News in South Africa 19th October:
1. Gauteng – water shortage:
South Africa’s major cities in the Gauteng Province – the country’s economic heartland – are experiencing major water shortages. In Johannesburg and Tshwane taps have run dry, with numerous areas experiencing intermittent supply while some areas have no water at all.
The province has metropolitan areas – the City of Johannesburg, Tshwane and Ekurhuleni. All are affected. Rand Water, the water authority for the region, has imposed restrictions of 30%. This will be revisited when the system recovers.
The last water shutdown was in November 2021 when Rand Water cut off water for 54 hours so that it could to do infrastructure maintenance. There were also restrictions during the drought in 2015-2017.
The province serves as a perfect example of how an area can experience water shortages and intermittent supply even though dams are full.
The biggest problem lies with decaying infrastructure. This includes water storage, water supply and treatment. In addition, water resources are poorly managed. And there’s been poor planning, a lack of financing to maintain ageing infrastructure and to keep up with rapid urbanisation.
The crisis in Gauteng has been developing over many decades. The water and sanitation infrastructure in Johannesburg is old – some water pipes were installed nearly a century ago. In addition, there’s been exponential growth – of businesses and the population.
Gauteng is South Africa’s smallest province, but contributes 45% to the country’s total economic output. All economic sectors have expanded in the past decades.
The province’s population has also increased to just over 16 million – up from 12 million in 2011.
Rand Water has indicated that high water consumption is to blame for the current shortages. Estimates suggest that water consumption in Gauteng per person per day is over 300 litres, well above the global average of 173 litres. Importantly, this estimate includes non-revenue water – water that’s lost before it reaches the consumer.
What’s needed
The following steps should be considered to try and ensure continued suitable water supply within the Gauteng Province as well as other areas experiencing the same issues:
A suitable budget needs to be made available immediately to address priority areas. Proper planning and informed actions, not just promises, is a major requirement. Johannesburg Water estimated in 2020 that R88 billion was required for the replacement of infrastructure with a total renewal backlog of R20.4 billion.
The entity has been allocated a R3.3 billion multi-year capital budget aimed at replacing water and sewer pipes, upgrading water storage infrastructure, a wastewater treatment works programme and lastly, repairing and maintaining outdated infrastructure. A further R2.3 billion has also been allocated to address burst pipes across the province.
This amount of money might be a suitable investment to address the dilapidated state of infrastructure. But it should have been assigned much sooner.
Dilapidated infrastructure needs to be upgraded and properly maintained. The lack of maintenance has contributed to leaking pipes and faulty infrastructure which now needs to be fixed as a matter of urgency as it contributes to major physical water losses. This won’t solve the problem overnight given that there have been decades of neglect. But a start needs to be made.
Capacity constraints or lack of skills need to be identified and addressed.
Private sector investment in water infrastructure needs to be incentivised together with the promotion of private-public partnerships.
Implementation of water conservation and demand management.
Political will to move away from simply providing infrastructure to maintenance, rehabilitation and upgrading of existing infrastructure.
2. 80% of Transnet workers back:
The devastating Transnet strike is coming to an end after the United Transport & Allied Trade Union (Untu) agreed to a 3-year wage deal on Monday.
On Tuesday, Transnet was still in discussion with the South African Transport and Allied Workers Union (Satawu) says CEO Portia Derby.
Untu is the majority union, representing more than 50% of the Transnet workforce.
Derby says 70-80% of workers were back on the job on Tuesday.
She says the Bargaining Council extended the wage agreement to all workers, so for those who have not yet returned it’s still a case of no work, no pay.
What we’ve done is given all of our workers a reprieve to get back to work by Thursday, seeing as some of them might have travelled far as a result of the strike. – Portia Derby, CEO – Transnet Group
Derby explains that, in essence, the Transnet strike lasted just over a week considering it was staggered with Untu kicking off before Satawu did.
However, she acknowledges this create significant backlogs both at ports and for rail.
The backlog at ports should be cleared within the next 6-9 weeks.
At the ports is where the backlog becomes more difficult because you’re moving containers, there are yards… allocation of spots where containers are kept… so in port terminals we have we have a lot of hard work to do over the next couple of weeks. – Portia Derby, CEO – Transnet Group
In the case of Transnet Freight Rail they need about 24 to 48 hours for the backlog… and another 3-7 days to catch up on the critical flows… But the real problem is that time lost is time lost… In the case of TFR in particular, we would not be able to make it up in this year. – Portia Derby, CEO – Transnet Group
3. Inflation keeping rates up:
South African borrowing costs will only be lowered when inflation’s retreat toward the midpoint of the central bank’s target range is sustained, Reserve Bank Governor Lesetja Kganyago said.
The bank officially targets price growth in a band of 3% to 6%, though its monetary policy committee prefers to anchor inflation expectations close to the midpoint of that range. It’s responded to the worst global inflation shock in a generation quicker than several of its peers and raised the policy rate by 275 basis points since November.
“Once you see inflation declining back within the target and moving toward 4.5%, which is what we actually aim for, that would be telling you that the interest rate cycle has done its job,” Kganyago said in an interview with Johannesburg-based broadcaster eNCA Tuesday. “If that is sustained, then it’s time to adjust policy.
The central bank said in its six-monthly Monetary Policy Review on October 4 that an environment of heightened uncertainty with rising costs and domestic price pressures that have “intensified sharply” means policy makers may still need to raise interest rates to “levels that are consistent with a stable and lower inflation rate.”
4. All clueless about new travel pass:
A new online travel declaration form is due to be introduced by the South African Revenue Service (SARS) at Johannesburg’s OR Tambo International Airport on 1 November. But nobody, including government, knows how it will work.
The country’s embattled tourism sector is gun-shy, explains the CEO of the Southern Africa Tourism Services Association (Satsa), David Frost during Tuesday’s briefing to media and stakeholders on SARS’ recent announcement of the South African traveller management system. It also comes at a time when tourism is banking on a busy summer season following two years ruined by pandemic-induced restrictions.
And while the pandemic crushed South Africa’s tourism industry, failing government-led initiatives, like the e-visa programme and airports’ biometric systems, have made travel-focused businesses jittery when confronted with new systems imposed by the state. SARS’ traveller management system – or travel pass – is one such project sending shivers through the sector.
“South Africa will be introducing an online traveller declaration system to simplify passenger movement at South African airports,” SARS said in a notice on 12 October.
“The new system requires all travellers, including South African citizens and residents, children and infants, leaving or entering South Africa by air to complete and submit an online traveller declaration, as well as receive a traveller pass before they travel.”
By SARS’ own description, this new travel pass, to be launched at OR Tambo on 1 November, will have far-reaching consequences for passengers moving into and out of South Africa.
But the practical details on how this pass will work and what the exact implications on travellers will be is not yet known. That travel associations, like SATSA, say they weren’t consulted muddies the waters even more. The decision to launch this untested system at the start of South Africa’s summer holiday season has also been heavily criticised.
SATSA and SARS agreed to host a briefing on Tuesday to deal with these concerns. But a day before the event, SARS backed out, citing, according to Frost, “insufficient alignment within government on this project.”
“Obviously, it’s massively underwhelming,” says Frost on SARS’ unwillingness to engage industry on this new system just two weeks before it’s due to be implemented.
“They [SARS] realise, and I’m just going to put it in the vernacular, that they’ve stuffed up [and] they apologise profusely.”
5. Former Steinhoff CEO assets seized:
The Reserve Bank has seized more than R1.4 billion worth of assets belonging to former Steinhoff CEO Markus Jooste, his wife and his family trust.
This is the first move against the former CEO, relating only to suspected exchange control infringements rather than the broader fraud involving R106 billion in “fictitious and irregular transactions” that duped a wide array of pension funds and investors in the country five years ago.
The court order freezes Jooste’s home in Hermanus, the Lanzerac wine farm in Stellenbosch, five vehicles, about R100 million worth of art, jewellery and other assets.
All information sourced from articles posted by: BusinessTech, EWN, Moneyweb, Business Insider, and BusinessLive.
