News in South Africa 18th October:
1. Load shedding back at stage 4:
Power utility Eskom has pushed load shedding to stage 4 in the early hours of Tuesday morning (18 October) following more breakdowns at its power stations.
Stage 4 will stay in place until further notice, it said.
The move was necessary due to the breakdown of five generators at five power stations overnight. Full details will be published later in the day.
Load shedding was previously expected to remain at stage 2 until Wednesday and only be implemented in the evening peak between 16h00 and 00h00. However, Eskom’s ageing fleet of power stations operates on the edge of collapse, with any breakdown forcing the power utility to enter higher stages of rolling blackouts.
Chief operating officer Jan Oberholzer warned last week that the country will be dealing with persistent load shedding for at least 18 months before new generating capacity can be added to the grid.
“We need another year or year-and-a-half to get out of this,” Oberholzer said at the Agri SA conference near Johannesburg on Thursday. “We are going to go through a tough time over the next year and a half.”
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.
Smartphone users can also download the app EskomSePush to receive push notifications when load shedding is implemented, as well as the times the area you are in will be off.
2. Transnet strike costing berry industry:
Industrial action by workers at state-owned ports and railway operator Transnet costs South Africa’s berry industry as much as R134 million weekly.
Since the strike by Transnet workers began almost two weeks ago, as many as 80 containers of berries that were headed for country’s European markets, have been stuck at the South Africa’s ports, according to industry body BerriesZA.
Workers affiliated with the United National Transport Union (UNTU) and the South African Transport and Allied Workers Union (Satawu) downed tools, initially demanding increases of up to 13.5%.
But Transnet has offered increases below half of what the unions are demanding and last week declared force majeure, citing that the strike would profoundly impact economic activities across all sectors.
Now, it is projected that the strike by the unions could lead to a R1 billion loss a day for South Africa’s economy, according to the Durban Chamber of Commerce.
As the strike drags on, the industry is now ‘gravely’ concerned about the outlook of the berry sector, whose R3 billion export revenue stands to be lost, chairperson of BerriesZA Justin Mudge, said. “Even if a solution to the current impasse is found in the next day or two, the backlog in the berry value chain will take weeks to clear, resulting in hundreds of millions of rands in further losses for the sector,” Mudge said.
The local harvesting season, dominated by blueberries, usually commences in mid-September, with peak exports occurring from October through November. In its 2022/2021 season, the berry industry exported more than 15,000 tons of fruit, primarily to the countries in the European Union and the UK
The association said it will continue engaging with the Transnet team and has urged national ministers to intervene in this crisis urgently to find a solution to the impasse with the unions.
Transnet announced a three-year deal with the United National Transport Union (Untu) on Monday (17 October).
Untu represents 54% of unionised employees, and the agreement includes a 6% increase in 2022 (from 1 April), a 5.5% increase in 2023, and a 6% increase in 2024 (ending March 2025).
Other unions, however, have still not reached an agreement, and Satawu says Untu has ‘insulted’ unions by signing a 6% wage agreement with Transnet.
3. Gauteng getting emergency water:
The Water and Sanitation Department will be sending water to Gauteng.
That’s to deal with the current water shortages affecting a number of municipalities.
Minister Senzo Mchunu met with Rand Water, three Gauteng metros and representatives from local municipalities to understand the current water crisis.
Mchunu has committed to temporarily increasing bulk water allocation to Rand Water.
It’s hoped the emergency relief will help struggling municipalities dealing with water restrictions and shortages.
4. Import duties on poultry excessive:
The South African Association of Meat Importers and Exporters (Amie) is calling for a comprehensive review of import tariffs on poultry, claiming that the duties are another form of tax that consumers cannot bear.
This comes after the South African Reserve Bank (Sarb) Monetary Policy Review report for October indicated that customs duties on frozen whole chicken and bone-in pieces more than trebled between 2013 and 2022, increasing from 27% to 82% and 18% to 62% respectively.
The report said this contributed to rising prices of frozen chicken meat and declining imports, with the effects exacerbated by anti-dumping duties and safeguards “imposed to limit substitution towards the European Union”.
The report added that frozen chicken experienced a cumulative increase in most favoured nation (MFN) tariffs, from 18% in 2010 to 62% in 2021, increasing consumer prices by between 13% and 40%.
“Because chicken is the main source of meat protein for most low-income households in South Africa, tariffs on chicken products are regressive,” the report states, recalling government’s recent decision to temporarily suspend tariffs on chicken imports for 12 months.
It says the suspension should support purchasing power and real consumption by lower-income South Africans.
Call for review
“Given the weak economy and high inflationary environment, and the fact that the Sarb believes that the country has not yet seen a peak in inflation, it is essential that the government do everything it can to ensure that this critical source of protein remains within reach of the most vulnerable in our society,” says Amie CEO Paul Matthew.
“It is time that the government takes a long, hard look at its trade policy, which seems to be protecting large domestic manufacturers at the expense of consumers,” he adds.
5. First interest cut expected in 2024:
The repo rate in South Africa will likely peak at 7.25% by the first quarter of next year, above the pre-pandemic level of 6.5%, FNB forecasts in its latest property barometer.
Furthermore, the bank pencils in “a moderate rate cut” in the first quarter of 2024.
The SA Reserve Bank (SARB) again hiked the repo rate by 75 basis points in September amid concerns over rising inflation. The repo rate is now 6.25%, and the prime rate 9.75%. There is still one more SARB monetary policy committee meeting left for this year, in November.
“Higher inflation expectations have driven more aggressive policy tightening in advanced markets and should result in the SARB further front-loading interest rate hikes,” states the FNB barometer report.
“Steeper-than-expected interest rate hikes and slower wage growth mean housing affordability is becoming more stretched, suggesting the market will slow further in the coming months.”
Property market activity weakened further in the third quarter of 2022 as reflected in properties remaining on the market for longer before being sold. In the second quarter, the average time on the market was 9 weeks and 4 days. In the third quarter, it was 10 weeks and a day.
The latest barometer shows the FNB House Price Index moved lower in September, averaging 3.1% from 3.4% in August. This takes the average house price growth to 3.3% in the third quarter of 2022 – lower than the 3.8% reached in both the second quarter of 2022 and third quarter of 2021.
FNB suggests the rising probability of a global recession and escalating geopolitical tensions could see a more accelerated decline in market activity.
All information sourced from articles posted by: BusinessTech, Business Insider, BusinessLive, ENCA, Moneyweb, and Fin24.
