An economic review of the past week

JOHANNESBURG – The week started off with the SA Chamber of Commerce and Industry (Sacci) announcing weak trade conditions in South Africa, which have been attributed to the punitive 15 percent value added tax (VAT) and fuel hikes last month.

The Trade Activity Index (TAI) of Sacci’s Trade Conditions Survey for April measured 39, down from 43 recorded in March.

Sacci said respondents to the survey pointed to the fuel hikes that affected turnover and put profit margins under pressure.

“The increase of VAT to 15 percent, the higher fuel levy, strikes, and looting and property damage at certain locations, had a negative effect on trade activity,” said Sacci in a statement.

As if to undo the sour mood that followed after the trade conditions statement was released, Statistics South Africa released its Quarterly Labour Force Survey, which showed that retail trade sales in the first quarter of 2018 surged 4.8 percent to R83.3 billion in March. This was attributed to consumers upping spending ahead of the VAT percentage point increase and fuel hikes in April.

Data from Statistics SA (Stats SA) showed that general dealers, textiles, clothing, footwear and leather goods, pharmaceuticals, food, beverages and tobacco sales all contributed to the increase which beat the meridian estimates of a 4.4 percent increase.

Public Enterprises Minister Pravin Gordhan, whose broom has been sweeping clean troubled state-owned enterprises, announced a new interim board for freight rail and logistics company Transnet.

He brought in ANC heavyweight Popo Molefe from the Passenger Rail Agency SA to head the Transnet interim board.

Transnet appointed chartered accountant Mohammed Mahomedy as interim chief financial officer. He has been with the company for 12 years and takes over from Garry Pita who resigned last month amid a financial scandal involving the controversial Gupta family.

Not to be outdone, the Guptas, who are accused of grand scale corruption and state capture, also thrust themselves into the spotlight this week. In an interview with Indian media shown on eNCA from his hometown of Saharanpur, Ajay Gupta dismissed talk of any criminal allegations against him or his brother Atul “in any part of the world”.

He claimed that no authorities had approached him to indicate any charges.

In April, Ajay was approached by South African businessman Justin van Pletzen outside an office block in Dubai. He asked him when he would be returning to South Africa, where Gupta is wanted by the Hawks, to which he replied: “They’re not giving a reply. The day they give a reply, I’ll go there.”