News in South Africa 11th May:
1. Third wave worse than projected:
The detection of two new variants to our shores has shaken the foundation of the latest modelling on Covid-19 in SA.
Top scientists take part in modelling Covid-19 so that the rest of us can get a sense of what to expect when, and the government can respond accordingly, but even at its best modelling is beset with so many variables that the data are never definitive.
South Africa’s modelling of the expected third wave of Covid-19 has been disrupted by the detection of two notable variants among the population. Modelling published last week showed that the third wave would likely be smaller than the second – however, none of the scenarios documents included the presence of new variants.
Should variants spread, the third wave could be bigger and deadlier than the second, the researchers said.
Currently, it is not known how widespread the two variants are, with only 15 people found to be carrying them. Authorities say they are on high alert.
2. Ace must apologise:
Suspended ANC Secretary-General Ace Magashule has been ordered to apologise for the letter of suspension he wrote to President Cyril Ramaphosa last week, in response to his own suspension.
In his closing address to the three-day national executive committee (NEC) meeting held on a virtual platform, select snippets of which were leaked through audio-recordings, Ramaphosa said the NEC discussed Magashule’s letter, for which he, “… had no authority or mandate from any structure of the movement”.
Ramaphosa, in an address livestreamed on Facebook on Monday afternoon, and seated at a table in front of an ANC flag, said the NEC agreed, “… that such conduct was completely unacceptable and a flagrant violation of the rules, norms and values of the ANC”.
In addition to being suspended for failing to adhere to the step-aside rule, Magashule faces additional disciplinary charges if he does not publicly apologise to Ramaphosa and to the general body of 1.4 million ANC members. The two together create grounds for expulsion as they bring the ANC into disrepute, the same charges used to expel EFF leader Julius Malema in 2012.
Such an order to publicly apologise is unprecedented in the ANC and leaves Magashule with a Hobson’s choice. To make the apology is a massive climbdown for the strongman politician; but if he does not apologise, he could be expelled from the party for bringing it into disrepute.
3. SARS rejects R600m claim:
Regiments Capital claimed more than R600-million in professional fees as taxable deductions — a large chunk of payments it had made to several letterbox companies.
Those include the controversial Gupta-linked front company, Homix, that extracted just more than R139-million in 2015 and 2016 from Regiments.
This is according to a tax audit carried out by the South African Revenue Service (SARS) into the company’s affairs for the period 2014 to 2016. Audits for 2017 to 2019 are still under way.
Regiments Capital was a highly successful financial advisory company until it was exposed in the State Capture scandal in 2016. It has since been the subject of multiple investigations including one by the National Prosecuting Authority for allegations of fraud, corruption and money laundering relating to its work at state-owned entities, including Transnet.
Ordinarily, an individual or company’s tax matters are confidential, but SARS introduced documents into the public domain after an urgent high court bid by Regiments to wriggle out of liquidation in April 2021.
SARS said that the payments were made not as a quid pro quo for services rendered, but as kickbacks or bribery or gratification to procure contracts – and bribes are not tax deductible.
4. Nersa opposes Eskom:
The National Energy Regulator of South Africa (Nersa) announced on Monday that it would oppose an Eskom High Court application seeking to review and set aside the Energy Regulator’s latest regulatory clearing account (RCA) determination.
In an unusual step, the regulator also urged other stakeholders to join it in opposing the utility’s legal challenge.
The RCA decision, which relates to the 2018/19 financial year, was made in 2020 and was one of several factors that contributed to this year’s 15.63% hike.
Following an adjudication of Eskom’s 2018/19 RCA application, Eskom was given permission to recoup R13.3-billion, broken into two yearly amounts, as well as a supplementary revenue balance of R1.3-billion.
The State-owned utility had applied to recover R27-billion.
Eskom’s existing debt stood at R488-billion at the end of financial year 2020 and the utility had an additional borrowing programme of R96-billion planned for the financial years 2022 to 2026, which was nevertheless “insufficient to close the more than R216-billion funding gap to 2026”.
Besides this placing a heavy burden on the fiscus, in the form of guarantees and direct financial injections, the interlinked nature of State debt also poses a risk: “[A] failure to meet any demand made on South Africa by any creditor of Eskom with the benefit of the South African State’s Eskom guarantees would also potentially trigger acceleration of the full liability of South Africa’s own debt which can be accelerated if any such demand is not met when made, potentially exposing over $68-billion (over R980-billion, based on an assumption of USD/ZAR of 14.50) of international debt of South Africa.”
5. Wage deadlock still ongoing:
As government and public sector unions remain deadlocked over wage negotiations, additional help has been roped in to facilitate talks and avert a potential strike by civil servants.
Facilitation proceedings started on Sunday and by Monday the internal processes of facilitation were still being sorted out.
Mugwena Maluleke of the SA Democratic Teachers’ Union stated on Monday afternoon that the negotiation process was now being assisted by an independent facilitator and, over and above that, the International Labour Organisation is also involved in the facilitation.
The ILO is the oldest specialised agency of the United Nations.
“This is a decision of the Public Service Coordinating Bargaining Council (PSCBC) in order to break the impasse,” said Maluleke.
Reuben Maluleka, spokesperson of the Public Servants’ Association (PSA) – which has more than 235 000 members in the civil service – said this process is the last hope for a solution.