News in South Africa 11th June:
1. Third wave officially here:
The National Institute of Communicable Diseases says that South Africa is now officially in a third wave, with the latest numbers meeting the technical requirements to declare as such.
While provinces have been declaring a third wave over the past few weeks, the national picture had not yet met the requirement of having the national seven-day moving average incidence of cases above 30% of the peak incidence of the previous wave.
Over 9,000 new cases were reported in the last 24 hours, with Gauteng being hardest-hit, carrying over 5,000 of those cases.
The National Institute for Communicable Diseases (NICD), a division of the National Health Laboratory Service, reports that 9 149 new COVID-19 cases have been identified in South Africa, which represents a 15.7% positivity testing rate. This brings the total number of laboratory-confirmed cases to 1 722 086.
12 044 072 tests have been conducted in both public and private sectors as per the table below.
2. US travel restrictions updated:
The United States has updated its travel advisory bulletin for citizens wishing to visit South Africa after placing the country on its highest risk alert level back in April.
The US Bureau of Consular Affairs has made sweeping changes to its international travel advisories over the past three months. Guided by data presented by the Centres for Disease Control and Prevention (CDC), which analyses Covid-19 risks in other parts of the world, the US has incorporated health notices with travel advisories to warn its citizens of country-specific hazards.
This adjustment to the state department’s travel advisory system was rolled out in April and saw nearly 200 countries – including South Africa – added to the Level 4 category. This highest risk level, also known as the “do not travel to” list, was applied to just 34 countries prior to the adjustment.
In another round of changes to its travel advisory billboard on Tuesday, the US lowered South Africa’s risk rating back to Level 3 which, instead of warning citizens to avoid all travel, urges visitors to “reconsider travel”. Prior to the pandemic, South Africa was listed as a Level 2 risk, with US citizens told to “exercise increased caution” when travelling.
While the recent lowering of South Africa’s risk level has removed warnings around drought and non-coronavirus health risks, crime, and civil unrest still form part of the main advisory.
“Violent crime, such as armed robbery, rape, carjacking, mugging, and ‘smash-and-grab’ attacks on vehicles, is common,” notes the current travel advisory.
“There is a higher risk of violent crime in the central business districts of major cities after dark.”
3. Private power production easier:
President Cyril Ramaphosa has announced an amendment to the Electricity Regulation Act that will make it easier for independent power providers to generate power and even sell it back into the grid.
Speaking during a live-streamed briefing a little earlier, Ramaphosa announced that government will amend schedule two of the act to raise the exemption threshold from 1 megawatt to 100 megawatts.
That means power producers will be able to produce power without going through a long drawn-out process with the energy regulator.
However, it is also an indication that the president and government are shifting away from ‘Eskom protectionism’, and are finally putting the South African economy before political interests.
The policy change is aimed at large companies and entities, and should alleviate pressure on Eskom’s grid – but at the same time, putting its revenue in jeopardy.
4. Mining at 18 year high:
PwC’s Mine 2021 report released this week forecasts mining profits to hit an 18-year high this year. This comes on top of a 15% jump in net profit in 2020 and a 40% surge in cash on hand.
“The Top 40 mining companies have never been in a stronger financial position to make a big, bold pivot towards the future. And the future is already visible today: the world is in the midst of an era-defining transition to a low-carbon, sustainable economy. Eight of the 10 largest economies have set ambitious net-zero targets. Many global companies, including several of the Top 40 miners, have made similar commitments,” says PwC.
A key finding of the Mine 2021 report is that companies embracing ESG (environmental, social and corporate governance standards) outperformed the broader market during the peak of the Covid pandemic. Investors are increasingly drawn to companies that actively embrace ESG policies.
Companies are shifting away from thermal coal towards the green economy, and that’s likely to drive demand for minerals critical to the green economy six-fold by 2040, according to the International Energy Agency. Eight of the world’s 10 biggest economies have committed to achieving net-zero emissions by mid-century, and mining companies are expected to be front and centre in this transformation.
If 2020 was a good year for the Top 40, 2021 is shaping up to be a great one, with revenue (excluding trading) forecast to rise 29%. Cash on hand is now up 40% and balance sheets are rock solid.
5. Service delivery fails citizens:
Finance minister Tito Mboweni says that the Treasury is increasingly being asked to intervene in the financial affairs of municipalities across South Africa as they are unable to provide basic services.
Responding in a written parliamentary Q&A, Mboweni said that a court action was brought by Astral Foods Limited compelling the National Treasury to prepare a financial recovery plan for the Lekwa local municipality in Mpumalanga.
The court order issued on 12 April 2021 allows for a period of six months from the date of the order; however, the financial recovery plan will be prepared in terms of the timeframes in the Municipal Finance Management Act.
Mboweni added that there are now similar court applications which Treasury is dealing with across South Africa, with at least six other municipalities facing calls for intervention.
These municipalities are:
- Emalahleni Local Municipality in Mpumalanga
- Enoch Mgijima Local Municipality in the Eastern Cape
- Makana Local Municipality in the Eastern Cape
- Kannaland Local Municipality in the Western Cape
- Maluti-A-Phofung Local Municipality in Free State province
- Mafube Local Municipality in Free State province
There are also 163 municipalities in financial distress and 108 municipalities that have passed an unfunded budget in 2020/21 financial year, deputy finance minister David Masondo said.
“The crisis at Lekwa is unfortunate. Even more unfortunate, is that being ordered by the High Court to intervene goes against the very essence of our cooperative intergovernmental system.
“But in any crisis, there are also opportunities. Opportunities to redefine what is acceptable and what is not, opportunities to remind ourselves of our duty to serve, opportunities that force us to rethink our approach.”
All information sourced from articles posted by: BusinessTech, Business Insider, NCID, 702, and Moneyweb.
