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South Africa records 4.9% economic growth after 6.4% contraction in 2020

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Fresh data from South Africa shows the country’s economy grew by 4.9% in the 2021 calendar year after contracting by 6.4% in 2020.

Statistics South Africa said gross domestic product (GDP) grew by 1.2% quarter on quarter in the last three months of 2021 following a contraction of 1.7% in the third quarter.

According to the agency, the expansion in the final quarter of 2021 was driven by a recovery in agriculture and manufacturing.

Agriculture expanded by 12.2% quarter on quarter, manufacturing by 2.8% and retail trade sales by 2.9%. But mining contracted by 3.1%, construction by 2.2% and finance by 0.8%.

The South African economy has struggled to gain traction despite promises of sweeping reforms made by President Cyril Ramaphosa after he took office in 2018, with persistent electricity cuts choking growth, among other woes.

2021 recorded an increase compared to a 6.4% contraction in GDP in 2020 when the country entered the pandemic as it was already in recession.

These economic difficulties are reflected in the record unemployment rates recorded in 2021: from 34.9% in October, it reached up to 65% among young people, according to the latest official statistics.

The COVID-19 pandemic disrupted Ramaphosa’s efforts and pressure has built for his government to take corrective action after the unemployment rate hit a record high of nearly 35% last year.

The finance ministry expects economic growth of 2.1% this year, a rate officials and economists have said is far below the level required to make a meaningful dent in unemployment and poverty.

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South Africa’s FM, Naledi Pandor, wants quick solution to Ghana, MTN tax dispute

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South Africa’s foreign minister Naledi Pandor wants the tax dispute between the tech company and the Ghanaian tax authorities solved.

The minister on Friday called MTN Group, which has a presence in 19 countries in Africa and the Middle East, and the Ghana Revenue Authority to find a solution to a $773 million tax dispute.

South Africa’s Department Of International Relations and Cooperation said in a statement, Minister Pandor was briefed on the issue this week and called “on the parties involved to do everything possible to find an amicable solution.”

Two weeks ago, the South African mobile operator giant revealed that its Ghanaian subsidiary has received a bill for back taxes of around $773 million. The billing came after the tax authority audited MTN for the years 2014 to 2018 and inferring that it had under-declared its revenue by about 30% during the period.

MTN said it disputes the “accuracy and basis” of the assessment and that it would fight it.

MTN Ghana is the largest company in Ghana by market capitalization as the annual data revenue of MTN Ghana (Scancom PLC) amounted to over 2.7 billion Ghanaian cedis (GHS) in 2021.

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Ivory Coast to increase cocoa processing capacity with new plants

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Ivory Coast, the largest cocoa-producing country in the world, has hinted that it will increase the amount of cocoa it processes domestically to 49%.

According to the head of the sector, the regulator said on Friday, the increase is projected to begin in production starting from October with the addition of several new plants.

The new plants will allow the country to process more than 1 million tonnes of cocoa annually, making it the world’s leading cocoa grinder,

Ivory Coast boasts of annual production of about 2.2 million tonnes with 35-40% processed in the country and the rest exported, but the government has a goal of increasing that to at least 50%.

The country recently signed a deal with the United Arab Emirates for the construction of a new plant in San Pedro with a grinding capacity of 120,000 tonnes, said Yves Brahima Kone, director general of the Coffee and Cocoa Council (CCC), who was in Abu Dhabi this month to open a new CCC office.

“This permanent representation (in Abu Dhabi) is the fruit of our new vision for Ivorian cocoa that we want to export all over the world. This office will allow us to explore markets in Asia, the Middle East, and North Africa,” he told journalists

Ivory Coast also expects two new factories financed by China to enter into production in October, with a production capacity of 50,000 tonnes each, Kone said.

In November, the two biggest cocoa producers, Ivory Coast and West African neighbour, Ghana pushed for higher prices for their farm products under the Living Income Differential (LID) and vowed to charge a premium of $400 per tonne on all cocoa sales, starting with the 2020/21 harvest.

The lack of technology and industries to process its produce has fanned discussions about Africa being a raw material economy and extractive centers for industrial western countries that are advanced, able processed and positioned to maximize the resources.

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