Business & Tech News
South African Mid-Term Budget Draws Concerns: While State Owned Enterprises such as Eskom and Prasa are not provided any further bail-outs in the budget that Minister of Finance, Mr Enoch Godongwana, tabled yesterday, there have been big concerns raised regarding the reduction of budgets for the National Prosecuting Authority and the Police Force. This while members of parliament will see a large 221 million ZAR increase in salaries. There are 400 members of parliament in South Africa so the average increase per MP is a massive 552 500 ZAR. An additional 3,5 billion has been allocated to the South African military forces in the DRC, that many in South Africa have questioned. In a nation where there is an average of over 80 murders a day and rampant corruption and gender based violence is out of control, the budget allocation is most concerning. Income Revenue forecasts have been reduced by a significant 22.3 billion rand (ZAR), while Economic growth is expected to improve marginally, with a projected growth of 1.1% in 2024 and 1.7% in 2025.
Kenyan Finance Law Reinstated: In a decision made by Kenya’s Supreme Court on Tuesday, the bench set aside the previous finding of the Appeals Court, that the entire Finance Act of 2023 was unconstitutional. This was a rare victory for President William Ruto’s administration. The government was anticipating improved revenues that would have resulted in its implementation after having had to withdraw the finance bill due to widespread protests. The 2023 finance law, included increased fuel taxes, a housing levy, and higher income tax rates, triggered opposition-led protests, leading to over 60 deaths in June and July. In response, Ruto withdrew this year’s bill, delaying an International Monetary Fund (IMF) disbursement. The President has maintained that the tax hikes are crucial for funding development and addressing Kenya’s debt.
AI Capacity Issues Hit Big Tech Companies: Microsoft, in its latest quarterly revenue report, has predicted an increase in revenue on artificial intelligence this quarter but has indicated a slower growth is expected in its cloud business Azure. This is a clear indicator that big AI investments were not enough to keep pace with capacity constraints at its data centres. Microsoft’s Share price dipped 3.6% in after-market trading, shedding earlier gains after it had surpassed Wall Street’s estimates for first-quarter revenue and profit. Facebook-owner Meta which had also reported results above analyst expectations, warned markets of anticipated acceleration in AI-related infrastructure expenses, sending its share price down 3.1% in after-market trading. Brett Iversen, Microsoft’s vice president of investor relations, commented that Microsoft will not be able to address AI capacity constraints until the second half of its fiscal year.
Market News
Markets: Indices in the US closed lower yesterday with the NASDAQ closing -0,79% down, the S&P 500 dropped by -0,33% and the Dow Jones closing -0.22% down. The Nikkei is -1.05% down today at 38864, while the Hang Seng is down by -1,55% this morning at 20380 currently.
Currencies: The US Dollar has strengthened and is currently trading at 1.085 against the Euro, at 1,295 against the Pound, and at 152.92 against the Yen. The rand has strengthened slightly this morning and is currently trading at R17.68 to the US dollar.
Commodities:
- Gold prices are currently trading at $2,783
- Platinum prices are currently trading lower at $1005, with Palladium prices also dropping today trading down at $1135 currently
- Brent crude is currently trading upwards at $73.02 with WTI trading at $69.06 currently.
- Cocoa prices have seen further gains this morning and is currently trading at 5885 pounds,
(All prices quoted at 07H20 CAT)
Other News in Africa Today
Post-Election Protests in Mozambique: At least 11 people including a policeman have been killed and over 400 people detained, in ongoing riots following the recent election results. The lead-up to the election was marred by murders of political opposition members and the youth in Mozambique have questioned the result giving the FRELIMO party a clear sweep. Frelimo have been in power for almost five decades now and there is widespread criticism of the government. Reports of ballot stuffing, ghost voters, and altered voter registration sheets started to filter in from observers, including the African Union, the European Union and the local association of Catholic bishops. A veteran academic Joseph Hanlon, who has studied Mozambican politics for decades and monitored the elections, told reporters on election day, “The whole thing was organised to steal the elections,” “In some places, we’re seeing result sheets written in pencil so they can be changed afterward. The elections are irregular from beginning to end.” These irregularities have led to a strong belief among younger voters in particular, that the election had been rigged. Protests are set to continue today
Somalian Democratic Agreement Break Through: After several months of negotiations and marathon talks, Political leaders in Somalia agreed on a framework for the country’s first national one-person, one-vote elections yesterday, according to a government statement. The agreement followed month-long talks led by Somali President Hassan Sheikh Mohamud that saw the withdrawal of Jubaland President Ahmed Mohamed Islam, also known as Madobe, from the National Consultative Council meeting in Mogadishu. Somalia’s government and federal member states announced on Wednesday that direct universal suffrage would be introduced with local elections planned to be run in June 2025.