News in South Africa 13th September:
1. Stage 6 load shedding:
South African electricity outages remain at record levels despite the state power utility burning through vast quantities of diesel to bolster output.
Eskom said Tuesday that Stage 6 power cuts, whereby 6,000 megawatts of capacity is removed from the grid to prevent a total blackout, will be scheduled throughout the week.
That matches the deepest level of blackouts officially announced by the utility and caused the rand to extend earlier losses.
While President Cyril Ramaphosa and Electricity Minister Kgosientsho Ramokgopa have given repeated assurances that they are tackling the energy crisis, little headway has been made in improving the performance of the coal-fired plants.
These power plans form the backbone of the generation system. Their poor performance had forced Eskom to increasingly use its auxiliary units to boost its output.
Stage 5 load shedding will still be in effect during the day between 05h00 and 16h00, but stage 6 will kick in from 16h00 overnight to 05h00.
The full schedule is below:
Tuesday, 12 September
- Stage 5: until 16h00
- Stage 6: 16h00 to 00h00
Wednesday, 13 September
- Stage 6: 00h00 to 05h00
- Stage 5: 05h00 to 16h00
- Stage 6: 16h00 to 00h00
Thursday, 14 September
- Stage 6: 00h00 to 05h00
- Stage 5: 05h00 to 16h00
- Stage 6: 16h00 to 00h00
Friday, 15 September
- Stage 6: 00h00 to 05h00
- Stage 5: 05h00 to 00h00
The escalation is due to the loss of additional generating units overnight, which has pushed the group’s unplanned outages to almost 16,800MW.
At the same time, planned maintenance is up to around 5,000MW.
Over a period of 24 hours, a generation unit each at Camden, Duvha and Kendal was returned to service, Eskom said.
However, at the same time, a generating unit each at Duvha, Grootvlei, Kendal and Matla power stations were taken offline for repairs.
The delay in returning to service a generating unit each at Hendrina, Kendal, Matimba and Matla power stations is also contributing to the current capacity constraints.
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.
2. SA’s ticking time bomb:
South Africa’s Deputy President, Paul Mashatile, has warned that the country needs to summon enough bravery to discuss its challenges openly “to prevent the ticking time bomb of poverty, inequality, and joblessness from going off”.
Mashatile issued this warning during his keynote address at the summit of the National Economic Development and Labour Council (Nedlac).
President Cyril Ramaphosa, during the 2022 State of the Nation Address 18 months ago, pledged to forge a social compact within 100 days to fire up the economy and tackle rampant unemployment.
Since then, Nedlac has been through 11 drafts of a social compact without success. Mashatile admitted the deadlines for establishing a written declaration of commitments and actions have not been met.
In March this year, Ramaphosa sought to explain why the social compact had not been realised.
“We had wanted to have a comprehensive social compact, and we had put together a timeline, and we were not able to reach that timeline, but what we have seen over time is that we have been able to reach a number of compacts.”
Mashatile said the most significant obstacle appears to be ideological differences between social partners concerning how to grow the economy.
“These ideological positions have not shifted despite the enormous crisis the country faces,” Mashatile said.
“We must summon enough bravery to discuss this matter openly in order to prevent the ticking time bomb of poverty, inequality and joblessness from going off.”
Business Unity South Africa CEO Cas Coovadia agreed with Mashatile in saying the country is confronting an “existential crisis” after failing to agree on how to turn the economy around.
3. Industrialisation plans failing:
The international trade environment is moving towards deglobalisation, greater reliance on subsidies for domestic industries, and an increased focus on ‘industrialisation’.
South Africa introduced an Industrial Policy Action Plan (Ipap) in 2007. Since then, and despite the umpteenth annual iteration of Ipap, economic growth has declined from an average of 3.5% to far below 1%.
Government interventions are not generating positive economic output, says Donald MacKay, director at XA Global Trade Advisors. He was speaking during the session on the future of trade for SA at the annual Tax Indaba in Sandton.
“We are intervening in the wrong way.”
Cherry-picking not the way to go
Growth Diagnostics director Francois Fouche says SA should be significantly less obsessed with trying to pick the ideal trade partners at industry policy level or the industries it thinks will be winners.
“We should be far more focused on creating an environment that is conducive to becoming internationally competitive,” he says.
“We really have to face our own domestic conditions and environment that we have created, especially for manufacturers.”
The country does not really have trade challenges; instead, it has “domestic production capability” challenges created on its own account. Government prescribes who can participate in the economy, who can trade with whom, and what and how goods should be produced, says Fouche.
He advocates for a less interventionist, more enabling environment where businesses can produce their goods and get them to the ports and those who want to buy their products. This will yield far greater success than the rhetoric currently going around in international trade discussions.
4. Retailers under fire for high food prices:
The Competition Commission says that South African consumers are paying higher prices for certain foods, even though inflation and producer costs have come down significantly. Meanwhile, retailers continue to grow their profits.
This is one of the key findings in the commission’s latest Essential Food Pricing Monitoring (EFPM) Report.
The report looked at comparative trends in grocery retailer margins to global peers and found that trends in retail profits over the past three to four years show that South African retailers are more profitable than their counterparts in other countries.
Local retailers have maintained or bumped up their margins in the last four years, while international retailers have seen their margins thinning.
While the commission conceded that there may be various reasons for this – including different levels of competition – it has also picked up an ongoing “rocket and feather” effect in food pricing, where shelf prices shoot up amid high inflation, but take significantly longer to come back down, even if there is a rapid decline in inflation.
This effect has been seen in maize meal, cooking oil and bread, in particular.
While overall inflation has come down, food inflation remains nearly twice the inflation rate for all goods and services, the commission noted.
“The commission is actively monitoring essential food prices and investigating the factors driving food inflation,” it said. “This ensures transparency regarding the profit margins set by producers and retailers of these products.”
With upstream commodity prices declining in the first half of 2023, the commission said it is now focusing on how quickly this translates into lower prices for consumers.
5. Rice price spike amid climate woes:
A 15-year high in rice prices, prompted by top exporter India’s restrictions on overseas sales, should be a wake-up call on how climate change can disrupt food supplies, experts say.
Rice prices jumped 9.8% in August, bucking decreases in other staples, the Food and Agriculture Organization said last week.
That followed the July decision by India, which accounts for 40% of global rice exports, to ban the overseas sale of non-basmati rice.
The government cited soaring domestic prices for the staple, caused by geopolitics, the El Niño weather pattern and “extreme climatic conditions.”
This year is expected to be the hottest in human history, and the impacts of the seasonal El Niño weather pattern could make conditions even harsher.
Despite severe flooding in parts of northern India, this August was the country’s hottest and driest on record.
The monsoon season that brings up to 80 percent of the country’s annual rain has been far below normal levels.
India’s July restrictions followed a decision last September to ban exports of another variety of rice that is a staple in parts of Africa.
Up to 8% of global rice exports for 2023/24 could now be taken out of the market, according to analysis by BMI, Fitch Group’s research arm.
All information sourced from articles posted by: BusinessTech, DailyInvestor, Moneyweb, and Fin24.
