Bridging the trust gap between business and government in South Africa
The Edelman Trust Barometer highlighted a significant trust gap in South Africa, with businesses being more trusted than the government (62 vs. 29 out of 100). The survey indicates a growing confidence in business-government collaborations, particularly in technology and renewable energy. Success stories like the Renewable Energy Independent Power Producers Programme have bolstered this trust. Challenges remain in the criminal justice system, with high-profile corruption cases affecting government trustworthiness. Efforts to improve this include public-private partnerships in infrastructure and support for legal processes to combat corruption, aiming to rebuild societal trust.
Philip Morris shifts from cigarettes to smoke-free alternatives
Philip Morris International, known for its Marlboro brand, is shifting its focus towards smoke-free nicotine delivery alternatives, which now generate 40% of its gross profit. With 21 million users switching from cigarettes to these less harmful options, the move reflects a global trend towards reducing smoking rates. In South Africa, a significant illicit cigarette market thrives, partly due to previous sales bans. Philip Morris advocates for regulatory recognition of the reduced risks of their heated tobacco products. Meanwhile, South Africa is debating a tobacco bill that could affect the regulation of nicotine products, including smoke-free alternatives.
MTN profits plunge 72% due to Nigerian naira devaluation
MTN Group reported a 72.3% decrease in annual profit, heavily influenced by a drastic devaluation of the Nigerian naira, significantly impacting MTN Nigeria. The company’s headline earnings per share fell from 1,137 cents to 315 cents. This decline followed Nigeria’s central bank implementing new forex rules, leading to a 96.7% drop in the naira’s value against the dollar. Despite this, MTN, serving 295 million customers across 19 African markets, saw a 6.9% increase in group service revenue, reaching R210.1 billion, and declared a final dividend of 330 cents per share.
Markets
The South African rand noticed a slight increase, trading at R18.97 against the dollar, as the market anticipates the central bank’s interest rate decision. The rand faced pressure from a stronger dollar due to global risk aversion, but positive local economic strategies could improve investor confidence and the rand’s value. Meanwhile, South Africa’s benchmark 2030 government bond yield remained stable at 10.43%.
Week Ahead:
The economic events for the week start today with the release of the United States Consumer Confidence and South Africa’s Leading Indicator. Wednesday will see the EURO zone’s Consumer Confidence figures come out. On Thursday, there will be several key releases: the United Kingdom’s GDP, South Africa’s Private Sector Credit, and South Africa’s Trade Balance. The week concludes on Friday with Japan’s Unemployment Rate.
