News in South Africa 20th November:
1. SABC suspends retrenchments:
The SABC board has suspended its retrenchment process for one week, a spokesperson announced on Thursday.
“The board of the SABC would like to announce that it will suspend the [Section 189] process for a period of seven days. This will allow all stakeholders to further engage and explore further options in an effort to ensure the financial sustainability of the SABC,” a statement released by acting SABC spokesperson Mmoni Seapolelo said on Thursday.
“The SABC is committed to meaningfully engaging with all its stakeholders as it continues to make the corporation financially sustainable in order to fulfil its public mandate,”Mmomi Seapolelo said.
The SABC was planning to retrench around 400 workers, it announced on Wednesday.
The public broadcaster was also considering a three-year salary freeze; reducing employee annual leave from 35 to 28 days; stopping the cashing in of leave; and reducing sick leave from 30 days a year to the 36 days in three years stipulated by law.
Hannes du Buisson, spokesperson for union Bemawu, said the suspension of retrenchment processes for seven days “means nothing”.
“Suspending the process for seven days does not cure the defective process and its misplaced rationale.”
2. Interest rate unchanged:
Interests rates will be kept on hold at 3.5%, Reserve Bank Governor Lesetja Kganyago has announced.
Kganyago was speaking at a briefing on Thursday after the bank’s Monetary Policy Committee concluded its last meeting for the year.
Economists had predicted a “close split” among members. According to Kganyago two members were in favour of a cut while three were not.
Inflation is expected to remain “well contained” over the medium term. The bank’s Quarterly Projection Model indicates no further repo rate cuts in the near term, with increases being introduced in the latter part of 2021.
The MPC also revised the year’s economic contraction projection to -8%, an improvement from the -8.2% projected at the last meeting. “Locally, further easing of lockdown restrictions has supported economic growth, with high frequency indicators continuing to show a pickup in economic activity during August and September,” Kganyago said. During a question and answer session, he explained that there has been higher economic activity in manufacturing and mining, which is why “robust” performance is expected in the third quarter.
3. Ratings downgrade possibility:
The South African Reserve Bank’s monetary policy committee announced on Thursday that rates would remain unchanged while the economy showed some signs of picking up.
RMB chief economist Ettiene le Roux said that Reserve Bank Governor Lesetja Kganyago has been clear about growth forecasts.
“I think the governor explained it quite nicely why they are slightly less pessimistic about the growth for this year. It basically has to do what they said it would be, a very strong down stack when you think about the economy in the third quarter.”
Kganyango said that Moody’s and S&P Global may delay pronouncing on their ratings. Either way, he said the bank would respond accordingly.
4. Netcare warns of losses:
South Africa’s third largest hospital group, Netcare, warned that it may report a R2.3 billion loss as patients shied away from surgeries in the wake of Covid-19 pandemic.
In a trading update released on Thursday, the company tallied up its revenue loss due to the pandemic to be in the region of R3.7 billion. Netcare, which comes third in size compared to the likes of Mediclinic and Life Healthcare, is expected to report its annual results next week.
Netcare has seen fewer than normal patients in its hospitals, after they postponed their surgeries when South Africa went into its hard lockdown in March. The group which operates 56 acute hospitals, with 10 471 beds, ended its year with 52.5% full week occupancy levels compared to 66% in 2019 and 56% weekday occupancies, down form 71.6%.
5. Electricity theft in upmarket areas:
While electricity theft and illegal connections are typically associated with townships and informal settlements in South Africa, Eskom says the problem is far more widespread than that, with the utility recently uncovering bypassed metres in the more upmarket Waterfall Estates.
Speaking to John Perlman, Eskom senior manager Daphney Mokwena says they have found issues at the estate and have corrected them.
While most residents are compliant, Eskom said it has found a number have illegally bypassed their meters.
The power utility is on a campaign to clamp down on electricity theft to help its financial losses.