Understand Your Motor Vehicle Insurance

The Ombudsman for Short-Term Insurance warns consumers to ensure that they fully understand and appreciate the basis upon which motor vehicle insurance is taken out and the category of persons who are insured whilst driving a motor vehicle belonging to an insured.

 

“Motor vehicle policies are commonly underwritten on the basis of a regular driver or a nominated driver, however in insurance, a regular driver is not the same as a nominated driver,” says Ombudsman for Short-Term Insurance, Brian Martin. These concepts are used in order to assess the risk associated with the insurance of a particular motor vehicle and the premium to be charged.  The identity and profile of the driver of a motor vehicle is obviously an important factor in risk, which the insurer is being asked to assume as well as the premium to be charged. 

 

Certain policies of insurance define a regular driver as “the person who uses the motor vehicle the most frequently and more than any other”, but this definition is not without its difficulties. The concept is not always capable of precise definition. Where a policy is underwritten on a regular driver basis, other persons may drive the motor vehicle in addition to the regular driver, provided that they are in possession of a valid driver’s license and that they are only the secondary driver. It is vitally important that consumers correctly identify the regular driver in instances where more than one person will drive a motor vehicle, to be insured on a regular driver basis and that they provide this information to their insurance company or broker.

 

A nominated driver policy, on the other hand, only gives cover to persons who are actually nominated and recorded as a nominated driver on the policy of insurance. Any person who is not nominated and recorded, as a nominated driver on the policy schedule will not be covered.

 

The Ombudsman says that consumers should take heed of the fact that if a vehicle is incorrectly insured or incorrect information is furnished to an insurer concerning either a regular driver or a nominated driver, this can result in a policy being declared void from inception, or the insurer having no liability to compensate for any loss or damage. “Utmost care must be exercised in ensuring that the correct information is given to an insurer and that any change in one’s circumstances or day-to-day living is immediately communicated to one’s insurer or broker so that the necessary endorsements or changes to the policy can be made. Changes could include any change of address or change in the use of a motor vehicle,” says Brian Martin. 

 

If consumers are in any doubt as to whether their motor vehicle is correctly insured or not, they should seek professional advice from a licensed broker, insurance advisor or attorney prior to taking out the policy. This will avoid many problems that could arise at a later stage.

It's not all that bad in SA!

This from Fin24.com:

SA cities score in global poll

Oct 28 2008 07:14

Theunis Strydom

Johannesburg - South Africa has performed well in a survey of the best cities for business in the developing world.  The project, funded by MasterCard, indentified cities with the highest potential for commercial activity.

South Africa has more cities (Johannesburg, Cape Town and Durban) among the top 40 cities than any country outside of Brazil, Russia, India and China (the BRIC nations).

Johannesburg, in the 11th position, has fared better than any cities in Russia, India or Brazil. China has four cities amongst the top ten.

"South Africa is clearly on the move and worth watching," says the report, which goes so far as mooting the country as a possible future Bric component.  South African cities performed well in a number of categories, including the tax system, the ease with which an enterprise can be established or shut down, and the effective enforcement of contracts.

Johannesburg also scored well for its standard of financial services.  Cape Town, in turn, came first for quality of city life, while Durban and Cape Town shared first place in terms of safety.  In the safety category Johannesburg took eighth position among the 65 cities rated.

Emerging economies will, according to MasterCard, soon contribute 12 times as much to world growth as the developed world does.

- Sake24

So, it's not all doom and gloom is it?

Why you need REAL 4x4 insurance, from a REAL broker

The misery of clients making a wrong decision when choosing 4X4 insurance became evident again this month when our most recommended 4x4 underwriter, TUFFSTUFF, was requested by the 4X4 community forum to step up and assist one of their group who had been left high and dry by a direct insurer.

On 16 October 2008, TUFFSTUFF was approached by the chairperson of the 4x4 community forum requesting urgent assistance for one of their members who had his R700 000 V10 Touareg stranded in the very north of Moremi in Botswana. The vehicle became stranded following ingestion of water into the cars’ engine during a water crossing. When calling his insurers in South Africa for assistance to recover and repatriate his vehicle, the policyholder did not budget on the rude reality (and enormity) of his plight. It was only when his insurers advised him that he did not have “that kind of cover” and as such, they could not assist him in getting home that he realised that he should have obtained proper advise from a broker.

Without hesitation TUFFSTUFF confirmed their commitment and loyalty to the 4x4 owning public by immediately activating their international recovery and rescue resources to assist this person in bringing his valuable asset back home. Within a matter of hours, all arrangements were finalised and the recovery was underway…. And he isn’t even a TUFFSTUFF client!

Whether or not the R270 000 damage to the drowned V10 engine will be paid for by the insurers, is still to be seen. This unpleasant incident underlines the fact that people should not budget on insurance cover when they have not made use of professional Insurance Brokers who understand their clients needs and know where to get the best product available.

This is not the first time TUFFSTUFF has been called in to assist. On new years day in 2006 TUFFSTUFF went to the rescue of a seriously injured accident victim in Mozambique – another victim who was not even a TUFFSTUFF client.  

For REAL 4x4 insurance from a REAL 4x4 insurer, drop us a line.

Lightning Strikes and What You Can Do To Protect Your Electronic Equipment

This article courtesy of SABCnews.com:

Lightning strike plunges Jo’burg into darkness

October 20, 2008, 19:45

Johannesburg City Power says it is busy restoring power to several areas in the city after lightning struck one of its transmission towers. The bolt hit the tower, several cables then snapped fell to the ground. The explosion startled a truck driver, who then drove into a pylon. 

City Power says the affected tower is very close to one of its major substations, causing other stations to lose supply. The blackout, combined with the rain, caused traffic chaos in Johannesburg. 

Some of the suburbs affected include the city centre, Orange Grove, Mondeor, Booysens and Glenhazel.

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It's summer on the Highveld! And with that comes the notorious lightning and thunderstorms.  Beautiful to watch, and frighteningly powerful at the same time.  

Do yourself a favour and buy a decent quality power surge protector for your electronic equipment.  Computers, Fax machines, LCD screens, home alarm systems, electric fence energisers, intercom systems and electric gate motors are very susceptible to surges caused by lightning.  

"But I have insurance for that", I hear you say.  Sure you do. But have you taken a look at what your excess is for a lightning claim?  Often R1'000 or more! Ouch. 

What will a decent multiplug with power surge protection cost you? About R300. Not only is it a lot cheaper than your excess, installing one of these units will also ensure you don't have a premium increase due to the lightning claim.  

Remember that lightning likes to travel along Telkom wires and so, many lightning damage claims we see are on equipment that are connect to a Telkom line.  So make sure your ADSL router, computer, fax machine, portable telephone and so on is protected properly.

When it comes to business insurance policies, most will cover lightning damage only if the item was protected by an SABS approved surge protector.  Alternatively an additional higher excess of R2'000 is applied.

Personally, I use Clearline's range of products.  Not only do they guarantee their product but they also offer a R15'000 connected equipment warranty.

Protect your equipment today. It is worth it. 

Climate Change and the Effect on Insurance Premiums

Climate change hits insurance

HERALD CORRESPONDENT

THE effects of global climate change will soon touch the wallets of many South Africans as insurance premiums for those living in high risk areas is set to rise.

This comes as international re-insurers say the South African insurance industry is poorly prepared for the effects of climate change, taken seriously in Europe and north America.

High insurance risk areas include the Southern Cape, repeatedly affected by floods in the last five years, as well as those living near rivers, wetlands and the seashore. It also highlights what specialists have said for years: that climate change is an environmental and economic problem.

Santam, the country‘s largest short-term insurer, has announced that it will adopt “higher pricing structures” to insure against the effects of climate change because it has to cover risks that are more volatile and less certain.

Santam has not said by how much premiums will rise, because each policy-holder will be assessed according to his or her specific risk of being affected.

Ray-Ann Sedres, the manager of Santam‘s integrated sustainability section, said the company was used to cycles in the economy and climate and to balancing premiums with insured losses.

“Climate change is different. More volatile climatic events create less certainty and lead to bigger claims, which inevitably results in more complex and higher pricing structures,” Sedres said.

Householders living below the one in 50-year flood level, close to rivers and wetlands, are likely to be at higher risk, as are people living close to the seashore.

Apart from sea-level rise, predictions are that winds will rise in intensity, driving waves well above the high water mark – as seen in last week‘s storms in the Eastern and Southern Cape.

Product Recall Insurance - Can you Protect Your Company's Reputation?

How Long Does It Take to Lose Your Reputation?

How fast does word of a recall spread? With a single decision in any EU Member State, notifications go out immediately across the entire European Union of a product recall. During one week in March, Germany recalled inflatable beach balls; Spain banned a mini-motorbike; Belgium recalled push toys for children; Poland did the same on a fishing set… and the list goes on and on.

Within minutes of the alert to the Rapid Notification System, your product could be recalled across all of Europe. The expenses are all yours - to say nothing of the potential damage to your reputation, not just in one country, but across all of Europe and, shortly thereafter, worldwide.

One recall can cost you the valuable reputation you have built up over the years. It can also cost you:

• Expense to ship the products
• Expense to notify customers and vendors of the recall
• Expense to hire extra staff to make the needed repairs
• Expense to dispose of the faulty components

…all on top of the expense of lost consumer and retailer confidence in your products and your company.

Is there a solution? Now there is. AIG Recall Insurance.

AIG Recall Insurance can protect businesses from the devastating effects of such recalls; covering the key expense areas and also providing the expertise of world renowned crisis management and publicity consultants to guide the company through the critical first few weeks of a product recall.

The speed of today's communication systems and worldwide media make this an issue you need to resolve now.

If you would like to know more about AIG Recall Insurance, AIG South Africa has the best Crisis Management Solutions to help you through your time of need.

Contact Absolutely Covered Brokers on +27 (0) 12 345 4101. Or click here to email us


AIG South Africa is a member of American International Group, Inc. (AIG), world leaders in insurance and financial services. AIG is the leading international insurance organisation with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo.

How safe is your generator installation?

The Dangers of Electrical or Portable Generators

The recent power failures have resulted in many Homeowners rushing out to buy generators and there has been much said recently in the media about the boom in sales for generator suppliers.

The question is how much does the average person understand about the dangers brought about by these electrical generators?

Firstly it must be noted that any Generator installed should comply with the South African National Standard (SANS 10142-1:2003) for the wiring of premises Clause 7: 12 which prescribes the minimum safety requirements for the installation of low voltage generators.

These Electrical Generators or Portable Generators are useful when temporary or remote electric power is needed, but they also can be hazardous. The primary hazards to avoid when using a generator are carbon monoxide (CO) poisoning from the toxic engine exhaust, electric shock or electrocution, fire and burns.

Every year, people die in incidents related to portable generator use. Most of the incidents associated with portable generators involve Carbon Monoxide poisoning from generators being used indoors or in partially-enclosed spaces with inadequate open air ventilation.

Carbon Monoxide Hazards

When used in a confined space, generators can produce high levels of Carbon Monoxide within minutes. When you use a portable generator, remember that you cannot see or even smell Carbon Monoxide. Even if you do not smell exhaust fumes, you may still be exposed to Carbon Monoxide fumes. Carbon monoxide at high levels can kill a person in minutes. Carbon monoxide (CO) is produced whenever any fuel such as gas, oil, petrol, diesel, wood, or charcoal is burned.

Hundreds of people die accidentally every year from Carbon Monoxide poisoning caused by malfunctioning or improperly used fuel-burning appliances. Even more die from Carbon Monoxide Poisining produced by idling cars. Fetuses, infants, elderly people, and people with anemia or with a history of heart or respiratory disease can be especially susceptible.

Check Your Insurance Policy

These are legal requirements and failure to comply with these requirements could possibly invalidate any home owners insurance should it be established that a fire or injury was caused as a result of the incorrect connection of the generator. This should be carefully checked with your Insurer or Broker and it should be declared on your policy and noted that you have now installed a generator.

IF YOU START TO FEEL SICK, DIZZY OR WEAK WHILE USING A GENERATOR ,
GET TO FRESH ARE RIGHT AWAY . DO NOT DELAY .

Follow these safety tips to protect against Carbon Monoxide (CO) poisoning.

Protection from CO Poisoning

• NEVER use a generator inside homes, garages, enclosed spaces, sheds, or similar areas, even when using fans or opening doors and windows for ventilation. Deadly levels of carbon monoxide can quickly build up in these areas and can linger for hours, even after the generator has shut off.

• Follow the instructions that come with your generator. Locate the unit outdoors and far from doors, windows, and vents that could allow CO to come indoors.

Electrical Hazards

• Generators pose a risk of shock and electrocution, especially if they are operated in wet conditions. If you must use a generator when it is wet outside, protect the generator from moisture to help avoid the shock/electrocution hazard, but do so without operating the generator indoors or near openings to any building that can be occupied in order to help avoid the Carbon Monoxide (CO) hazard. Operate the generator under an open, canopy-like structure on a dry surface where water cannot reach it or puddle or drain under it. Dry your hands, if wet, before touching the generator.
  

• If you have not had your generator wired into your premises by a qualified electrician only connect appliances to the generator using heavy-duty extension cords that are specifically designed for outdoor use. Make sure the wattage rating for each cord exceeds the total wattage of all appliances connected to it. Use extension cords that are long enough to allow the generator to be placed outdoors and far away from windows, doors and vents to the home or to other structures that could be occupied. Check that the entire length of each cord is free of cuts or tears and that the plug has all three prongs.
  

• Protect the cord from getting pinched or crushed if it passes through a window or doorway. ( Please note : we do not recommend that you use the generator in thisway and you should install the generator correctly using a licensed electrician).
  

• NEVER try to power the house wiring by plugging the generator into a wall outlet, a practice known as “backfeeding.” This is extremely dangerous and presents a possible electrocution risk to external workers and neighbors served by the same transformer. It also bypasses some of the built-in household circuit protection devices.
  

• A licensed electrician or registered electrical contractor must carry out the installation and must understand and have the experience with the requirements for the wiring of switches. Incorrect wiring of all the live, neutral and earth wires could be life threatening.
  

In addition when he has completed the installation make sure that he issues you an Electrical Certificate of Compliance. Failure to obtain such a certificate could invalidate any insurance claims arising as a result of electrical faults or accidents.

Fire Hazards

1. Never store fuel for your generator in the home. Petrol, Diesel, propane and other flammable liquids should be stored outside of living areas in properly-labeled, non-glass or breakable safety containers. Do not store them near any fuel-burning or heating appliance.
   
2. Before refueling the generator, turn it off and let it cool down. Fuel spilled on hot engine parts could ignite.
3. Be extremely careful should a power failure occur at night and never use a naked flame, matches or a candle near the generator or fuel tanks. Make sure you have a torch available for use when going to turn the generator on.
4. It is advisable to keep a small fire extinguisher in close proximity to the generator. A 4.5 Kg Dry chemical Powder (DCP) or 2 Kg Carbon Dioxide (CO2) fire extinguisher is recommended.

Is the bad mood justified?

This from ITINews:

Tonight I have decided to republish an excellent article by J.P. Landman of the BOE Investment Research Team with the above title:

The mood in the country, certainly amongst white people, is quite depressed. An annual opinion poll on how optimistic South Africans are, found that in February 2008 60% of South Africans felt positive.

That was down from an average of mid-sixties in previous years. The real outliers were whites; only 31% were optimistic, down from the mid-forties in previous years.

The poll reveals that Cape Town has the least positive residents (49%); the Vaal triangle has the most optimistic (74%); Pretoria and Johannesburg come in at 62% and 67% (interesting if one considers the crime in Gauteng); young people are more optimistic than their elders (66% vs 51%); and the inland areas of SA more optimistic than the coastal areas.

This is probably explained by the fact that optimism amongst coloureds and Indians is fairly low (40% and 44% respectively) whilst blacks are very optimistic.

Why such a bad mood? In the previous years this poll was conducted we also had crime and malfunctioning municipalities (think the murder of David Rattray and the whole furore at the beginning of last year). So it cannot be that.

In my opinion three factors have contributed: politics, economics and Eskom.

• Politics, particularly the post-Polokwane reaction to ANC elections and decisions about the media, the Scorpions and the judiciary;
• Economic headwinds, particularly rising petrol & food prices which also push up inflation and interest rates and depress general activity; and
• Lastly and the most damaging, Eskom’s inability to supply sufficient power.

Eskom is the straw that broke the camel’s back. It brought up all the subliminal fears that (whites) have about (black) governance.

Never mind the fact that in the mid-seventies Eskom had a similar crisis when the whole country was without power for 18 hours and power tariffs rose by 75% to fix the problem.

Somehow the current Eskom crisis is seen as the beginning of the end.

Eskom

Lets deal with Eskom first, because that also tells us something about economics and politics. The question is simple: can SA rise and respond to this crisis in a way that makes the country stronger?

At the heart of the Eskom problem is a lack of investment and maintenance. Is that being fixed?

Last year Eskom invested R17.7 billion, 67% more than the previous year. This year it will spend R46 billion and next year R80 billion. By 2012 it would have spent R360 billion.

Sure, it will take time for these investments to work through; 2012 means another four years of pain and interruptions.

But distinguish that from a situation where power cuts take place and no investment is taking place to improve matters (as in Mugabe’s Zimbabwe). So Eskom will turn, even if it takes four years.

Investment

This investment story repeats itself all over the SA economy. Transnet is investing R78 billion over five years; about R12 billion a year are being spent on roads, and toll roads will add to that amount; municipalities are budgeted to spend R100 billion over three years on infrastructure.

Then add airports, broadband telecommunications, hospital upgrading, electrification, school building … the list carries on and on. I do not even bother to mention the World Cup stadiums. It is noticeable in the media, but not really in total investment spend.

By the way, comfortably more than 90% of these budgets are actually spent. Just take last year when total capex budgets came to R128 billion of which R124 billion was actually spent (97%).

All the public attention fell on the R4 billion not spent (3%), very little on the R124 billion actually spent. When last have you built a house, renovated a kitchen or added a bathroom and all those came in 100% within the time you budgeted?!

All over the country there is a frantic search for skilled people. Engineers who were retrenched are being called back; the collapse in Zimbabwe helps SA construction companies fill their complements; labour brokers are bringing people in from foreign shores to work here. The country is booming beyond its ability to supply skills.

Before it depresses you, consider the following statement from the Asian Development Bank about the skills shortage in Asia: “Although this brain drain (skilled workers leaving to work in the developed world) is hardly new to the region, it has added a new, more urgent dimension …(to the skills shortage).”

It goes on to call the skills shortage “a symptom” of Asia’s economic success. Lovely problem to have.

One hears a lot that SA spends on social welfare but not on investment. This fiscal year the country will invest 7% of GDP …. and spend 4.6% of GDP on social security, including the Road Accident Fund, UIF and of course the 12.4 million social allowances paid out every 30 days.

Whilst the state probably spends 80% of what is spent on social security (churches, NGOs and individual do the rest), its investment spend is only about 30% of what the country invests. The private sector does the rest.

Can we now please bin this nonsense that we spend more on social welfare than investment?

Politics

So how will politics change this investment outlook? The Polokwane decision on investment is relevant: “The ANC will also continue to roll out a massive state led infrastructure investment programme that will significantly improve the country’s logistics, energy and communications capacity. It will also promote strategic investments in productive activities, aimed at diversifying the economy and improving the ratio of investment to GDP.” (my underlining)

There are some rather questionable decisions from Polokwane, notably on the media, judiciary and the Scorpions, but not on economics and welfare policies.

There are budgets and business plans around capex, political decisions backing it and a rising numbers of people benefiting from it. I think the investment programme is sustainable.

Economics

Even if we accept lower economic growth over the next few years, say 4% rather than the 5% we enjoyed the last few years, the beauty of SA is that per capita incomes will still rise and at an accelerating rate.

In the fourteen years since democracy, per capita incomes have increased by 26%. At 4% growth for the next seven years to 2014, per capita incomes can again increase by ….26%!! Consider what has happened in the last fourteen years, it can happen again over the next seven.

Yes consumption expenditure will fall and all sectors exposed to that will feel the pain: retail, advertising, car sales and so on. Huge squeals to come from there.

But that growth is being replaced with investment that creates jobs, which will in turn stimulate consumption spending. In a year or two interest rates will ease, there will be scope to do tax cuts and per capita incomes will continue to increase.

Back to Basics

The basics have not changed. For me the most important pre-condition of progress is sustained rising per capita incomes. Regular readers will know that I have punted this view for years.

Thus, an article in a recent Economist that we should measure per capita income growth, rather than just economic (or GDP) growth, was music to my ears.

The music became more beautiful when a brilliant analysis on Ugandan population growth drew the following comparison: “(…) from 1993 to 2003, GDP growth rates across Asia managed to outstrip the growth in the labour force, in China comfortably so. By contrast, average GDP growth in sub-Saharan Africa in the same period was 2.9%, all but cancelled out by a growth in the labour force of 2.8%.”

This statement probably tells us more about the reasons for sub-Saharan Africa’s failures than any other explanation. If a country cannot grow its economy quicker than its population, it is going absolutely no where. SA is clearly not in that league.

It is instructive to note that per capita incomes have been declining in Zimbabwe in every single year since 1999 (Hanke, 2008). Fitting then that precisely ten years after the decline started, even Mugabe could not rig the election.

Also instructive to note that per capita incomes in SA stared to decline in 1977. Thirteen years later FW de Klerk unbanned the ANC and released Nelson Mandela. Declining per capita incomes have political consequences.

Messiness

The latest pin-up in financial writing (justifiably so in my view) is Nassim Taleb (“The Black Swan” & “Fooled by Randomness”). He offers this simple but highly relevant insight: “That things in the real world are far messier than in recorded history or in memory.”

Things were not as clean as some whites’ memories tell them. I have a dear friend who knows and experienced Afrikaner politics quite intimately. In the 1990s he always said that we must go back to 1948 before we can get to 2000.

The liberals freak out when they hear this. Those who understand tradition recognise that messiness is part of progress. Gosh, look at China today and the UK in the 1800s – hardly examples of messy free progress.

For a long time there was nothing messy in Zimbabwe – good education and health that they could not afford but never debated, little crime, a clean country and little civil society and debate. Not messy at all. Did they progress?

Challenge & Response

Arnold Toynbee taught us that the ability to respond to crises is the critical difference between societies that succeed and those that fail. Progress does not come from having no challenges; rather it comes from responding successfully to challenges.

In the eighties and nineties SA responded most successfully to its political/constitutional crises. Remember when Whites were to be killed, Black ethnic violence to erupt, the rightwing to lead an armed resistance and so on and so on.

Nothing of the sort happened – the country responded successfully to its constitutional crises.

In the late nineties SA had a low growth crisis; a 1% economy that looked as if it could not break through a 3% growth ceiling. And now growth is sufficient to lift per capita incomes quicker than Australia, Brazil, Germany, France, Italy, the UK and US. The country responded successfully to the challenge of low growth.

So What?

• Rising incomes mean resources to tackle problems, create jobs, fight poverty and build infrastructure. To paraphrase Bill Clinton, it is about per capita incomes, stupid.
• Over the next seven years per capita incomes can rise as much as during the last fourteen years. This will trump the negative fallout from politics. The economist Prof De Kiewiet wrote several decades ago that SA progresses through “political disasters and economic windfalls.” Between rising incomes and post-Polokwane political uncertainty, it will happen again.
• SA is responding to its infrastructure crisis (which will be around for a while, make no mistake) with a massive investment programme.

All that remains now is to put one foot in front of the other, carry on and expect a lot of messiness. Sometimes I think it is our inability to live with messiness that paralyses us.

If Whites can make this paradigm shift their mood might not be so bleak. More importantly, they can capitalise on the opportunities.

Thinking of Emigrating to Greener Pastures?

I don’t know about you, but I feel that South African journalism, and their overriding desire to sell their media, has a lot to answer for. Have you noticed how, over the years, media has become more sensationalist and dramatic, in an attempt to grab our attention and make us buy their news over their competitor’s? I have always felt that South Africa is an incredible land of opportunities. But to see and seize these opportunities, we all need to stop the griping, and actually start being thankful for how good we have it in South Africa. This article by Steven McManus really puts some perspective on things.

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If you care about South Africa, please help spread the good news to counter the negativity by reading just how good things really are and sending this everyone you know…….



I believe that part of the reason we are going through mass negativity at present is because we are constantly bombarded with bad news. I believe that if we all keep reading, talking, thinking, and worrying about the bad stuff all the time, we will end up attracting it.



At the beginning of 2008, almost as soon as most South Africans returned to their everyday lives, having enjoyed a relaxing summer holiday, the perfect storm erupted. In quick succession there has been the unanimous unseating of the country’s President as leader of the ANC in December 2007, followed by a nationwide power crisis with regular “load shedding” which started in January 2008 and which we are told this will continue until after 2010. In addition South Africans are dealing with the perceived high level of crime (perception is reality), increasingly high levels of inflation (9.4% in February 2008), petrol at the highest levels ever and according to the popular media and dinner talk, more people than ever are considering immigrating to greener pastures.



After the last few months one may ask “Is there any good news about South Africa?” Yes!! After digging around on the internet, I have found plenty of good news about South Africa, which I would like to share with you to help put the constant bad news in perspective:



Cheap Petrol

Although the price of petrol in South Africa has increased dramatically it is still amongst the cheapest in the world. The highest price in South Africa is the Gauteng (inland) price for 95 octane unleaded petrol which as at 2 April 2008 is R8.91 per litre. In contrast according to a survey of 9 700 petrol stations in the UK by www.Petrolprices.com, for unleaded petrol, the minimum price in the UK is £1.03, the average price is £1.07 and the highest price £1.19 per litre. Using an exchange rate of £1=R15, this means that the average price per litre in the UK is over R16 per litre, nearly double South Africa’s price.



Cheap Housing

Housing in South Africa is still amongst the cheapest in the world. According to the April ABSA housing index the average price for middle segment housing (Residential houses nationwide between 80m2 and 400m2 ) is just R929 000. In contrast according to the BBC News Survey of UK house prices (which fell 3.6% in the last year) as at February 2008 the nationwide average is currently (Rand figures are conservatively calculated at £1=R15) (http://news.bbc.co.uk/1/shared/spl/h...l/houses.stm):

*Detached (A house not joined to any other) £342 800 (R5 142 000)

*Semi-Detached (A house which is joined to another house on one side) £200 037 (R3 000 555)

*Terraced (Streets of houses joined together in long rows) £176 732 (R2 650 980)

*Flat (A flat is part of a bigger building where all the flats share a front door) £200 967 (R3 014 505)



Lower Unemployment

According to Statistics South Africa the unemployment rate fell fractionally to 23% in September 2007—the lowest since records began in 2001. The government’s target is to cut the rate to 14% by 2014 (http://www.southafrica.info/business...lfs-280308.htm)



Winning the War on Crime

The United Nations Interregional Crime and Justice Research Institute have conducted research on the victims of crime which shows the picture of South African crime as more typical of a developing country. These statistics show that South Africa has lower rates of violent crime than many African and South American countries. (http://www.unicri.it/wwd/analysis/ic...o57/c04_57.PDF)



According to the South African Police Service Statistics, the incidence of most types of crime has reduced since 2001. Their latest report for the 6 month period April to September each year since 2001 (http://www.saps.gov.za/statistics/re...rt20062007.pdf) reveals the following rates of incidence per 100 000 of the population:

*The incidence of murder, although still unacceptably high is clearly decreasing 2001=22.7, 2002=22.9, 2003=21.0, 2004=19.7, 2005=19.6, 2006=20.0, 2007=18.7

*The incidence of rape, is also still unacceptably high but has clearly decreased in the past 2 years 2001=55.1, 2002=52.3, 2003=51.1, 2004=53.7, 2005=55.6, 2006=49.6, 2007=47.8

*The incidence of common assault has decreased dramatically in the past few years 2001=260.1, 2002=275.2, 2003=279.1, 2004=269.4, 2005=229.5, 2006=201.6, 2007=191.4



Stock Exchange Growth

*South Africa’s stock exchange (the JSE Limited), ranks 18th in the world in terms of total market capitalisation

*South Africa’s stock exchange ALSI (All Share Index) has risen from 7510.4 on 30 April 2003 to over 30 000 in April 2008, an increase of nearly 400% in 5 years (http://www.jse.co.za/)



Sporting Successes

*South Africa are the Rugby World Cup champions (http://www.rugbyworldcup.com)

*South Africa is the number 1 ranked rugby team according to the IRB as at 31 March 2008 (http://www.irb.com)

*South Africa is the number 1 ranked cricket team according to the ICC for One Day Internationals as at 22 March 2008 (http://icc-cricket.yahoo.com/rankings/rankings.html)

*South Africa are hosts of 2010 world cup (http://www.fifa.com/worldcup/index.html)

*South Africa has 2 golfers ranked in the top 10 in the world according to the Official World Golf Ranking for Week 13 - March 30th – 2008 (http://www.officialworldgolfranking....me/default.sps)



Competitive Nation

*South Africa ranked 44th out of 131 countries in the World Economic Forum’s Global Competitiveness Report 2007/8 (http://www.gcr.weforum.org)

*South Africa has been ranked 28th among 108 countries measured for responsible competitiveness, according to the global think tank AccountAbility. (http://www.accountability21.net)

*South Africa ranks 52nd out of 157 countries in the world in terms of economic freedom, ahead of Italy (60th), Brazil (70th), the United Arab Emirates (74th), Greece (94th), India (104th) and China (119th), according to the Index of Economic Freedom 2007 (The 2008 Index of Economic Freedom covers 162 countries across 10 specific freedoms such as trade freedom, business freedom, investment freedom, and property rights http://www.heritage.org/research/features/index)



Rich in Resources

*South Africa is one of the world leaders in mining and minerals, with a significant share of the world’s reserves and production.

*South Africa has, according to the SA Department of Minerals and Energy, nearly 90% of the world’s platinum, 80% of the world’s manganese, 73% of the world’s chrome, 45% of the world’s vanadium and 41% of the world’s gold. (http://www.southafrica.info/business...ors/mining.htm)

*South Africa still has huge potential for the discovery of other world-class deposits in areas yet to be exhaustively explored.



Infrastructure Development

Since 1994, the South African government has channelled substantial resources into social programs and services, with varying degrees of success.

*Households with access to clean water: 85% in 2001, 80% in 1996

*Households using electricity for lighting: 69.7% in 2001, 57.6% in 1996

*Households in formal housing: 63.8% in 2001, 57.5% in 1996

*Households with chemical or flush toilets: 51.9% in 2001, 50.5% in 1996

*Pupil-teacher ratio: 38:1 in 2003, 43:1 in 1994

*People who have completed grade 12 schooling: 20.4% in 2001, 16.3% in 1996

*People with access to electricity: 70% in 2003, 32% in 1994



Lower Cost of Living

Despite recent inflation and price increases, South Africa still has one of the lowest cost of living levels in the world. According to the latest Xpatulator (http://www.xpatulator.com) cost of living survey of 228 global locations covering every country in the world, Johannesburg is the 71st, Pretoria is 58th, Cape Town is 51st, and Durban is the 36th cheapest place in the world to live. This means that 192 of the 228 global locations are more expensive places to live compared to Durban, while 157 locations are more expensive than Johannesburg. A detailed cost of living comparison of Johannesburg and London reveals that overall London is 74.5% more expensive than Johannesburg:

*Alcohol & Tobacco (alcoholic beverages and tobacco products) is 56.7% more expensive in London

*Clothing (clothing and footwear products) is 85.3% more expensive in London

*Communication (fixed line, internet, and mobile) is 16.18% less expensive in London

*Education (school & tertiary) is 55.6% more expensive in London

*Furniture (furniture, household equipment and household appliances ) is 51.8% more expensive in London

*Groceries (food, non-alcoholic beverages and cleaning material) is 46.7% more expensive in London

*Healthcare (general healthcare, medical and medical insurance) is 92.9% more expensive in London

*Household (housing, water, electricity, household gas, household fuels, local rates and residential taxes) is 104.3% more expensive in London

*Miscellaneous (stationary, linen and general goods and services) is 180.7% more expensive in London

*Personal (personal care products and services) is 145.2% more expensive in London

*Recreation & Culture is 4.8% more expensive in London

*Restaurants Meals Out and Hotels is 219.26% more expensive in London

*Transport (public transport, vehicle costs, vehicle fuel, vehicle insurance and vehicle maintenance) is 89.80% more expensive in London



Higher Purchasing Power

The lower cost of living in South African means that your salary goes much further in Johannesburg compared to London and most other places. Using the cost of living difference, hardship difference, and exchange rate, Xpatulator (www.xpatulator.com) calculates that if you earn R500 000 Rand in South Africa, you would need to earn £54 182 in London in order to have a similar standard of living, much more than the £33 333 the (£1=R15) exchange rate indicates. The good news is that if you move the other way (i.e. from London to Johannesburg) and you earn £60 000 currently, you would not have to find a job paying R900 000 the (£1=R15) that exchange rate indicates. Taking into account the vastly lower cost of living in Johannesburg, you would in fact only require a salary of R552 302 to have the same buying power as £60 000 in London.



In conclusion, yes 2008 will mostly be a tough year, given the short term difficulties, but the power problems and current high inflation are short term issues which will eventually be in the past.

The main reason so many people are negative is because bad news sells newspapers and attracts more listeners and viewers. Good news does not often make the front page!!



Thanks



Steven McManus

Website: http://www.xpatulator.com

E-Mail: Steven@Xpatulator.com

Blog: http://xpatulator.blogspot.com/