Tag: South Africa

Amazon set to enter SA

By Zintle for IT News Africa 

Amazon, a global e-commerce technology company, is reportedly set to expand to African countries including South Africa and Nigeria in 2023, according to news that was first published by Business Insider.

Belgium, Chile, and Colombia are also among the five markets that the giant e-commerce company is set to penetrate next year, according to leaked documents that were seen by Business Insider.

According to The Cable, the timing of the rollouts in a detailed timeline would be between 2022 and 2023.

This development would mean serious competition for e-commerce platforms like Jumia and Takealot. Amazon currently has a presence in 20 countries and it aims to scale up in the main market in the US.

“South Africa, codenamed Project Fela, is also expected in February 2023. The marketplace in Nigeria is due to launch in April 2023. That project shares the codename Project Fela with South Africa,” the leaked report revealed.

The earliest project which is codenamed “Project Red Devil” will be launched in Belgium in September 2022. Colombia’s marketplace “Project Salsa” which shares the name with Chile will be scheduled for February 2023. On the other hand, the project in Chile will take off in April 2023.

The documents have also revealed that all the countries are planning to launch their own marketplace and access Amazon’s fulfillment service called Fulfillment by Amazon. According to The Cable, Amazon’s prime membership program will be available at launch in Belgium while other countries will have to wait until introduction.

“For example, Belgian shoppers, who are already able to sign up for prime through some of Amazon’s other European sites, will get their own dedicated prime service for a more consistent pricing and shopping experience,” the report said.

After Covid-19 hit the company lost sales. This development seeks to ensure that everything that was lost during the pandemic is restored and ensure more growth. The company has also been scaling back hiring, subleasing warehouse space, and limiting delivery network expansion this year in anticipation of unforeseen slowdowns.

Amazon has also been in the process of constructing its African headquarters in South Africa. There were, however, hiccups in the process after an indigenous group in the country claimed that the tech giant had not undergone the proper process to acquire the land on which it was to be built.

 

Source: News24

South Africa’s economy was stronger than expected in the first quarter of 2022, with real gross domestic product (GDP) growing by 1.9% from the previous quarter.

The size of the economy is now at pre-pandemic levels, with real GDP slightly higher than what it was before the Covid-19 pandemic, Statistics SA said.

Last year, the South African economy grew by 4.9% as it started to recover from a 6.4% slump in 2020 due to pandemic-related lockdowns.

The median expectation among economists polled in a Bloomberg survey was for growth of 1.2% in the first quarter. The economy grew by a revised 1.4% in the fourth quarter of 2021.

The manufacturing sector saw strong growth of almost 5% in the first quarter, driven by a rise in the production of petroleum and chemicals, food and beverages, and metals and machinery.

But construction and mining activity declined compared to the previous quarter.

Household consumption increased by 1.4% in the first quarter, with a sharp 6.5% increase in spending on restaurants and hotels.

Second-quarter GDP is expected to be hit by the impact of flooding in KwaZulu-Natal and increased load shedding, as well as the knock-on effects of the Ukraine invasion, particularly higher food and fuel prices. In addition, higher interest rates are also expected to weigh on growth.

The SA Reserve Bank expects growth of 1.7% this year.

By Colleen Goko and Prinesha Naidoo for Bloomberg

A change in the way South Africa’s central bank implements monetary policy may lead to greater volatility in the rand.

The transition will start Wednesday night and will see the central bank shifting to a surplus system from its current deficit set-up, meaning commercial banks will be allowed to hold and earn interest on excess reserves. The South African Reserve Bank will also introduce measures to prevent banks from hoarding liquidity, and thus help maintain an interbank money market, similar to the “tiered floor” framework used by the Reserve Bank of New Zealand and the Norges Bank.

While the change won’t affect the central bank’s inflation target or interest-rate decisions, it may make it easier to speculate in the rand, resulting in wider price swings during times of stress. Elevated ZAR-USD basis-swap rates since the pandemic have made it expensive to short the South African currency.

“The currency basis will contract, making it cheaper to short the rand,” said Michelle Wohlberg, a Johannesburg-based fixed-income analyst at Rand Merchant Bank. “This could result in volatility in risk-off bouts.”

The rand has been less volatile this year than a host of peers – including the lira, zloty and real – even as risk assets came under pressure amid rising global inflation and policy tightening, concerns of a slowdown in China, and Russia’s war with Ukraine. The currency’s historic volatility versus the dollar has risen 63 basis points to 14.66%, the seventh highest of the 23 developing-currencies monitored by Bloomberg.

In a published paper addressing concerns around volatility, the Reserve Bank said managing the risk would require “caution and vigilance,” both during the transition to the new framework and in moments of acute market pressure. South Africa is the first emerging-market economy to adopt the tiered-floor framework.

“The risk is assessed as modest and does not represent a major objection to the concept of the new monetary policy implementation framework,” it said. “That said, the exchange rate may prove to be one area where South Africa’s status as an emerging market yields a different experience to those of advanced economies which have used floor-style systems.”

The central bank has “a long track record of tolerating FX volatility” and inflation expectations are anchored, and therefore not highly sensitive to exchange rate fluctuations, the paper said.

Source: IOL

South Africa’s unemployment rate edged from 35.3% in the final quarter of last year to 34.5% in the first quarter of 2022, the statistics agency said on Tuesday.

Statistics South Africa said the number of unemployed totalled 7.862 million people in the three months to end-March, compared with 7.921 million people in the previous three months.

According to an expanded definition of unemployment that includes those discouraged from seeking work, 45.5% of the labour force was without work in the first quarter, from 46.2% in the prior quarter.

Stats SA further said that the Eastern Cape, Mpumalanga, Limpopo and Kwa-Zulu Natal provinces recorded expanded unemployment rates above 50,0% in Q1:2022.

The Northern Cape, North West, Kwa-Zulu Natal and Limpopo recorded more than 15 percentage points difference between expanded and official unemployment rates.

The report also showed that the formal sector in South Africa accounts for 68,3% of total employment.

Formal sector employment increased by 408 000 jobs between Q4:2021 and Q1:2022.

15-34 year-olds make up the highest unemployment rate in SA

Youth aged between 15-24 years and 25-34 years recorded the highest unemployment rates of 63,9% and 42,1% respectively.

StatsSA said that the graduate unemployment rate (12.6%) is 21,9% points lower than the national official unemployment rate in the country.

The agency further said that 370 000 more jobs were recorded in the first quarter of 2022, from the fourth quarter of last year.

The bulk of jobs came from community and social services, manufacturing and trade sectors.

Zoom launches South African offices

By Myles Illidge for MyBroadband

Zoom Video Communications is increasing its presence in South Africa by launching offices in the country and focussing on distribution channels in the Sub-Saharan region.

The video conferencing company has also signed a deal with First Distribution, which will help expand its footprint in the region. It plans to adopt additional distributors in the future.

Zoom had previously worked with TechSonic as its channel distributor in South Africa.

Zoom’s sales manager for the region, Parmesh Naidoo, explained that its customers will still be able to purchase its products directly online and through its new distributor.

He confirmed that while pricing may differ through distributors, there would be no pricing adjustment for Zoom’s current client base.

The company will also launch its “bring your own carrier” (BYOC) Zoom Phone product in Africa.

Zoom Phone is a voice over internet protocol (VoIP) system integrated within the Zoom app to let users switch between voice and video calls as they need.

The native version of Zoom Phone is cloud-based and is available in South Africa.

Since it is not available in other African nations, Zoom will launch the BYOC version of the product on the continent in the coming months. This will allow customers to select a telecom provider that best suits their needs.

Zoom is also introducing its global partner programme, Zoom Up, in South Africa. This will allow companies to enrol as sales or performance partners to offer Zoom’s products to their customers.

Additionally, the video conferencing company’s expansion in Africa will add support for its developer platform.

Zoom’s Developer Platform provides several avenues of integration, including Zoom Marketplace, apps, APIs, and its voice and video SDKs.

Zoom Marketplace offers over 1,500 apps, such as client relationship management integrations, which users can add to the conferencing platform.

For livening up meetings, Zoom’s apps offer several integrations such as Kahoot, Warmly, and weather updates.

The company’s solutions engineer for the region, Ryno Venter, said many of the apps are designed to combat meeting fatigue.

Zoom observed a significant jump in sales as more people transitioned to hybrid or work-from-home environments when the Covid-19 pandemic hit, with sales increasing by 170% in the first fiscal quarter of 2020.

The video conferencing company generated $328 million (R5.2 billion) over the period, exceeding analyst expectations.

This surge has subsided as demand for video conferencing normalised as countries started relaxing lockdown restrictions.

 

Source: MyBroadband

Prescribed minimum benefits (PMBs) covering 271 life-threatening conditions and 26 chronic illnesses are the biggest cost driver for medical aid schemes.

This is according to Medshield Medical Scheme acting principal officer Alan Fritz, who spoke to personal finance journalist and educator Maya Fisher-French.

Conditions and chronic illnesses falling under PMBs must be covered “at cost,” Fritz stated.

However, the problem is not necessarily the range of care medical schemes must provide at cost, but specialist doctors that take advantage of the PMB regulations.

“There are specialists that charge as much as 700% of the medical scheme rate, and these are sucking the schemes dry,” said Fritz.

In its 2020 industry report, the Council for Medical Schemes reported that medical aids spend R866.02 on PMB per average beneficiary member.

This sets a floor for the cheapest medical aid plan in South Africa — they must charge at least R866.02 to cover the average cost of PMBs.

Any additional care offered by even a basic hospital plan would mean additional costs.

Reporting for City Press, Fisher-French said medical aids are becoming increasingly unaffordable for average South Africans.

Basic hospital plans start at R1,500–R2,000 per month for the main member, increasing to around R2,300 per month for a single parent with a child.

South Africa’s medical tax credit makes these premiums more affordable for some members.

However, the credit can only be claimed at the end of a tax year, and only applies to people who must pay tax. That is, those earning over R7,604.16 per month (R11,770.82 for people over 65, and R13,158.33 for people over 75).

Although an advisory committee at the council is working on how schemes could provide low-cost benefit options, including considering a reduced set of PMBs, this has been ongoing for years.

No deadline has been set, and no estimated completion date has been provided.

In the meantime, medical insurance is filling the gap despite many insurers advertising their products as an add-on for basic hospital plans.

According to Fisher-French, medical insurance does not have to provide full PMB coverage because it is not a medical scheme.

This allows insurers to apply risk rating, waiting periods, and limited cover, making them more affordable.

However, it is important to note that South Africa’s medical tax credit does not apply to insurance policies — only to medical scheme contributions.

 

State of Disaster lifted in SA

Source: MyBroadband

President Cyril Ramaphosa has announced that South Africa has lifted the state of disaster, as of 00:00 on Tuesday, 5 April 2022.

In an address to the nation on Monday evening, Ramaphosa emphasised that the state of disaster was necessary to manage the pandemic and its consequences on various industries.

However, he added that the additional powers that a state of disaster provides are temporary and limited and should be maintained only as long as necessary.

Ramaphosa said that because of the drastic downturn in Covid-19 cases and Covid-19-related deaths, and the number of hospital beds available to patients, South Africa would be able to return to normality in public health facilities.

“These conditions no longer require that we remain in a national state of disaster,” Ramaphosa stated.

While government will lift the state of disaster from midnight, Ramaphosa said specific transitional measures would remain for 30 days before automatically lapsing.

Outside of these few exceptions, all existing rules under the state of disaster are repealed.

Cooperative governance minister Nkosazana Dlamini-Zuma gazetted these transitional regulations for public comment last week.

It is important to note they will be separate from the National Health Act regulation amendments that will be used to manage the pandemic once finalised after the public comment period lapses on 16 April.

SA sees surge in contactless payments

Source: Engineering News

FNB says South African consumers and businesses are increasingly using smart devices to make contactless tap-to-pay payments. According to FNB, its retail and commercial clients processed in excess of R4.2 billion in contactless payments via smart devices in 2021, compared to just R640 million in 2020. The average monthly spend has soared from just R53 million (2020) and R350 million (2021) to nearly a billion (R935 million) in the last 3 months.

Raj Makanjee, CEO of FNB Retail, says, “The growth validates our belief that digital is central to the future of payments, and we are encouraged by our customers’ appetite to embrace digital migration. We believe that digital payments enable consumers, merchants, and providers to improve the efficiency of the payments ecosystem. As a result, we’re thrilled to be facilitating this transition by providing our customers with a broader range of industry-leading payment solutions on our digital platform.”

The sentiment is echoed by Gordon Little, CEO of FNB Commercial, who says, “Businesses are critical to accelerating the adoption of digital payments by enabling wider acceptance. “This is why we’re equipping our merchants to be able to support and drive such a migration, and we’re pleased with the sustained growth in the rate of digital payments acceptance among our merchants,” he says.

Through FNB Pay on the FNB App, the bank supports several digital wallets, including Apple Pay, Samsung Pay, Fitbit, and Garmin, and customers can also link their FNB Virtual Cards to a digital wallet.

The virtual card has a dynamic CVV number that changes on a regular basis to reduce the risk of fraud. Customers can use their virtual cards to pay for online purchases, streaming services, subscriptions, and at the majority of QR code providers via the FNB app’s Scan to Pay feature. Furthermore, customers who make purchases with their FNB Virtual Card get free Purchase Protect cover for the first 30 days post purchase, up to R15 000.

In its recent interim results, FNB revealed that its digitally active customers increased to 6.21 million for the six months ending December 2021. FNB customers’ digital logins totalled 804 million, with the FNB App contributing nearly 500 million logins in six months.

Source: MyBroadband

South Africa has the most resilient Internet in Africa, new data from the Internet Society’s Pulse Platform has revealed.

The Internet Society is a global non-profit promoting the development and use of an open, globally-connected, and secure Internet.

It defined a resilient Internet connection as one that maintains an acceptable level of service in the face of faults and challenges to regular operation.

According to the Internet Society’s Pulse Platform, South Africa achieved high marks in infrastructure, security, market readiness, and performance.

All of these factors will be essential for connecting underserved communities and encouraging economic growth and innovation, it stated.

South Africa achieved an overall score of 69%, broken down as follows:

  • 68% in performance
  • 69% in infrastructure
  • 69% in security
  • 68% in market readiness

Mauritius ranked second in the region with an overall score of 66%, followed by Seychelles with 58%.

Eritrea, the Central African Republic, and South Sudan scored the worst with 24%, 26%, and 28%, respectively.

Southern Africa had the highest Internet resilience on the continent on average, with a score of 51%. Middle Africa came last with 38%.

“Unfortunately, not all countries have reliable Internet infrastructure,” the Internet Society stated.

“Low-income countries often have under-provisioned networks and lack both robust cable infrastructure and redundant interconnection systems.”

It said that in these countries or regions, the likelihood of Internet outages occurring is much higher than elsewhere.

The Internet Society said that its Pulse Platform’s Resilience Index would be expanding in the future to focus on other regions of the world.

Is Amazon planning to enter SA?

Amazon is shopping around for warehouse space in South Africa, leading to industry speculation that the company could be looking to enter the local e-commerce sector, according to a recent MyBroadband article.

Amazon did not respond to MyBroadband’s request for comment on the matter.

However, every year for the last 12 years, there have been rumours that Amazon is coming to South Africa based on incomplete information.

Where speculation was rife that Amazon was entering online retail in South Africa more than a decade ago, the company instead launched a local call centre to provide support for its products to customers worldwide.

In the event that Amazon did enter the local e-commerce space,  it is expected to go one of two ways according to MyBroadband: they could acquire a local player; or enter the market directly.

Many South African e-commerce players are hoping for a buy-out offer from Amazon, as competing against the global retail giant is seen as a losing battle.

Amazon offers seamless importing for South African shoppers by estimating taxes and import duties for items it can ship to the country.

It provides a guarantee on this cost estimate. If taxes end up lower, Amazon repays you the difference. If taxes are higher than estimated, Amazon eats the loss.

A recent example where Amazon bought out a local player is Souk.com, which was the largest e-commerce platform in the Arabic-speaking world.

Amazon Egypt is the company’s only African retail presence so far. Amazon.co.za currently redirects to the main Amazon.com website.

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