News Column

African Press Review 12 June 2014

June 12, 2014

Michael Fitzpatrick

Economic forecasts for South Africa, more on the Nkandla controversy and Uganda's Sam Kutesa at the United Nations - all in today's African press ...

There's bad news on the front page of South African financial paper, BusinessDay.

There we learn that economists are worried that the government's budget deficit for this year will be higher than forecast. This, they say, is likely to lead to spending cuts on projects intended to stimulate economic growth and job creation.

Weak domestic demand and the four-month platinum strike are expected to see revenue fall short of the Treasury's projections, with low consumer demand curbing value-added tax collections, which account for more than a quarter of tax revenue. Strike-related declines in mining and manufacturing could also reduce inflows from corporate tax.

The World Bank this week cut its growth forecast for South Africa to 2 per cent, but many economists have revised their forecasts to 1.8 per cent or lower.

On inside pages, BusinessDay reports that the latest quarterly report from South Africa's arms control committee has a defence expert baffled. This is because it records foreign-manufactured weapons being exported to the country that manufactured them.

The National Conventional Arms Control Committee approved contracts to the value of 413 million euros and weapons transfers of 43 million euros in the first quarter.

The problem is that the report shows that five Al Mansour armoured personnel carriers were transferred to Saudi Arabia, the country in which they are manufactured.

A local defence expert said the transaction "baffled" him, but he speculated that the vehicles might have been built in South Africa under licence.

The opposition Democratic Alliance says the anomaly about the vehicles needs to be explained by the Arms Control Committee.

The vast majority of South Africa's weapons exports are armoured personnel carriers or combat vehicles. Grenade launchers were exported to Estonia, and mortars to the United Arab Emirates.

The Sowetan gives pride of place to a report that South African president Jacob Zuma has undertaken to give the Parliamentary Speaker a "comprehensive and final report" on the Nkandla controversy within 30 working days.

Earlier this year, the public protector found that Zuma had unfairly benefited from improvements made using millions of rand in public money at his private Nkandla homestead in KwaZulu-Natal.

The opposition Democratic Alliance welcomed the commitment from the president but pointed out that the 30-day deadline means Zuma's report will reach parliament six days after the summer adjournment.

In Kenya, the Nairobi-based Standard gives pride of place to the fact that National Treasury Cabinet Secretary Henry Rotich will this afternoon unveil the 2014/2015 budget, the largest in the country's history, at the shilling equivalent of one thousand, five hundred million euros.

The main items of expenditure are likely to include education and health, investment in infrastructure, salaries and wages for civil servants and cash transfers from national to devolved government units.

Experts say the government will also have to focus on security to improve investor confidence and reverse the decline in tourism.

The Treasury plans to fund this year's Budget deficit through domestic borrowing, commercial financing, and a debt swap.

According to sister paper, The Daily Nation, Treasury Secretary Rotich is expected to engage in a delicate balancing act as he seeks to raise additional revenue to pay for the government's rising expenditure while ensuring that he does not overburden taxpayers. Nice work, if he can manage it.

Not surprisingly, the Ugandan Daily Monitor gives pride of place to Sam Kutesa.

The 193 members of the United Nations yesterday afternoon unanimously elected the Ugandan Foreign Affairs Minister as the next President of the UN General Assembly. Kutesa's one-year tenure begins in September.

In making his acceptance speech, Kutesa was buoyant, having triumphed over an online petition to block his candidature on the grounds that he was unfit. Activists have criticised Uganda's anti-gay legislation, denouncing the country as a violator of UN principles and therefore undeserving of providing leadership to the General Assembly.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: AllAfrica

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