Real Estate Investor Magazine South Africa March 2015 | Page 10

PROPERTY ALERTS

The
Bad

The
Good

Drop in the
petrol price

C

onsumers have welcomed the
news about the decreased
cost of petol. The price
of petrol dropped by 93 cents per
litre at the beginning of February,
which economists say this is lowest
recorded decrease in about three
years. In February 2014, consumers
paid R13.60 a litre for fuel.
This means that the lower cost
of fuel and subsequently decreased
inflation can positively affect the
cost of living of consumers who are
already indebted.
On average consumers save about
R200 every time they fill up with
fuel.
Consumers will now have more
cash to spend which is good news
to national retailers too. Internal
inflation of national retailers has
slowed down significantly over the
past few months to 4% in December
2014.
Lower costs have provided some
financial relief to businesses too by
boosting higher profit margins and
impacting on increased investment.
However, some economists warn
that these low fuel prices may end
up increasing again in a few months
time.
Taxpayers can also look forward to
lower taxes, as the cost of these taxes
are relative to inflation. If the cost of
fuel had increased, taxpayers will be
expected to pay higher fees.

10

March 2015 SA Real Estate Investor

Power failure
dims economic
performance

F

aith in South Africa as a reputable investment destination
is fading. This is owing to poor
economic performance caused by
widespread load shedding.
The Gross Domestic Product
(GDP) is expected to drop by 1%
point this year. Some economists
have predicted that the GDP may
further decrease to 0.4%. Chief
Economist at Eskom, Mandla
Maleka’s, GDP forecast decreased
from 2.5% to 2.2%.
The International Monetary Fund
(IMF) warns that long-term daily
disruptions caused by load shedding
will negatively impact the local economy. Manufaturing and mining industries have been affected the most
with productivity and performance
steadily declining.
Cash-strapped consumers can
expect to pay 12.69% more for
electricity when tariffs increase in
April. Small business owners are
also feeling the pinch. Entreperneurs
will have to fork out more money
for electricity bills or pay for costly
power alternatives such as diesel
generators or solar equipment.
Solutions for the power crisis were
discussed during President Zuma’s
State of the Nation Address such as
investing in infrastructure upgrades,
green energy sources and importing
electricity
from
neighbouring
Nambia and Mozambique.

They
Ugl

R700 billion lost to
corruption

R

700 Billion has been lost to
corruption over the past 20
years. This is according to the
Institute of Internal Auditors.
Whistleblowers are being muzzled.
and cite intimidation as the main
reason for keeping quiet.
Meanwhile, during President
Zuma’s State of the Nation Address
he said that, “The fight against
corruption continues to be taken
forward by the Anti-Corruption
Inter-Ministerial Committee. In the
2013/14 financial year, 52 persons
were convicted in cases involving
more than R5 million.” However,
while the statistics may be correct;
this statement made in his annual
speech lacks context.
Accountability
for
corrupt
practices and maladministration is
a major problem. Public perception
about the government’s role in
combatting corruption has further
declined in recent years. A Statistics
SA 2013/14 Victims of Crime Survey
revealed that, over three-quarters
(76.9%) of households thought
people were involved in corruption
to get rich quickly.
There has been many resignations
and suspensions of staff in key
positions at various institutions
investigating
corruption.
[