By: Mamello Matikinca-Ngwenya, Siphamandla Mkhwanazi, Thanda Sithole, Koketso Mano
The latest United Nations (UN) Sustainable Development Goals (SDGs) Summit highlighted the significant shortfall in progress made to achieve these goals by 2030. Specifically, indicators tracking the goal of gender equality remain distant from the targets set. The UN estimates that $6.4 trillion is required each year to empower women and achieve gender equality across 48 developing countries, including ending poverty and hunger as well as increasing women's participation. To address these shortcomings, the UN proposes gender equality accelerators, which include political and economic participation, transforming care systems, and enhancing the safety of women and girls - both from social aggression and the impact of climate change.
One of the major highlights of this year is that around 50% of the globe's population is electing political leadership. At the start of the year, the UN tracked women political leaders across the globe and found around 15 countries with women as heads of state or government. As a share of cabinet ministry leadership, women made up 23.3% globally, led by Europe and Northern America (32.5%), with Sub-Saharan Africa (SSA) recording slightly above the average at 23.6%. At a country level, Finland took top spot with 63.2%. South Africa (SA) also sat in the top echelon of rankings, with 50% representation of women as heads of cabinet ministries, however, following the finalisation of the Government of National Unity (GNU), the figure has fallen to 43.8%. Some emerging markets have very limited (less than 10%) or no women representation in these positions. These include India, Russia, Turkey, and Saudi Arabia. Looking into the kinds of portfolios women tend to lead, social portfolios are prominent while economic, finance and defence-related portfolios tend to have limited representation of women leadership. Encouragingly, of the 89 countries in the world with gender equality portfolios, 43.8% are in SSA.
The participation of women in politics is key to understanding and driving the economic and social change required to close the gender divide, while also creating a safer space for women. However, the financial and political backing for these positions, along with dynamism in representation across portfolios, remains integral to the intended success. As the above statistics show, there is much more progress to be made in many countries, and political ideological shifts can influence these outcomes.
Economic participation cannot be overlooked. This ranges from employment to entrepreneurship, given the importance of financial independence to insulating women's agency and the ability to navigate social and climate change. Before increasing women's labour participation, which in SA stands at 55.6% versus 65.8% for men, barriers to enhancing human capital remain challenging. The African Union notes that while progress has been made in access to education in Africa, barriers such as child marriage and early unintended pregnancy as well as inadequate and unsafe learning environments are prevalent. Even after managing to enter the labour force, the UN estimates that young women are twice as likely to experience some form of sexual violence at work relative to young men.1 The probability is even higher for migrant women, and entrepreneurs are not spared. Fortunately, countries have made ratifications to make workplaces safer and this should enable various women to support their families in this period of elevated inflation and rising food insecurity. Interestingly, the UN also speaks of the transformation of care systems, which includes recognising and rewarding care and domestic work. This not only addresses agency issues but could mobilise income for women currently doing such work without pay.
Week in review
SA's foreign exchange reserves for July increased to $62.3 billion from $62.1 billion in June. The increase was supported by higher gold reserves and SDR holdings, while foreign exchange reserves declined. Foreign exchange payments were made on behalf of government, including a partial repayment of a foreign exchange loan from the International Monetary Fund.
Total manufacturing production, not seasonally adjusted, fell sharply by 5.2% y/y in June, worse than the downwardly revised decline of 1.2% y/y (previously 0.6% y/y) in May. Seasonally adjusted output shrank by 0.5% m/m, better than the 3.6% monthly decline in the prior month. This was already reflected by the manufacturing PMI business activity, which remained in contractionary territory at 36.3 points during the same month. Manufacturing output expanded by 0.9% in 2Q24 after shrinking by 1.2% in 1Q24. This supports our long-standing view that GDP likely rebounded in Q2 after contracting by 0.1% in Q1. In addition, the significant annual decline in manufacturing output is consistent with our slightly below-consensus GDP growth forecast of 0.9% for 2024. We will closely monitor the remaining high-frequency data for June over the next two weeks to gain a clearer understanding of the economy's performance in Q2.
Overall, the weak manufacturing output performance, despite easing energy and supply chain constraints, underscores the lacklustre demand for manufactured products.
Week ahead
On Tuesday, data on mining production for June will be released. In May, mining production (not seasonally adjusted) was flat (0%) compared to May 2023. On a seasonally adjusted basis, output fell by 0.6% month-on-month, partially offsetting the 0.8% increase recorded in April. Over the three months to May, mining output declined by nearly 1.0%, indicating that the sector may have continued to weigh on growth in 2Q24. The upcoming June data will be crucial in providing a complete picture of the mining sector's contribution to GDP growth.
The Quarterly Labour Force Survey (QLFS) data for 2Q24 will also be released on Tuesday. In 1Q24, the QLFS indicated modest net employment gains of 21 555, almost entirely offsetting the 21 587 job losses recorded in 4Q23. However, the unemployment level surged by 330 454, reaching 8 225 889 due to a significant influx of new entrants into the labour market. As a result, the official unemployment rate rose from 32.1% to 32.9%, reflecting less favourable labour market conditions.
Finally, retail sales data for June will be published on Wednesday. In May, volume sales came in slightly higher than expected, growing 0.8% y/y compared to 0.7% in April. Six out seven categories recorded growth, spearheaded by spending at general dealers, food and beverage stores, and furniture shops. Seasonally adjusted sales declined by 0.7% compared to the previous month, partly reversing the 1.3% gain in April. Nevertheless, as of May, the retail industry was still contributing positively to the economy in the second quarter of 2024. That said, consumer spending should remain relatively subdued given the persistently high costs of living and low consumer sentiment.
The key data in review
| Date | Country | Release/Event | Period | Act | Prior |
|---|---|---|---|---|---|
| 7 Aug | SA | Foreign exchange reserves $ bn | Jul | 62.3 | 62.1 |
| 8 Aug | SA | Manufactruring production %m/m | Jun | -0.5 | -3.6 |
| SA | Manufactruring production %y/y | Jun | -5.2 | -1.2 |
Data to watch out for this week
| Date | Country | Release/Event | Period | Survey | Prior |
|---|---|---|---|---|---|
| 13 Aug | SA | Mining production %m/m | Jun | -0.6 | |
| SA | Mining production %y/y | Jun | 0.0 | ||
| SA | Unemployment rate % | 2Q24 | 32.9 | ||
| SA | Retail sales %m/m | Jun | -0.7 | ||
| 14 Aug | SA | Retail sales %y/y | Jun | 0.8 |
Financial market indicators
| Indicator | Level | 1 W | 1 M | 1 Y |
|---|---|---|---|---|
| All Share | 80,364.86 | -2.9% | -0.5% | 4.6% |
| USD/ZAR | 18.39 | 1.0% | 1.1% | -2.8% |
| EUR/ZAR | 20.08 | 1.8% | 2.0% | -3.2% |
| GBP/ZAR | 23.36 | -0.2% | 0.3% | -3.2% |
| Platinum US$/oz. | 917.76 | -6.2% | -10.9% | 1.4% |
| Gold US$/oz. | 2,382.92 | -2.6% | -0.4% | 23.8% |
| Brent US$/oz. | 78.33 | -3.0% | -9.5% | -9.1% |
| SA 10 year bond yield | 10.16 | -0.1% | -3.1% | -7.0% |
FNB SA Economic Forecast
| Economic Indicator | 2021 | 2022 | 2023f | 2024f | 2025f | 2026f |
|---|---|---|---|---|---|---|
| Real GDP %y/y | 5.0 | 1.9 | 0.7 | 0.9 | 1.7 | 1.8 |
| Household consumption expenditure % y/y | 6.2 | 2.5 | 0.7 | 0.8 | 1.8 | 1.8 |
| Gross fixed capital formation % y/y | -0.4 | 4.8 | 3.9 | 1.2 | 4.8 | 3.8 |
| CPI (average) %y/y | 4.5 | 6.9 | 6.0 | 4.9 | 4.4 | 4.5 |
| CPI (year end) % y/y | 5.9 | 7.2 | 5.1 | 4.5 | 4.4 | 4.6 |
| Repo rate (year end) %p.a. | 3.75 | 7.00 | 8.25 | 8.00 | 7.50 | 7.50 |
| Prime (year end) %p.a. | 7.25 | 10.50 | 11.75 | 11.50 | 11.00 | 11.00 |
| USDZAR (average) | 14.80 | 16.40 | 18.50 | 18.40 | 17.60 | 18.30 |
