Author: Midcham Newsletters

The SACCI released the May 2018 SACCI Business Confidence Index (BCI)BCI moderated by two index points between April 2018 and May 2018, measuring 94 in May. The BCI was nevertheless still 0.8 index points up on the May 2017 level. The SACCI BCI (with the year 2015 as 100), remained reasonably steady up to May 2018, after the notable regression seen since the start of 2014 and up to the 3^rd quarter of 2017.

There were no notable adverse movements in domestic-prompted sub-indices between April and May 2018, except for inflation caused by the VAT increase. The main negative impact came from lower merchandise import and export volumes, stemming from trade developments – beyond the scope of short-term remedies by South Africa.

Of the thirteen sub-indices of the SACCI BCI, four had a positive monthly impact in May; four were unchanged, and five had a negative month-on-month influence on the business climate. Increased new vehicle sales made a moderate, but a positive monthly contribution to the business climate while manufacturing and lower real financing cost contributed positively to the BCI.

The year-on-year increase of 0.8 index points in the BCI was mainly attributable to five of the seven real-activity indices, while lower merchandise import and export volumes held/or wore the BCI down.

SACCI noted the lack of performance by local authorities with concern. It has become noticeable that the lack of service delivery continues to inform the dissatisfaction of residents. This deficiency of proper service delivery by local government is affecting businesses operating in municipalities and service-delivery areas, curtailing their ability to expand and create employment.

The recently announced 1^st quarter GDP figures, notably the quarter-on-quarter seasonally adjusted annualized growth rate of minus 2.2% was disappointing. The year-on-year GDP growth rate for the 1^st quarter of 2018, however, was 0.8%, while the GDP growth rate (excluding agriculture) measured 0.9% – similar to the 2017 growth rate.

SACCI believes that once the challenge of good governance has been achieved, attention will focus on structural economic issues, placing South Africa on the road to sustainable economic recovery. Once investment and employment creation are reinstated, business confidence should shed short-term variations and enhance economic growth and participation.

For a full background to this month’s SACCI BCI see the Economic Commentary in the BCI report on www.sacci.org.za.

The Mineral Resources Minister, Mr Gwede Mantashe announced on 17 June 2018 that he put the Mpumalanga, Limpopo and the Northwest Department of Mineral Resources (DMR) Regional Offices under investigation and moved the administrative responsibilities to the DMR’s Head Office in Pretoria until they finished with their inquiry.

The Minister said that during their provincial engagements on the Mining Charter, role-players raised issues on the DMR Regulator’s work. Three main concerns were raised: allegations of double-granting of licenses; claims of improper application of Section 54 of the Mine Health and Safety Act and, the backlogs in the issuing of licenses.

MCCI acknowledges the importance of the mining sector and their role is a significant employer in our area.  The DMR’s actions are already affecting our economy, through their decisions linked to the Optimum Mine saga. MCCI is extremely concerned that these practices were allowed to take place at all, and now it seems that there were other suspect dealings. For years, the DMR’s representatives snubbed most of the community-based meetings that the MCCI attended. There are too many meetings to list, but some of the more important meetings were the Upper Olifant’s Water Forum meetings, Air Quality meetings, regardless that it is a high priority or even road safety on the R555.

Not only do their decisions influence our area’s economic survival, but also our environment, and also the how, where and when of the Social an Labour plans of the mines. Their actions have a direct impact on our communities’ quality of life.  The senior management’ accountability process is wanting and by moving the problem to the national office, we are concerned that the issues will be shelved.

Mining is not only about the people, as the Minister stated, but also about business, and our environment. We trust the Minister would deal with these problems quickly and effectively. The full article is available on https://www.dmr.gov.za/news-room/post/1723/statement-by-mineral-resources-minister-mr-gwede-mantashe-on-policy-and-regulatory-matters.

National Economic Development and Labour Council (NEDLAC) appointed a United Kingdom-based company to undertake a review of Eskom’s business model focussing on the following three issues: (1) primary cost drivers of Eskom’s electricity supply, (2) demand, supply and tariff setting and (3) sustainable revenue and funding models.

Preliminary findings on the context of drivers of electricity prices for Eskom include the following:

o The flow of electricity from generation to final consumption in South Africa.

o The economic importance of sectors that consume the most electricity.

o Electricity costs as a proportion of total operating costs for firms.

o Impact of electricity price increases on the profitability of sectors/firms.

o The proportion of electricity costs on poor households’ income compared to

higher income groups.

o Electricity makes up more than 20% of municipal expenditure.

o More than a third of municipal revenue comes from electricity sales.

o Over the past decade, nominal electricity prices have increased by more than

350%.

The company will also be investigating the impact of Eskom’s sustained and significant price increases on the economy, some of the impacts can be gauged regarding reduced GDP growth, an accelerated inflation rate and reduced employment as direct effects.

The final report should be available by the end of September 2018.  Should you like a copy of The Review of Eskom’s Business

The Middelburg Chamber of Commerce & Industry in partnership with Wits Business School and SSETA started an NQF 7 bursary course on Fast Track Leadership Development. The aim of the program is to equip delegates with the requisite skills and knowledge to improve their leadership effectiveness in their organisations.

The Modules of the course included:

• Personal Mastery setting goals and objectives
• Group & Team Dynamics
• Principles of Management
• Principles of services Management
• Principles of Marketing
• Strategic Management
• Principles of service management

Renowned lecturers Mzoxolo Gulwa, Keith de Swart, Jabu Baloyi, Laurence Beder, and Dr. Sibongile Vilakazi all contributed their knowledge and shared experiences in the field of leadership.

If you would like to enroll for the 2019 course, please do not hesitate to contact us businesslink@middelburginfo.com.  Limited space available.

Promoting energy efficiency in the Tourism Industry, the National Department of Tourism has established the Green Tourism Incentive Programme. The objective of this programme is to encourage private-owned tourism enterprises to move towards a cleaner and renewable energy sources.

This programme is managed by the Industrial Development Corporation (IDC). The Green Tourism Incentive Programme grant funding of up to R1 Million to qualifying small and micro facilities to reduce their energy costs.

For more information on this Programme attend the Local Tourism Organisation Meeting on the 3^rd of July 2018, 10h00 at the Middelburg Chamber of Commerce and Industry’s Boardroom.  Contact Lizzy to RSVP on 013-243 2253 or info@middelburginfo.com