Tag: South Africa

SA ranks high in global survey on cyberbullying

South Africa showed the highest prevalence of cyberbullying in a recent report by Ipsos Global, based on research in 28 countries. The report showed that more than 80% of South Africans said they were aware of cyberbullying and almost three-quarters of South Africans believe that the anti-bullying measures that are in place are insufficient. A Vodafone survey from 2018 ranked South Africa fourth for teen cyberbullying out of 13 countries, and Dean McCoubrey, founder of MySociaLife, a South African in-school Digital Life Skills Program teaching digital life skills program for schools, says that it’s likely even more prevalent, based on student feedback.

Vodafone survey

Cyberbullying is real, it’s here, and it’s harming South African children and teenagers daily, with its effects often being mistaken for ‘kids just being kids’ by parents who are yet to understand how rife and damaging cyberbullying can be. Anti-Bullying Week 2019, from 11-15 November, is a good time for schools to pay attention to the extent of cyberbullying, and for parents to get a handle on what they can do to avoid and deal with it.

“The challenge with cyberbullying is that parents can’t permanently monitor their child’s devices,” explains McCoubrey, whose programme teaches thousands of students, parents, teachers and psychologists to help children feel safer and behave smarter online.

“Parents and teachers need specifics – not just the broad term of ‘cyberbullying’ – as this is a broad and elusive form of ‘warfare’ on these devices – and parents will definitely find it difficult to track or understand what’s actually going on.

He shares the five faces of cyberbullying:

  • Children can use negative, harmful, false images or text, chat, apps or social media posts to embarrass or threaten someone.
  • The sharing of personal or private information that may cause the victim to feel embarrassed or humiliated. This can surprisingly hail from a friend (a practical joke) or a former friend, turned enemy. In that event, the controlling of a person’s account, posting photographs, starting rumours, or changing profile photos can also occur.
  • Faking profiles, known as ‘catfishing’, when bullies create new accounts and borrow profile photos and names and pretend to be a person to create a false relationship – sometimes sharing the personal and confidential declarations made in confidence.
  • Sexting or sextortion is the sharing of nude photographs either within group chats, or on social media sites, or websites (although less likely due to the possibility of tracking the source of the publisher). Sextortion is focused more on the threat and bribery associated with publishing photographs, rather than the act itself.
  • Video shaming is the sharing of videos of someone being embarrassed, threatened or hurt, and then publishing these to allow the content to go wider, or even viral, compounding the psychological harm.

Students and parents have a few options:

  • Record: Most importantly, kids need to be reminded to record the cyberbullying event by using the device to take a screenshot, and even send the screenshot to a safe place (email, storage) so you can take it off your device. This can be used to prove the problem exists as bullies are cunning and cover their tracks.
  • Don’t take the bait: As difficult as it may seem, reacting is what the bully wants, and kids need to avoid the situation, and remove themselves from groups or feeds which aren’t supporting their mental health. It may be hard but it’s necessary.
    Seek support: Parents and schools need to create safe spaces to discuss the issues and not ‘freak out’ – students often say that reactive parents and teachers who tackle the issue too abruptly can snowball or magnify the problem. Adults need to handle situations calmly with patience and maturity.
  • Engage: From a mental health perspective, students need support, but it’s essential to select a trusted expert. This may be a counsellor or senior figure in the school to assist with the situation. Alternatively you can seek out a social media lawyer or the police, dependent on the extent of the harm. Suggestions include SafetyNet for bullying, or the South African Depression and Anxiety Group for mental health concerns.

In conducting MySociaLife’s interactive social media and safety program, which includes a module about cyberbullying, McCoubrey has been surprised by students coming forward and admitting they had no idea of the extent of cyberbullying, the different sensitivities of human beings, and how different images, social media posts, chat forums and messages can hurt people, and impact them long-term. McCoubrey explained that of the ten modules they teach; cyberbullying is the #1 problem followed by mental health and self-esteem, then privacy and security and sexuality online.

But cyberbullying is an issue which starts early and continues throughout. It’s the nature of social media – we feel we have a voice to say good and bad things! “These are kids, and because they look savvy online, it doesn’t mean they have the maturity to handle the device.

“Four out of 10 kids don’t want to share their concerns. We need to find a way to engage, a safe platform to discuss these concerns, without withdrawing them from their community, unless of course that’s a necessity to keep them safe.

According to Commonsense Media, there are four parties involved in a cyberbullying situation: the cyberbully that’s using digital tools to deliberately upset or harass their target – the victim of cyberbullying. The bystanders are aware that something cruel is happening, but who stay on the side-lines out of indifference or fear of becoming targets themselves. The upstanders are the kids who actively try to stop the cyberbullying cycle, whether it’s by sticking up for the victim, standing up to the bully, or notifying the appropriate authorities about what’s happening.

“Parents and teachers can use Anti-Bullying Week to make children aware that it’s everyone’s responsibility to make the online and real life worlds a safe place,” says McCoubrey. “Anyone can be an upstander by reporting a bully, flagging a cruel comment, or even just choosing not to forward or share cyberbullying content. Doing so will stop a cyberbullying episode from escalating, and will reduce or even remove the bully’s power.

“It’s also important to have open paths of communication with everyone and to continue talking about how to prevent cyber bullying from happening. That is why every school should have a digital life skills program in place,” he says.

SA cloud market to grow to R23.6bn by 2023

Source: MyBroadband

BMIT has published its SA Cloud Computing Overview and Market Sizing 2019 report, which shows that the growing adoption of cloud computing in South Africa has democratised IT resources and made technology available that traditionally would have been out of reach of the smaller player.

For businesses considering moving to the cloud, first mover advantage is more important than ever – while supporting innovation is a key success factor in today’s highly-competitive industries.

Analytics and artificial intelligence, along with other emerging technologies, are available to businesses at a fraction of the investment that would have been required before the transition to cloud computing.

IT modernisation, cost optimisation, and digital transformation are factors which motivate all companies to implement cloud computing.

The ability to scale is more important to medium and large companies than small companies, whose primary motivation is to transform digitally.

There is significantly less resistance to moving to the cloud in general – however, the question the market is grappling with is the “when and how” to move.

That being said, the conservative mindset of some in the IT market along with aversion to change is still challenging the industry and slowing adoption as more traditional-minded IT personnel often want full ownership and control over their IT resources – rather than the pay-per-use model that cloud has ushered in.

The cloud services market in South Africa is estimated to have grown at 31% in 2018 and is expected to grow another 35% in 2019 as the multinational hyperscale (Amazon, Google, Microsoft) local data centres go live over the next two years.

Looking further into the future, BMIT forecasts the cloud services market growing at a CAGR of 28% over the next five years to R23.6 billion in 2023.

Bank Zero goes live with debit card

Bank Zero has now fully completed its core value proposition by going live with its debit card. Following this card go-live, rigorous health-checks such as simulated card attacks, card fraud detection and retailer readiness are currently underway. Thereafter the final countdown to starting public operations will begin.

South African card holders suffered a whopping R873m in theft in 2018, according to SABRIC statistics. To protect customers from this traumatic experience, Bank Zero has designed a new patented card which offers vital security and convenience. This patent will dramatically minimise the negative impact of card data theft and card skimming on Bank Zero customers.

Open source technology combined with a scientific design approach delivered this card in record time. MasterCard teams from South Africa, India and the USA were closely involved in validating and commissioning this card solution. IBM’s global expertise in encrypted card security was also tapped into. Michael Jordaan, Bank Zero chair, says: “Globally, banks are big spenders on such projects, often spanning multiple years, but sweat capital along with an integrated business-and-tech design approach is our strategic advantage.”

“During the development of Bank Zero, no traditional banking systems were bought nor was any outsourcing done – these are expensive yet conventional solutions. We wanted to create an exciting customer offering which required building our own systems,” says Yatin Narsai, Bank Zero CEO. He explains that, in just over a year, three large payment rails were created, each from a clean slate:

  • Direct integration into the South African Reserve Bank’s system, in order to become a settlement bank
  • Electronic payments (EFTs) and debit orders, establishing Bank Zero as a clearing bank
  • Issuing and processing of debit cards

“Zero pricing, along with our advanced card security, are just some of the ways in which we make our customers’ lives easier. We also bring special functionality around social connectedness, transparency, control, advanced payments and a focus on savings,” says Narsai.

“Feature-rich banking must never force customers into paying exorbitant fees.”

The card go-live sets Bank Zero on the path to opening its digital doors to the public, and current internal beta testing continues to provide solid insights. Bank Zero now begins its final countdown towards starting public operations in the first half of 2020:

  • Add the final ‘shine’ to the Android and iOS Apps for both individuals and businesses
  • Put the patented card through its paces by actively using the first cards which recently arrived, sporting a fresh new design
  • Confirm regulatory reporting is in order
  • Perform the annual disaster recovery test
  • Ensure that cards can be used internationally
  • Confirm security and performance testing to ensure Bank Zero’s systems can handle massive volumes
  • Implement a standby system, enabling maintenance without inconveniencing customers
  • Fine-tune and complete the build-out of the customer service model
  • Extend current beta testing
  • Start public operations

“The last mile is always the hardest. You can walk this last mile with us by following our tweets,” says Jordaan.

Local seven-year-old starts stationery business

By Lungile Satsuma for IOL 

Omphile Mabitsela, 7, is so determined to beat the country’s harrowing unemployment statistics that he has already started building his stationery empire.

Mabitsela, a Grade 2 learner from Randburg, has already roped in two of his friends, his aunt and mother to help him grow his stationery business.

His “office” space is situated at his mother’s business building, also in Randburg. Quirk Quirk Inc, Omphile’s business, produces and supplies a variety of paper-based stationery, such as bookmarks and party packs and sells puzzles, crayons and pencil cases.

He told The Star this week he wanted to be the person who hired the unemployed who he heard President Cyril Ramaphosa speaking about in the media. It was announced recently the country’s unemployment rate had shot up to 29.1%.

“President Ramaphosa told us there are so many people who are not hired so I want to be that person who hires them,” Omphile said.

His mother, Prudence Mabitsela, said parents needed to instill entrepreneurial skills into their children to become self-starters and not necessarily wait for jobs.

“We should stop creating job seekers as a country and start creating jobs ourselves,” she said.

The young mogul said he was inspired by his mother to start his business which has been in existence for a year now. It also has its own website.

“It was my mother that inspired me to start my business because she is a business owner as well. I want to hire people who don’t have jobs,” he said.

Quirk Quirk Inc is a registered and 100% black-owned business. Omphile mixes his academics and arts to produce his products.

He said his passion was inspired by his friend who showed him his “quacks quacks” and that inspired him to make bookmarks for people who read books. These sold for R10 each.

His mother said Omphile was someone who was aware of his surroundings and wanted to assist where he could.

“He has hired a team which consists of social strategists, a brand manager and a receptionist,” she said.

Omphile said his target audience is from everywhere in South Africa and people can order items online.

His parents initially funded the company which eventually grew to be self-sustainable.

The determined young man said he was motivated by unemployed people seeking jobs and knowing that he can be the solution in inspiring people to be business-minded.

“I want to inspire them to have their own company,” he said.

The company has sold more than 1000 products countrywide.

By Janice Kew for IOL

Shoprite Holdings Ltd. started a review of supermarket operations outside South Africa and would consider exiting certain countries if that would help reverse regional sales declines.

Africa’s biggest grocer reported a 4.9% fall in third-quarter revenue when its main market is excluded, the Cape Town-based company said at the start of its annual general meeting on Monday. Weaker currencies weighed on performance and the Nigerian business was affected by xenophobic attacks — a response to violence in South Africa against immigrants from elsewhere on the continent.

“We are not scared to take the hard decisions,” Chief Executive Officer Pieter Engelbrecht told investors, adding that leaving certain markets would be considered. Other measures including cost reductions are underway, he said.

The performance contrasted sharply with improved trading in South Africa, where quarterly sales jumped by 10% even as Shoprite’s main lower-income customers battle with the impact of an economic showdown. Chains including Checkers and U-Save are benefiting from a new IT system and the revamp and opening of new stores, the retailer said.

The shares rose 0.6% to 139.04 rand as of 11:50 a.m. in Johannesburg, valuing the company at 82 billion rand ($5.6 billion). The stock has fallen 27% this year.

Shoprite reported the update at the start of its annual general meeting, where former billionaire Christo Wiese was re-elected as a non-executive director despite some investor pressure over his three decades as chairman. Shareholder All Weather Capital had last week nominated former Pepkor Ltd. head Jan le Roux as a director to try and reduce Wiese’s influence, though he received just 16% support.

The makeup of the board will change over the next year, Wiese said at the AGM, while more attention will be given to succession planning. A decision on whether he continues as chairman will be taken later on Monday.

Black Friday is not a charity, consumers warned

Source: Supermarket & Retailer

Black Friday, which falls on 29 November this year, may feel like an annual treat for thrifty shoppers, but it has little to do with altruism. For retailers it is all about maximising consumer spend.

Some Black Friday bargains will save you money, with some items selling at or below cost price, but profit-starved stores, especially those in South Africa under extreme pressure, do not plan to come in at a loss for the day.

Rather, online and brick and mortar stores use the annual shopping day to manipulate consumers, get feet through doors, win hearts and minds, and generate additional revenue.

In South Africa, shoppers spent close to R3 billion at stores on Black Friday 2018 – a leap in spending so high that it even helped ‘save’ the country’s economy after a torrid year. And with South African consumer spending habits often dictated by pay day deposits, it’s an expense that few local consumers can actually afford.

In order to get consumers parting with their cash, and then, ironically, thanking the stores while doing so, retailers employ several tricks and techniques – many of which are refined each year as the shopping day continues to gain traction in South Africa.

This is how stores will try to trick you into spending more money than you probably should on Black Friday 2019.

Stores will build up your bargain-seeking arrogance – to your detriment.

The psychological manipulation starts long before anyone bangs on the store doors early on Black Friday morning itself, and all the retailers taking part are conspiring against you.

Stores use several psychological tricks to manipulate shoppers, but one of the most important is boosting your certainty of finding a great deal on days like Black Friday, according to brand and consumer specialist Martin Lindstrom.

He argued on Bloomberg that most of what we do while shopping is irrational and subconscious, and calls the mall “the soul of seduction”. The more rational shoppers think they are, he says, the more likely they are to be manipulated.

In other words, you might think it’s entirely rational, and even pretty genius, to be tracking down that amazing deal on Black Friday – but if anything, this confidence just means you’re more likely to fall prey to their tricks.

Building up the hype prior to Black Friday reinforces the idea that great bargains are to be had. Also watch out for messages that tease limited availability and the need to pounce on deals while they are available, rather than sitting on the idea of buying that brand new washing machine until it is “too late”.

“Limited stock” is just that – especially if the numbers aren’t specified.

Mainstream stores will not risk being caught for fraud; if they advertise a once-in-a-lifetime discount of tens of thousands of rands, they really will sell at that price. But there is no requirement for them to have enough stock to make sure you too can get that item at that price.

Be especially worried when the level of stock is not specified, because “limited” can mean “one”.

Stores count on the fact that the adrenaline rush of Black Friday will make you grab a “deal” you haven’t properly researched when limited stock means you can’t get exactly what you want – especially after you’ve camped out on a cold floor all night or obsessively clicked “refresh” on a web page.

Retailers lure you in with great deals, and then subtly tempt you to buy stuff that is not on sale

The concept of loss leaders – items that aren’t necessarily profitable, but sold to attract customers to other items – is nothing new, and not exclusive to Black Friday, either.

Between online research and social media, retailers have to offer genuinely good deals to get feet through their doors rather than those of competitors. If they draw enough traffic they may be able to offset the losses with higher volumes on regularly-priced goods, and they tend to do everything in their power to convince you to buy those.

In some cases it seems as if stores also subtly mark up items they think shoppers may not know the value of, and let the halo-effect of Black Friday give the impression that these too are really good deals.

Loss-leading is not a failsafe way for stores to generate profits, but they do work – to the extent that they’re banned in many US states and European countries.

The products on sale may be old….

Check the model numbers of the hot ticket items that are deeply discounted, and you may find that the products are anything but new.

Events like Black Friday are a great way to move old items that haven’t sold through the year, and probably won’t move during Christmas shopping either – and which will only drop in value as they are outpaced by newer models with new features or technologies.

These can still be great deals if you know what you are in for, and if you are happy with last year’s model, or one with limited features. Just don’t be caught with a “new” TV that isn’t quite what you expected.

… or inferior

Because American consumers can now be counted on to flood into stores for Black Friday, some manufacturers create products especially to capitalise on that spending.

In at least some cases, these special product lines are cheaper to make, and inferior, to mainstream product lines that carry the same name. Because of this, Forbes suggests that the very bastion of a Black Friday deal – the not-so-humble flat screen television – is better bought at other times of the year to avoid buying “toned down, derivative models”.

If you can’t find the model number for a common item from a big name with a simple Google search, beware.

You are not being paranoid: some stores will quietly increase prices before Black Friday to claim bigger discount levels.

As with some online stores in South Africa, those dramatic double-digit percentage discounts on offer come 29 November will not necessarily be as attractive as simple math would suggest.

That’s because in order to hit the advertised discounts, some retailers quietly increase the retail price of sale items a few weeks before the event.

That way they can genuinely claim a discount compared to what they were charging before, even though that is not necessarily the price that was generally charged.

Chances are you’ll get the same thing at the same discount later – and you may do even better.

It’s easy to fall into the temptation trap of Black Friday and think it’s the only sale of the year. But, in the US market at least, CNN claims that there are the same – if not better – deals to be had at other times of the year.

And the South African seasonal retail cycle is looking more and more like that of America, as Black Friday and Cyber Monday take hold here.

Sales on things like clothes and outdoor equipment are often dictated by the changing weather, so if you’re after summer fashion items, you may be better off waiting a few months after Black Friday.

Likewise, South African electronics stores increasingly release items like smart phones and televisions soon after they launch elsewhere. Those launch dates are often linked to big international events, such as the Consumer Electronics Show in the US.

So if you lust after a big-ticket item such as a new iPhone or a large TV, you might be better syncing your sales clock with, say, Apple’s international releases, and waiting for the fire-sale price drops that come when that now top-of-the-line phone suddenly becomes a previous model.

When the going gets tough … the marketing budget gets slashed. It’s an age-old truism that marketing activities are among the first to be cut back during austere times. It’s also often the wrong thing to do, said Nona Koza, Business Partner at Oliver South Africa.

“It’s a mistake that brands make worldwide. Research shows the contrary is true: if you keep up your brand activity during austere times, when the economy swings up again you make a lot more money. The reason why is something we often forget: consumers buy a value. It’s a promise of what that brand is going to deliver. In tough times, when the brand becomes less prominent, it comes across as a lack of empathy. Your customers are struggling – where are you?”

Customers, just like companies, are more frugal and value-conscious when the economy is down. So, it is ironic that by underplaying your brand during such periods, you are taking important signs of confidence away from your customers. Hence why cutting back on brand positioning as a cost-saving measure is often self-defeating.

But slashing budgets need not be the only strategy. Hard times are an opportunity to revisit marketing strategies and ask if there is a better way to do things – and yes, there is. Through an on-site approach, organisations can radically improve their marketing activity. This is crucial for the above considerations: to keep customers close in a tough economy, you want a marketing approach that operates on close proximities and immersion with them.

“What you want to pursue is customer retention,” explained Koza. “How are your customers using your products? Who are your best customers? How do you reach them more directly? For example, the cost of one billboard can cover several breakfast events with key customers. The key thing here is targeted customer engagement and much more face to face interaction.”

Targeted engagement is just one side of this strategy. The other is to develop an agile marketing pipeline that is engaged with the business. Brand activities should align with business strategy and expectations. If your marketing people are not there in the trenches, meeting customers alongside other staff, grasping the roadmap and moving with its requirements, your branding efforts will struggle.

External marketing agencies are often too removed from the business coalface to achieve this. Internal marketing can, however represent an incredible cost centre. This challenge has given rise to a third model – the on-site agency.

“Unlike an external agency, an on-site agency works at the customer’s premises,” Gabrielle Gray, Executive Creative Director at Oliver South Africa explained. “Its people are there to engage with the business at every level – from chatting at the water cooler to sitting in on important meetings. And unlike internal agencies, an on-site agency manages marketing operations such as talent acquisition externally. You get the best of both agency models, but without the drawbacks.”

Oliver is pioneering the on-site agency model. It works with customers to create internal teams from Oliver’s own ranks, based at the customer’s premises to ensure the types of engagements described above. Complementary to any other internal or external marketing functions, on-site agencies improve delivery times, move with the customer business, help align marketing with business objectives, and brings the nuance needed to woo the business’ clients.

In difficult times, such a personal touch is important. Customers want to see it from their brands, and those brands need it from their agencies. Cutting back on brand positioning is not the right strategy during tough times. But branding can be done differently: customer-focused touch points and engagements, pop-up events, tailored digital messages – these are crucial tools. The on-site approach offers significantly better engagement and brand performance at the budgets of traditional marketing, since it works intimately with the organisation to become on-premise brand partners and it can leverage creative resources like no other.

“Traditional approaches do work for some companies,” said Gray. “However, what we find is the immediacy of being on-site, a client being able to walk over to us and say, ‘I’ve had this idea, how can we execute it? What do you think?’ – this is a very good way to deliver on business objectives. As a result, we understand the customer’s business better and, in turn, the customer is more involved with brand activities. ”

South Africa’s economy is in bad shape

Source: FNB

The Medium-Term Budget Policy Statement (MTBPS) is an update by the National Treasury of the South African government’s financial health relative to what was proposed in the main Budget Review tabled in February.

In his opening remarks Finance Minister Tito Mboweni presented an Aloe ferox to the House, which he highlighted had survived a bitter cold winter during which the ground had become hard.

The Minister likened this plant to the toil that the average South African has been enduring through these challenging economic times.

While the 2019 MTBPS provided a reasonable framework given the challenging circumstances, Minister Mboweni emphasised that the timely implementation of much-needed structural reform was the silver bullet that would provide the fundamental support required for the South African economy to grow meaningfully and sustainably.

In sum, the MTBPS highlighted that chronically poor economic growth is putting pressure on tax revenue collection, while expenditure pressures continue to mount as the government continues to offer assistance to ailing state-owned entities (especially Eskom). Indeed, the combination of these factors has put the government between a rock and a hard place, as sovereign debt continues to rise at increasingly unsustainable levels.

Highlights of the budget:

  • In line with expectations, there was a material deterioration in the fiscal deficit. The estimate for the main budget balance widened to an average of -6.2% of GDP in 2019/20, compared to the -4.7% estimate from the 2019 Budget Review.
  • There were no announcements of tax increases. The Treasury acknowledged that tax measures implemented in recent years have not translated into stronger economic growth. However, given the severity of revenue under-collection, they will still consider additional tax measures in the 2020 Budget Review.
  • Encouragingly, the expenditure ceiling (which excludes Eskom) was lowered for this year and the next two years.

Key takeaways:

  • The reaction of the rand has been largely negative, with the R186 bond yield spiking by roughly 16bps from yesterday’s close on release of the budget.
  • A wider fiscal deficit combined with a higher debt-to-GDP ratio through the forecast horizon will be credit negative for Moody’s sovereign rating decision. However, we remain of the view that South Africa will maintain its investment grade rating status, although the possibility of being placed on a negative outlook has increased.
  • Equity prices have also been adversely affected, with the JSE All Share Index falling by approximately 0.3% from yesterday’s close. In all, much needed structural reforms that lend support to lifting potential economic growth and consequently equity prices will need to be announced in the February 2020 Budget Review.

Public forces SABC, Dstv to reach rugby deal

Source: IOL

A sponsorship deal with Heineken will allow the SABC to broadcast the Rugby World Cup final match between SA and England live across 11 SABC radio stations as well as on television.

Earlier this week, the broadcaster announced that, following an agreement with pay-channel Supersport, who owns the broadcasting rights to the 4-yearly rugby showcase, Saturday’s highly-anticipated clash would be broadcast on SABC 2.

This follows a public outcry that many South Africans would not be able to watch their team in the final, due to not having access to Dstv and other streaming platforms.

Additionally, the SABC will also broadcast the third-place play-off match between semi-final losers New Zealand’s All Blacks and Wales that will be played on Friday November 1.

The SABC announced Heineken as the official sponsor of the broadcast, and a partner in bringing the historic final match to the broader South African public.

The radio stations which will broadcast the match are: RSG; Radio 2000; Ukhozi FM; Umhlobo Wenene FM; Thobela FM; Motsweding FM; Lesedi FM; Ikwekwezi FM; Ligwalagwala FM; Phalaphala FM and Munghana Lonene FM, with live updates on SAFM.

Fans can watch a live build-up to the third place playoff and Rugby World Cup final on SABC 2 from 10am on Friday and Saturday respectively with the matches kicking off at 11:00.

SA, UK strike post-Brexit deal

Source: Supermarket & Retailer

The ANC’s Minister for Economic Development, Ebrahim Patel, has concluded a groundbreaking new trade deal with the UK, ensuring all existing trade arrangements and more have been cemented prior to the UK’s departure from the European Union (EU).

With the prospects of a no-deal Brexit having risen significantly in recent months, the onus has been on the UK to engineer new trade deals with partners across Africa and the rest of the globe in the event of a disorderly exit from the EU and immediate trade on World Trade Organization (WTO) terms.

The spectre of a no-deal Brexit has been the elephant in the room in terms of the financial markets for several months, with the pound looking increasingly weak against both the US dollar and the euro.

However, the pound has also become a forex market of interest among investors option trading in South Africa who are already speculating on the future price of sterling in the event that Prime Minister Boris Johnson’s new Brexit withdrawal agreement bill is approved by Parliament. Put options are also a useful hedge for those with ‘long’ positions on sterling in case a no-deal Brexit happens out of the blue, causing the pound to crash.

As the UK became South Africa’s fourth-largest export market in 2018, it was imperative for the South African government to have clarity and certainty as a Commonwealth trading partner, regardless of the Brexit outcome. Minister Patel has confirmed that the new trade agreement is effectively a “rollover” of the terms of trade in their existing European Partnership Agreement, which will enable “seamless” and “uninterrupted” trade to continue post-Brexit.

This new deal is essential for the protection of up to 175,000 jobs that have been created as a consequence of increased trade links between South Africa and the UK. It’s now a marketplace worth an estimated R142 billion to the South African economy.

What does this new trade deal offer for South Africa?

First and foremost, all automobiles assembled in South Africa can continue to be exported to the UK with tariff-free access. The new arrangement also extends the nation’s tariff-free quota for unrefined and refined sugar, canned fruits and wine – the latter extending to a whopping 70 million litres of South African wine. This is very good news for the Western Cape given that wine was its most influential export to the British Isles in 2018, valued at R1.89 billion. The new agreement also extends South Africa’s quota levels for specific duty-free products, whilst safeguarding the agricultural sector’s health and safety standards for all new products.

The nation’s existing trade terms on EU livestock will also remain applicable to British poultry, until March 2022 at the earliest.

This new trade continuity deal doesn’t just benefit South Africa before the Brexit deadline, it also offers certainty to the five other nations on the African continent within the Southern African Customs Union and Mozambique (SACU+M). The preferential trade terms will provide continued access to UK markets for Botswana, Lesotho, Namibia and Eswatini too.

In total, the trading relationship between the UK and the entire SACU+M was worth R184.3 billion in 2018. Consumers in the UK will continue to benefit from greater choice of goods exported from SACU+M, while the SACU+M will also benefit from UK exports of automobiles, machinery, appliances and much more.

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