News in South Africa 20th January:

1. Four day work week debate:

The four-day workweek, and the flexibility it could provide, is a hot topic at the annual World Economic Forum in Davos, Switzerland, this year. 

Four day work week debate
Photo by fauxels

This comes shortly after the results of a six-month trial on the subject were released. It found participating companies had increased revenue and improved employee health and well-being. The experiment, conducted by 4 Day Week Global, asked 33 companies with employees in six countries to decrease their workweeks to four days, or 32 hours, in 2022 to determine whether employees’ productivity would remain the same while they worked 80% of the typical workweek. 

Productivity should be at the core:

Each of the panellists understood the global workforce’s desire for flexibility. While a four-day workweek seems like an obvious answer, there are some key factors to consider before making the change, they agreed. 

For instance, the importance of productivity should not be overlooked, van Gennip said.

“If you look at the amount of work that’s ahead of us — that’s climate transition, healthcare — we cannot afford for everybody to go to a lower number of hours with the same productivity,” she added.

But there are productivity benefits to giving employees more time to invest in themselves, which could come through the four-day workweek or other rescheduling methods.

“If you really give people enough time to invest in themselves, the hours that they put into projects and work will become more productive,” she said. 

While work-life balance is important, a universally shortened week doesn’t make sense for many sectors of business, the panellists said. Instead, workplace flexibility needs to be aligned with the workers it will affect.

For example, less time on the job may not benefit service or hourly workers, as some are looking for more opportunities to earn money, Hoffman said. The four-day week “is very much a discussion for the upper class,” van Gennip said. 

Flexibility through reorganisation:

Whether it be a four-day workweek or another method of schedule restructuring, a focus on both flexibility and productivity also benefits companies, van ‘t Noordende said.

“This is a business imperative,” he said of considering employee flexibility, because the talent pool is scarce. Businesses need to start treating their talent with the same respect as their customers because people are willing to leave if they aren’t satisfied, van ‘t Noordende added. 

The panellists suggested taking concrete steps, including shortening meeting times — like changing 30-minute meetings to 25 minutes — or reorganising the type of work done by employees and outsourcing administrative tasks to lessen workloads.

2. ‘Real’ matric pass rate under 55%:

While the Department of Basic Education is celebrating the official 2022 matric pass rate of 80.1%, critics of the government’s methodology in determining the number are pushing what they call a more realistic figure.

The DBE announced the matric pass rate on Thursday evening (19 January), noting that 922,034 matrics registered to take the exams – of these 87% (725,146) were full-time candidates.

However, the department’s official pass rate does not factor in South Africa’s worryingly high drop-out rate, with the opposition party the Democratic Alliance reporting that the dropout rate for the class of 2022 was 31.8%.

In other words, 336,364 learners that would have been part of the class of 2022 were not, bringing the ‘real’ pass rate down significantly to 54.6%.

“Every year, the DA calculates the real matric pass rate by bringing into account the number of learners that dropped out and never made it to matric. Some learners opt out of schooling at the end of grade 9 to pursue their education through technical and vocational education and training (TVET), but a large number simply stop their education entirely,” the DA said.

“To bring the TVET learners into account the DA calculates the real matric pass rate from the grade 10 cohort that ought to complete matric.”

The ‘real’ 2022 matric pass rate is only 54.6%, and is an increase from 2021’s 50.4%, but remains very concerning, the party said.

Calculations done by MyBroadband put the figure even lower, at under 53%.

“What makes the national 45.4% fail rate and high dropout rate particularly concerning is that many of those learners contribute to the country’s staggering youth unemployment of 59.6% – a little over 3.5 million youth are not in education, employment or any form of skills training,” the DA said.

“Given the fact that the Minister of Basic Education, Angie Motshekga, recently revealed in an answer to a parliamentary question from the DA that her Department has not established a system of tracking learners that exit the public schooling system and does not have information regarding learners’ further education or employment paths in line with outcome 3 and 4 of the Medium-Term Strategic Framework of DBE, means a high likelihood of learners joining the unemployment lines once they leave school, whether through dropping out or after graduation.”

3. JSE losing listings:

South Africa’s main stock exchange will probably continue haemorrhaging listings over the next year as companies grapple with onerous regulatory and funding conditions, making it less attractive to raise capital through initial public offerings.

“The macro-economic environment is not particularly conducive to raising capital in South Africa,” Kevin Brady, the chief executive officer of A2X, one of the top stock exchanges in the country, said in an interview on Wednesday.

“The regulatory requirements to have a primary listing are quite burdensome from cost, to time, to compliance departments, particularly for the smaller companies, which are the ones we are seeing de-listing.”

South Africa’s primary stock exchange operator JSE Ltd. has seen a steady decline in the number of listed companies, with the FTSE/JSE Africa All Share Index currently featuring 136 companies, down from 143 at the start of 2022 and 165 in 2012, according to data compiled by Bloomberg.

Small companies are also struggling to keep up with the regulations imposed on listed entities, according to Brady.

“We have swung the pendulum too far on regulation and investor protection and we haven’t spent enough time on how do we grow this market,” he said.

The JSE has proposed changes to its listing framework, as it seeks to stem the de-listing trend, and draw in more listings. Among the proposals is a review of the free-float requirement and allowing companies listed in other African exchanges to access the JSE via depositary receipts.

4. Load shedding crippling municipalities:

With Stage 6 load shedding more regular, stretching as far as the eye can see, municipalities heavily reliant on electricity sales for revenue – which is most of them – are going to find themselves wards of the state.

Load shedding for eight hours a day means electricity sales could be reduced by a third.

In some municipalities, electricity sales account for 80% of revenue. The impact is less severe in the eight metros, where electricity accounts for an average of 34% of revenues.

South African municipalities are already in dire financial straits, with only 16% of the 257 municipalities receiving clean audits from the Auditor-General, and many reliant on substantial transfers from the provinces and national government.

“Metros add a margin to their bulk purchases of electricity from Eskom and that allows them to reinvest in the network and to cover other municipal budget items,” says Glen Robbins, head of research at the Toyota Wessels Institute for Manufacturing Studies in Durban.

“Relying on this as a source of revenue appears to be increasingly volatile and is in some cases narrowing. As a result, we can expect further city budget squeezes, made worse by some user defection and persistent billing and payment challenges.”

Big hit

Municipalities earn a margin of 15% to 25% on reselling electricity purchased from Eskom, but these revenues are now diminishing, says Ratings Afrika analyst Leon Claasen.

“The metros generate huge amounts from electricity sales. Load shedding has therefore an enormous effect on their revenues.

“The revenue foregone is permanent and has long-lasting effects on their financial sustainability,” says Claasen.

“Some of the lowest-scoring municipalities generate relatively large amounts of revenue from electricity sales. Since their financial sustainability [is] doubtful, the effect of load shedding is quite severe on their financial situation and ability to provide services.”

5. Solar powered street lights:

Joburg City Power said it will soon be rolling out solar-powered street lights across the city that can stay on during load shedding.

City Power spokesperson Isaac Mangena said this is part of the entity’s initiative to ensure the lights stay on for Joburg’s residents.

Mangena was speaking in Alexandra on Thursday afternoon, where city power concluded its three-day disconnection drive for businesses that defaulted on their utility accounts.

Mangena said that load shedding had created an enabling environment for crime to thrive.

He added that the solar-powered street lights will contribute to keeping residents safe during evening load shedding.

“When lights go off during load shedding those apollo lights should remain on so that at least there could be some level of illumination so that people can be able to move around. Cars are hijacked during the darkness and people cannot walk around or do anything.”

Mangena said the initiative will also assist in preventing other government infrastructure, like traffic lights from being stolen or vandalised in the dark.

He said they expect to begin the rollout of the solar-powered street lights within a month.

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

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