yet been brought to the table. We believe it should be considered. Our estimation suggests it would raise significant revenues. And it would allow the country to allocate the cost of the national response on the least vulnerable.

In the spirit of solidarity, a wealth tax could be part of the solution to safeguard long-run fiscal sustainability and inclusive growth.

How much could a wealth tax raise?

We propose a progressive wealth tax, which would apply only to South Africans with a net wealth currently superior to R3.6 million, that is the richest 354,000 (1% of the adult population).

The first bracket – all wealth between R3.6 million and R27 million – would be taxed at a 3% rate, the second bracket (R27 million to R119 million) at 5%, and all wealth above R119 million at 7%. Individuals with less than R3.6 million would be exempt. A billionaire would face a 6.7% tax rate: she would pay 3% on the fraction of her wealth higher than R3.6 million but lower than R27 million; 5% on wealth higher than R27 million but lower than R119 million; and 7% of the R821 million she owns above R119 million. This would leave her with post-tax wealth of R933 million.

Other tax schedules could of course be designed. The objective here is to give an order of magnitude of the expected revenues.

Taking into account the recent Johannesburg Stock Exchange All Share Index drop in value and assuming a 30% evasion rate (as available evidence suggests), we simulate that such tax would raise R143 billion.

It would still leave rich individuals with very high levels of wealth: for each of the brackets, post-tax wealth would on average be R9.3 million, R50 million and R376 million respectively.

A realistic policy

Critics of a wealth tax argue that it would be too costly and complex to implement. But South Africa is well positioned to administer this tax cost-effectively.

Firstly, the tax base we consider covers very few individuals, reducing the administration required.

Secondly, South Africa already has in place third-party reporting by financial intermediaries straight into the South African Revenue Service, providing information on capital income and ownership. Existing municipal valuations could be used to value property assets. This would cover the major components of asset holdings, especially stocks and bonds.

Capital flight, through offshoring or migration, is a potential risk. We account for this by making conservative assumptions about avoidance and evasion, and still project sizeable revenues. There is also markedly more cooperation between tax authorities to clamp down on undeclared incomes and assets in foreign jurisdictions, including tax havens. The premise is not a given. Capital flight implies forfeiting opportunities that considerably enriched them for the sake of avoiding a tax that barely makes an impact on their total wealth. Importantly, the wealthy themselves have said now is the time for solidarity.

A wealth tax, contrary to popular opinion, would not necessarily discourage job-creating investments. Maintaining fiscal sustainability while sparing the most vulnerable is more important to ensure a quick recovery and attract investments. Moreover, inherited wealth has a significant role in South Africa: we find high levels of wealth concentration even among 20-year-olds. Diminishing the importance of inherited capital with a wealth tax may actually be a better collective strategy to improve social welfare, including growth.

In light of the lessons learned from the Zondo commission of inquiry into corruption, taxpayers would need guarantees that this special tax will be properly collected and spent. The national treasury already uses ringfencing mechanisms to make revenue and spending for specific projects accountable. To answer potential criticism, the government could build on such rules to generalise more transparent practices.

There may be theoretical implementation challenges of such a wealth tax. But we would argue that South Africa is well placed to overcome these.

When designing the radar for Britain during World War II, Robert Watson-Watt justified his choice of a nonoptimal frequency as follows:

Give them the third best to go on with; the second best comes too late, the best never comes.

This radar was pivotal in allowing Britain to overcome a larger, more sophisticated German air force.

In our situation, we cannot let perfection be the enemy of progress, or in this case, survival.The Conversation

 

Aroop Chatterjee, Research Manager: Wealth Inequality, Southern Centre for Inequality Studies, University of the Witwatersrand; Amory Gethin, Research Fellow - World Inequality Lab - Paris School of Economics, and Léo Czajka, Research fellow - World Inequality Lab - UCLouvain

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Zimbabweans and other African Nationals based in South Africa face being elbowed out of that country after authorities adopted a nationalistic policy to favour locals on jobs, an official said.

Million of South Africans face losing jobs because of the coronavirus outbreak and last week President Ramaphosa announced a R500 billion package to bail out industry and protect jobs.

South African Finance minister, Tito Mboweni, at the weekend, was quoted as having said his government would only provide financial support to companies that would lean towards a new unwritten employment policy that favours more nationals as compared to foreigners.

Mboweni was quoted as saying: “The proportion of South Africans working in a restaurant must be greater than that of non-South Africans… The new economy after lockdown must prioritise South Africans, but this must not discriminate against non-South Africans either.”

He reportedly added: “We will assist those who show a willingness to hire staff from SA… Every spaza shop must be licensed to operate, must have a bank account and registered for tax and open itself up for health inspections from the Department of Health.”

The statement, analysts noted, could become a catalyst for a new round of xenophobic attacks.

In a statement to the NewsDay, Constance Chemwayi, the spokesperson for the Ministry of Foreign Affairs and International Trade said Mboweni’s statement was a reflection of the new policy thrust that Zimbabwe’s neighbours could take going forward, adding there could be need to utilise communication channels available to the two governments to settle the issue in the event disturbances broke out in South Africa over jobs.

“The South African minister (Mboweni) mooted the policy trajectory that his government might use,” she said.

“The Ministry (of Foreign Affairs in Zimbabwe) would fully respect the policy position that the government of South Africa would adopt. Every country has the sovereign right to take measures they deem necessary.

“Our two countries and governments enjoy excellent relations and we have mechanisms and channels to discuss matters of mutual interest to our two countries,” she added.

Chemwayi said Zimbabwe was ready to ensure its nationals were safe in the event xenophobic attacks recurred.

“However, in the event that xenophobia attacks ensue, the government of Zimbabwe; through our embassy in South Africa will ensure that the interests of Zimbabweans in South Africa are protected,” Chemwayi added.

In an interview from his base in South Africa late yesterday, Bongani Mkhwananzi, the spokesperson for the Zimbabwe Community in South Africa said Mboweni’s statement could “cause a lot of problems.”

“The minister might have spoken too soon and let the cat out of the bag on an issue that is sensitive. We believe this statement might create a lot of problems for our people (Zimbabweans) who are here in South Africa.

“As a matter of fact, the hotel and catering industry here is in the hands of mostly Zimbabweans. This is because they can adapt to very difficult situations which include strict regulations, low pay, and many other issues.

“There are a lot of exploitative mechanisms that are at play here in South Africa and we wonder whether the locals will be able to withstand the situation, according to the minister’s declaration,” Mkhwananzi said.

 

Credit– News Day

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