News in South Africa 12th April:
1. Sugar tax a success:
Three years ago South Africa introduced Africa’s first major tax on sugar-sweetened beverages based on grams of sugar. The tax now stands at about 11% of the price per litre.
The impact was assessed in recently published research. It was found that the health promotion levy coincided with large reductions in purchases of taxable beverages, in terms of both volume and sugar quantities. No significant changes were found for non-taxable beverages.
This isn’t the first research to show positive outcomes from the levy. A national study one year after it was introduced found households in urban areas halved the volume of sugary beverages they bought, cutting their sugar intake by nearly a third. Similar results were found regionally in Soweto in Gauteng.
The new research is the first evaluate this particular tax design. At a national level, changes were measured in household purchases of taxable and non-taxable beverages in terms of volume, sugar and calories. Changes in the purchasing behaviour of households stratified by household socioeconomic status were also assessed. The changes were assessed between the period before the levy to after its announcement and through the first year of its implementation period.
Research shows that excess sugar, particularly in liquid form, is a major cause of obesity and is a risk factor for diseases like type 2 diabetes, hypertension, heart disease, many common cancers and tooth decay. Recognising this danger, the World Health Organisation (WHO) has recommended that individuals should consume no more than 10% of total calories from added sugar, and preferably less than 5%.
2. Tariff hikes being questioned:
Civil groups are starting to push back against proposed tariff increases in Johannesburg, saying that the rate hikes are coming at a time of economic sensitivity, with many households unable to afford the jumps.
While massive increases to water and electricity tariffs are unavoidable, questions have been raised around the R200 residential prepaid metre surcharge, as well as the R50 ‘recycling’ levy that the city wants to impose.
These have been described as egregious and unreasonable ‘double taxes’ being levied on the population.
3. Industrial metal prices under pressure:
Industrial metals prices fell on Monday after China’s premier said the country will strengthen control of commodities prices that have hurt businesses.
The most-traded June nickel contract on the Shanghai Futures Exchange fell 3.3% to 122,600 yuan ($18,698.43) a tonne by 0305 GMT, while three-month nickel on the London Metal Exchange declined 2.5% to $16,220 a tonne.
LME copper fell 1.1% to $8,829.50 a tonne, zinc was down 1.4% at $2,791 a tonne, while tin decreased 1.1% to $25,470 a tonne.
In Shanghai, copper declined 1.7% to 65,760 yuan a tonne, zinc fell 2.1% to 21,565 yuan a tonne, while tin dropped 2.7% to 177,780 yuan a tonne.
Chinese Premier Li Keqiang stressed the need to strengthen market regulation of raw materials to ease the cost pressure of enterprises amid rising global commodities prices, China’s official Xinhua news agency reported on Saturday.
4. Final offer given to pilot’s union:
SAA’s rescue practitioners have made what they claim to be a final offer to the pilots’ union.
South African Airways (SAA) is in business rescue due to “financial malfeasance, corruption, tenderpreneurship, gross mismanagement and incompetence, lack of corporate governance and the constant interference by politicians and political agendas in its operation”.
This is the response from the SAA Pilots’ Association (SAAPA) to allegations made against it by the Director General of the Department of Public Enterprises (DPE) Kgathaso Tlhakudi in an opinion piece published on Friday. The DPE is SAA’s shareholder.
SAAPA members have been locked out since 18 December 2020 and have recently started a strike in order to prevent the kind of situation where the company lifts the lockout only for some pilots, especially training pilots, who are needed to get the airline back in the air again.
Tlhakudi claims SAAPA’s evergreen Regulating Agreement (RA) with SAA, signed in 1988, is a reflection of “apartheid heydays” when there were no opportunities for black pilots. He also regards the seniority system stipulated in the RA as hampering transformation “… within the captain cadre in the pilot body”. Aviation experts have, however, pointed out that this seniority system is usually followed by airlines all over the world.
SAA’s business rescue practitioners are hoping to reach a settlement with SAAPA and get rid of the union’s RA.
5. Purple Group and RMB Holdings figures:
Purple Group – which owns cut-price trading platform EasyEquities – reported a 80% increase in half-year revenue to R100.6 million, with the company posting a profit attributable to shareholders of R8.3 million, compared to R800,000 in the previous period.
EasyEquities revenue increased by 197.6% to R85 million. Purple also owns GT247.com, and Emperor Asset Management. Purple’s share price fell by almost 8% on Friday, after recently reaching a record high.
RMB Holdings declared a special dividend of 80c a share, returning capital which was earmarked for a property development in Bucharest.
The planned development didn’t meet the conditions for the investment to go ahead. Its share price jumped 8% following the announcement on Friday.