South Africa: Selected Issues

The external current account in South Africa has strengthened significantly in 1999, mainly owing to a large decline in imports. Compared with a deficit of about 1.5 percent of GDP in recent years, it is close to balance during the first three quarters of 1999. A resumption of investor confidence has led to an increase in international reserves and facilitated a decline in the net open forward position (NOFP). The external current account deficit has declined to 0.2 percent of GDP during the first three quarters of 1999.

Abstract

The external current account in South Africa has strengthened significantly in 1999, mainly owing to a large decline in imports. Compared with a deficit of about 1.5 percent of GDP in recent years, it is close to balance during the first three quarters of 1999. A resumption of investor confidence has led to an increase in international reserves and facilitated a decline in the net open forward position (NOFP). The external current account deficit has declined to 0.2 percent of GDP during the first three quarters of 1999.

VII. The Forward Book of the South African Reserve Bank 127

240. The South African Reserve Bank (SARB) has operated in the forward foreign exchange markets since the 1960s, and its uncovered position has been, at times, quite large.128 This foreign exchange exposure has caused concerns among international investors and in the domestic financial markets,129 and the SARB has stated that its intention is to gradually reduce its participation in the forward markets and eventually dismantle the forward book.130 This section briefly describes the SARB’s operations in the forward market in recent years; examines the implications of the forward operations in financial terms and with regard to any risk premium reflected in the level of interest rates; and discusses the relative merits of external borrowing to pay off maturing forward contracts.

A. Introduction

241. The SARB’s net forward foreign exchange liabilities (“the forward book”) is depicted in Figure 17 together with its net international reserves. The difference between these series is denoted the “net open forward position” or “the net open foreign currency position” (NOFP) of the SARB. The NOFP is an open forward position in the sense that it refers to the difference between the SARB’s forward U.S. dollar liabilities and its forward U.S. dollar assets, and it is a net position in the sense that the SARB’s holdings of (net) international reserves is netted out from its open forward position, that is, it is the part of the open forward position that is not covered by spot (net) reserves. It can be noted that during the 1990s, the SARB chose to substantially increase the NOFP on three occasions when there was sustained downward pressure on the rand: in 1994, during the turbulent pre-election period; in 1996, reflecting concerns in the market about certain political developments,131 and again in mid- 1998, when contagion from the global emerging market crisis affected South Africa. The forward book and the NOFP were reduced markedly between these periods, and again in the period after October 1998.

Figure 17.
Figure 17.

South Africa: foreign Exchange Market, 1994-99

Citation: IMF Staff Country Reports 2000, 042; 10.5089/9781451840957.002.A007

Sources: South African Reserve Bank Quaterly Bulletin

242. The nature of the SARB’s forward operations changed significantly during the 1990s. In the past, the presence of capital controls meant that the forward market was somewhat underdeveloped, and the SARB played the role of market maker; authorized foreign exchange dealers could obtain from the SARB forward cover for their open positions. The SARB also offered subsidized long-term forward cover to parastatals that raised foreign loans, in order to encourage capital inflows and thereby support a weak balance of payments position.132 However, since 1997 the SARB no longer provides long-term forward cover, and all new (short-term) forward contracts are written on commercial terms, that is, the forward price is given by the interest spread between South Africa and the United States for the relevant maturity. There is, therefore, no longer any subsidy element involved in the SARB’s participation in the forward market. Moreover, the limits on the banks’ foreign currency holdings were abolished early in 1998, in part to promote the development of the commercial forward market.133 As a result, and as a consequence of the general globalization and opening up of the South African economy, the foreign exchange markets—including the forward market—have grown rapidly in recent years, and the SARB today participates only in the forward market at its own initiative. As shown in Figure 17, turnover in the foreign exchange markets increased from US$2.7 billion per day in 1995 to US$6.3 billion in 1998. In addition, following the abolition of exchange controls on nonresidents in 1995, the share of foreign exchange transactions involving nonresidents increased from 22 percent in 1995 to 50 percent in 1998.

243. The SARB’s operations in the forward market typically take the form of currency swaps. An increase in its forward book corresponds to a situation where the SARB swaps rand for U.S. dollars with an authorized foreign exchange dealer at the outset of the forward contract and agrees to reverse the transaction at the forward rate when the contract matures. Such operations allow the SARB to intervene in the foreign exchange markets in excess of its spot gross reserves and unused foreign credit line facilities, i.e., without affecting its spot net reserves, as the SARB can enter into forward swaps and immediately sell the acquired spot U.S. dollars back to the market. It also implies that the intervention is automatically sterilized, because without a direct effect on spot reserves there is no effect on domestic liquidity or short-term interest rates.

B. Implications of Forward Intervention

244. According to the SARB, the main objective of its intervention in the foreign exchange markets in recent years has been to absorb speculative pressures on the currency, and thereby prevent an even sharper depreciation of the rand and increase in interest rates than was actually experienced in, for example, 1996 and 1998.134 The SARB has, at the same time, repeatedly emphasized that the intention of the intervention has not been to defend any predetermined level of the rand, but rather to support orderly adjustments of the exchange rate. However, market participants have argued that the intervention strategy has lacked credibility and has been counterproductive, in the sense that any increase in the NOFP has heightened South Africa’s vulnerability to speculative attacks and thereby forced the authorities to maintain higher interest rates than would otherwise be warranted.135 In general, theoretical and empirical research on whether sterilized foreign exchange intervention can effectively influence the relative value of a domestic currency is, at best, ambiguous (see Almekinders (1995) or Dominguez and Frankel (1993)).

245. The exchange rate was relatively stable in 1995,1997 and early 1998, and again in 1999, as the considerable capital inflows from nonresidents to purchase South African equities and bonds were acquired by the SARB to reduce the NOFP (see Figure 18). In contrast, in 1996 and mid-1998, nonresidents’ purchases of South African assets slowed (and even reversed in certain months), the rand depreciated markedly, Mid the SARB increased the NOFP. It is always difficult to disentangle the cause and effects among financial variables during turbulent periods—especially using data with a monthly frequency—as macroeconomic aggregates tend to evolve simultaneously. While a more thorough analysis would require high-frequency data,136 there is a consensus that the SARB has taken advantage of relatively favorable market conditions to reduce the NOFP, while it has responded to sustained downward pressures on the rand by increasing the NOFP.

Figure 18.
Figure 18.

The NOFP, Net Sales of Bonds and shares by nonresident, and Excange Rate

Citation: IMF Staff Country Reports 2000, 042; 10.5089/9781451840957.002.A007

Sources: South African Reserve Bank Quaterly Bulletin

246. It should be noted, however, that the sharp increase in the NOFP in mid-1998 came before nonresidents started to sell South African assets on a net basis (see bottom panel of Figure 18). The SARB increased the NOFP by US$10 billion between end-April and end- June 1998, while nonresidents acquired a small amount of South African assets on a net basis during these months (net sales of bonds amounted to US$1.3 billion, while net purchases of equities amounted to US$1.4 billion); the rand depreciated by 16 percent. However, after the full extent of the increase in the NOFP became known to the market in early July, sales of South African bonds intensified, and during the subsequent two months nonresidents sold South African assets amounting to US$800 million on a net basis, (net purchases of equities amounted to US$1.1 billion, while net sales of bonds amounted to US$1.9 billion), while the rand depreciated by 9 percent.

247. These developments indicate, arguably, that the intervention strategy by the SARB only dampened the downward pressures on the exchange rate for a limited period. It should also be noted that the SARB raised the short-term repo rate by 540 basis points between end- April and end-June 1998 and by another 160 basis points during the subsequent two months. Moreover, the experience in mid-1998 is consistent with the hypothesis that a higher level of the NOFP is associated with a higher risk premium on investments in South Africa (owing to either currency and/or credit risk, see below), although the higher long-term interest rates in South Africa in mid-1998 certainly also were affected by a sharp increase in the global assessment of risk in emerging markets. For example, J.P. Morgan’s bond index EMBI+ (which is an average of foreign-currency-denominated bonds in 15 emerging market economies) rose by nearly 800 basis points in August 1998 following the crisis in Russia.

248. By examining the interest spreads on South African bonds denominated in rand and foreign currencies, respectively, it is possible to partly disentangle how currency risk and credit/sovereign risk have developed in South Africa. The top panel of Figure 19 shows the NOFP and the interest spread between long-term South African government bonds denominated in rand and long-term U.S. government bonds. This spread reflects both a currency risk and a sovereign/credit risk and peaked at 1,350 basis points in September 1998. The spread then narrowed by 400 basis points in late 1998 and early 1999, but then remained at about 900 basis points until the last quarter of 1999, when it resumed its downward trend.

249. The middle panel of Figure 19 shows the NOFP together with the interest spread between a South African long-term bond denominated in U.S. dollars (a “Yankee bond”)137 and a long-term U.S. bond. As the Yankee bond carries no exchange rate risk, this interest spread should, in principle, reflect solely the sovereign risk. It can be noted that this risk rose sharply in August 1998, possibly reflecting not only an increase in the global risk owing to the crisis in Russia, but also the South Africa specific risk following the US$10 billion increase in the NOFP in May and June 1998. During 1999, this spread narrowed by 370 basis points, along with a US$9.5 billion reduction in the NOFP.

Figure 19.
Figure 19.

South Africa: Interest Spreads and the Net Open Forward Position,1995-99

Citation: IMF Staff Country Reports 2000, 042; 10.5089/9781451840957.002.A007

Sources: South African Reserve Bank Inyernational Financial Statistic; and Bloomberg

250. The bottom panel of Figure 19 shows the spread between South African long-term bonds issued in rand and U.S. dollars. If the sovereign risk is similar on these bonds, this spread would mainly reflect currency risk, that is, it would represent a measure of the market’s expectation of the future depreciation of the rand. However, to the extent that the sovereign risk on foreign-currency-issued bonds is higher than that on domestic-currency bonds (as argued below), the spread would be an underestimation of the expected depreciation, and it should, therefore, be regarded as a lower bound of the expected depreciation. Although the movements in this series are a little erratic, it can be noted that the currency risk was falling in late 1997 and early 1998, along with lower inflation and a reduction in the NOFP. The spread then increased sharply in June and July 1998 but came back to precrisis levels (about 450 basis points) relatively quickly. The spread continued to narrow in the beginning of 1999 but has drifted in a range of about 400-500 basis points since April 1999.

251. To sum up, although a more thorough examination of the impact of the SARB’s foreign exchange intervention would need to control for factors such as interest rate policy, fiscal policy, and the international environment, a cursory examination of the various spreads indicates that an increase in the NOFP might contribute to raising the perceived sovereign risk on investments in South African bonds, and thereby be reflected in somewhat higher long-term interest rates. This view would also be consistent with the SARB’s argument that a disadvantage with the forward book is that “the credibility of the Bank/Treasury may be called into question as the market focuses, from time to time, on the sustained ability of the Bank to run a large uncovered forward book.”138

252. Another aspect of the SARB’s forward operations is that the government may incur large financial losses on them. In the event the actual depreciation of the rand is larger than that implied by the forward price of a forward foreign exchange liability of the SARB, a financial loss results, which ultimately is borne by the government.139 Such a loss is reflected in an increase in liquidity that the SARB needs to sterilize to maintain its monetary stance unchanged. As the SARB conducts these forward operations on behalf of the government, the latter settles the losses by issuing zero-coupon bonds to the SARB. The government replaces these bonds by interest-bearing government bonds, such as the R 150, when the SARB sells them to the public.

253. In the past, the SARB’s losses were mainly attributed to the long-term forward contracts that were granted to the parastatals, primarily Eskom (the electricity company), at a subsidized rate. For example, between April 1981 and January 1998, a total loss of R 26.4 billion was recorded on the forward operations, of which R 19.1 billion was directly attributed to the long-term part of the forward book. Although this part of the forward book is today very small (less than US$500 million), the expected losses are still substantial on a mark-to-market basis because of the very large difference between the current exchange rate and the average forward exchange rate of those contracts. The short-term part of the forward book has generated alternating profits and losses in recent years, as the exchange rate has at times remained stable and at times depreciated sharply. The profits and losses on the SARB’s foreign exchange operations (including gold, as well as spot and forward foreign exchange operations) are reported in the Gold and Foreign Exchange Contingency Account. The change in this account for the last four fiscal years is shown in Table 24 together with the depreciation of the rand. Although the losses were substantial in 1998/99 (April-March), it should be noted that the SARB has made profits on its foreign exchange operations thus far in 1999/2000.

Table 24.

Change in Gold and Foreign Exchange Contingency Account 1/

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South African Reserve Bank, Quarterly Bulletin.

Fiscal year begins in April. A negative figure indicates profits.

C. Relative Merits of External Borrowing to Reduce the Forward Book

254. Given the potential costs and uncertainties associated with the forward book of the SARB, some analysts have proposed that the government (and/or the SARB) should borrow externally to reduce the NOFP.140 The advantages of such operations would include the following:

255. Notwithstanding these advantages, borrowing externally to reduce the NOFP would have to be gradual and take into account changes in investor sentiment and market conditions, as the advantages mentioned above would have to be weighed against uncertainties regarding the effects on the borrowing costs (both domestic and external) from such an operation. On the one hand, increased external borrowing may lead to a higher risk premium on South African (foreign-currency-denominated) bonds and/or contribute to expectations of increased future depreciation of the rand, implying that the interest costs on all new external borrowing would increase. On the other hand, reductions in the NOFP may reduce the risk premium, as well as expectations about future depreciation, and thereby contribute to lower interest costs. The net effect would, a priori, be uncertain.

256. Nevertheless, even if it is assumed that the risk premium and expected depreciation are unaffected by the external borrowing that is used to reduce the NOFP, it is possible that an additional financial cost would emerge. However, this financial cost would be expected to be relatively small, because the interest cost on the external borrowing would have to be netted out against the lower interest costs that would result from a reduction in domestic government debt. The latter would occur since there is a drain of domestic liquidity when the SARB pays off a forward contract with externally borrowed funds (as explained in the introduction, the forward contracts take the form of currency swaps), and this effect would need to be sterilized by, for example, a corresponding reduction in government domestic debt.141

257. More specifically, assume that the government can choose between borrowing domestically, by issuing bonds in domestic currency, or abroad, by issuing bonds in foreign currency.142 Assuming that risk-adjusted interest rate parity holds, the interest rate on borrowing in domestic currency would be a function of the international interest rate, the expected percentage change in the exchange rate, and any risk premium (in percent):

idc=i*+E[et+1et]+θdc,(1)

where idc is the interest rate on a domestic currency bond (e.g., the yield on the R 153 bond), i* is the interest rate on an assumed risk-free foreign asset of the same maturity (e.g., the yield on a U.S. government bond), E[ei+1 -et] is the expected percentage change in the nominal exchange rate (where e is defined as (log of) rand per U.S. dollar), and θdc is the risk premium for holding a domestic-currency-denominated bond. The latter reflects the premium the market requires over and above the one related to the currency risk and includes, for example, the sovereign risk stemming from the probability that the authorities may default on the domestic bond.

258. The interest rate on a bond issued in foreign currency, ifc, would equal

ifc=i*+θfc,(2)

where θfc is the risk premium for holding a foreign-currency-denominated bond. Combining (1) and (2), we find that

idcifc=E[et+1et](θfcθdc).(3)

Thus, in the event that θfc = θdc, the expected depreciation (in percent) would be the same as the difference in interest rates on domestic and foreign currency denominated bonds. In this case, the net financial cost of external borrowing to reduce the forward book would be zero, as the cost of external borrowing would equal the saving from the reduction in government domestic debt (see Box 3 for a numerical example).

259. However, in the event that θfc > θdc, there would be a positive net financial cost associated with external borrowing to reduce the NOFP; the expected nominal depreciation would be larger than the difference in interest rates on bonds denominated in domestic and foreign currencies. Intuitively, this net cost appears because the government has to pay an additional premium for borrowing in foreign currency, that it cannot recoup when domestic debt is lowered (following the sterilization of the liquidity reduction), as this premium is not reflected in the interest rate on domestic bonds.

260. There are (at least) three reasons why θfc > θdc might occur. First, in an extreme foreign exchange crisis with few buyers of domestic currency, it is conceivable that the market believes that the probability of the government effectively defaulting on liabilities in foreign currency is higher than that of defaulting on domestic currency liabilities; in principle, the government could always honor the domestic currency liabilities by printing more money. In the case of South Africa, this argument is supported by substantially lower credit ratings of (the government’s) foreign currency liabilities than that of domestic currency liabilities.143

The Cost of External Borrowing to Reduce the NOFP: A Numerical Example

Assume the government borrows, say, US$2 billion at 9 percent interest (about 2.5 percentage points above the U.S. bond yield) and uses the funds to pay off maturing forward contracts. The reduction of the forward book also implies that the domestic money market is drained by US$2 billion times the current exchange rate, Ep that is, R (2-E,) billion. To keep the domestic money market unchanged, this amount would need to be injected back into the market (“sterilized”) by, for example, reducing the stock of government bonds held by the public by R (2-Et) billion. Assuming that both the external borrowing and the government bond yield mature in one year, and that the latter yield is 13 percent, the savings for the government would then be R (1.13-2’E1) billion, including principal plus interest.

When paying back the borrowed amount, the nominal exchange rate will have changed (presumably depreciated); the total amount to be paid back would thus be R (1.09-2-Et+I) billion. Hence, the net cost for the government would equal R (1.09-2-£,+J) - (1.13-2’is,) billion. It can immediately be noted that the net cost for the government of this operation would be a function of the relation between the difference in interest rates for borrowing in foreign currency (here assumed to be 9 percent) and domestic currency (here assumed to be 13 percent) and the actual currency depreciation (El+, IEt). In the event that the realized depreciation equals the spread in interest rates (1.13 / 1.09), the net cost for the government of this operation would be zero. However, as discussed in the text, the depreciation of the currency could be expected to be larger than the spread in interest rates, implying that there would be a positive (albeit possibly small) net financial cost of paying off forward contracts with external borrowing.

261. Second, the market for foreign-currency-denominated bonds issued by the South African government is quite small and illiquid compared with, say, the market for R 150 or R 153 bonds.144 This could imply that market participants tend to require an extra premium for holding foreign-currency-denominated bonds.

262. Third, it is possible that South African residents and nonresidents have different views (for example, owing to information asymmetries) of the sovereign risk in South Africa, and that the residents’ portfolio exhibits a “home bias.” It is well known in the empirical finance literature that such a home bias exists in many countries; institutional investors tend to hold a very high degree of domestic securities, especially bonds, in their portfolios (see, for example, Lewis (1999) or Griffin (1997)).145 If this applies also to South Africa146 and if the residents perceive that the sovereign risk on domestic currency bonds is relatively low, a situation would probably appear where θfc > θdc.

263. In summary, it is likely that the financial cost associated with external borrowing to reduce the forward book is positive but relatively small. Although it is difficult to measure exactly the magnitude of this cost, it is possible to provide an estimate. As argued in Section B, the interest spread between domestic and foreign currency bonds can be viewed as a measure of the lower bound of the expected depreciation; as of end-December 1999, this spread was 430 basis points (see Figure 19). But since the inflation differential versus the U.S. currently is about 6 percent,147 and with the announcement that inflation will be further reduced in the medium term (under an explicit inflation-targeting regime), it seems probable that the expected depreciation currently is not higher than, say, 5 percent per year in the medium term, assuming that purchasing power parity holds. Together, these observations would imply that the difference in the risk premium for foreign- and domestic-currency denominated bonds—and the financial cost associated with external borrowing to reduce the forward book—is less than 1 percentage point.

264. Apart from the financial costs related to external borrowing to reduce the NOFP (as discussed above), two additional aspects of such borrowing deserve to be mentioned:

  • It would not change the foreign exchange exposure of the government/SARB.The increased vulnerability to exchange rate fluctuations due to higher external debt would be offset by less vulnerability to these shocks due to the reduction in the forward book. Thus, the actual fiscal costs of a nominal depreciation of the rand would be largely unaffected by any external borrowing that is offset by reductions in the forward book.

  • It would not change the overall public debt stock. As noted above, the increase in external borrowing to reduce the forward book would be accompanied by a corresponding reduction in domestic government debt held by the market. In this context, it can be noted that, of the total public debt outstanding at June 1999 (49 percent of GDP), only 3 percent of GDP (about US$3.6 billion) was denominated in foreign currencies—a figure that is quite small when compared to other emerging economies (see Box 4).

D. Summary and Conclusions

The SARB has operated in the forward foreign exchange markets for several decades, and its net open position has been, at times, quite large. Market participants have expressed concerns about the SARB’s forward operations and argued that its net open position has heightened South Africa’s vulnerability to speculative attacks and resulted in higher long-term interest rates than otherwise would have been warranted. An examination of the interest spreads in South Africa provides some support for this view. In particular, the perception of sovereign risk in the South African bond market appears to be related to the level of the NOFP.

265. As the financial markets, including the foreign exchange and forward markets, have grown rapidly in South Africa in recent years, the SARB has announced its intention of gradually reducing its operations in the forward market and eventually dismantling the forward book, and significant steps have been taken to this end. Indeed, during 1999, the NOFP was reduced by US$9.5 billion to US$13 billion as of end-December. External medium- to long-term borrowing by the government to pay off maturing forward contracts could be one element in a strategy for further reducing the NOFP. While such borrowing would imply a more balanced maturity profile of the total foreign exchange liabilities, it would not alter the foreign exchange exposure of the government/SARB. Moreover, such borrowing would have to be gradual and take into account changes in investor sentiment and market conditions, although the net financial costs of such operations would be expected to be relatively small.

Public Debt in Emerging Market Economies

South Africa’s public debt (national government) is higher than in many other emerging market economies. However, foreign-currency-denominated public debt is much lower in South Africa than elsewhere, both when measured as a share of GDP and as a share of total public debt.

Public Debt in Selected Emerging Market Economies in 1997

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IMF, International Financial Statistics, Government Finance Statistics’, and Fund staff estimates

Includes bank restructuring liabilities.

South Africa: Tax Summary as of April I, 1999

(All amounts in South African rand)

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Table 25.

South Africa: Expenditure on Real GDP,1994-99

(In percent)

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Source: South African Reserve Bank, Quaterly Bulletin

Contribution to GDP growth

First three quaters of 1999 relative to the corresponding in 1998

Table 26.

South Africa: Gross fixed inverstment and Capital Stocks,1994-99

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Sources: South African Reserve Bank Quaterle Bulletin

Including transfer costs.

Finance, insurance, real estate, and business services

End of period

General government plus four departmental enterprise (Community Development Fund, Government Motor Transport Trading, Government Printing Works, National Housing Fund)

Table 27.

South Africa: Financing of domestic investment,1994-99

(In percent of GDP at market prices)

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Sources: South African Reserve Bank, Quarterly Bulletin

Before inventory valuation adjustment

Provision for depreciation at replacement value.

Table 28.

South Africa: Growth of Disposable Income of Households,1994-98

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Sources: South African Reserve Bank, Quarterly Bulletin

After adjustment for net remmuneration paid to the rest of the world

After Provision for depreciation and invertory valuation adjustment

Table 29.

South Africa: Real domestic prodcut art factor costs,1994-99

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Sources: South African Reserve Bank Quarterly Bulletin
Table 30.

South Africa: Indicators of mining and quarrying,1991-98

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Sources: South African Reserve Bank, Quarterly Bulletin.

In 1990.

Table 31.

South Africa: Indicators of manufacturing activity,1994-99

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Sources: South African Reserve Bank, Quarterly Bulletin
Table 32.

South Africa: Non agricultural employment,1990-99

(1995=100)

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Sources: South African Reserve Bank Quaterle Bulletin

Central Government, local authorities, provincial administration, statutroy bodies and national and independent states(TVBC)

Transnet and the department of posts and telecommunication

Includes also construction, commerce, adn private services sectors(e.g banking, insurance, hotels, transprot and laundary)

Table 33.

South Africa: Remmuneration, Labor producitvity, and unit labor costs in the nonagricultural sector,1994-99

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Sources: South African Reserve Bank Quaterle Bulletin

Seasonaly adjusted

Table 34.

South Africa: Price Developments sector,1994-99

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Sources: South African Reserve Bank Quaterle Bulletin

The weights for the consumer prices series corresponded to 1995 expenditure patterns, and the weighs for the prodcer prices series are based upon 1998/90 production and foreign trade statistics.

Table 35.

South Africa: National Government finances,1995/96-1999/2000 1/

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Department of finance;and staff estimates

Fiscal year begins April 1

Net od SACU payments

excludes extraordinary receipts including privaitization receipts and sales of strategic oils stocks;and the profit and loses from the forward market operations of the reserve bank.

Includes the national government extrabudgetary institutions(e.g univeristies) social security fund provinces, and local authorities.

General Government plus the nonfinacial public enterprise. excludes extraordinary receipts including privaitization receipts and sales of strategic oils stocks;but includes the profit and loses from the forward market operations of the reserve bank.

Table 36.

South Africa: National Government Revenue,1995/96-1999/2000 1/

(in billions of rand)

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Department of finance

Fiscal year begins April 1. Excludes repaymentt of budget lending

includes privatization receipts.