Tag: economy

A litre of petrol is now nearly R16

By Jay Caboz for Business Insider SA 

After last night’s increase, a litre of petrol will cost twice as much as a litre of Coke. These favourite local SA items will cost the same as – or more than – a litre of petrol will tonight.

After tonight’s price increase South Africans will be paying almost R16 per litre for petrol. In Gauteng one can expect to pay R15.79 per litre while coastal cities will pay R15.20 per litre, according to the Central Energy Fund.

The recent fuel hikes have been taxing on South African motorists who will now be forking out even more following May’s 49c per litre increase.

Business Insider South Africa visited shopping stores to see how this compared to some of South Africa’s daily items on the isles.

These favourite local SA items will cost almost the same as a litre of petrol will tonight:

  • A litre of Clover Long Life Full Cream Milk – R15.99.
  • A 300ml bottle of drinking yogurt (R15.08) or a 500g tub of plain low fat yogurt (R15.99).
  • A 2-litre bottle of Coca-Cola – R15.99.
  • A 5-litre bottle of water – R16.99.
  • 750ml of No Name Cooking Oil – R15.99
  • A 250ml can of Red Bull Energy Drink go for R14.99.
  • A 350ml refill of Sunlight dish washing liquid.
  • A six pack of hotdog rolls from Pick n Pay – R14.99.
  • A kilogram of rice – R15.99.
  • For the sweet tooth you can get a packet of marshmallows (R15.49), a small packet of Cadbury Tumblers Raisins (R16.13), or a 85g packet of microwave popcorn (R16.49).

Shock as GDP shrinks by 2.2%

By Karl Gernetzky for Business Live

SA’s economy shrank by a shock 2.2% in the first quarter of 2018 compared with the final quarter of last year – with the surprisingly poor performance due to a plunge in the agricultural sector of 24.7%.

This is the largest quarterly fall since the second quarter of 2009. Economists had expected a contraction of 0.5% quarter on quarter.

The rand reacted immediately and dramatically, weakening by about 10c against the dollar shortly after 11.30, to about R12.65.

SA’s gross domestic product (GDP) grew 0.8% compared with the same quarter in 2017, well below a Trading Economics consensus forecast of 1.9%.

Mining fell 9.9%, manufacturing 6.4% and construction 1.9%, Statistics SA said on Tuesday.

The decline in the manufacturing sector was largely due to the petrochemicals and metals subsectors.

Government services grew 1.8% and financial services 1.1%.

Government services had been bolstered by activities conducted by the Independent Electoral Commission in the first quarter, statistician general Risenga Maluleke.

Economists had expected mining and manufacturing to weigh on first-quarter GDP performance due to, among other factors, a stronger rand and investors’ continued caution, despite improved sentiment since Cyril Ramaphosa became president of SA.

Uncertainty over black economic empowerment policy and mine stoppages were cited as additional actors that held back mining.

Agriculture was the wildcard expected to lift the overall figure, as SA continues to recover from drought conditions.

“In consumption-driven economies like SA, it is not unusual for a weak first-quarter GDP print given the high base set in the final quarter of the previous year,” said FNB chief economist Mamello Matikinca.

Outlook

Analysts expect consumers to be hard pressed for the rest of 2018, as the effect of April’s tax hikes and increased fuel costs seep into the market.

Broad consensus among analysts was that growth would accelerate towards 2%, amid improved global economic conditions and due to positive sentiment emanating from SA’s escape from full junk status.

“For the year as a whole, however, we expect growth to pick up from the second quarter and accelerate in 2018 to 1.9% year on year from 1.3% year on year in 2017 as cyclical factors linked to higher sentiment levels, improved private sector investment and the impetus from global demand increasingly take effect,” said Investec economist Lara Hodes.

The recession that never happened

The South African economy grew 3.1% during the fourth quarter compared with the previous quarter — putting growth for the year at 1.3%, beating Treasury’s and other forecasts.

Compared with a year earlier, gross domestic product (GDP) increased by 1.5% in the fourth quarter of 2017.
Treasury had expected growth of 1% for the year.

The largest positive contributor to fourth-quarter growth was the remarkable recovery in the agriculture, forestry and fisheries sector, which increased 37.5% and contributed 0.8 of a percentage point to GDP growth.

The trade, catering and accommodation industry grew 4.8% and contributed 0.6 of a percentage point.

The primary sector (which includes agriculture and mining) increased by 4.9%, the secondary sector (manufacturing, electricity and construction) grew by 3.1% and the tertiary sector (trade, transport, finance, government and personal services) grew by 2.7% compared with the third quarter.

This signals that the country’s economy is poised for a recovery.

It is a vast improvement on the dismal 0.3% GDP growth achieved in 2016 but still remains weak by the country’s historic standards.

In the third quarter, the economy grew by 2% quarter on quarter, demonstrating a resilience that suggested it was in better shape than most economists had previously thought.

Expenditure on real GDP increased by 3.1% in the fourth quarter of 2017, while final consumption expenditure by general government increased by 1.3%.

Treasury is forecasting growth to rise to 1.5% in 2018 on political and policy certainty, renewed confidence and rising private fixed investment.

Finance Minister Nhlanhla Nene said on Monday that it was likely that the growth forecasts would be revised upwards due to improved business and investor confidence.

Growth for 2016 was revised up to 0.6% from 0.3%.

Third-quarter GDP growth in 2017 was revised higher, from 2% to 2.3%.

The changes were based on better access to data sets, said Statistics SA deputy director-general Joe de Beer.

The revisions indicate that SA wasn’t actually plunged into a recession last year. A recession is based on two consecutive quarters of negative growth.

The performance in the fourth quarter of 2016 has been revised from a 0.3% contraction to growth of 0.4%.

By Sunita Menon for Business Day

The Gauteng government has unveiled the first details for its new PWV15 highway.

Speaking on the tabling of the provincial budget on Tuesday (6 March), Gauteng finance MEC Barbara Creecy said that the develoment will form part of a significant investment into infrastructure in the Ekurhuleni municipality.

“The Gauteng department of transport will receive R6.4 billion in infrastructure money over the medium term.

“The most significant project to start in the design phase this year is the PWV 15, the first brand new Gauteng Highway to be built since the 1970s,” Creecy said.

R250 million of this is expected to be spent during the design phase of the highway in the current financial year, she said.

Aerotropolis

While details on the highway were relatively light in the budget itself, Creecy reportedly told journalists in a media briefing ahead of her address that the PWV 15 highway would run east-west, reports BusinessDay.

“This will help facilitate and enhance the Aerotropolis in Ekurhuleni and the first phase is going to be dealing with the roads around the OR Tambo international airport and the city of Johannesburg,” she said.

“The intention is to try and cut out the Gillooly’s interchange because any of you who travel in the early morning or late afternoon in that area would [know] that it is an area of very intensive congestion. This is particularly when all the trucks and freight vehicles move into that area.”

Gauteng had previously outlined its plans for a new highway and other infrastructure developments as part of its new Aerotropolis corridor.

The corridor promises to host an number of major ‘catalyst projects’ including new commercial, retail and logistics hubs, as well as a number of upgrades to the surrounding areas.

Source: Business Tech

China is likely to see price rises for paper products this year on a shortage of raw materials and imported waste paper, according to Hong Kong-listed Nine Dragons, one of Asia’s largest packaging and paper producers.

Cheung Yan, the company’s chairwoman and one of China’s richest women, said at a press conference in Hong Kong on Tuesday that the company was likely to raise product prices in 2018, pressured by increased costs in raw materials, whose supply has been hit by Beijing’s tighter controls on imported waste paper, an important source for manufacturing paper products.

“The government’s tightened control on imported recovered paper has resulted in significant volatility in both imported and domestic recovered paper prices,” said Guangdong-based Nine Dragons in an interim results filing to the Hong Kong stock exchange.

In the six months ended December 31, the company saw its net profit more than doubled to 4.33 billion yuan (US$690 million), up from the previous 1.91 billion yuan.
Separately, Vinda International Holdings, China’s third-largest tissue manufacturer, said last month that it had raised tissue product prices by 4 to 5 per cent since last October in response to rising pulp prices.
China’s tissue giant Vinda expects further industry consolidation as Beijing tightens environmental controls
US pulp prices have risen more than 35 per cent in the past year, contributing to the hike in toilet-paper costs among other factors, according to Bloomberg.

The toilet paper price hike has sparked panic buying in Taiwan over the weekend after suppliers told local supermarkets they would raise prices by 10 to 30 per cent from next month.
Raw materials accounted for around 48 per cent of the costs for toilet paper products, and almost all of the pulp was imported from abroad, said Taiwan’s Ministry of Economic Affairs.

Vinda has operations in Taiwan, but it is not immediately known the level of price increase they will put in place for their products on the island.

Source: BusinessLive

BankservAfrica’s latest take-home pay and private pensions indices show that 2018 is off to a good start, with growth experienced in both nominal and real terms.

The BankservAfrica Take-home Pay Index shows average formal sector pay was R14,675 in January 2018, 5.8% higher than January 2017 before inflationary adjustment.

This increase was lower than December’s growth of 7.3%. However, when adjusted in line with inflation, take-home pay increased by 1.2% on a year-on-year basis, and represents the slowest increase in five months.

“This positive real increase for money banked by employees’ points to a gradual increase in living standards for most formally employed people,” said Mike Schüssler, chief economist at Economists dot coza.

The typical formal employee experienced a real increase of 2.2% – nearly double that of the average take-home pay increase.

The share of employees who receive up to R4,000 per month declined to 13.7% in January 2017 compared to 15.2% in January 2018. This is a 7.8% decline in the number of employees receiving less than R4,000 per month over the last year.

Those earning monthly salaries between R12,000 and R1,000 now stand at 474,000 people, which is more than the 436,900 who earn below R4,000.

While the number of employees taking home between R12,000 and R16,000 only grew by 1.2% , this number is still higher than the number of earners in the low-income category.

A quick review of the salary index shows that the real increase average was 1% more than in 2016, the group said.

Real take-home pay declined in the first two months of the year and then gradually increased. In the last three months of 2017, take-home pay increased by 2.8% on average after inflation.

Source: Business Tech

2018 budget speech in a nutshell

Finance Minister Malusi Gigaba’s Budget Speech has seen him make “difficult decisions” to address a revenue shortfall and to fund free higher education.

An increase in value-added tax (VAT), fuel levy and a higher estate duty tax are just some of the things South Africans will be faced with this year.

On the other hand, Minister Gigaba announced some relief for the poor and the working class in the form of below inflation increase in personal income tax, while ensuring an above average increase in social grants.

As part of wide-ranging tax proposals, the Minister said the measures were being introduced, in the main, to generate an additional R36 billion in tax revenue for 2018/19.

The main tax proposals for the 2018 Budget are:

  • An increase in the value-added tax (VAT) rate from 14% to 15%, effective 1 April 2018;
  • A below inflation increase in the personal income tax rebates and brackets, with greater relief for those in the lower income tax brackets;
  • An increase in the ad-valorem excise duty rate on luxury goods from 7% to 9%;
  • A higher estate duty tax rate of 25% for estates greater than R30 million in value;
  • A 52 cents per litre increase in the levies on fuel, made up of a 22 cents per litre for the general fuel levy and a 30 cents per litre increase in the Road Accident Fund Levy, and
  • Increases in the alcohol and tobacco excise duties of between 6 and 10%.

Tabling the 2018 Budget Speech in the National Assembly on Wednesday, the Minister said increasing VAT was unavoidable, as there was a need to maintain the integrity of public finances.

“In developing these tax proposals, government reviewed the potential contributions from the three major tax instruments, which raise over 80% of our revenue – personal and corporate income tax and VAT.

“We have increased personal income tax significantly in recent years, particularly at the higher income bands, and our corporate tax is high by international standards.

“We have not adjusted VAT since 1993, and it is low compared to some of our peers. We therefore decided that increasing VAT was unavoidable if we are to maintain the integrity of our public finances,” he said.

What the tax proposals mean for 2018/ 19 financial year

In December, former President Jacob Zuma announced that from this year, government would implement fee-free higher education in a phased approach.

In its budget review document, National Treasury said the central adjustments to the fiscal framework in 2018/19 are meant to:

• Raise an additional R36 billion in tax revenue through an increase in the VAT rate, limited personal income tax bracket adjustments and other measures;

• Reduce the Medium Term Budget Policy Statement baseline expenditure by R26 billion;

• Allocate R12.4 billion for fee-free higher education and training;

• Set aside an additional R5 billion for the contingency reserve;

• Provisionally allocate R6 billion for drought management and public infrastructure.

“The baseline spending reductions and tax measures feed through to the outer years of the framework, while allocations to higher education increase sharply,” National Treasury said.

Vulnerable households shielded from VAT increase

The Minister said, meanwhile, that vulnerable households were protected from an increase in VAT.

“Vulnerable households will also be compensated through an above average increase in social grants.

“Some relief will be provided for lower income individuals through an increase in the bottom three personal income tax brackets and the rebates,” Minister Gigaba said.

The Minister said in addition to VAT, National Treasury would increase excise duties on luxury goods and estate duty on wealthy individuals.

He said taken together, National Treasury believed that the proposals best protect the progressive nature of the country’s tax regime to minimise the impact on lower-income households.

Taxes in more detail

Individuals

The maximum marginal rate for natural persons remains at 45% and is reached when taxable income exceeds R1 500 000.

The minimum rate of tax remains at 18% on taxable income not exceeding R195 850.

The primary rebate for all natural persons has been increased to R14 067 (previously R13 635). The additional rebate for persons aged 65 years and older is increased to R7 713 (previously R7 479). Persons aged 75 and older are granted a further R2 574 (previously R2 493).

The tax free portion of interest income remains at R23 800 for taxpayers under 65 years, and R34 500 for persons aged 65 years and older. In addition the tax-free savings dispensation for other investments, including collective investment schemes, became operative 1 March 2015 and remains at R33 000 per tax year.

Local dividends tax remains at a flat 20% rate which was effective 22 February 2017.

Foreign dividends also remain taxed at a flat rate of 20%, but this may be reduced in terms of Double Tax Treaties.

An individual is exempt from the payment of provisional tax if the individual does not carry on any business and the individual’s taxable income:
• Will not exceed the tax threshold (see 4 below) for the tax year, or
• From interest, foreign dividends and rental will be R30 000 or less for the tax year.

Companies and close corporations

The rate of normal tax remains at 28%.
The final withholding dividend tax remains at a flat rate of 20%.

Tax Exempt bodies (e.g. Retirement Funds) will suffer no withholding tax upon production of a tax exemption certificate.

Trusts

The flat rate remains at 45%, although distributions in the same tax year are taxed instead in the beneficiaries hands.

Individual tax thresholds

Liability for tax is as follows:

Under 65 years: R 78 150 (previously R 75 750)
65 to 74 years : R121 000 (previously R117 300)
75 years and older: R135 300 (previously R131 150)

Income tax: individuals and special trusts 

Taxable income (R) Rates of tax

0 – 195 850 18% of taxable income
195 851 – 305 850 R 35 253 + 26% of taxable income above R 195 850
305 851 – 423 300 R 63 853 + 31% of taxable income above R 305 850
423 301 – 555 600 R100 263 + 36% of taxable income above R 423 300
555 601 – 708 310 R147 891 + 39% of taxable income above R 555 600
708 311 – 1 500 000 R207 448 + 41% of taxable income above R 708 310
1 500 001 and above R532 041 + 45% of taxable income above R1 500 000

Trusts other than special trusts have a 45% rate of tax.

Tax rebates

Primary – R14 067
Secondary (age 65 and over) – R7 713
Plus (age 75 and over) – R2 574

Estate duty and donations tax

The rate of estate duty and donations tax remains at 20% for dutiable estate amounts of R30-million or less and increases to 25% for dutiable estate amounts over R30-million.

The estate duty abatement (exempt threshold) remains at R3,5-million per person and a surviving spouse may also benefit automatically from any unused deduction in the first dying spouse’s estate. i.e. the abatement remains a combined maximum R7-million for the second dying spouse.

There is a similar treatment of Donations Tax namely 20% for donations of R30-million or less, and increases to 25% for donations over R30-million.

The first R100 000 of amounts donated in each tax year by a natural person remains exempt from donations tax. Donations between spouses are fully exempt.

Capital gains tax (CGT)

• The annual capital gain exclusion for individuals remains at R40 000.
• The primary residence exclusion from capital gains tax remains at R2 million.
• The capital gain exclusion at death remains at R300 000.
The effective rate of CGT is the range of 7.2% to 18% for individuals, 22,4% for companies and 36% for Trusts, although correctly structured Trusts can result in the individual rate being applicable.

Transfer duty

The rates remain, i.e. property costing less than R900 000 will attract no duty. A 3 percent rate applies between R900 000 and R1,25 million, 6 per cent between R1,25 million and R1,75 million, 8 percent between R1,75 million and R2,25 million, 11 percent between R2,25 million and R10 million and 13 percent thereafter.

Retirement funds

Retirement Fund Lump Sum Withdrawal Benefits:

Taxable Income Rates of Tax
0 – 25 000 0% of taxable income
25 001 – 660 000 18% of taxable income above 25 000
660 001 – 990 000 114 300 + 27% of taxable income above 660 000
990 001 and above 203 400 + 36% of taxable income above 990 000

Retirement Fund Lump Sum Retirement Benefits or Severance benefits:

Taxable Income Rates of Tax
0 – 500 000 0% of taxable income
500 001 – 700 000 18% of taxable income above 500 000
700 001 – 1 050 000 36 000 + 27% of taxable income above 700 000
1 050 001 and above 130 500 + 36% of taxable income above 1 050 000

Tax Harmonisation of Retirement Fund Contributions
As from 1 March 2016 all retirement funds (pension, provident and retirement annuity funds) are treated similarly for tax contribution purposes.
The tax deduction formula of 27,5% per annum (with a cap of R350 000) of the greater of taxable income and remuneration applies to members of all retirement funds, including provident funds.

Medical expenses

Taxpayers may in determining tax payable deduct monthly contributions to medical schemes (a tax rebate to be known as a medical scheme fees tax credit) up to R310 for each of the taxpayer and the first dependent on the medical scheme and R209 for each additional dependent.

An individual who is 65 and older, or if that person, his or her spouse or child is a person with a disability, 33.3% of qualifying medical expenses paid and borne by the individual and an amount by which medical scheme contributions paid by the individual exceed 3 times the medical scheme fees tax credits for the tax year.
Any other individual, 25% of an amount equal to qualifying medical expenses paid and borne by the individual and an amount by which medical scheme contributions paid by the individual exceed 4 times the medical scheme fees tax credits for the tax year, limited to the amount which exceeds 7.5% of taxable income (excluding retirement fund lump sums and severance benefits).

VAT

The rate increases one percentage point to 15% (previously 14%), effective 1 April 2018. The compulsory VAT registration threshold remains at R1-million turnover per twelve month period.

Foreign exchange

The offshore investment allowance remains at R10 million per adult person per calendar year. In addition the R1 million individual single discretionary allowance remains.

Voluntary disclosure program

A new OECD global standard for the automatic exchange of financial information between tax authorities came into effect from end of 2017. SARS and the Reserve Bank thus offered the Special Voluntary Disclosure Program (SVDP) to parties with unauthorized foreign assets or income who wished to regularize their affairs, until 31 August 2017. This SVDP has expired but taxpayers who have foreign undisclosed assets and/or income may still avail themselves of the normal Voluntary Disclosure Program (VDP) contained in the Tax Administration Act.

Source: BusinessTech, Sterling Wealth

November retail sales data surprised market expectations with an 8.2% year-on-year increase, the strongest performance in five years.

According to FNB senior economic analyst Jason Muscat, Black Friday, during the last week of November, helped lift sales in the sector.

Sales were higher than the 3.5% year-on-year sales recorded for October, according to data released by Stats SA on Wednesday.

“This was the strongest year-on-year performance in five years,” said Muscat. Month-on-Month sales for November were 4% higher, compared to a -0.1% decline for October and -0.4% recorded for September.

“The figures should be viewed as transient in light of significant buying during the ‘Black Friday’ month, and in the context of relatively lacklustre trading updates from many domestic retailers.”

Muscat said that the figure shows that consumers and retailers are still constrained. Retailers are forced to introduce deep discounts to drive revenue, while sacrificing profit, and consumers are making use of the opportunity to save.

“Nevertheless, the sector is on track to make a significant, positive contribution to both fourth quarter GDP and full year 2017 GDP.”

Muscat said that a moderation in the retail sales data for December is expected. There will also likely be a contraction in the sales data for the first quarter of 2018, coming off the exceptionally high data reported for the fourth quarter.

Investec economist Kamilla Kaplan is also of the view that there may be weaker sales growth reported for December, especially as the Bureau of Economic Research Retail Survey for the fourth quarter showed that the retail sector’s performance during the festive period was not as expected.

The highest growth was reported for other retailers at 20.8%. This includes book stores, jewellers, sporting goods and second-hand goods. Retailers of household furniture, appliances and equipment reported growth of 14.1% and retailers of textiles, clothing, footwear and leather goods reported growth of 12.4%.

The main contributors to the 8.2% increase were general dealers, having contributed 2.6 percentage points, textiles, clothing, footwear and leather goods with 2.3 percentage points, and other retailers which contributed 2.2 percentage points.

Stefan Sulzer, partner and managing director at Boston Consulting Group, said at the end of 2017, the overall economy was in a fragile state as a result of factors such as appalling business confidence, political uncertainty ahead of the election of the new ANC president, as well as high unemployment.

Consequently, it was expected that all of these factors would culminate in constrained consumer consumption.

“However, the overall development of the retail sector was strong, following suit with the previous months. Amongst other factors, this was fuelled by significant promotional activity by retailers in SA,” said Sulzer.

“Based on the most recent retail figures, we can conclude that Black Friday 2018 was bigger than the previous year. It will now be interesting to see what momentum the retail sector carried into the arguably more important December 2017 trading period.”

Source: Supermarket & Retailer

Back-to-school stationery price shock

The average stationery list for a primary school child starting Grade 1 has a total cost of between R700 and R1 000 and, while parents would want to compare prices to get the best deals, schools are prescribing certain brands for parents to buy.
Many schools offered parents the option of paying the school for the stationery or purchasing it themselves.

Most parents who spoke to the Daily News on Monday while doing their last-minute stationery shopping felt some items on the list were “overboard”.

Parents believed items such as a box of tissues and toilet paper should be provided by the school.

Different types of crayons, glue sticks and paper reams were some of the items schools required on the first day, but parents said this added another expense to the already exorbitant price of getting children back to school.

The price of a ream of A4 paper of 500 sheets is about R47.99 and some schools stipulated which brand they wanted parents to buy.

Grade R pupils were no exception. A stationery list for Grade R pupils at a Durban North public school with 18 items cost R615.22, excluding an extra R200 for a swimming bag, a chair bag and a library bag.

Five-year-old Thando Mokwena of Westville is attending Holy Family College this year and was busy shopping for stationery with her parents on Monday. Picture: Motshwari Mofokeng/ANA
A mother of a Grade 1 pupil said she thought being told to buy 17 exercise books for her child was a bit too much.

“I have a problem with the school asking me to buy so many exercise books. I know that times have changed and that children these days do more than I did in my time, but I think 17 books are just too much. Asking for four items of glue stick, which cost R56.49 each, to be bought at the same time was inconsiderate,” she said.

She said it would be reasonable for schools to instead ask parents to supply one of each item which could be replaced when they ran out.

Sizakele Mthembu, a parent of a Grade 2 pupil attending a private school in Durban, said she had a problem with schools dictating which brands parents should buy.

“There are retail shops with cheaper options on items such as pencils, glue sticks, wax crayons, rulers, paper reams and ballpoints, but schools ask for specific brands,” she said.

A Grade 6 pupil said: “I find myself having to ask my parents to buy me more glue stick, pens and pencils by the end of the first term. They are stolen,” she said.

Khethiwe Ndlovu, a parent of a Grade 3 pupil, said last year she had dropped off all the stationery on the first day of school and was told not to remove the items from their packaging. That was the last time she saw the stationery.

“The children are made to keep the books at school and only take their homework books home,” she said.

She suspected that schools were supplying other children who did not have.

“I understand the kind of poverty that some pupils come from and, if that is the case, then the school should make us aware of such challenges so that it can be done properly,” she said.

Ntombizodwa Zungu, a mother of a Grade 9 pupil, had the choice of buying her daughter’s stationery from the school but instead opted for shopping around at different retail shops, saving R350.

“Checking for prices beforehand helps and, although it is a lot of work, my secret has always been to buy early and have a proper shopping plan. The last-minute rush would always work out to be expensive,” she said

Vanessa Chetty said she found exercise books were not expensive, but it was the extras, such as dictionaries and crayons, that were.

She said that while they could be used for more than a year, she was forced to buy them twice a year.

Vee Gani, South Durban chairman of the KZN Parents Association, said stationery was expensive and schools and parents should have discussions about making cost effective purchases.

He said when it came to schools’ choice of brands, there was no choice as some cheaper brands were useless.

“I can understand why parents are sceptical about sending more than one item to school for risk of it being stolen or lost.

“But teachers also want to prevent a situation of items being forgotten at home,” he said

By Sne Masuku for IOL

Tech costs ‘likely to rise’ in SA

Information technology (IT) hardware is likely to become more expensive in SA because of the weak economy and rand, according to Mark Walker, associate vice-president for sub-Saharan Africa at the International Data Corporation.

“SA is looking at a growth rate of 0.7% to 1.5% [in 2018]. Many organisations are pricing this weak economy into their discussions as it means that hardware and imported equipment will be more expensive.

“There are also murmurs around adding VAT to petrol and potential increases in taxes, so the technology sector could very well be an easy target from a tax point of view.”

As a result, IT was expected to become more expensive, particularly hardware, and this was likely to prompt “an acceleration into cloud-based computing”, Walker said.

Further, if the outcome of the ANC’s elective conference was not well received, the market would weaken further and this would further fuel the rise in IT costs.

Innovation and investment could be affected by the lacklustre economy, he said. “We have started seeing a trend emerge where you have individuals and organisations innovating locally, but then taking those ideas overseas because they are not able to unlock investment in the local market.”

However, a favourable elective conference outcome would be a boon for the local IT sector.

“The perception that SA is back on track could herald in a period of release of pent-up demand, investment spend on innovation and rolling out the infrastructure to enable broadband in rural areas, fibre and others that SA gravely needs.”

Source: eNCA

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