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South African CPI data released last week hit a record +13%, spurred on by rising energy and food costs. Bracketed by annual household expenditure, the numbers are even more grim. The more than 22 million people (50% of the population) living below the poverty line faced year-over-year inflation of well over 15% last month.

2008 has been difficult for South African industry as the hopelessly overstretched power grid has subjected factories and mines to blackouts repeatedly, causing foreign investors to cool on new projects. For a nation with an unemployment rate in excess of 20%, this is very, very bad news.

As the South African Rand depreciates versus the US Dollar, and domestic cost of living climbs for the residents of Sub Saharan Africa’s largest economy, so too does the risk of more ugly civil unrest like the riots this spring.

Its global this time, indeed.

Andrew Barber
Director