The Reserve Bank's count of foreign direct investment had a big second quarter. Its Quarterly Bulletin put the figure at R49.8 billion, up from R20.3 billion in the first three months of the year, Reuters reported on Tuesday. The jump has one explanation, and it is a loan.
One company, borrowing from its parent
Direct investment is meant to capture the money foreign owners put into businesses they control here, and money lent by a parent company abroad counts. According to the bulletin, as reported by Reuters, the higher inflow came from a local telecommunications company receiving debt funding from its parent overseas. The Reserve Bank did not say which company, because the deal was not public.
That makes the direct investment figure real, but narrow. Other foreign money moved in both directions over the same three months: overseas investors sold R34.2 billion of South African shares, and bought R25.1 billion of South African bonds. Add up every kind of flow and the net capital that came into the country for the quarter was R1.9 billion.
Fewer people on formal payrolls
The same day, Stats SA published its count of formal jobs. Its quarterly employment survey asks businesses, not households, so it measures formal jobs outside farming rather than the whole labour market. Between March and June that count fell by 14,000, to 10,425,000. Manufacturing lost the most, 20,000 jobs, while business services, trade and transport also shed staff.
The mix shifted towards part-time work. Full-time employment fell by 40,000 over the quarter, while part-time work grew by 26,000. Community services added the most, 29,000. Over the full year to June, formal employment is down 95,000.
The wider numbers point the same way. Stats SA's household survey, the broader measure that takes in informal work and people looking for jobs, had already shown the same direction in August, with unemployment rising to 33.6% in the second quarter from 32.7%. The economy itself shrank by 0.2% over those three months, its first contraction after six quarters of growth. Nedbank's economists said the weak jobs numbers mirrored softer activity, particularly in manufacturing and trade.
The Reserve Bank knows which telecoms company borrowed the money. Until the deal is made public, the rest of us only know what it did to the investment figure.
