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Unions' Lofty Wage Targets Underline Key Fiscal Battle Ahead; State Bank Talks Gain Traction

SOUTH AFRICA
  • LOCAL NEWS
  • Union insiders say demands for CPI + 4% in the 2021 wage demands are a ploy for unions to appear relevant and active, having lost the R37bn 2018 wage agreement battle in court.
    • Union's wage demands show the difficulty of Govt's task to trim the wage bill will be, but current demands are nothing short of ridiculous and indicative of pressure from a govt starting to make some of the harder decisions that have been needed after years of being to unaffordable above-CPI wage deals.
  • Ramaphosa & Mboweni continue to push the idea of a state bank in order to provide greater financing options with local banks being "too risk averse."
    • Ramaphosa says the bank will be run with best principles and a positive disruptor to the local system, but with a poor SOE track record, this seems questionable.
    • Govt has yet to indicate if it will set up a new entity or use the Land or Post Bank.
  • Local political analyst says Public Protector Mkhwebane's removal/impeachment could take years after an independent panel advised it yesterday.
    • National Assembly speaker must schedule this onto the order paper (could be by Thurs) then the lower house must vote to give the special committee the go ahead to deliberate
  • Ramaphosa drops search for replacement for FinMin Mboweni to cover the risk of him leaving his post due to a lack of alternatives. Dept FinMin Mcebisi Jonal & SARB Gov Kganyago were floated, but neither showed interest in the job
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market News
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market News

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