News in South Africa 18th January:

1. Eskom pushing for 20.5% increase:

Eskom has reiterated its calls for a 20.5% tariff increase for the 2023 financial year, warning that the hike is necessary for the continuation of its operations.

Eskom pushing for 20.5% increase
Image taken by: Saya Kimura

In a presentation to the National Energy Regulator of South Africa (Nersa) on Monday (17 January), the power utility said the increase was partly being driven by purchases from independent power producers (IPPs) and carbon taxes – two costs which are outside of Eskom’s direct control. These two costs alone make up around 13.8% of the requested increase, it said.

The group has also indicated that it plans to ask for a further 15.07% increase in 2024 and a 10% increase in 2025. However, this will depend on the actual increase that Nersa grants Eskom this year, with the regulator rarely giving the power utility the full increase that is asked for.

On 5 March 2021, Nersa approved a hike of 15.06% for Eskom’s direct customers, which was subsequently implemented on 1 April 2021. A hike of 17.80% for municipalities was implemented on 1 July 2021.

Over and above the requested tariff increase, Eskom said it is still dependent on further equity support provided by the government to remain a going concern.

It added that every effort is being made to find further efficiencies within the business, to address corruption and fraud, and to make inroads into addressing municipal and other debt.

2. Matric results and Popia:

The High Court in Pretoria will hear arguments on Tuesday morning against the Basic Education Department’s decision not to release last year’s matric results on media platforms.

The court application by AfriForum, Maroela Media and Anlé Spies – a 2021 matriculant – is asking the court to compel the department to continue with the release, arguing that the sudden change is both irrational and ill-informed.

The parties have applied for an urgent interdict.

The Department of Basic Education’s spokesperson Elijah Mhlanga said that the decision to withhold the matric results from the media was arrived at following consultation with the Information Regulator.

However, he said that some legal advice sought to clarify how they should act to comply with the Protection of Personal Information Act (Popia) contradicted the regulator’s guidance.

“We sought legal opinion which goes one way and the Information Regulator said something else and also other people that we contacted in the legal fraternity are also giving varying interpretations of that Act, so we will wait for the court, the competent authority to tell us how to proceed,” Mhlanga said.

The department will not be contesting the case but the Information Regulator is cited as one of the respondents, so it will present its side.

” The department is caught in a very tricky situation. On the one side, we have a very long-standing tradition of seeing the results of our National Senior Certificate polished in media platforms and on the other hand we have the POPIA that came into effect in July last year.” said Elijah Mhlanga, Spokesperson for the Department of Basic Education

3. African fintech sector increased by $2bil:

Having secured about $31 billion in funding in the third quarter of 2021 alone, the world’s more than 26 000 fintech companies have together pulled the industry out of the niche sector and into the mainstream, and Africa isn’t missing out on this growth.

According to Dominique Collett, Rand Merchant Investment’s senior investment executive and head of AlphaCode, investment into the African fintech sector increased to about $2 billion in 2021, in comparison to $500 million in 2020.

The continent remains a hotbed for fintech investors and it seems Africa’s huge unbanked population will continue to pique the interest of investors looking to plough money into emerging markets.

“The fintech sector in Africa is currently very focused on payments and digital banking – this makes sense given the low level of banking penetration across the continent,” says Collett.

“So I think investors will continue to focus on this space and [this is] where we will see activity for the next few years.”

The coronavirus pandemic had a lot to do with the global shift in consumer behaviour towards fintech platforms. According to Collett, about 30% of banking consumers use banking apps and about 64% are using one or more fintech platforms.

These numbers are expected to continue growing as more money is expected to be invested on the continent, opening opportunity for innovation to solve other problems hindering the financial industry in Africa.

“As African consumers get pulled into the financial ecosystem through payments and digital banking services, we will see the emergence of other verticals like lending, asset management and insurance,” says Collett.

4. JHB government brawl:

The multiparty coalition governing the City of Johannesburg has called for President Cyril Ramaphosa’s urgent intervention after a council meeting last week turned violent and left personnel injured.

The first council meeting of the year took place on Friday and was due to elect a chair of chairs and chairpersons of portfolio committees. It ended prematurely after clashes over voting procedures. 

The meeting was postponed to Tuesday, but the coalition partners — who came into power after the ANC lost its outright majority in the November 1 local government polls — fear history might repeat itself if Ramaphosa does not intervene overnight.

Speaking at a media briefing on Monday, FF Plus leader Pieter Groenewald lamented the behaviour of ANC and EFF councillors, who were allegedly behind the collapse of the meeting.

He said Ramaphosa ought to bring his members into line, despite the incident taking place at a regional level.

“There is a responsibility on the president. It is his members, his party. He cannot distinguish between local, regional or national,” he said.

Groenewald said the incident should not be viewed as isolated but rather as part of a broader picture that showed what would happen if the same voting patterns were repeated in the 2024.

“The governing power is not willing to hand over [power], which is ironic, because the president, in his weekly newsletter, is appealing to the people of SA and everyone to uphold, protect and preserve the constitutional democracy of SA. But his own members in the city of council don’t do that.

5. Fiber wanted in small towns:

Some small towns in South Africa were opposed to laying of underground fibre optic cables – but that was before the Covid-19 pandemic and the influx of new, younger residents looking to capitalise on the remote-work trend.

The global coronavirus pandemic has altered how and where people work. South Africa’s offices are emptier than they’ve ever been before. Employees are working remotely, utilising video communication apps like Zoom and Microsoft Teams to stay connected.

Smaller towns, particularly those close to the coast in the Western Cape and parts of KwaZulu-Natal, have attracted a flurry of inland homebuyers. “Zoom Towns”, or “Teams Towns” – named after the popular platforms which facilitate virtual meetings – offer entrepreneurs and employees a better work-life balance, with property prices generally more affordable than those near metropolitan business districts.

And while this influx of remote workers has given new life to small towns which were previously reliant on seasonal trade, technological infrastructure, critical to work in this heightened digital age, has some catching up to do.

A stable, secure, consistent, and fast internet connection is a prerequisite, something some of these new Zoom towns, initially resistant to the digging of roads and sidewalks for the laying of cable, still lack.

While fibre is generally considered one of the most reliable and affordable ways of connecting a home to the internet, many small towns still rely on LTE, wireless broadband communication utilising cellphone towers.

For areas with poor network coverage, satellite internet access has been a feasible, but more costly, alternative.

All information sourced from articles posted by: BusinessTech, EWN, 702, Moneyweb, TimesLive, and Business Insider.

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