Tag: South Africa

By Sibongile Khumalo for News24

The South African economy shrank by 1.4% in the fourth quarter of 2019, according to new Gross Domestic Product numbers, released by Statistics SA on Tuesday.

This followed a contraction of 0.8% in the third quarter, which means that the economy was in recession for the last half of 2019. South Africa last entered a recession – when the GDP falls for two consecutive quarters – in the second quarter of 2018. This is South Africa’s third recession since 1994.

For the whole of 2019, the South African economy grew by only 0.2% (in real terms). In 2018, it saw growth of only 0.8%.

The fourth-quarter decline is larger than economists had predicted, as the economy battles the fallout of load shedding.

Seven out of 10 industries contracted in the fourth quarter, with agriculture (-7.6%) taking the biggest hit.

The manufacturing industry shrank 1.8% in the fourth quarter, while the transport, storage and communication industry saw a decline of 7.2%.

Stats SA reports that household spending increased by 1.4% in the final quarter of 2019, but spending on clothing and footwear was up by 8.5%.

The weak growth is likely to add more woes to President Cyril Ramaphosa’s government, as the economy under his leadership continues to suffer, amid internal and external pressures.

Over 9 000 jobs to be cut in SA

The first two months of the new year have seen a number of South African companies give notice to retrench workers – a move which will result in more than 9 000 people losing their jobs.

Below are some of the companies who are looking to downsize their workforce:

Telkom

  • Telkom informed trade unions and staff that it could cut up to 3 000 of its more than 15 000 employees
  • The company is struggling with declining performance in the face of competition
  • The Federation of Unions of South Africa (FEDUSA) has highlighted that overall job cuts at Telkom in 2020 could be around 6 000 jobs

Samancor 

  • Mining company Samancor Chrome said it could cut close to 2 500 jobs in response to weak chrome prices and power supply problems
  • The job cuts would apply to its Eastern and Western Chrome mines
  • It cited Eskom’s power supply problems and increased electricity tariffs as reasons for the jobs cut

Dion Wired/Massmart 

  • Massmart plans to shutter the 23-store Dion-Wired chain of hi-tech appliance shops and 11 Masscash wholesale outlets
  • This will affect 1 440 employees of 12 000
  • Massmart is suffering from an earnings slump due to declining consumer traffic in malls and low consumer confidence, which has affected sales of high price-ticket electronic items

Sibanye-Stillwater

  • The mine has reportedly retrenched 1 142 employees, well below the initial anticipated retrenchment figure of 5 270 jobs
  • The mining company employs 88 000 people across South Africa
  • The retrenchments follow the Section 189 restructuring at its Marikana operation, which has suffered losses since the shooting in 2012

Glencore

  • Glencore issued section 189 notices to 665 employees
  • The retrenchments centre around the mine’s Rustenburg Smelter
  • The group has cited the high cost of electricity and an increase in the carbon tax and logistics costs as reasons for downsizing

Aspen

  • Aspen Pharmacare said it plans to cut up to 219 jobs at its Port Elizabeth and East London plants
  • The drugmaker is disposing of non-core assets to manage its debt burden as it seeks to remain globally competitive

IT workers suffer as SA bleeds jobs

Source: BizNews

Many South African technology and telecommunications companies are firing workers, and this is set to continue in the coming year.

This is the view of labour consultant Tony Healy, who told Business Day TV that job losses are a consequence of many years of low economic growth and increased digitisation.

On 13 January, Massmart announced it was planning to shut down its 23 Dion Wired stores which will affect over 1,000 employees.

Only days later Telkom said it was planning to cut 3,000 jobs this year because of the tough economy, the move to mobile data, and inefficiencies at the company.

This, however, is only the tip of the iceberg. Many other tech companies have already shut their doors or are cutting staff.

In the last two weeks news broke that ICT service provider ATIO is set to be liquidated and that Yekani Manufacturing’s R1bn electronics factory in East London may shut its doors.

These job cuts, Healy said, are not surprising when one considers there was very little economic growth over the last few years.

“Without economic growth, one just can’t create the jobs that we need to stave off job cuts,” he said.

Dennis Dykes, chief economist at Nedbank, said what we are seeing is capitulation – with companies realising the much-needed economic growth will not come.

“Companies have done the cost cutting and trimmed their budgets to keep expenses under control in the hope that we will now start to see an uplift in the economy,” he said.

“They are now basically thinking it is not going to happen and are therefore turning to more serious interventions, including job cuts, to survive.”

Bad outlook for 2020
Bad news for employees is that South Africa’s dismal economy growth means companies do not have the funds to train employees for other positions.

Healy said while the government is trying to intervene to prevent job losses, there is not much companies can do as they have to balance their books.

Further bad news is that South Africa’s projected economic growth of 0.9% in 2020 is not close to what is needed to turn the situation around.

“We need growth levels above 5% before we can begin to realistically say that we are growing fast enough to reverse the job losses we are seeing now,” said Dykes.

Dykes highlighted that unemployment in South Africa is currently at worse levels than what countries experienced during the Great Depression.

He said unemployment is sitting at 29%, but if one includes discouraged workers it is closer to 37%.

“This is horrendous,” he said.

Good news for IT professionals
Good news for IT professionals is that while jobs are lost, there are several areas where there is strong demand.

Healy said jobs which are required in the fourth and fifth industrial revolutions are very different from the skills which are currently required.

He said local companies are not up-skilling enough people to fill the kinds of positions which are being created, though.

While people with more traditional skills are losing their jobs, those who have skills suited to the digital world are in demand.

Loadshedding cost SA R59bn in 2019

New data released by the Council for Scientific and Industrial Research (CSIR) has indicated that South Africa suffered a 2019 loss of between R59bn and R118bn due to loadshedding.

According to the CSIR, the 530 hours of unplanned power cuts during the year occurred at a higher intensity than previous years, including an unprecedented move to Stage 6 loadshedding in December. More energy – approximately 1 352 Gigawatt hours (GWh) – was shed during 2019 than previous years.

The percentage of time that Eskom’s power plants were able to produce electricity was at just 67%.

“Historical fleet EAF decline seems irreversible,” stated the presentation’s authors.

Loadshedding is expected to continue for two to three years, depending on key decisions and actions by government.

The CSIR presentation set out various scenarios for South Africa to ensure the supply of power in the current decade. A key response to start to close the “energy supply gap” is to let businesses, private citizens, mins and farms produce their own electricity.

SA’s huge Windows piracy problem

By Bradley Prior for MyBroadband

Only a third of PCs being shipped to Africa include genuine software, which is a reason for the increase in data breaches and malware attacks in the region.

This is according to Deniz Ozen, regional general manager for consumer and device sales at Microsoft Middle East and Africa.

Ozen said that this has resulted in the loss of important data and decreased productivity on the continent.

Benefits of legal software for Africa
“Africa’s emerging market potential is unparalleled and business development and the growth of existing SME’s remains a key focus across the continent,” Microsoft said in a statement.

“To tap into this potential growth, access to affordable genuine software and hardware is necessary if the digital divide is to be closed.”

Microsoft believes that access to genuine software ensures comprehensive security for devices and data, making legitimate software important to the long-term success of businesses.

The same applies to students who rely heavily on access to devices, software and information to complete their required tasks and projects.

Fixing the piracy problem
The Software Alliance said in its June 2018 report that the overall rate of pirated software in the Middle East and Africa region stood at 56%.

“Pirated software is often installed without the end user’s knowledge, and it is those users who suffer the consequences including lost data and unusable PCs,” said Microsoft.

Microsoft EMEA VP of consumer and device sales Bradley Hopkinson told MyBroadband in October that Microsoft has various measures in place to fight piracy in South Africa and in Africa as a whole.

“We have come up with a programme called the Africa Coverage Programme, which is an affordability programme with our multinational partners,” said Hopkinson.

“Effectively, it is a programme that we believe will address affordability, and at the same time we need to drive awareness for the value of genuine software, which we will do as part of that programme.”

Microsoft has also launched its Windows PC Affordability in Africa Initiative, which aims to reduce the prevalence of Microsoft software piracy in the African market.

“Through the Windows PC Affordability in Africa Initiative, we aim to educate consumers on the risks of using pirated software, and to work with our PC ecosystem partners including Acer, ASUS, Dell, Intel, Lenovo, Mustek and SMD to make Genuine Windows 10 PCs more affordable across Africa,” said Hopkinson.

“We have high aspirations to bring piracy almost to zero across Africa. We see a world across Africa where we can get genuine Windows in excess of 80% and even higher, and that is also based on the success we’ve seen through similar programmes in other emerging markets.”

Expat tax is coming

By Pedro Gonçalves for International Investment

South Africans working abroad will face higher taxes as they will only be exempt from paying tax on the first R1m they earn elsewhere, under the amendments to the Income Tax Act which are due to come into effect from March.

The country’s Treasury said that additional tax measures were under consideration to raise an extra R10-billion in fiscal 2021. “Given the fiscal position we find ourselves in, all tax options need to be on the table,” said Chris Axelson, chief director for economic tax analysis in the Treasury.”

Under the changes, the totality of an expat’s income earned abroad would be subject to tax in South Africa.

The expat exemption only relates to South Africans who are tax resident, so the obvious answer would be to cease tax residency of South Africa”
“What this means is that, if they remain tax resident, they will be taxed fully on any allowances and benefits, as if they were just a normal employee working in South Africa,” Jean du Toit, editor of “Expatriate Tax – South African Citizens Working Abroad and Foreigners in South Africa”, told local news outlet Fin24.

One of the unforeseen consequences from what has been dubbed the ‘expat tax’ could be that South Africans abroad may simply decide to sever their ties with South Africa and cease their tax residency.

“Unfortunately, the solutions for the expat in relation to this amendment are now becoming very limited. The expat exemption only relates to South Africans who are tax resident, so the obvious answer would be to cease tax residency of South Africa,” du Toit added.

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.

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