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The good, the bad and the ugly of 2012

Jan 02 2013 12:21 Adiel Ismail

Police on guard just days before 34 striking miners were shot dead at Marikana.(File, Sapa)

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Cape Town - As 2013 unfolds, Fin24 wraps up the good, the bad and the ugly of top news events from the world of business in the year that was.

The good...

All-round cheers for NDP

The National Development Plan (NDP), a roadmap to grow the economy, has been widely accepted by all sectors.

The final document outlined key problems, including too few people working, poor quality of school education for  blacks, poor infrastructure and an unsustainable, resource intensive economy.

Among the NDP's more ambitious targets is decreasing unemployment to 14% by 2020. Business Unity SA called for the urgent implementation of the NDP to create the certainty and predictability that business and investor confidence needs.

Record tax returns filed

According to the South African Revenue Service, a total of 5.66 million income tax returns were submitted during the 2012 tax season. The total included 4.214 million returns from individuals, representing a 14.3% increase compared to 3.688 million in 2011.

Nearly 400 000 individuals received refunds this year.

Pay rise for domestic workers

The minimum wage for domestic workers is set to increase. However, Dennis George, general secretary  of the Federation of Unions of SA, called on employers to rather sit down with their domestic workers and discuss realistic increases linked to the rising cost of living as the minimum wage set by the government is only a guideline.

Standard scoops global finance awards

The Standard Bank Group [JSE:SBK] scooped eight awards at a ceremony for Global Finance Transaction Processing at the annual Sibos conference in Osaka, Japan.

Standard Bank’s awards span four categories, including foreign exchange, trade finance, treasury and cash management and sub-custodian banks.

FNB bags global banking award

First National Bank won the Most Innovative Bank of the Year Award at a prestigious award ceremony in Washington DC honouring the most innovative banks in the world. FNB, a division of FirstRand [JSE:FSR], received the award for its culture of innovation and advancement of retail banking.

Capitec Bank is Top Company of the Year

Capitec Bank Holdings [JSE:CPI] won the coveted title as SA’s top company at the Sunday Times Top 100 Companies Awards banquet held at the Sandton Convention Centre in Johannesburg.

Capitec CEO Riaan Stassen said the company's consistent growth, on which the award is based, is a direct reflection of client demand for the bank's unique, simplified offerings.

The bad...

Surprise credit downgrades

The government was caught unawares when global rating agency Standard and Poor’s (S&P) cut the country's local and foreign currency sovereign ratings one notch to BBB with a negative outlook, saying strikes and social tension could reduce fiscal flexibility and hurt growth.

Finance Minister Pravin Gordhan responded by saying that the downgrade came as “a surprise”.

Moody's Investors Service also downgraded South Africa's sovereign rating, warning of a decline in the government's institutional strength as socioeconomic stresses rise. The country's five biggest banks and seven major companies - including Eskom and Transnet - were also downgraded amid warnings of further downgrades.

Inequality persists

After 18 years of democracy, SA is still one of the most unequal countries in the world as the gap between rich and poor widens. About 23 million people live in poverty and unemployment figures for the past year stood at 25%.

Education gets an "F"

Despite spending around R190bn from the 2012 budget on education, the country has one of the lowest literacy rates in Africa. According to the World Economic Forum, SA ranked 132nd out of 144 countries for the quality of its primary education and came in second last for science and maths.

1time grounded

Hundreds of passengers were left stranded when 1time, the country's second-largest low-cost airline, was granted provisional liquidation by the high court in Pretoria in November.

A frustrated Fin24 user wrote in, saying "I just  want my money back". This came after the company said customers who had used credit cards to purchase their air tickets could be refunded by the banks, while those who had bought tickets in cash would have to wait longer for a refund as their money was considered cash which belonged to the company.

The company had about R320m in short-term debt and had been in negotiations with creditors since March. In December, Fastjet signed an option agreement with 1time Airlines parent 1time Holdings to buy all issued share capital in the defunct airline for R1.

And the ugly...

Strikes mar business landscape

The year 2012 will be remembered for unprotected strikes which turned violent.

The Marikana massacre shocked people the world over when a series of violent protests at one of the world's largest platinum-producing mines led to the deaths of 34 miners, after a shoot-out involving the police and striking workers. Two policemen and two security guards also lost their lives.

In September shares of the platinum producer fell 5%, hitting nine-year lows. It also expected sales for the full year to reach 685 000 ounces to 700 000 oz of platinum, below its annual production target of 750 000 oz.

Lonmin [JSE:LON]  accounts for 12% of global platinum output. It is already struggling with low prices and weak demand, and has slashed spending plans.

A judicial inquiry has been established to probe the cause of the deaths at Marikana.

Freight industry strike

The transport sector also had its fair share of protests after a three-week long strike by 20 000 truck drivers. It was marked by violence which left several truck drivers injured and one dead, and a number of trucks damaged or  destroyed.

The strike wreaked havoc and affected deliveries of petrol, coal, cash and other goods. It also spilled over into Namibia.

Grapes of wrath

Protests also occurred on vineyards. Strike action spread across the winelands from De Doorns to Robertson, Wolseley, Ceres, Prince Alfred Hamlet and surrounds, and saw vineyards burned and shops looted.

Unrest  in the sector started in early November, with farmworkers demanding an increase in their daily minimum wage from R69 to R150, and improved living conditions. Farmworkers suspended their strike for the festive season and are  expected to take to the streets again

 - Fin24
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