News in South Africa 19th September:
1. Eskom in dire straits:
Following an urgent board meeting while Stage 5 load shedding was biting on Saturday 17 September, Eskom will on Monday start to urgently procure additional energy from existing independent power producers.
This announcement was made during an emergency media briefing by Eskom group chief executive André de Ruyter on Sunday morning. He hopes to access about 1 000MW from existing independent power producers like Sasol and Sappi and hopes to have it online within a week or two.
The struggling utility was forced to intensify load shedding to Stage 6 around 4:00 on Sunday morning after two further coal-fired generating units tripped.
This means South Africans are left without electricity for around a third of the day.
Eskom chief operating officer Jan Oberholzer said that while staff are working flat-out to return units to service, it must replenish its emergency reserves and high levels of load shedding are expected for most of the coming week.
At the time of the media briefing Eskom had 7 062MW of generation capacity on planned maintenance outage and 15 630MW was unavailable due to breakdowns. The expected peak evening demand was 26 399MW, which left a shortfall of 5 282MW.
While Eskom was hoping to have the dam levels of its emergency pump storage units replenished by Monday morning the diesel levels at its Ankerlig open-cycle gas turbines (OCGT) was at a mere 32%. Due to the logistics of transporting diesel by road, this was only expected to recover later in the coming week. The diesel level at the other OCGT plant Gourikwa was at 85%.
Oberholzer explained that depleting the 6 000MW of emergency reserves could result in a total blackout if they were unavailable when needed by the system.
Eskom earlier disclosed that it has already depleted the whole diesel budget for the year up to end of March 2023. According to Oberholzer the CFO Calib Cassim has made a further R550 million available despite Eskom’s liquidity problems.
De Ruyter gave the assurance that there is no indication the current generation shortage is due to sabotage.
The CEO added that Eskom has asked municipalities to identify non-essential loads that can be switched off and will engage organised business for further energy savings like limiting the period lighting, heating and air conditioning runs.
2. Interest rate hike on Thursday:
The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) is set to hike interest rates on Thursday (22 September) this week in an attempt to support the rand and control inflationary forces, but economists differ in expectations on how much.
A recent survey conducted by the international comparison website Finder revealed that half of the economists polled (50%) expect an increase of 50 basis points (bps) at the September meeting.
A further 44% expect it will rise as much as 75bps, and only one respondent predicts a 25bps increase.
Despite all expecting varying degrees of action by the SARB, the majority believe that the increase should only be 50bps.
The economists polled in the survey included experts from the Bureau of Economic Research, Standard Bank, Old Mutual, Wits Business School, Investec and more.
Jee-A van der Linde, an economist from Oxford Economic Africa, said she expects a 50bps hike as a result of high inflation that peaked in July that increased to 7.8% y-o-y.
Van der Linde said that the SARB might want to see further evidence that the peak is actually behind us. Elna Moolman, Standard Bank’s head of macroeconomic research, added that 50bps should be enough.
She noted, however, that with higher headline and core inflation, alongside wage increases, the SARB would be reluctant to slow its rate hikes.
3. ANC staff strike:
African National Congress (ANC) staff members say they’re out to ensure a total shutdown of the governing party’s offices across all provinces on Monday.
Disgruntled staff members say the ANC has failed to do good on its promise to pay their salaries despite past commitments to do so.
Aggrieved staff members say they’re disappointment with ANC leaders, who they call uncaring.
Mandla Qwane, who speaks for disgruntled ANC staff members, says most workers have not been paid for the past two months, while others are still owed salaries from three months ago.
“We have been in engagements with ANC management and also the treasurer-general wanting to understand when salaries are going to be paid and the response we’ve been getting is nobody knows,” Qwane said.
He said that Monday’s protest would be intensified.
“There shall not be work in all the offices of the ANC. We expect employees of the ANC who are under the employ of Luthuli House not to report for duty,” Qwane said.
Attempts to get a response from ANC spokesperson Pule Mabe on the matter have not yet been successful.
4. UK to ramp up support:
The days after Monday’s funeral of Queen Elizabeth II are set to be marked by a flurry of activity from the UK’s finance and business ministries as the new government announces measures aimed at capping energy prices and boosting economic growth.
British Business Secretary Jacob Rees-Mogg is expected on Wednesday to set out the details of legislation that will help companies deal with soaring energy costs, while Friday is likely to bring an emergency budget from new Chancellor Kwasi Kwarteng, the Times of London reported.
Kwarteng and Rees-Mogg are together expected to announce tens of billions of pounds in tax cuts combined with billions more in energy support measures designed to stave off a recession and to buffer British households and businesses from soaring energy prices during the winter.
Prime Minister Liz Truss made cutting taxes to boost economic growth the centerpiece for her winning campaign for the leadership of the Conservative Party. She was chosen to lead the Tories earlier this month after the resignation of Boris Johnson in July.
The Times of London reported that Kwarteng is reviewing the UK government’s fiscal rules ahead of the announcement next week of £30 billion ($34.3 billion) of tax cuts, which would presage further measures in a full budget plan in November. The planned tax cuts could breach current fiscal rules that require the government to reduce the debt as a percentage of economic output, the paper said.
Kwarteng is also drawing up plans for a blanket discount on business energy bills, The Daily Telegraph reported. Under the program, businesses could receive a fixed reduction to the rate they pay per kilowatt hour, the paper reported.
A spokesman for the Department for Business, Energy and Industrial Strategy declined to comment on the reports.
Truss has already said her government will provide a support package for household energy bills that will cap their energy costs at £2,500 for an average annual bill with the difference between the capped price and the market price covered by a taxpayer-funded subsidy to energy companies.
5. Honey factory saving bees:
A honey business headquartered in the small town of Taung in South Africa’s North West province is on a mission to build and distribute a million hives to repopulate dwindling bee colonies and empower rural communities.
The world’s bee population is declining because of intensive farming practices, land-use change, mono-cropping, pesticides, and higher temperatures associated with climate change. Present species extinction rates are 100 to 1,000 times higher than normal due to human impacts, according to the Food and Agriculture Organization of the United Nations (FAO UN).
This bee die-off threatens to intensify food insecurity. About one-third of commonly eaten foods rely on crops pollinated by honeybees, according to the US Food and Drug Administration (FDA).
South Africa’s rural North West, home to towering Acacia trees, has traditionally been abuzz with the sound of honeybees. The area has a rich history of indigenous beekeeping and honey collecting.
During South Africa’s hard lockdown and alcohol bans, these indigenous beekeepers in and around Taung, with an innate knowledge of honey harvesting, turned to producing mead, explains Lesego Holzapfel, founder of Bee Loved Honey.
“But their methods of harvesting honey have been terrible for the environment.”
With no sophisticated equipment to safely harvest honey from wild hives, these indigenous beekeepers often resort to setting fire to the surrounding area, with smoke pacifying bees. In the process, these fires sometimes rage out of control, destroying vegetation and bee colonies.
Bee Loved Honey uses vastly different methods of honey harvesting, with an emphasis on caring for the bees and protecting the environment. These methods are taught, through training sessions, to both unemployed youth and older indigenous beekeepers in rural areas as part of Holzapfel’s mission to produce pure honey for sale, create jobs, and repopulate bee colonies.
To date, Bee Loved Honey has deployed more than 600 hives and collected more than seven tons of honey. This brand of honey recently received FDA approval and is already kosher certified. With this, Holzapfel is keenly eyeing the export market, wanting to build a proudly South African brand that is revered by overseas consumers for its superior taste and sustainable sourcing practices.
All information sourced from articles posted by: Moneyweb, BusinessTech, EWN, Fin24, and Business Insider.
