News in South Africa 10th February:
1. Ratepayers have had enough:
Rates and tax revolts are either underway or being contemplated by ratepayer associations fed up at being forced to pay rates and taxes to dysfunctional municipalities.
They are called ‘tax diversions’ rather than revolts, and they’re of questionable legality, but several ratepayer associations are willing to test the law. Others are planning court actions to allow residents to take over the delivery of municipal services, as recently happened in Kgetlengrivier in North West Province.
The UAG or Umdoni Action Group (based in Scottburgh, KwaZulu-Natal) was established in 2015 to protect the interests of ratepayers, tenants and residents of the area, and has opted for ‘tax diversion’ to hold the local municipality accountable. The ratepayers’ complaints are familiar ones: “Broken roads and stormwater systems, crumbling basic infrastructure, decrepit CBD, very few working street lights, overgrown verges and parks. The list is almost endless,” states the group’s website.
The UAG launched a rates diversion policy in May 2020 after years of attempting to engage with the local municipality to resolve their complaints without success. To get involved, ratepayers have to fill in a ‘Declaration of Dispute’ form which the UAG emails monthly on behalf of all participants to the municipal manager. The rates and taxes that would normally be paid to the municipality are retained in ratepayers’ own accounts.
“Should our complaints not be resolved within a reasonable period, we will impose on Umdoni Municipality an ultimatum, in which we will reserve the right to effect repairs using the diverted funds and our own labour, contractors and material,” says the group’s call to action.
2. MTN sells stake in Belgacom:
MTN’s share price jumped almost 4% yesterday following a deal to sell its 20% stake in the Belgium group Belgacom International Carrier Services (BICS), which manages telecom cables and satellites to handle calls and internet traffic, for R1.8 billion.
MTN intends to use the R1.8 bil to pay down US dollar debt and for general corporate purposes. The transaction consideration compared to MTNs market capitalisation results in a percentage below the categorisation threshold as prescribed in the Listings Requirements of the JSE Limited.
BICS was classified as a non-current asset held for sale and this transaction has resulted in a remeasurement of its carrying value resulting in a reduction of R397 million for the year ended 31 December 2020.
MTN will record a profit on disposal amounting to approximately R1,2 billion during the first half of 2021, mainly due to the release of the foreign currency translation reserve. This results in a net impact of R812 million over the two periods.
3. SA urged not to dump AstraZeneca vaccines:
The South African government is being urged to not dump the AstraZeneca vaccines it has procured, as the shots are still likely to prevent death and hospitalisation in serious cases of Covid-19.
With the WHO concluding that there is still a major role for the Oxford/AstraZeneca vaccine, the principal investigator in the SA trial said on Tuesday that the vaccine will probably protect against severe Covid-19, hospitalisation and death caused by the 501Y.V2 mutation of the virus first identified in South Africa.
Given that it is the cheapest and the most readily available Covid-19 vaccine available globally at present, South Africa is likely to be faced with having no vaccine or one that will probably protect against death and hospitalisation, the principal investigator in the Oxford/AstraZeneca trial, Professor Shabir Madhi, said on Tuesday, 9 February.
“There is still a major role for the AstraZeneca vaccine, the World Health Organisation said. There is a reason for that,” Madhi said.
“If South Africa becomes reckless in dealing with the AstraZeneca vaccine it will have global repercussions. This vaccine will be the cheapest and the most readily available. The toss-up might be between no vaccine and a vaccine that likely will protect against death and hospitalisation.”
Professor Glenda Gray agreed, saying if it can stop deaths and stop health facilities from being overrun, the vaccine should be given to high-risk patients.
4. Schools facing a fee crisis:
A survey by the credit bureau reveals that parents are struggling to pay school fees.
With the current economic climate exacerbated by the COVID-19 pandemic, schools are falling in the ranking of priorities. The ripple effect of this has left many schools struggling to survive.
Pupils are getting back to school. But economic challenges have left many parents unable to pay school fees. This has left many schools battered.
“We anticipated close to 34-million in terms of school fees, and we actually received far less than 50-percent of it. That has actually had a very negative impact on the productivity of the institution,” says Melanie Kallie, principal at Hyde Park High School.
“We, unfortunately, had to retrench some of our staff, and some staff got pay cuts for about two or three months,” says John Skelton, a principal at Bryanston High School. “The worry is that this year it looks worse than last year,” says Skelton.
The education department’s budget, meanwhile, is being cut, while some provinces are being left in the lurch by suppliers and staff, where millions of rands are owed.
5. Trellidor and Implats project rise in profits:
Trellidor is expecting an increase in its headline profit of between 17% to 21% for the six months to end-December, due to “turnover growth and control of overheads”, as well as a share buy-back.
In a trading update for the six months to end-December, Implats projected that its headline profit will be between 318% to 338% higher, which means its half-year profit can almost reach R15 billion. This was thanks to higher production, as well as “robust dollar pricing” for platinum group metals.