Tag: South Africa

By Carin Smith for Fin24 

Research by Momentum and Unisa shows that 73.5% of SA households were “financially unwell” in 2017.

The research found that, while some households did very well during 2017, others just muddled through, while a large portion struggled immensely.

According to the study, one of the more concerning findings was that the proportion of financially well households was virtually unchanged between 2016 and 2017.

Even more concerning was that the proportion of financially well households was virtually unchanged since 2011.

However, there was a bright spot: The research found that while a large proportion of households was still financially unwell, it also found that these households were not as financially unwell as they had been previously.

Decline in net wealth

The study looked at various factors influencing the financial well-being of South Africans.

One was a decline in the net wealth to disposable income ratio of households, caused by a decrease in assets to disposable income ratio.

The decline was mainly due to negative growth in house prices and real investments in residential property increasing by less than 1% compared to 2016.

In addition, the real value of financial assets was lower during the first half of 2017 compared to the same time a year earlier.

Skills gap

The research further showed many households just don’t have the means and skills needed to take control of their finances.

While more people completed secondary and tertiary qualifications, social capital levels remained low due to feelings of disempowerment, low levels of subjective well-being, financial vulnerability and low consumer confidence in the economy.

There are indications that, although the SA educational system delivers a growing number of matriculants and graduates, the students predominantly acquire academic knowledge and not high-level cognitive, social and communication skills.

It furthermore looks like an improvement in education did not translate into a proportional increase in income, the study suggested.

This can, to a large extent, be explained by low labour demand growth due to a skills mismatch in the SA economy.

Control

Factors over which households have little control include macroeconomic factors such as low economic growth, high levels of unemployment, political and policy instability, and low levels of business confidence.

The factors over which households do have control include the educational levels of household members, their financial literacy and capability levels, their work statuses, the degree to which they conduct debt and financial risk management and financial planning, the amount of money they earn, and the level to which they save and accumulate their net wealth.

The results of the study have shown that, although households do have control of these factors, they generally don’t budget, conduct very little debt- and financial planning, and generally have very low financial literacy and capability levels.

Intervention

The research findings suggest that a comprehensive intervention is needed for financially unwell households to become financially well.

Such a comprehensive intervention should be more multi-faceted than merely providing social grants, social housing, free services and financial products, according to the report.

Putting households on a path of financial wellness growth will require high-quality education, an enhancement of their financial literacy and financial capabilities, and improving their understanding of financial planning and other financial services.

By Tom Head for The South African 

A study released by Ipsos this year cites citizens of Mzansi as the most ignorant in the world. We came out on top of the “Misperceptions Index” – a table which charts the 38 nations surveyed about the biggest concerns in their country. South Africans are seen as being the most ignorant of the lot, after a series of questions found that we tend to overestimate and misunderstand certain issues.

The dictionary definition of “ignorant” is what’s being applied here – meaning to have “a general lack of awareness or knowledge”. This study doesn’t imply that South Africans are rude or crass.

What makes South Africans ‘ignorant’?
Of the 10 social issues analysed, South African perceptions are the worst in the following areas:

Murder rate

85% of people in South Africa believe the murder rate is higher than it actually is. Predictions averaged to be 29% higher than the actual figures.

Foreign-born prisoners

This sample size of South Africans believe that 50% of prisoners are foreigners, when in fact, that number is below 20%.

Teenage pregnancy

South Africa ranks as highly as several Latin American countries when it comes to guessing the teenage pregnancy rate. Our participants incorrectly guessed that 44% of 15-19-year-olds are having children, whereas the actual figure is 4.4%.

Most ignorant countries ranked by Ipsos
The South Africans surveyed by Ipsos tend to overestimate these figures rather than anything else. The only perception where they fell short was related to religious beliefs. In general, it was thought that 67% of our countrymen and women believe in heaven – that figure is actually up at 84%.

Brazil, The Philippines, Peru and India make up the top five “ignorant” countries. The three least ignorant countries were all Scandinavian – Sweden came out on top, with Norway and Denmark emerging as the second and third most perspective countries respectively.

Business confidence worse than in 2017

By Asha Speckman for TimesLive

The economy was unlikely to shake off anaemic growth in the second quarter of this year‚ economists said on Tuesday after a dip in the South African Chamber of Commerce and Industry (Sacci) Business Confidence Index confirmed their concerns.

The Sacci Business Confidence dipped to 93.7 index points in June from 94 index points previously. The index has slipped each month from a high of 99.7 in January this year.

John Ashbourne‚ Africa economist at Capital Economics said: “The latest drop strengthens our view that South Africa’s economy remained weak in quarter two.”

Economic growth contracted by 2.2% in the first quarter of this year after a stronger finish in 2017.

The Sacci index is a measure of business activity and is based on several indicators including energy production‚ trade figures and the performance of financial markets.

Seven of the thirteen sub-indices reflected negativity in the business environment.

The largest negative influences were the weaker rand exchange rate‚ lower real retail sales‚ a decline in the value of building plans passed and higher energy costs.

A rise in merchandise import and export volumes and new vehicle sales impacted positively.

The risk of a global trade war and potential knock-on effects also weighed negatively on the outlook from certain industries in South Africa‚ the survey noted.

Ashbourne anticipated further clarity when mining and manufacturing production and sales data for May are published on Thursday.

Weakness in these sectors is‚ however‚ expected to continue. The recent Absa purchasing manufacturer’s index‚ which measures activity in the manufacturing sector‚ dropped to 47.9 index points in June from 49.8 in May.

The index reading was 50.9 in April. A reading below the 50 neutral mark indicates a possible slowdown in business activity.

Lara Hodes‚ an economist at Investec‚ said about second quarter growth: “We’re not expecting positive news.”

Hodes said growth in mining was tempered by continued uncertainty over the mining charter and a restrained investment.

Investec expects an improvement to -3.5% for mining in May compared to -4.3% previously. It has forecast manufacturing to be -1.4% from 1.1% in April compared to a BNP Paribas expectation of 0.1% growth from 1.1% previously. However‚ Hodes said retail trade sales and consumer confidence data to be released next week would complete the picture.

Ashbourne said the potential slowdown had prompted London-based Capital Economics to temper its growth forecast for the year to 1.3% from 2% previously.

National Treasury has forecast 1.5% for the year and the Reserve Bank expects 1.7%.

Sacci said: “It has become imperative that structural economic matters hampering inclusive economic growth should be addressed with economic rationality. Uncertainties surrounding economic policy direction and position should be clarified so that investor and business confidence can reaffirm itself.”

Google tops SA’s best places to work

Branding firm, Universum, has released its Most Attractive Employer rankings for 2018. In it, it lists the companies that South African professionals are most keen to work for, based on aspects such as salary expectations, concerns relating to employment, goals (both short and long term), expectations around training and development and the importance of corporate culture.

The survey for this ranking was carried out between September 2017 and April 2018, and involved 21 686 professionals in a range of environments covering 35 industries and 88 professions.

These included 9 031 professionals in business/commerce, 3 197 in engineering/technology, 4 2855 in humanities, 2 289 in natural sciences, 1 627 in health care/health sciences and 1 248 in law.

Of these categories, Google ranked top in the business/commerce and engineering sections.
The company ranked second in the humanities division, fourth in law and eighth in natural sciences.

Universum’s Winani Ndlovu was quoted in a Business Tech article as saying, “Despite the high unemployment levels talent is facing, they are reporting that being aware of an employer and their staffing needs is not enough to drive the desire to work for that employer.

“Employers need to clearly articulate their value proposition to assist them in making an informed decision before joining the organisation. Clearly having a strong employer brand is imperative for the attraction and retention of talent.”

By Tehillah Niselow for Fin24 

Liberty Holdings customers received SMSs on Saturday alerting them that personal information related to their insurance policies could have been stolen by an external party.

The Information Regulator, which has asked for information about the Liberty breach, is clearly concerned about the increasing number of cyber attacks affecting personal data in South Africa.

“Without a fully functional Information Regulator, these breaches will continue to occur without sanctions provided for in the Protection of Personal Information Act (POPIA),” said chairperson Advocate Pansy Tlakula.

Tlakula urged “the powers that be to assist it in fast tracking its operationalisation”.

According to corporate law firm Michalsons, certain limited sections of POPIA have already been implemented. However, the bulk of the legislation will only commence at a later date, to be proclaimed by the president. As there is a one-year grace period, the POPIA deadline might only be set for the end of 2019 or in 2020.

In the meantime, South Africans are coming under heightened attack from cyber criminals and hackers.

Andrew Chester, MD of Ukuvuma Security, told Fin24 that affected clients or users should immediately alert their banks and cellphone provider. They should also undertake a credit check as well as a Google search to determine whether their personal information is in the public domain.

Liberty email hack

In SMSs to clients on Saturday, financial services company Liberty informed them that its email repository had been breached by a third party trying to demand a “ransom” in exchange for the data.

Liberty has not revealed much about the breach, citing a police investigation. CEO David Munro confirmed that Liberty’s insurance clients were the only ones affected, and that none of its other business had been compromised.

The company said none of its clients have been impacted financially, and that individuals will be personally advised if their information has been affected.

ViewFines licence details

In May the Hawks, the State Security Agency and the Information Regulator said they would probe the breach of personal records of 943 000 South African drivers, allegedly from online traffic fine website ViewFines.

The information reportedly contained the names, identity numbers and email addresses of South African drivers stored on the ViewFines website in plaintext.

The ViewFines website is owned by Aggregated Payment Systems. News24 reported that its operations manager confirmed the company was “implementing security measures immediately” to improve the website after being informed of the breach.

The source of the data was located by Troy Hunt, an Australian security researcher and creator of the free service Have I Been Pwned, which checks whether an individual’s information has been compromised.

Facebook scandal

While Facebook founder and CEO Mark Zuckerberg had to face angry lawmakers in the US and European Union, it was reported that the data breach involving the UK political consultancy affected almost 60 000 South African users.

In May, the Information Commissioner’s Office of the United Kingdom (which regulates Facebook outside the US and Canada) advised the Information Regulator of South Africa that over 87 million people had been affected worldwide.

However, no evidence could be found of South Africans having been targeted, as the majority of users involved were in the US.

Master Deed’s data breach “biggest” digital security threat in SA

Hunt was once again instrumental in revealing what was known as the “biggest” data breach in South African history, together with iAfrikan CEO Tefo Mohapi in October 2017.

Over 60 million South Africans’ personal data, from ID numbers to company directorships, was believed to have been affected.

The information was traced to Jigsaw Holdings, a holding company for several real estate firms including Realty1, ERA and Aida. The information reportedly came from credit bureau agencies, and was used to vet potential clients.

The information trove was found not to have been hacked, as it was stored in an easily accessible manner on an open web server.

Ster-Kinekor’s database compromised

Movie theatre chain Ster-Kinekor was responsible for up to 7 million South Africans falling victim to a data leak in March 2017.

Fin24 reported that Durban developer Matt Cavanagh announced he had discovered a flaw in Ster-Kinekor’s booking website, and that he had reported it to the company.

There were between 6 and 7 million users in the database. Of those, 1.6 million people had email addresses linked to them on the movie theatre chain’s database.

Which IT job pays best in South Africa?

Source: CareerJunction

Jobs portal CareerJunction has published it latest salary review for 2018, showing among others what the average IT employee earns per month.

CareerJunction used actual salary offerings on their jobs portal Web site (16 000+ jobs monthly) for the latest measurable period (December 2017 to May 2018).

Skill levels covered in the report include both intermediate and senior.

IT management jobs saw the biggest jump in salary, moving from R59 490 per month to R66 010 (11%). Systems analysts were the worse hit by decreases, losing 17.1% in value over the year (from R42 420 to R35 170).


Image credit: Business Tech

Regional salary differences

The Western Cape and Gauteng remain favourable locations to work for IT professionals. Salaries in these regions are very close to the national average while salaries in KwaZulu-Natal are not nearly as competitive.

The salary ranges above are based on monthly “cost to company” remuneration and only serve as an indication of the average salary offerings for each occupation.

By Ben Roberts, Prof Sharlene Swartz and Dr Adam Cooper for the HSRC

The current recommendation for a minimum wage of R3 500 for South Africans is far too little. It should be at least twice that. In addition, we should also legally cap the income of company executives.

This is according to the majority of people who participated in the HSRC’s most recent social attitudes survey. They responded to questions related to a minimum wage and whether there should be a limit to what company heads could earn. These questions were included as part of the HSRC’s ongoing work into issues of poverty, inequality and restitution.

Income inequality has grown in post-apartheid South Africa, as the democratic period has brought with it greater disparities in earnings between a small, increasingly deracialised affluent group and the poor Black majority. This has been shown by Prof Murray Leibbrandt and his colleagues at the Poverty and Inequality Initiative at the University of Cape Town who describe a shift in the Gini-coefficient, a measure of income inequality, from 0.6 in 1993 to 0.7 in 2008. According to Leibbrandt and colleagues, wage income is responsible for 85% of income inequality with the labour market playing the defining role in ongoing income differences.

To test how the South African public feels about these differences in wage earnings, questions on the topic were included in the 2017 edition of the annual South African Social Attitudes Survey (SASAS). SASAS is a nationally representative sample survey of adults aged 16 and older that investigates public opinion in the country. The long-term aim of this survey programme is to construct an empirical evidence base that will enable analysts to track and explain the attitudes, values, beliefs and behaviour patterns of the country’s diverse populations by age, sex, population group, educational attainment, province, geographic subtype and class.

The survey questions explored South Africans’ perceptions regarding appropriate legislative interventions in labour market rewards aimed at both the top and bottom end of the income continuum. Specifically, the questions probed what respondents thought were appropriate minimum wages for workers and whether remuneration of corporate executives should be restricted. The participants were asked:

“What do you think is a fair minimum amount that all South African workers should earn each month? (No worker should earn less than this a month).

and

“To what extent do you agree or disagree that a law should be introduced in South Africa that limits the amount that a person in charge of a large national company can earn?”.

Minimum wage is too low
Results showed that South Africans believe that a mean figure of R6,953 per month is an appropriate minimum amount, substantially more than the R3,500 for a 40-hour week proposed in the National Minimum Wage Bill. Differences between sub-populations within the sample were noteworthy, with figures ranging from rural farm dwellers believing R5,707 to be adequate, in comparison to R9,678 for students and R10,121 among adolescents.

Top-end wages should be capped
Opinions about executive pay were recorded on a five-point scale (ranging from ‘strongly agree’ that a law should be introduced to limit earnings to ‘strongly disagree’). In total, 53% of the participants agreed that executive pay should be limited, 15% disagreed, 22% remained neutral and 11% were uncertain of the appropriate course of action or did not answer the question. Interesting differences between attitudes of sub-groups also emerged from this question, as Black Africans displayed greater support for limiting executive pay, in comparison to White and Indian adults. More unemployed people favoured income restrictions than employed respondents, as did young people in comparison to those over 50 years old.

Results showed that South Africans believe that a mean figure of R6,953 per month is an appropriate minimum amount, substantially more than the R3,500 for a 40-hour week proposed in the National Minimum Wage Bill. Differences between sub-populations within the sample were noteworthy, with figures ranging from rural farm dwellers believing R5,707 to be adequate, in comparison to R9,678 for students and R10,121 among adolescents.

Opinions about executive pay were recorded on a five-point scale (ranging from ‘strongly agree’ that a law should be introduced to limit earnings to ‘strongly disagree’). In total, 53% of the participants agreed that executive pay should be limited, 15% disagreed, 22% remained neutral and 11% were uncertain of the appropriate course of action or did not answer the question. Interesting differences between attitudes of sub-groups also emerged from this question, as Black Africans displayed greater support for limiting executive pay, in comparison to White and Indian adults. More unemployed people favoured income restrictions than employed respondents, as did young people in comparison to those over 50 years old.

Source: Business Tech

The results resonate with data from elsewhere in the world – for example in the US, between half and three-fifths of Americans concur with this kind of regulatory policy. Populations in the highly unequal societies of South Africa and the US therefore agree that measures to restrict corporate salaries should be introduced.

The survey results indicate that the public is astutely aware of existing wage disparities and favours courses of action to reduce these differentials. This was true both at the top end, in terms of executive pay, and for attitudes towards those most vulnerable in our society, people who receive very low wages. At the very least, the minimum wage should be closer to R40 per hour according to the South African public. Importantly, these findings were consistent across the class spectrum, suggesting that a broad consensus exists in relation to this issue, one that can only function to bolster the South African democracy.

 

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

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

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