News in South Africa 18th May:
1. Covid-19 outbreak in Marula mine:
Impala Platinum (Implats) has temporarily shut down its Marula mine in Limpopo Province after finding a “cluster” of positive Covid-19 cases.
In a statement on Saturday, the company said the decision had been taken following “stringent and comprehensive screening, testing and tracing protocols” that identified 19 positive cases, all of whom were asymptomatic.
“Of these cases, 14 were identified as a result of proactive testing of employees returning to work. None of these employees had started work at the mine,” Implats said. Of the remaining five, one was the primary contact and the remaining four were found through contact tracing.
But the company expressed concern that there could be a higher incidence of Covid-19 than initially thought.
“Significantly, 17 of the confirmed cases reside locally, suggesting the prevalence of Covid-19 among local communities is far higher than the company’s initial estimates had indicated,” Implats said.
2. Rate cut expected:
Another rate cut is expected on Thursday, after a scheduled meeting by the monetary policy committee this week. The consensus expectation is for a 50-basis point cut.
3. Net-1 linked to new SASSA deal:
The company that the department of social development has appointed to help digitise its coronavirus social relief grant application process has links to disgraced Cash Paymaster Services, the firm that was kicked off the tender to pay social grants two years ago.
However, its CEO says there is nothing untoward about GovChat’s new partnership with the South African Social Security Agency because it won’t be earning anything from facilitating the grant application.
SASSA, which distributes more than 17 million social grants to needy South Africans every month, cancelled its R10 billion social grant payment contract with CPS. This emerged in court papers in May of 2018. The cancellation came four years after the Constitutional Court declared it invalid in 2014.
The agency then found a way to extend the contract, despite the court order that it must re-run the social grants tender.
However, GovChat CEO, Eldris Jordaan, said the company took up the Covid-19 grants processing deal pro bono and without Sacks or Neishlos’ involvement.
“GovChat, since 2016 until today, has not charged the South African government a single cent, and this too comes at no cost to the South African government. Data ownership also rests with the South African government,” he said.
He said GovChat is kept afloat by Capital Appreciation’s enterprise development fund and another venture capital fund that is wants to “hold government accountable”. The platform is dependent on grant funding, he said.
Jordaan said GovChat, which is one of several providers appointed to facilitate the unemployment grant applications, will only help connect applicants with the department. It will not be involved in processing the grant payments, and neither will any of Capital Appreciation’s payment service businesses, like African Resonance that Neishlos founded.
4. New Zimbabwe banknotes:
Zimbabwe has announced the introduction of two higher denomination banknotes in a bid to ease cash widespread shortages.
Finance Minister Mthuli Ncube this week gazetted the introduction into circulation of new Z$10 and Z$20 notes. Currently the highest denomination is the Z$5 note.
No date has been given for when the notes will enter circulation. A bank manager in Harare said “nothing formal yet” has been communicated from the central bank.
On the sidelines of the 2020 World Economic Forum in Davos early this year, Ncube said higher denomination notes would make it easier for citizens to transact.
The introduction comes at a time that Zimbabwe is experiencing hyperinflation, which reached 676% in March. It will takes more than the combined buying power of both the new Z$10 and Z$20 notes to buy a loaf of bread, which costs just over Z$30 in most outlets.
5. Foschini Group seeking funding:
South African clothing retailer TFG is in advanced talks with its lenders to secure an additional 2.5 billion rand loan facility and has cut its 2020/21 capital expenditure forecast, it said on Friday.
TFG, which also operates in Australia and Britain, said in addition it has concluded discussions with its lenders to extend the deadline to March 2021 from September for a debt covenant test that checks a company’s ability to pay back money to its lenders.
The retailer is placing new projects and developments on hold, which has reduced its 2020/21 capital expenditure by 1 billion rand. It will, however, prioritise investments to grow its e-commerce platforms and digital initiatives, it said.
TFG will also freeze salary increases for the new financial year and has cut board fees and salaries temporarily to preserve cash, while also negotiating lower rental, cancellation or the delay of merchandise orders to prevent inventory build-up.
On Friday, TFG’s shares were up 4.42% versus a 1.05% rise of the Johannesburg All-Share index, as the easing of lockdown restrictions in South Africa boosted sentiment.