We now have the highest unemployment rate in South Africa in a decade.  Our unemployment rate was 27,6% at the end of last year and it has now, for the first quarter of this year, risen to 29%.  With a growing population, more and more young people entering the job market and no growth in our economy, I can only see unemployment getting higher.  There are now 6,7 million people without jobs with 101,000 people entering the labour force every 3 months, but the economy only creating 53,000 jobs per quarter.  What that means is that every 3 months or every quarter, there are another 48,000 people who do not have a job. 

Lastly, we must remember that that is the official unemployment rate and most people believe that the actual unemployment rate is much higher.  The data does show that 40% of people aged 15 to 34 did not have a job and that too is obviously a tremendous concern.  We need to get this economy moving.

The divorce of Jeff Bezos, the Amazon founder, and his wife, MacKenzie, was recently finalised. In terms of the divorce settlement MacKenzie had 4% of the shares in Amazon transferred to her and at the time of writing this blog the value of those shares was $37 billion.  That is so much money that it automatically makes her the 23rd richest person in the world and it also makes it the world’s most expensive divorce.  I just cannot see that being topped for a very long time.  It is very hard to imagine the wealth that is required for somebody who gets divorced to automatically become the 23rd richest person in the world, but one should never say never!  Bezos himself now owns 12% of Amazon. 

There is one story that has never been covered in the media in South Africa that I always enjoy and that is that his parents supported him when he started Amazon in Seattle.  Interestingly enough, Seattle has 5 companies, in a city of 3,8 million people, that are bigger than the biggest company in South Africa by market capitalisation, namely Naspers.  In any event, they invested $245 573 in Amazon in 1995.  Obviously, to have had that much to invest they certainly had to be upper middleclass and cannot have been poor.  In return they took a share in their son’s business.  I would imagine, when investing in their son (and remember the father is his adopted father, because his natural father marched off into the distance) they cannot have imagined that that stake, and they have given quite a bit of it away to charity, subsequently would now be worth $30 billion!  What parent would not dream of a child like that?  On the other hand, they put their money where their mouths are, did not just encourage their child, but actually put down a lot of money considering that the average American retires with savings of $90,000 and they were very well rewarded for the best investment decision of their life.  Before you ask, no, Jeff Bezos had no interest in his real father when the real father obviously decided that he wanted to make contact again and I think we can all understand why he would rebuff those approaches once he was a billionaire.  

The Rand has come under pressure in recent weeks relating largely to the problems in financing Eskom.  One of the ratings agencies who had a stable rating for South Africa’s long-term foreign currency debt has lowered South Africa’s rating.  Fitch had South Africa rated as stable and now has taken a longer term view that is now negative.  They say that the money we are paying towards Eskom is going to widen the government deficit to about 6,3% which is much higher than the government’s forecast for 2019/2020 of 4,5%.  They raised, amongst other concerns, the actuarial liabilities of the Road Accident Fund, the liabilities which attorneys dispute because they don’t believe that that figure is correct.  The biggest problem at the moment is our low GDP growth and they are expecting 0,8% growth in 2018 and 0,5% in 2019.  We obviously need to grow at a better rate than that before our economy turns around.