News in South Africa 19th March:

1. Third wave could lead to credit downgrade:

South Africa’s finance minister said on Thursday that a third wave of the coronavirus could destabilise the government’s efforts to control its finances and avoid a further downgrade of the country’s sovereign rating.

Third wave could lead to credit downgrade
Image taken by: RODNAE Productions

Two of the top three rating agencies – Moody’s and Fitch – downgraded South Africa’s sovereign rating further into junk in November on concerns of rising debt levels and the government’s ability to raise revenues and pay off debt amid the economic shock inflicted by the pandemic.

Tito Mboweni, replying to questions in a virtual parliament session, said the rating agencies would be looking closely at how the government was moving on its promised structural reforms such as infrastructure growth, telecom spectrum allocation, reliable power supply and reducing the public sector wage bill.

“If it (reform) was seen to be deviating from our fiscal framework, then we’re going to be in trouble,” Mboweni said, and warned that a third wave of coronavirus could hurt the efforts.

A combination of relaxed regulations around gatherings and the Easter holiday period could push South Africa’s third Covid-19 wave up on the calendar, says professor Alex van den Heever, chair of social security systems administration and management studies at Wits University.

Van den Heever told the Citizen that excess death data shows that there are already signs in the Free State and the Western Cape that surges may be on the way.

“It is not clear that government has hit on the most efficient configuration yet. The curfew was probably the most effective at curtailing high-risk super-spreading events,” he said. “However, large indoor religious gatherings represent a significant potential driver of transmissions over the Easter weekend next month,” he said.

2. 8 Independent electricity suppliers approved:

Government has approved eight preferred independent power producers to produce 1 845 MW of additional electricity to support Eskom.

The companies, which will provide power generated by solar energy, wind, liquified natural gas and battery storage, are: ACWA Power Project, Karpowership SA Coega, Karpowership SA Richards Bay, Karpowership SA Saldanha, Mulilo Total Coega, Mulilo Total Hydra Storage, Oya Energy Hybrid Facility, and Umoyilanga Energy.

The renewable electricity produced by these companies is expected to flow to the grid from August 2022, providing a much-needed capacity boost to Eskom, which has for many years been crippled by outages which has been blamed for slowing economic growth.

Mantashe said the added renewable energy is meant to “supplement Eskom electricity supply” instead of merely waiting until the power utility’s operational challenges are resolved.

“If you add megawatts, you will see that we are supplying an equivalent of almost two power stations of energy, and we are going to grow that capacity … we are concerned about the situation, that is why we think this programme is urgent.”

3. 2bil recovered by UIF:

Employment and Labour Minister Thulas Nxesi told Parliament on Thursday afternoon that the Unemployment Insurance Fund (UIF) had already recovered more than R2 billion that was inappropriately paid out last year in the fund’s Temporary Employer-Employee Relief Scheme (TERS).

Last year the office of the Auditor General conducted an audit of the disbursements from the TERS scheme which was meant to give funds to employers to allow them to continue paying salaries during the hard lockdown aimed at curbing the spread of Covid-19.

The Auditor-General found that the disbursements were riddled with fraud and transfers to undeserving recipients, including prison inmates, university students and the deceased. It also found the scheme overpaid and underpaid to employers in some instances.

“Slightly above R2 billion has been refunded thus far to the UIF. The follow-up money is also on a daily basis recovering money and employers are entering acknowledgement of debt agreements. One thousand cases have been referred to SAPS [the SA Police Service] for criminal investigation and 15 [cases] have already [been] referred to court with 80 [suspects] already appearing in court,” said Nxesi.

4. Protests over bad roads:

Taxi associations, farmers’ groups, businesses and community members blocked roads into and out of Ficksburg in the Free State on Wednesday in protest against the “deadly” state of roads in the area.

The protests quickly spread to the neighbouring towns of Fouriesburg and Clocolan. Protest organisers from all sections of the community say their genteel letter-writing campaigns came to nought, so they decided to take to the streets and bring the towns to a standstill.

The protests appear to have yielded immediate dividends: Free State MEC for Police, Roads and Transport Sam Mashinini was on the scene within hours to hear the residents’ complaints. He got first-hand insight into what has riled the local residents when he had to navigate his vehicle through 18 kilometres of what residents describe as one of the worst roads in the country.

Mashinini promised to commence repair work on the three most problematic roads by Monday next week, overseen by the province’s chief road engineer. The poor state of the roads has resulted in several avoidable deaths, according to one of the protest organisers, Selloane Lephoi.

5. Northam Platinum released figures:

Northam Platinum has released half-year results this morning, which shows a 74% increase in headline profit to R3.3 billion. While it saw a decline in the metals it sold, the 9% decline in the rand/dollar exchange rate and a 50% increase in metal prices gave it a boost.

All information sourced from articles posted by: BusinessTech, Business Insider, Reuters, Fin24, and Moneyweb.

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