By Phillip de Wet for Business Insider SA

The Constitutional Court has ordered the decriminalisation of dagga for personal use – but that doesn’t mean you can’t be fired for using cannabis.
Policies on inebriation are still in force, and in some jobs a legal requirement, even though they’ll need to be adjusted.

Things will be particularly complicated over the next two years, while changes are made to legislation.
Smoking dagga can still get you fired, under the right circumstances. And staying away cannabis – at least just before you go to work – could still be a legitimate requirement for some jobs.

But things got a whole lot more complicated after the Constitutional Court on Tuesday said the use of dagga is not a criminal act.

And during the two-year period the Concourt gave Parliament to bring legislation in law with the Constitution, things are going to be particularly difficult when it comes to people getting high on the job, experts say.

“This is a curveball,” Richard Malkin, managing director of company wellness provider Workforce Healthcare, told Business Insider South Africa after the Concourt judgment, even if, ultimately, “nothing is really going to change from a workplace perspective.”

Occupational health and safety rules demand that companies keep the workplace safe, and that includes making sure nobody operates dangerous machines while inebriated – whatever the substance of choice.

For jobs involving heavy machinery, Malkin says, policy should require employees to disclose, up front, if they are using tranquillisers, for instance, even if under the direction of a doctor.

“The requirement is that you can’t be under the influence of any mind-altering substance; whether it is legal or illegal doesn’t really come into play.”

Jobs in finance, or customer-facing jobs such as call centre agents advising customers, should also come with policies on inebriation.

But testing for dagga use is not as straight-forward as a breathalyser test for alcohol. The common, cheap, and fast urine test for cannabis actually detects a metabolic product that can linger for days – well after the user is no longer mentally affected.

So what happens if that test shows dagga use, and you tell the boss you smoked dagga days before? Right now, at least, Malkin believes the only thing a company could do is ask for a spectrophotometric test, which takes around two days and costs around R2,000.

In the meantime, the employee will have to be temporarily suspended from sensitive duties, as a precaution.

The result of such a test could be grounds for dismissal, speculate labour specialists who were still studying the Concourt ruling, on the basis of dishonesty. Using dagga may not be a firing offence, but lying about it could be.

First, though, there could be a considerable fight about the whole process.

“Someone may have okayed drug testing by a company in a contract, but now that company can no longer look at THC [the active ingredient in cannabis],” says Quintin van Kerken, of The Clear Option, an organisation that works in the cannabis and addiction-treatment industry.

“It is pointless, because THC now falls under your right to privacy, so they can’t do anything with a THC test.”

Van Kerken believes there will be test cases about cannabis intoxication and medicinal use of cannabis in the workplace – perhaps soon – but until then there will be considerable confusion about the matter.

In the meanwhile, employees and employers both had better look at the exact wording of policies around drugs and inebriation at work, because a blanket reference to “alcohol, illegal drugs, and prescription medication”, such as those now commonly found, don’t strictly apply do dagga anymore. Probably.

Naspers to unbundle and list MultiChoice

By Nick Hedley for Business Day

The transformation of Naspers, which was founded more than a century ago to produce Dutch-language newspaper De Burger, into an online-only behemoth is almost complete.

Africa’s most valuable company, which owns a 31% interest in Chinese internet giant Tencent, said on Monday it planned to unbundle its pay-TV business MultiChoice onto the JSE.

Naspers will hand its interest in the DStv operator to its shareholders.

Investors cheered the news. After falling 3.2% earlier in the day, in line with Tencent’s decline in Hong Kong, Naspers rallied to close 0.7% up at R3,206.42, valuing the company at R1.4-trillion.

Naspers hopes to list the new entity MultiChoice Group, which includes its local and rest-of-Africa pay-TV business along with Showmax Africa and security company Irdeto, in the first half of 2019. The unbundling will cap off a remarkable transformation at Naspers, which was mostly a publishing and pay-TV business until its 2001 investment in China’s Tencent.

Naspers would not raise funds through the deal, said CEO Bob van Dijk, but its shareholders would benefit as the market currently ignored MultiChoice when valuing the group.

In its sum-of-the-parts valuation, US bank JP Morgan calculated that Naspers’ majority-owned MultiChoice unit is worth $8bn. More than 90% of that value sits in SA, according to the bank. That implies that MultiChoice Group is worth more than Shoprite.

Van Dijk said Naspers plans to give MultiChoice SA’s BEE investors another 5% stake in the local pay-TV business. “Besides unlocking value for our shareholders, maybe more important we think it will also unlock value for [BEE scheme] Phuthuma Nathi, which is already one of the most successful broad-based BEE schemes.”

He said Naspers will continue to invest in its SA e-commerce businesses, which include Takealot, Mr D Food, PayU and AutoTrader. “In the last year, we invested more than R3bn in the e-commerce businesses in SA alone. We expect to continue to invest and we’re looking at interesting prospects.”

It will also retain its interest in Media24, which is moving quickly into online publishing. The pay-TV market was poised for further growth despite pressure from internet-based rivals such as Netflix.

“Even in markets like Europe, people still have traditional TV services and on top of that people have connected services. In Africa the story is even more positive — you see very significant growth in traditional TV … as well as decent take-up already in SA of [streaming services] DStv Now and Showmax. I’m confident it’s a growth story.

“I feel confident about putting the business on its own legs.”

Robert Pietropaolo, a trader at Unum Capital, said the unbundling would be positive for Naspers “but the pressure will certainly be on MultiChoice to stay competitive”.

“MultiChoice themselves have already started cutting their headcount and they have started offering lower-tier packages, which unfortunately does not bring in the desired revenues. MultiChoice will not only have to be nimble from now on, but I think they may have to re-invent themselves to be competitive,” Pietropaolo said.

In the year ended March, the pay-TV operator lost 41,000 premium subscribers across its African markets. Even though the total subscriber base grew — MultiChoice added 563,000 users in SA in the year to March — this growth came from far less profitable lower-cost packages. However, the company remains highly cash generative. Over the same period, MultiChoice generated revenues of R47.1bn and trading profits of R6.1 bn.

MultiChoice SA CEO Calvo Mawela said the company had slowed the decline in high-margin premium subscribers. It lost more than 100,000 of these customers in its 2017 financial year but reduced that number to about 40,000 in 2018.

“Our focus on Premium is beginning to bear fruit.… We’ll continue to focus on Premium to ensure that we do not see further decline in Premium subscribers going forward.”

By Kaunda Selisho for The Citizen 

The nation will have to pull those belts a whole lot tighter with a projected increase of about R1.14 a litre of petrol.

There seems to be no end in sight for South Africa’s perpetual rise in fuel prices as the Central Energy Fund (CEF) has predicted yet another increase for the month of October.

The CEF report, released earlier this week, attributes the projected increase to a weaker rand and a higher international oil price.

The most recent hike was capped at 5c after government intervention but was dubbed a “once off” to provide citizens a short reprieve after sustained increases over five months in the lead-up to September.

According to the CEF’s calculations, early indicators estimate that the fuel price could rise by R1.14 a litre in October.

Fin24 calculated that the inland price of 95 octane petrol would rise to a possible record high of above R17 a litre, thus affecting food prices and transport costs.

Source: Fin24

South Africa is in its first technical recession in nine years.

Stats SA announced on Tuesday that the country’s real gross domestic product contracted by 0.7% in the second quarter of 2018. This follows a revised fall of 2.6% in the first quarter of the year.

Here are 10 things you need to know according to the report:

  1. The country’s agriculture sector was the hardest hit, with a decline of 29% in the second quarter of 2018. It contributed -0.8 of a percentage point to GDP growth. Stats SA says the decrease was mainly due to a drop in the production of field crops and horticultural products, and the impact of drought.
  2. Transport and trade were the sectors that were the second hardest hit. The national statistic service reported that the transport, storage and communication industry contracted by 4.9%, contributing -0.4% of a percentage point the GDP. Meanwhile the trade, catering and accommodation industry decreased by 1.9% and contributed -0.3 of a percentage point.
  3. Positive contributions to GDP came from the mining industry as well as the finance, real estate and business services sectors.
  4. Net exports also contributed positively to growth in expenditure on GDP, with exports of goods and services up 13.7%. This was largely influenced by increased trade in precious metals, mineral products and vegetable products. Imports increased by 3.1%.
  5. Expenditure on real gross domestic product decreased by 0.9% in the second quarter of 2018, following a decrease of 2.6% in the first quarter of 2018.
  6. Household final consumption expenditure decreased by 1.3% in the second quarter of 2018, contributing -0.8 of a percentage point to total growth. This was the first quarter-on-quarter decrease since the first quarter of 2016.
  7. Government final consumption expenditure increased by 0.7%, contributing 0.1 of a percentage point.
  8. Gross fixed capital formation decreased by 0.5%, contributing -0.1 of a percentage point.
  9. The manufacturing industry contracted by 0.3% in the second quarter. The majority of the 10 manufacturing divisions reported negative growth rates in the second quarter. The largest contributors to the decrease were the motor vehicles, parts and accessories and the furniture and ‘other’ manufacturing divisions.
  10. The rand immediately fell on news of the recession, compounding its earlier losses. After opening the day at R14.85/$ on Tuesday, it was trading at R15.22/$ at 13:05, down 2.4% on the day.

Standard Bank turns tweets into stationery

For every action there’s an equal and opposite reaction. Some call it the concept of cause and effect. Others would term it reaping what you sow. At Standard Bank, this means that #GoodFollowsGood.

From August to October, Standard Bank will launch the Tweet Machine, a mobile industrial container that acts as a factory of sorts by linking the global reach of social media to 3D printers and laser cutters, which will produce 1000 set square and ruler kits for grade 6 learners. This is the first installation in the world to turn tweets into educational tools.

The idea will be to kick-start a positive impact initiative on social media by encouraging South Africans to tweet about something positive using the #GoodFollowsGood hashtag. Standard Bank will then facilitate the forward payment of this positivity by transforming these tweets into stationery sets for learners that are part of the Standard Bank Tutuwa-BRIDGE School Programme. The five-year partnership with Tutuwa-BRIDGE seeks to support schools in improving learner outcomes. Both learners and school performance will be monitored to ensure that the impact is effective and long-lasting.

The technology powering the Tweet Machine is a customised Python programming script on a master computer to scrape Twitter and other social media channels like Facebook, Instagram and LinkedIn for posts using the #GoodFollowsGood hashtag. The social media posts will be fed to a special micro-controller unit called a Raspberry Pi, which will send the appropriate print commands to the 3D printers and laser cutters housed inside the Standard Bank Tweet Machine.

“Our goal is to use the power of social media to illustrate that everything you do sets something in motion. The Tweet Machine activation is a live demonstration of positive words having a positive impact, while at the same time creating tangible education tools to benefit young learners,” said Katlego Mahleka, Senior Manager, Brand at Standard Bank Group.

The public will be able to view and contribute to the stationery by posting on social media and feeding directly into the printers and laser cutters as they work. The activations will be held at a two venues in Johannesburg: Melrose Arch Square (30 August – 2 September) and Singularity U Summit (15-18 October).

See the Tweet Machine in action here:

Source: Fin24

The rand briefly broke below R14.00 to the US dollar following the news that Parliament’s portfolio committee on public works withdrew its expropriation bill on Tuesday.

The public works committee said in a short statement that it “officially resolved, in accordance with Joint Rule 208 (2), to reject (withdraw) the Expropriation Bill [B4D of 2015] so that it may be re-introduced at a later stage”. The bill is separate to the review of section 25 of the Constitution currently under way to make it possible for the state to expropriate land without compensation.

The rand, which immediately firmed to R13.95/$, returned to trade 0.06% firmer at R14.15 to the greenback by 17:13 in Johannesburg.

Important to note is that the expropriation bill existed before the latest processes on land expropriation and was referred back to Parliament by former president Jacob Zuma, who said consultation around the bill was inadequate.

Zuma returned the bill to parliament in 2017 due to inadequate public participation for the bill.

During its December conference, the ANC and its delegates agreed that expropriating land without compensation should be among mechanisms to effect land reform.

The condition was that expropriation should not undermine the economy, agricultural production and food security.

The constitutional review committee is due to report back to Parliament regarding its findings from the nationwide hearings on expropriation soon.

By Bekezela Pakathi for Business Day

British Prime Minister Theresa May has welcomed SA’s approach to land reform, saying the UK supported land reform that’s legal and transparent.

“The UK has, for some time now, supported land reform that is legal, transparent and follows a democratic process … it’s an issue I raised with President [Cyril] Ramaphosa when he was in London earlier this year. I will be talking about it with him later [on Tuesday] … but I welcome the comments he has already made about approaching land reform, bearing in mind the economic and social consequences … and that land reform will be no smash and grab,” May said at a business forum in Cape Town earlier on Tuesday.

Last week, US President Donald Trump posted a controversial tweet on SA’s push to expropriate land without compensation. “I have asked Secretary of State [Mike] Pompeo to closely study the South Africa land and farm seizures and expropriations and the large scale killing of farmers,” tweeted Trump. “South African Government is now seizing land from white farmers.”

Responding to questions on the matter and whether expropriation without compensation could hurt SA’s efforts to attract foreign investment, May reiterated that the UK supported land reform that is “legal and transparent”. She said SA and the broader African continent offered significant opportunities for investors.

“I think there are real opportunities for the future. I brought a significant business delegation with me across a wide range of business activities from financial services to agriculture. Obviously we look across Africa … they are looking to invest [but] want to ensure that countries have that stable aspect investors are always looking for,” May said.

The UK’s development aid would look at how “we can assist in bringing stability to those states that are fragile”, she said.

May was in SA as part of a three-nation visit to Africa in an effort to strengthen Britain’s economic relations with the continent, ahead of the UK’s exit from the EU In 2019. She is due to visit Nigeria and Kenya this week.

Review of fuel levy ‘is possible’

By Bekezela Phakathi for Business Day

The possibility of reviewing the fuel levies downwards to ease the financial burden on motorists and consumers has not been ruled out, says President Cyril Ramaphosa.

“The fuel levy is part of fiscal architecture we have in our country … we have said we want to look at that … the fuel levy is precisely one of those we are looking at,” Ramaphosa said in parliament on Wednesday

“We are sensitive to the burden imposed on our people.”

The price of fuel recently went up to more than R16 a litre in inland provinces. The hikes are expected to have a ripple effect on the economy.

The price of a litre of petrol in SA has more than doubled in 10 years, while the levies increased from about R1.30 in 2008 to the current R5.30.

The fuel levy contributes close to R63bn annually to the fiscus. The Road Accident Fund levy accounts for R1.93 of the fuel price. Taxis and other public transport operators have already upped their fares in response to the increases.

Ramaphosa said any decision would have to weigh the advantages of reducing the fuel levy against the loss of revenue for the state, which will have an effect “on a whole lot of things”.

“It’s not as easy as snapping a finger and coming up with an answer … it’s one of those issues we continue to look at and seek solutions for.… We import a commodity we have no control of in terms of prices,” said Ramaphosa, during a question-and-answer session.

DA leader Mmusi Maimane had asked Ramaphosa whether there was a plan to reduce the fuel levy, which he called a “corruption tax”. “The RAF [Road Accident Fund] is declaring losses and money is being wasted. Is there a plan to reduce the fuel levy?” he asked.

Department of energy officials told parliament on Tuesday that any adjustment to the fuel levy could only take place in the next financial year.

The government has said before there is nothing much it can do to stem the fuel increases since the country imports the bulk of its requirements. The change in the price of petrol is typically a function of both changes in international exchange rates, particularly the US dollar-rand exchange rate, and the change in international crude oil prices.

Ramaphosa also answered questions on the unemployment crisis and the burning issue of land expropriation without compensation.

“Since 2009 I have heard about plans and summits, yet millions of South Africans are still unemployed,” said Maimane. “The definition of insanity is doing the same thing and expecting a different outcome or keeping the same people [in the cabinet] and expecting a different outcome.… Can we bring change so we can expect a different economic trajectory?”

Ramaphosa said the cabinet would soon announce details to stimulate economic growth, including finalising the Mining Charter and allocation of broadband spectrum.

“We want to unlock the levers that hold the economy back,” said Ramaphosa.

The president hit back at Maimane, saying: “I’ve not heard anything wise that you’ve said.… You are playing the people or the man, not the substantive issues that have to do with economic growth.”

Without land redistribution there would be no stability in the country, Ramaphosa said.

“Transformation means we must have redistribution of land because there was an injustice committed many years ago.… If you do not want stability then do not transform … but if you want stability then you must transform.… We will make sure that our country succeeds. Even the landowners must embrace this process,” he said.

Source: Fin24 

Some 40% of the credit provided by the country’s top 10 credit providers appears to be reckless, a new survey has found.

The Reckless Lending Indicator, released by debt counselling firm DebtSafe for the first time, is based on data from the top 10 credit providers in South Africa for the period of April to July 2018.

Of 5 591 credit agreements investigated, 51% appeared not to be reckless, while 40% appeared to be reckless.

Of the remainder, 7% reflected agreements prior to the National Credit Act and 2% comprised other agreements.

“The analysed data of the top 10 credit providers, based on agreements that appear to be reckless, suggests that the ‘big’ credit providers are playing a major role in the reckless lending environment in South Africa,” DebtSafe said in a statement.

These lenders include – in order – First National Bank (FNB) with 12% of the agreements that appeared to be reckless; Capitec with 6.5%, African Bank with 5.5%, FinChoice with 5.1%, Nedbank (MFC) with 5.0%; Absa and CapFin each with 4.7%; and Standard Bank with 4.2%. Last on the list are Nedbank (3.9%) and Old Mutual (3.9%). All remaining providers accounted for 44%.

The latest statistics released by the National Credit Regulator (NCR) in March 2018 indicate that SA has 25.46 million credit-active consumers. Meanwhile, 9.7m consumers – totalling 38% – have impaired credit records.

According to DebtSafe, this means “almost one in every 25 credit-active consumers that sit with an impaired credit record […] might be over-indebted”.

Over-indebted in three clicks

“It is shocking and scary to know that consumers can pave their way to over-indebtedness with just three clicks using modern-day technology. These days it is all too ‘normal’ to not only apply for credit but to also get it approved within a few seconds. The concerning question here is: does the credit provider conduct a thorough affordability assessment to make sure that the consumer can keep up with the agreed upon payments?” DebtSafe said.

Matthys Potgieter, debt expert and spokesperson at DebtSafe, said, “Previously consumers went to creditors to ask for credit, but now things have changed, and instead, hard-selling credit comes directly from the creditor to the consumer.”

According to Potgieter, consumers may be confronted with pre-approved loan applications via various mobile apps or other methods like SMS, email and telephone calls.

“Before consumers click ‘accept’ on such an application, I would like to ask them the following question, ‘If you withdraw or use all this money on the same day, would you be able to afford the loan’s instalments in future?’ and if they answer ‘no!’ – then they, with the click of the ‘accept’ button, will already be over-indebted,” he said.

Massmart still failing to deliver for Walmart

Source: Supermarket & Retailer

More than seven years after the $2.5bn acquisition of Massmart by Walmart, the merger between the world’s largest company by revenue and Africa’s second-largest distributor of consumer goods is yet to set the SA retail sector alight.

Walmart may have been overoptimistic about the deal and have underestimated the difficulties that SA retailers face

Walmart’s high-profile purchase of a 51% interest in Massmart — whose products straddle the general merchandise, liquor, home improvement and wholesale food markets — heralded the US group’s foray into Africa. It was part of a broader strategy to get into high-growth markets. With such growth aspirations in mind, Massmart, a high-volume, low-margin business, was a logical target for Walmart.

“We see an opportunity to take our mission and apply it in this part of the world and create growth opportunities,” Walmart CEO Doug McMillon said in January 2011. Indeed, since the deal was consummated in June 2011, Massmart, the owner of Game, DionWired, Makro and Cambridge brands, has increased the number of its stores from 288 to 424, as of January 2018.

It has a presence in several sub-Saharan African countries through its four operating divisions, Massdiscounters, Masswarehouse, Massbuild and Masscash. But, overall, the transaction that promised so much has delivered very little.

It is difficult to overlook that Walmart bought the majority shareholding in Massmart at R148 a share. As of Friday, Massmart’s share price has slipped 14.35% since the implementation of the transaction on June 20 2011. The shares were up 2.63% on Friday at R113.66.

“It has been disappointing,” says Ian Cruickshanks, Institute of Race Relations chief economist, of Massmart’s performance over the seven years.

Walmart may have been overoptimistic about the deal and have underestimated the difficulties that SA retailers face, Cruickshanks says.

“We are still very much an emerging economy. They must be prepared for the long run. But they have done a lot recently to reduce costs,” he says.

In the year ended December 2017, Massmart’s costs fell 1.3% and expenses as a percentage of sales were 16.4%. In light of the constrained consumer environment, which is stifling sales, Massmart has no choice but to prioritise cost savings.

Analyst Chris Gilmour has been scathing about what he says is Massmart’s lousy performance since the 2011 milestone deal. In that period, Massmart’s share price has lagged the general retailer’s index, which has grown by 77.98%, as of Friday.

Massmart is taking strain from deflation in durable goods, Gilmour says. “Circumstances have not gone their way.” he says.

Massmart says the deflation in domestic appliances and electronics has not stimulated customer spending because hard-pressed lower and middle income consumers prioritise spending on food.

In the SA market, which accounts for 91.6% of Massmart’s total sales, food and liquor make up 56% of sales, with durables responsible for the rest. Growth into the food market is a sore point for Massmart because the group feels hard done by what it calls anticompetitive lease exclusivity leases that rivals in the grocery retail market — Pick n Pay, Spar and Shoprite — have at malls where Massmart wants to roll out its Game FoodCo stores.

Massmart took its concerns to the Competition Commission in 2014. The Competition Tribunal earlier in 2017 dismissed Massmart’s complaint, frustrating the retailer’s plans to sell fresh fruit and vegetables, meat, dairy and bakery products at more shopping malls.

Cruickshanks says all is not lost for Massmart and has commended its pursuit of new revenue streams through value-added services and online businesses. In the six months ended July 1 online sales soared 69%.

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