Local equities (ALSI), delivered a total return of -3.6% m/m in April, with listed property returning -1.4% m/m. The ALBI recorded a total return of -1.7% m/m, and cash returned 0.3% m/m. Non- residents were net sellers of both South African bonds and equities in April. The Rand maintained its reputation for volatility, and after starting April at R14.61 against the US dollar, it ended the month at R15.79 - a very dramatic 118 cents weaker m/m (-8.1%). The currency also weakened against the Euro at R16.68 (-3.1% m/m), the Pound at R19.88 (-3.6% m/m) and the Renminbi at 2.39 (-3.6% m/m).

The weakness was due to concerns over the size, and pace of Federal Open Market Committee (FOMC) interest rate hikes in the US. The second half of April also saw a negative impact on South Africa (SA's) trade balance from the extreme floods in KwaZulu-Natal (KZN) and disruptions to exports, which would have had a negative effect on the Rand.

The Absa PMI fell to 50.7 in April '22. This is the lowest level of the PMI since July '21 when unprecedented looting and rioting shook local production and demand. As was the case then, the decline in the headline PMI was due to a drop in the business activity and new sales orders indices, this time amid devastating flooding in parts of KZN.

The preliminary tax revenue data published by SARS showed that total tax revenue was better than the 2022 Budget and 2021 Medium Term Budget Policy Statement (MTBPS) estimates by R16.7bn and R78.4bn, respectively. The better-than-expected performance is attributed to a strong rebound in economic activity, administrative efficiencies as well as government's extended social assistance and tax relief measures.

SA's recovery to pre-pandemic levels is expected to be disrupted by lower-than- expected global growth because of the ongoing war in Ukraine and a faster pace of monetary policy accommodation withdrawal. Meanwhile, pre-existing structural constraints (especially electricity shortages, skills mismatch, and unemployment) continue to cap growth.

The World Bank mentioned in April that bold reforms are needed to boost export volumes and gain even more from favourable commodity prices while generating more and better jobs in the formal and informal sectors. This was also echoed in the National Planning Committee's (NPC) diagnostic report released in 2011 stating that too few South Africans are employed. The report aimed to identify the main challenges confronting the country and examine the underlying causes. Over a decade later nothing has changed. In fact, the labour market has deteriorated further.

From 2021, the recovery is expected to continue in 2022, with GDP growth expected at 2.1% and to average 1.7% over the medium term. The World Bank acknowledges that South Africa has made considerable strides to improve the wellbeing of its citizens since its transition to democracy in the mid-1990s but warns that progress has stagnated in the last decade. Structural challenges and weak growth have undermined progress in reducing poverty, which have been heightened by the Covid-19 pandemic.

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