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IOL News
a day ago
- Business
- IOL News
What's holding back South Africa's economy? Key insights from experts
Infrastructure failure and bottlenecks at ports, are among factors costing the economy billions of Rands. Image: eThekwini Municipality Failing infrastructure, systemic corruption, collapsed rule of law, state incapacity in public service and state-owned entities, erosion of local government, and high crime rates are among the key factors causing a decline in South Africa's economic growth, according to experts. This is despite the positive growth from the agricultural sector, where the Gross Value Added (GVA) expanded by 15.8% in the first quarter of 2025. Agriculture became the main driver of South Africa's overall GDP growth in Q1 2025, contributing 0.4 percentage points to the national GDP expansion of 0.1%. However, experts say that agriculture, although it has driven the country's economic growth, is volatile and dependent on factors such as weather, electricity supply, and transportation, among others. Professor William Gumede, from the Wits School of Governance, said the country's political culture has made corruption, incompetence, and misbehaviour acceptable if it is done by those who share a similar colour, party, and ideology, which has contributed to the economic decline. 'Property rights are vulnerable. The rule of law in many parts has collapsed, the lower courts are inefficient, and policing is ineffective. Corruption is systemic. State capacity in many parts of the public services, among state-owned entities, and local government has been eroded. Crime is out of control. The state cannot efficiently enforce laws, rules, or policies. Infrastructure has collapsed in many areas. Many sectors of the economy, such as public transport, mining, and construction, have become informalised. The country has been deindustrialising,' Gumede said. He added that state infrastructure development plans and forums, including the Reconstruction and Recovery Plan and initiatives such as Operation Vulindlela, have become virtual talk shops, and structures set up to play an oversight and coordination role, and provide governance over infrastructure, have not been able to do so. 'The breakdown of infrastructure drives up inflation, just as state, SOE, and policy failures do, as they drive up prices, the cost of living, cost of business, and erode savings and deter future investment. The Reserve Bank has warned that the breakdown in infrastructure threatens the stability of the financial system. 'Loadshedding, for example, has caused not only the loss of lives, but also of businesses, capital, skills, employment, and investment. It has contributed to South Africa's low-growth path, possibly taking away up to 3% of possible growth. South Africa needs around R150 billion per year just to replace the destroyed infrastructure, let alone build new infrastructure,' Gumede said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading He added that water provision has also plunged, with many of the water infrastructure SOEs, municipal entities, and boards having fallen into disarray. The provision of water in many of South Africa's cities and towns has deteriorated to such an extent that many citizens are without water for long periods during water outages. 'Transnet, the state-owned logistics giant responsible for South Africa's ports, rail, and pipelines, is, like Eskom, a major contributor to the country's low-growth path. Transnet has a debt burden of R136 billion. Its inefficiencies are causing bottlenecks at ports and limiting rail freight, undermining trade. It costs the economy over R1 billion per day," Gumede said. Transnet estimates it needs to invest R200 billion to restore the railways to capacity, however, Gumede said it will be a waste of money to invest in Transnet without bringing in merit-based management, cleaning up procurement by exempting the organisation from preferential procurement rules, and discarding ideological objections to having the organisation fully partner with the private sector in delivering infrastructure services. According to the Department of Public Enterprises, between 2012 and 2023, the debt levels of the largest 10 SOEs rose by R313.6 billion. The government had to bail out these SOEs with R318.1 billion during that period. In its latest Financial Stability Review, the Reserve Bank said while electricity availability appears to be gradually returning to historical trends, other critical infrastructure, such as the supply and quality of water and transport infrastructure, especially rail, port, and road networks, continues to degrade. Gumede said an external economic shock, such as a prolonged fallout with the US Donald Trump administration, will have a disproportionately debilitating impact on the South African economy. Political actors and groups who reckon South Africa can quickly pivot from the US market to alternatives, such as BRICS, have a case of wishful thinking, as a loss of the US market cannot be immediately replaced. A transition to new markets cannot be achieved overnight. Worse, SA's state trade negotiation capacity is currently possibly at its weakest, most over-ideological, least agile, and opportunity-minded, since the end of apartheid. State capacity has been eroded in state trade structures, as in other parts of the state, through cadre deployment, exclusion of minorities, and informalisation, he said. China may be South Africa's largest trading partner by volume, but it mostly takes South Africa's raw material, not manufactured products – it has trade barriers, but sends manufactured products to South Africa, which displaces local jobs. US companies manufacture in South Africa, meaning they have larger multiplier impacts, Gumede said. The International Monetary Fund ranks South Africa as the most difficult place to do business globally among 49 countries in the IMF's ease of doing business index. It argues that halving SA's restrictive business regulations relative to its emerging market peers could increase medium-run output by 9% and boost employment, Gumede said. He added that policymakers underestimate the impact of state failure, corruption, incompetence, and anti-growth policies on the economy, which reduces revenue and undermines business confidence. In the 1990s, the Johannesburg Stock Exchange had around 850 listed companies. By 2024, this had dropped to under 300, including some companies that have dual listings. He highlighted the lack of inclusive compromises on key policies, the NHI, the Expropriation Law, apparent refusal to renegotiate aspects of the Basic Education Laws Amendment (BELA) Bill to make it more inclusive, and perceived anti-American foreign policies have caused investment, capital, and skills flight as some of the factors. 'Many ANC politicians do not genuinely think growth should be at the centre of economic policy, arguing wrongly that to do so will be promoting 'neo-liberalism'. Policies that undermine growth will have to be jettisoned,' Gumede said. He said state debt levels need to be brought down, and key catalytic growth sectors will have to be prioritised. 'Manufacturing remains important; its declining trend needs to be reversed. Agriculture is critical. It is important that land reform is not populist, emotional, ideological and revenge-driven, but rather, that it focuses on securing food; fostering an agricultural, manufacturing, processing, and technology industrial hub; and fostering related artisan, technical, and research skills. This would mean partnering with the private sector to bring back artisan programmes, agricultural technical institutions – especially in the rural areas – and fostering agriculture technology,' he said. Dawie Roodt, a chief economist at the Efficient Group, said the biggest challenge in South Africa is a government that is destructive, inefficient, and is quite often corrupt. 'The government policies are broadly wrong. The Expropriation Bill, for example, is one of those policy choices that is wrong for economic growth because you must protect private property rights. There's also the inefficiency of the state. 'All good things go together in the economy. If per capita GDP goes up, then life expectancy, quality of life, and education follow suit,' Roodt said.
The South African
6 days ago
- The South African
Beneficiaries struggle with SASSA grant identity verification
SASSA grant identity verification is once again under the spotlight in South Africa. Back in January, the High Court ruled it unconstitutional to withhold social welfare due to budget issues. As such, stringent new SASSA grant identity verification protocols were ruled 'exclusionary.' Nevertheless, this month saw the introduction of the latest SASSA biometric verification rules. Essentially, any new applicant for R370 Social Relief of Distress (SRD) must verify their identity online with a digital photo uploaded via a smartphone. This is to protect against fraud and grant corruption. If an ID has been used fraudulently (often by a third party), that person will be unable to access the SASSA system. Image: File However, civil society group, Black Sash, says it is receiving hundreds of calls weekly about failed SASSA grant identity verification, reports GroundUp . The organisation says the most common complaint they're discovering is that ID numbers have been fraudulently used by others and therefore are blocked by the agency. This is an issue long-identified by the South African Social Security Agency as potentially damaging to the efficacy of R370 SRD. As such, agency officials want to eventually make the non-permanent grant into a permanent basic income grant for the unemployed. Doing so will prevent millions of Rands wastage on policing identity theft and fraudulent grants. SASSA has said it is unaware of any biometric verification issues this month. Image: File Interestingly, Black Sash confirms that most of these SASSA grant identity verification issues come from people who have just turned 18. Likewise, other applicants struggls because they don't have smartphones or data. In turn, this makes it impossible to access the links sent by the agency. And calling the SASSA helpline leads nowhere either. However, even those with smartphones and access to data will struggle. SASSA beneficiaries who still only have a green ID book, have a higher chance of failing the SASSA grant identity verification. This is because there is no digital photo on file with the Department of Home Affairs. Meanwhile, SASSA says it is unaware of any problems with the latest SASSA grant identity verification initiative. SASSA has asked the National Treasury to extend SRD by two more years till it figures out how to work a basic income grant. Image: File Roughly nine-million people living near the poverty line apply for R370 SRD relief each month. Typically, those unable to complete SASSA grant identity verification must apply for a new smart ID card, until such time as the flagged account is fixed. This costs R140 for a replacement ID as well as transport and time. Clearly, the SASSA grant identity verification system was is unreliable. It's often offline, slow, with inoperable links, or unable to accurately confirm peoples' true identities. As such, Black Sash's suggests SASSA set up help desks at local offices where beneficiaries can be manually verified by staff, too. Thankfully, clients are now also able to collect SASSA SRD grants in-person at participating retailers. To do this, beneficiaries must show their ID and cellphone number linked to the SRD account. A message is then sent to that number for approval before the cash is withdrawn. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
The Star
10-06-2025
- Business
- The Star
CEO caught on video admitting fraud - but it's a deepfake
William Petherbridge | Published 9 hours ago Artificial intelligence has now made it possible to wake up to a video of your CEO seemingly admitting to fraud or receiving an urgent audio message from your CFO authorising a large, unexpected transaction, without any of it being real. Deepfakes aren't limited to criminal use cases targeting individuals or governments – they represent a sophisticated and escalating threat to corporations globally, including South Africa. Disinformation using deepfake technology The use of deepfake technology has become one of the most powerful tools fueling disinformation. The rise in AI and machine learning embedded in commercially available tools such as generative adversarial networks (GANs) has levelled the playing field and increased the sophistication of deepfake content. Cybercriminals, disgruntled insiders, competitors, and even state-sponsored groups can leverage deepfakes for devastating attacks, ranging from financial fraud and network compromise to severe reputational damage. The threat itself, however, is not fake; it's manifesting tangibly within South Africa. The South African Banking Risk Information Centre (SABRIC) has issued stark warnings about the rise in AI-driven fraud scams, explicitly including deepfakes and voice cloning used to impersonate bank officials or lure victims into fake investment schemes, sometimes even using fabricated endorsements from prominent local figures. With South Africa already identified by Interpol as a global cybercrime hotspot, estimating annual losses in the billions of Rands , the potential financial impact of sophisticated deepfake fraud targeting businesses is immense. There are also implications for democracy as a whole. Accenture Africa recently highlighted how easily deepfakes could amplify misinformation and political unrest in a nation where false narratives can already spread rapidly online – a critical concern when it comes to elections. Furthermore, the 'human firewall' – our employees – represents a significant area of vulnerability. Fortinet's 2024 Security Awareness and Training Global Research Report highlights that 46% of organisations now expect their employees to fall for more attacks in the future because bad actors are using AI. Phishing emails used to be easier to identify because they were poorly worded and contained multiple spelling errors, but they led to successful breaches for decades. Now, they're drastically more difficult to identify as AI-generated emails and deep-fake media have reached levels of realism that leave almost no one immune. Numerous types of malicious actors are most likely to target companies using deepfake technology. Cybercriminals who have stolen samples of a victim's email, along with their address book, for example, may use GenAI to generate tailored content that matches the language, tone and topics in the victim's previous interactions to aid in spear phishing – convincing them to take action such as clicking on a malicious attachment. Other cybercriminals use deepfakes to impersonate customers, business partners, or company executives to initiate and authorise fraudulent transactions. According to Deloitte's Center for Financial Services, GenAI-enabled fraud losses are growing at 32% year-over-year in the United States and could reach $40 billion by 2027. Disgruntled current or former employees may also generate deepfakes to seek revenge or damage a company's reputation. By leveraging their inside knowledge, they can make the deepfakes appear especially credible. Another potential deepfake danger may be from business partners, competitors or unscrupulous market speculators looking to gain leverage in negotiations or to try to affect a company's stock price through bad publicity. Combating the deepfake threat requires more than just technological solutions; it demands a comprehensive, multi-layered strategy encompassing technology, processes, and people. Advanced threat detection: Organisations must invest in security solutions capable of detecting AI-manipulated media. AI itself plays a crucial role, powering tools that can analyse content for the subtle giveaways often present in deepfakes. Robust authentication and processes: Implementing strong multi-factor authentication (MFA) remains paramount. Businesses should also review and strengthen processes around sensitive actions like financial transactions or data access requests, incorporating verification steps that cannot be easily spoofed by a deepfake voice or video call. A Zero Trust approach, verifying everything and assuming breaches when in doubt, is essential. Empowering the human firewall: Continuous education and awareness training are vital. Employees need to be equipped with the knowledge to recognise potential deepfake indicators and understand the procedures for verifying communications, especially those involving sensitive instructions or financial implications. Reputation management: Proactive reputation management and clear communication channels become even more critical. Being able to swiftly debunk a deepfake attack targeting the company or its leadership can mitigate significant damage. Staying informed and advocating: Cybersecurity teams must stay abreast of evolving deepfake tactics. Collaboration and information sharing within industries and engagement with bodies working on updating South Africa's cyber laws (such as aspects of POPIA) to specifically address deepfake crimes are important. Preparing for the inevitable Deepfakes are not a future problem; they are a clear and present danger to South African businesses. They target the very accuracy of the information we rely on as consumers, employees and investors. The question is no longer if a South African organisation will be targeted by a deepfake attack, but how prepared it will be when it happens. Proactive investment in robust security measures, stringent processes, and comprehensive employee education is not just advisable – it's essential for survival in this new era of digital deception. William Petherbridge, Systems Engineering Manager at Fortinet
IOL News
09-06-2025
- Business
- IOL News
CEO caught on video admitting fraud - but it's a deepfake
The use of deepfake technology has become one of the most powerful tools fueling disinformation, says the writer. Image: Supplied Artificial intelligence has now made it possible to wake up to a video of your CEO seemingly admitting to fraud or receiving an urgent audio message from your CFO authorising a large, unexpected transaction, without any of it being real. Deepfakes aren't limited to criminal use cases targeting individuals or governments – they represent a sophisticated and escalating threat to corporations globally, including South Africa. Disinformation using deepfake technology The use of deepfake technology has become one of the most powerful tools fueling disinformation. The rise in AI and machine learning embedded in commercially available tools such as generative adversarial networks (GANs) has levelled the playing field and increased the sophistication of deepfake content. Cybercriminals, disgruntled insiders, competitors, and even state-sponsored groups can leverage deepfakes for devastating attacks, ranging from financial fraud and network compromise to severe reputational damage. The South African reality: A threat amplified The threat itself, however, is not fake; it's manifesting tangibly within South Africa. The South African Banking Risk Information Centre (SABRIC) has issued stark warnings about the rise in AI-driven fraud scams, explicitly including deepfakes and voice cloning used to impersonate bank officials or lure victims into fake investment schemes, sometimes even using fabricated endorsements from prominent local figures. With South Africa already identified by Interpol as a global cybercrime hotspot, estimating annual losses in the billions of Rands, the potential financial impact of sophisticated deepfake fraud targeting businesses is immense. There are also implications for democracy as a whole. Accenture Africa recently highlighted how easily deepfakes could amplify misinformation and political unrest in a nation where false narratives can already spread rapidly online – a critical concern when it comes to elections. Furthermore, the 'human firewall' – our employees – represents a significant area of vulnerability. Fortinet's 2024 Security Awareness and Training Global Research Report highlights that 46% of organisations now expect their employees to fall for more attacks in the future because bad actors are using AI. Phishing emails used to be easier to identify because they were poorly worded and contained multiple spelling errors, but they led to successful breaches for decades. Now, they're drastically more difficult to identify as AI-generated emails and deep-fake media have reached levels of realism that leave almost no one immune. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ William Petherbridge, Systems Engineering Manager at Fortinet Image: Supplied Who targets companies using deepfakes? Numerous types of malicious actors are most likely to target companies using deepfake technology. Cybercriminals who have stolen samples of a victim's email, along with their address book, for example, may use GenAI to generate tailored content that matches the language, tone and topics in the victim's previous interactions to aid in spear phishing – convincing them to take action such as clicking on a malicious attachment. Other cybercriminals use deepfakes to impersonate customers, business partners, or company executives to initiate and authorise fraudulent transactions. According to Deloitte's Center for Financial Services, GenAI-enabled fraud losses are growing at 32% year-over-year in the United States and could reach $40 billion by 2027. Disgruntled current or former employees may also generate deepfakes to seek revenge or damage a company's reputation. By leveraging their inside knowledge, they can make the deepfakes appear especially credible. Another potential deepfake danger may be from business partners, competitors or unscrupulous market speculators looking to gain leverage in negotiations or to try to affect a company's stock price through bad publicity.
IOL News
09-06-2025
- Business
- IOL News
Concerns over government spending on outdated driving licence printing machine
Government continues to spend millions repairing and maintaining its only driving licence card printing machine. Image: SUPPLIED The Organisation Undoing Tax Abuse (Outa) said it is concerned at how the government continues to spend millions of Rands maintaining its only driving licence card printing machine and the costs to catch up with backlogs. The organisation said this is concerning because the government has been talking obtaining about a new licence card machine for the past 10 years. This was after Transport Minister, Barbara Creecy, revealed that the machine had been out of service for 38 days since April 1, resulting in a backlog of 733,000 licence cards. Creecy disclosed this in response to a written parliamentary question from Rise Mzansi leader, Songezo Zibi. Zibi asked how many times the machine had broken down in the past three financial years, including since the start of the 2025/26 financial year. He also wanted to know how much had been spent on repairs during this period and how much overtime had been paid to employees due to lost printing time as a result of the breakdowns. Creecy revealed that the machine was broken for 26 days in the 2022/23 financial year. In 2023/24 it was broken for 48 days. It was also broken for 17 days in 2024/25. The department paid R9,267,862 for the repair and maintenance in 2022/23. It paid R1,651,772 in 2023/24, R544,747 in 2024/25, and R624,988 so far, totaling R12,089,370,64. The department also had to fork out R4.4 million for overtime payments between the 2022/23 and 2024/25 financial years. Creecy said it takes four people to operate the machine. She said she has directed that a declaratory order be sought from a competent court on the tender to acquire a new machine, in order to ensure that no further irregular expenditure occurs. In March, Creecy announced that she had instructed her department to lodge a High Court application for a declaratory order regarding the licence machine tender -awarded to Idemia and Security South Africa. Her decision was influenced by the findings from the Auditor-General (AG) report, which identified instances of non-compliance with the required procurement procedures. Outa's chief executive officer, Wayne Duvenage, said the organisation was also concerned by the length of time it takes for the department to get the court to nullify the contract - riddled with irregularities and potential corruption. 'Why does it take so long to get this process done?' he asked. 'Lots of money spent on maintaining and overtime costs to catch up with backlogs. This is very concerning. The government has been talking about a new driving licence card machine for about 10 years now, with multiple tenders awarded and cancelled for the past 5 years and still, we are nowhere near resolving this issue. Incompetence and political interference at its best,' Duvenage said. Department of Transport spokesperson, Collen Msibi did not respond to a request for comment.
