News in South Africa 17th August:
1. Investment in woman-owned businesses:
The Mineworkers Investment Company (MIC) wants to invest R150 million in emerging black-owned businesses.
The MIC, through its venture capital initiative, MIC Khulisani Ventures, has launch the second window of applications to support what it calls high growth potential and innovative businesses.
It is offering this financial support because it wants to back businesses that have had already had seed funding (and which are predominantly black-owned) but are “not plugged into the dominant streams of venture capital networks.”.
It says many of these businesses are “investment-ready,” and have ideas that can shift industries and society. But they do not get the boost they need at a key point in their development because of a lack of institutional support.
So far, MIC Khulisani Ventures has made two investments.
In May 2022, it said it invested R23,5 million in Kelo Africa, an interactive digital bookstore and e-library. It had also invested R20 million in Rentoza, an online electronics and appliances retailer operating on a subscription-based model.
MIC Khulisani Ventures will now offer up to R30 million per successful applicant. All sectors will be considered except those involved in primary agriculture and primary extractive industries.
In the next application window, the MIC want to be more transformative.
MIC CEO Mary Bomela says: “While the criteria for application does not significantly change this year, we are deliberate in targeting black female-owned or led businesses.”
Aside from supporting black woman, the MIC is also open to supporting what it calls relatively young businesses.
“We quickly learned that the field is slightly less developed than what we had initially envisaged in terms of where the demand for that kind of investment was, versus our ambitions,” Bomela says.
She adds: “Incidentally, this still gives us opportunity to diversify and reach as many businesses as possible especially those that are disruptors of market and show immense potential for scalability.”
Where to apply:
Those looking for funding can apply at khulisani.mic.co.za. Applications close on 23 August 2022.
2. Fuel price cuts hijacked for GFIP?:
Concerns are being expressed that the government may hijack the consumer benefits of an expected reduction in fuel prices and use them to pay for the Gauteng Freeway Improvement Project (GFIP).
Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said on Tuesday the organisation is concerned that Minister of Finance Enoch Godongwana may seize the opportunity presented by the expected petrol price reduction in the first week of September to increase the fuel levy by 25c to 30c per litre to raise additional revenue to cover the GFIP bonds, which the e-toll debacle has failed to do.
This follows Transport Minister Fikile Mbalula’s admission in June that a decision taken by cabinet on e-tolls was taking government in the direction of the fuel levy – but this plan was scrapped because of the then sharp increases in oil and fuel prices.
Duvenage referred to Mbalula’s comments that an announcement on the e-toll decision is expected to coincide with the MTBPS in October, and to strong hints that the Minister of Finance will increase the fuel levy to off-set the scrapping of e-tolls.
“Should this happen, Outa will denounce this decision on the basis that the fuel levy has already been increased in excess of R2.50 per litre since the Gauteng freeway upgrade began in 2008,” he said.
“Government failed to take up Outa’s suggestion of a ring-fenced 10c per litre increase to the fuel levy some 11 years ago, which would have settled the freeway bonds by today,” he added.
Duvenage said the government has made extremely poor decisions in the past, not only on the various fuel levies and taxes, but also on the road financing options available to it.
He warned that short-term financial gains lead to long-term negative ramifications for taxpayers, adding that a 25-cents-a-litre increase in the fuel levy will result in an additional R5.5 billion flowing into Treasury’s coffers each year.
3. 10 year driver’s licenses possible:
Transport minister Fikile Mbalula says that his department is ready to look at amending the five-year validity period that currently applies to driver’s licence cards in South Africa.
“We are also looking at the duration time. It is five years, but in terms of the national land transport act, that issue is not very clear that it has to be five years,” Mbalula told SABC News.
Mbalula announced in February that a team at the Road Traffic Management Corporation would compile a report with a focus on how extending licences to 10 years could impact safety and revenue.
He said his department completed the research on the matter.
“I’ve got the report now, and I’m ready to go to cabinet with new proposals to probably re-look at the five years in terms of the driver’s licence,” the minister said.
However, he said that he could not provide further information until his proposal has passed through the cabinet.
Groups like the Automobile Association (AA) and the Organisation Undoing Tax Abuse (Outa) have for years urged the government to extend the validity period of driving licences from five to 10 years as a way of dealing more effectively with renewals.
Among the proposal, these groups have recommended:
- That an extension for driver’s license renewal be applied from 5 to 10 years;
- The extension from 5 to 10 years applies between the ages of 18 to 65 years;
- That more efficient online application processes for DL renewals precede the actual renewal to allow for more effective service delivery and flow between appointment, eye test and licence delivery;
- Multiple methods for DL renewal are made available through test centres and reputable service providers, i.e. stronger collaboration with neutral, third-party organisations such as the AA;
- That current restrictions applicable to Professional Driver’s Permits either remain the same, or are possibly extended as well, but that this decision be based on more extensive research and the inclusion of input from bussing and tourism role players.
4. Elimination of cheap medical schemes:
The Board of Health Funders is taking legal action against the Council for Medical Schemes over the latter’s bid to eliminate low-cost benefit options in the country.
The CMS announced plans to disallow these schemes at the end of 2019.
These plans target low-income members and offer only primary healthcare for low monthly fees.
While the CMS has put a hold on these schemes, insurance companies have filled the gap with similar products. The BHF wants the moratorium overturned.
5. R1.25tril needed to end load shedding:
South Africa will need R1.25 trillion by 2035 to add 50 gigawatts of renewable energy to the grid and end load-shedding.
This is according to Windlab managing director Peter Venn during an interview with Cape Talk’s John Maytham.
“The challenges we have with load-shedding are going to be solved by everybody getting together and using their collective resources to take a just energy transition forward,” Venn said.
“We really need to put as many Megawatts as we can on the grid. New builds are only going to come out of renewables, so we need to leverage these resources and go forward.”
“By my estimation, we need about R1.25 trillion by 2035 to stop load-shedding, and everybody has to chip in,” he added.
Venn also discussed Seriti Resources’ acquisition of a majority stake in Windlab, saying that the intention is to use renewable power to reduce the cost of coal mining and, ultimately, the cost of electricity in South Africa.
“The first underpin is to provide cheap green electricity to Seriti’s coal mines to reduce the cost of coal, which in turn, will hopefully reduce the cost of coal electricity for citizens in the country,” he said.
The deal worth R892 million will give Seriti a 51% stake in the wind and solar power business.
The remaining shares will be held by Venn with 15%, Rand Merchant Bank and Standard Bank each with 14.5%, and Ntiso Investment Holdings with 5%.
Seriti’s CEO Mike Teke said that it is “transitioning to an energy company” by moving toward lower carbon technology with the capital it receives from coal.
As the green unit looks to add renewable stations and power generation, the mining company is still “committed to coal, we will run those assets,” he said.
He explained that, based on Eskom’s energy availability factor data, South Africa needs to build 50GW of renewable energy projects in addition to the existing coal fleet by 2035 to end load-shedding.
“So without decommissioning any coal, we need to build an additional 50GW of renewable energy to keep the lights on if you look at Eskom’s availability factors,” he said.
All information sourced from articles posted by: Business Insider, Moneyweb, BusinessTech, Fin24 and MyBroadband.
