News in South Africa 12th June:
1. Food inflation easing:
Food prices in South Africa continue to increase at a startling rate, although the pace of acceleration is easing and possibly faster than is reflected in the official data so far.
The cost of a basket of goods in Bloomberg’s South African Shisa Nyama Index, designed to show the cost of a traditional backyard barbecue in townships and rural areas, rose 12% year-on-year in May, a sharp decline from 19% in February and a third consecutive monthly slowdown. A continuation of that trend will provide welcome relief for consumers who are also contending with high fuel prices, widespread unemployment, daily electricity outages and a stagnating economy.
Consumer prices rose 6.8% year-on-year in April, down from 7.1% the previous month, with food prices rising 14.3%, according to Statistics South Africa. Official data for May is scheduled to be released on June 21.
Crunching data from the Pietermaritzburg Economic Justice and Dignity group, Bloomberg’s index tracks the prices of some of the key ingredients in a shisa nyama — corn meal, onions, carrots, tomatoes, curry powder, salt, frozen chicken portions, beef and wors — a type of sausage made from a variety of ground meat offcuts.
To compile its survey, the PMBEJD’s data collectors track food prices on the shelves of 44 supermarkets and 30 butcheries that target the low-income market in the greater areas of Johannesburg, Durban, Cape Town, Pietermaritzburg, Springbok in the far northwest and the far northeastern town of Mtubatuba.
The cost of three items in the index — green peppers, cooking oil and samp — which is similar to grits — fell in May from the month before.
2. Load shedding to be suspended this week:
Power utility Eskom says that it will again suspend load shedding during the day this week, keeping evening outages at stage 3.
Stage 4 load shedding will be implemented from 16h00 until midnight on Sunday (11 June), thereafter, it will be suspended.
The suspension will run from midnight to 16h00 on Monday, after which stage 3 load shedding will be put in place. This is expected to repeat on Tuesday and Wednesday as well.
Monday, 12 June
- Suspended: 00h00 to 16h00
- Stage 3: 16h00 to 00h00
Tuesday, 13 June
- Suspended: 00h00 to 16h00
- Stage 3: 16h00 to 00h00
Wednesay, 14 June
- Suspended: 00h00 to 16h00
- Stage 3: 16h00 to 00h00
This pattern will repeat until further notice, it said.
The suspension of load shedding is coming despite breakdowns exceeding Eskom’s baseline plan for 15,000MW
Breakdowns are currently at 16,115MW of generating capacity while the generating capacity out of service for planned maintenance is 3,766MW.
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. Rand starts week on front foot:
The South African rand edged up in early trade on Monday, building on gains from the previous week, but trading was expected to be cautious this week ahead of several major global monetary policy decisions.
At 08:54, the rand traded at R18.67 to the dollar.
The dollar was flat against a basket of global currencies.
Policy meetings of the US Federal Reserve, the European Central Bank and the Bank of Japan will set the tone for the week, as markets seek clues from policymakers on the future path of interest rates.
The rand gained more than 4% against the dollar last week as an easing in power cuts and some encouraging economic data helped it recover some of its steep losses in May.
Investors will wait for guidance from the Fed meeting’s outcome on Wednesday before adopting any fresh direction, said ETM Analytics in a research note.
4. Risk of a ‘flash revolution’:
Professor Francois Vrey from Stellenbosch University’s military science department has warned that the government’s inability to provide basic services puts the country at risk of a “flash revolution”.
Vrey was interviewed on Biznews about the lack of basic service provision in South Africa and its potential consequences.
South Africans are entitled to exceptional services in the constitution, among the best in the world, Vrey said.
However, these services are not delivered in reality, with local government being extremely inefficient and ineffective in providing basic services.
The lack of basic service provision, particularly regarding security and economic opportunity, results in “ungoverned spaces” in South Africa.
These are areas where the government is simply unable to ensure its citizens are free from fear and want.
Private actors inevitably fill this space. This can be positive through high-quality private healthcare, education, and security.
However, it can also have negative effects if these spaces are filled by nefarious actors such as criminal groups or even armed groups.
In South Africa, Vrey said, “ungoverned spaces” can be found mainly in rural areas, with some urban areas, specifically in Gauteng, becoming ungoverned.
Criminal elements tend to fill these gaps in South Africa, with armed groups not prevalent in the country.
The government does not have to worry about external threats, according to Vrey, with internal instability a much higher risk due to the growth in “ungoverned spaces”.
However, the security cluster has proved unable to prevent and mitigate widespread criminality and unrest – as seen in July 2021.
5. Inflation fight continues:
The Organisation for Economic Co-operation and Development (OECD) says the South African Reserve Bank must continue fighting inflation, with South Africa’s current inflation rate at 6.8%.
The OECD said that it expects inflation to remain above the SARB’s 4.5% target midpoint in 2023, but it expects it to return to the target range of 3%-6% in 2024 due to the delayed effects of monetary policy.
It added that load shedding will continue to impact consumer prices.
All information sourced from articles posted by: Fin24, BusinessTech, Moneyweb, DailyInvestor, and BusinessDay.
