News in South Africa 11th April:
1. Eskom debt relief extends to municipalities:
National Treasury is rolling out an ambitious plan to rid struggling municipalities of their ever-growing debt to Eskom, but only if they adhere to strict conditions to permanently change problematic behaviour at council and consumer level.
If successful, the plan – set out in a circular to municipalities dated 31 March – will deal with Eskom’s outstanding municipal debtors, who collectively owe the power utility R56 billion.
Leveraging the R254 billion debt relief to Eskom announced in February, National Treasury will require Eskom to write off one third of the principal debt, interest and penalties of every participating municipality accumulated up to the end of February 2023 per year over a three year period.
A municipality must stick to strict conditions for 12 consecutive months to qualify for the one third write-off that year.
Eskom’s cooperation is one of the conditions of the R254 billion loan to be converted to government equity.
Defaulting municipalities that fail to apply for the debt write-off will see National Treasury taking over their electricity business and National Energy Regulator (Nersa) revoking their distribution licence and awarding it to someone else.
Conditions
Municipalities must apply for participation in the scheme before May every year.
If they qualify, they will immediately start enjoying the benefits. Any existing payment plan with Eskom will be suspended and the municipality will no longer have to pay arrear debt, interest, or penalties. Eskom will further suspend any litigation against them.
If the municipality complies for 12 consecutive months, Eskom, in consultation with National Treasury, will write off a third of its debt. Once written off, the debt remains written off.
Conditions include the regular payment of the current Eskom bill, the adoption of a realistic and funded budget, disconnection of defaulting consumers’ water and electricity supply, and a collection rate of at least 80%.
2. Load shedding at stage 5:
Power utility Eskom says load shedding will return to stage 5 after the long weekend.
Stage 3 load shedding will be implemented from 17h00 on Monday (10 April) and will continue until 16h00 on Tuesday.
Thereafter, stage 5 load shedding will be implemented from 16h00 until 05h00 on Wednesday followed by stage 3 load shedding until 16h00.
Eskom will publish a further update as soon as any significant changes occur.
The schedule is as follows:
Monday, 10 April
- Suspended: until 17h00
- Stage 3: 17h00 to 00h00
Tuesday, 11 April
- Stage 3: 00h00 to 16h00
- Stage 5: 16h00 to 00h00
Wednesday, 12 April
- Stage 5: 00h00 to 05h00
- Stage 3: 05h00 to 16h00
- Stage 5: 16h00 to 00h00
Schedules
For people living in the major metros, load shedding schedules are available here:
- City of Johannesburg
- City of Ekurhuleni
- City of Tshwane
- City of Cape Town (PDF)
- Nelson Mandela Bay
- eThekwini
- Manguang
- Buffalo City
For access to other load shedding schedules, Eskom has made them available on loadshedding.eskom.co.za.
3. Minimum wage changes and effects:
The Department of Employment and Labour says that increases in the National Minimum Wage (NMW) have not impacted employment numbers in South Africa.
This was minister Thembelani Thulas Nxesi’s response in a recent parliamentary Q&A, where his department was asked to comment on whether or not the NMW had a material impact on employment numbers across several sectors, including Agriculture, Mining, Manufacturing, Construction, and Trade.
The department said that research had been conducted annually for the past three years, assessing the impact of the NMW on employment, hours of work and wages. They observed no significant shifts in aggregate employment following NMW increases over the past few years.
This sentiment goes against many expert opinions – such as organisations and CEOs in the affected sectors – that said the increases in the NMW amid the current economic climate would cripple businesses and lead to job losses across the country.
Private households (domestic workers and gardeners) were also among the sectors noted by the Department of Employment and Labour. The research showed that it also experienced no significant changes in employment due to increased NMW.
However, data from Stats SA shows that domestic workers have seen a notable decline in employment numbers across the country despite the department’s remarks.
According to the latest Quarterly Labour Force Survey for Q4 2022, South Africans currently employ around 863,000 domestic workers, adding 38,000 jobs (+4.6%) since the last survey.
Year-on-year, however, 86,000 fewer domestic workers are employed – a 9% drop since Q4 2021 – and total employment numbers are still significantly lower than pre-Covid levels.
South Africa has historically had around 1 million domestic workers employed in the country, but this took a massive knock in 2020 following the Covid-19 pandemic and subsequent lockdowns.
4. Load shedding has led to job shedding:
Almost two-thirds of township businesses have been forced to shed jobs because of load shedding, according to a new report. But business owners say the situation is even direr – they face closing if the power outages continue.
According to the Nedbank Insights Report, conducted in partnership with the Township Entrepreneurs Alliance (TEA), 64% of small township businesses cease operations during load shedding and almost 66% of business owners have cut jobs because of load shedding.
The jobs cuts were most visible in the food and beverage sector, as well as manufacturing.
The report also found that load shedding has led to increased operating costs, lost revenue and declining margins.
According to the report, one in five businesses had turned to alternative energy sources.
Mlungisi Mazana, the chairperson of the Gugulethu Business Forum, said that small township businesses faced a number of barriers caused by load shedding, including increased crime at their premises during the power outages.
“They end up losing customers to bigger chain stores that have generators because a small business doesn’t have that luxury,” said Mazana.
Mazana raised concern that the challenges of operating amid load shedding are a barrier to future entrepreneurs.
“It discourages aspirant entrepreneurs when they see people they look up to closing shop,” he said.
The report also found that the challenges caused by power cuts are impacting entrepreneurs’ mental health and resilience.
5. Tshwane go dark after pylons collapse:
Large parts of Pretoria are without power after several pylons collapsed, with allegations that metal theft and vandalism caused the disaster.
Tshwane Mayor Cilliers Brink said that the city could not give a credible estimate of when the issue will be resolved as the city lacks capacity and requires Eskom’s expertise.
Many businesses, including a Ford manufacturing plant, are without power due to the collapse.
All information sourced from articles posted by: Moneyweb, BusinessTech, News24, BusinessDay.
