News in South Africa 21st December:
1. Festive road fiasco:
South Africa’s roads are hazardous, more so over the festive season when dangers multiply with more motorists reported to be driving under the influence. In one week alone, the Western Cape recorded a more than 300% increase in drunken driving arrests, with other provinces echoing similar figures.
While the festive season is a time filled with merriment and cheer, it is also a period when motorists are tempted to drive under the influence, which has led to an increase in drunken driving arrests across the country.
Transport minister Sindisiwe Chikunga urged all road users to “behave on the roads” and to “avoid drinking under the influence of alcohol” after she led the Festive Season Road Safety Awareness Campaign at the N3 Heidelberg Weighbridge in Johannesburg on 20 December.
The campaign forms part of a series of governmental initiatives that attempt to curb irresponsible driving behaviour during this festive season, following an increase in traffic volumes and road accidents on South Africa’s roads.
The Western Cape recorded a 312% increase in drunken driving-related arrests in one week of December. Over the week of 4 to 10 December and the week of 11 to 17 December, arrests rose from 25 cases to 103.
In Cape Town, the city’s traffic services reported that their worst offender was found to be over nine times the legal limit.
The 50-year-old man was arrested at a vehicle checkpoint in Manenberg at 10.35am on Sunday, 17 December, after Cape Town officers conducted a Breathalyser test.
This was according to Maxine Bezuidenhout, spokesperson for the City of Cape Town Traffic Services.
In the same week, KwaZulu-Natal’s Road Traffic Inspectorate arrested a woman in Pietermaritzburg whose blood alcohol level reached five times the legal limit, while 10 motorists were arrested for drunken driving in the Eastern Cape after being stopped at a roadblock near Port St Johns on 16 December.
“Gauteng, KwaZulu-Natal, Eastern Cape, Western Cape, Limpopo and Mpumalanga will receive focused attention this year with the time deployment of traffic officers and road safety activations,” said Chikinga at the launch of the 2023/2024 Festive Season Road Safety Campaign in Ekurhuleni on 26 November.
The Gauteng MEC for Transport and Logistics, Kedibone Diale-Tlabela, launched the Gauteng Festive Season Road Safety Campaign on 13 December.
The Western Cape has also ramped up its traffic safety operations with the deployment of close to 600 traffic officers across the province, said Rebecca Campbell, spokesperson for Western Cape minister of mobility.
“Each district has a comprehensive programme of daily operations. These include patrolling routes, enforcing speed limits, checking vehicle and driver safety, detecting drunk or tired drivers, passenger overloading, and seat belt usage,” she said.
Trends at a national level:
Between 35% and 40% of South African road deaths are pedestrians, said Arrive Alive advocate Johan Jonck. Prohibiting drunken driving is essential to ensure that drivers are alert to their surroundings at all times, he said.
“We are sadly a nation that counts among the highest in alcohol consumption,” said Jonck.
“We need a combination of interventions — creating awareness is one of those — effective enforcement across all our provinces and alerting the public to this is perhaps the most important intervention needed.”
According to national figures released by the South African Police Service (SAPS) Annual Crime Statistics for 2023/2024, driving under the influence has significantly declined over the past 10 years.
The SAPS recorded almost 70,000 reports of driving under the influence in 2013 alone, while in the past three years, these figures have halved.
Jonck said that the increasing trends in alcohol consumption over the December festive season are of national concern and that they have to be taken seriously.
“We need to emphasise to the public that there will be consequences for reckless and drunk driving,” he added.
2. 2024 elections hamper stocks:
Risks around an election expected to be the most competitive since South Africa became a democracy in 1994 cloud the outlook for its stocks next year.
While 40 national elections are due globally in 2024, the vote in South Africa is on Bank of America Corp. strategists’ shortlist of the most market-relevant in developing countries.
Turbulence around the poll — which is yet to be scheduled — threatens to curb the benefit to Johannesburg stocks from falling interest rates and a soft landing in major economies, investors say.
Surveys suggest the ruling African National Congress could lose its absolute majority for the first time since coming to power almost 30 years ago, potentially forcing it to find coalition partners. It’s this scenario that’s spurring the greatest unease.
“With unknown outcomes, there is a lot of uncertainty in the system,” said Duncan Artus, chief investment officer at Allan Gray, which oversees about $31 billion from Cape Town.
“This is weighing on investor sentiment and particularly foreign participation in South African markets.”
An election result that pushes the ANC into a coalition with the Economic Freedom Fighters, the third-largest party in the 2019 vote and a group that advocates for the nationalization of banks, mines and land, “would spook the markets,” according to Bloomberg Economist Yvonne Mhango.
BofA strategists said last month they expect “tense and competitive elections.”
Allan Gray’s Artus expects local investors to continue to proceed cautiously, favouring fixed income over equities, until there is more certainty, he said in emailed comments.
The election isn’t the only concern for South African investors. Since hitting a record high in January, the main stock index has lagged behind the emerging-markets benchmark as a 15-year-old power crisis and crumbling port and rail infrastructure increase costs for local companies and constrain economic growth.
Those headwinds have contributed to valuations that look attractive to some. Stocks in the FTSE/Africa All-Share Index trade at 9.5 times future earnings, compared with 11.6 times for MSCI Inc.’s emerging-market index.
“We think that the South African equity market is very cheap, with a lot of value in the globally operated but locally listed shares, as well as select sectors and stocks within South Africa itself,” said Nicholas Hops of Coronation Fund Managers, which oversees about $33 billion. “
Multiples are low — as are expectations — and many companies have the ability to compound their earnings going forward.”
Here are some more views from investors on the outlook for South African stocks
Coronation’s Hops
- “Elections always create volatility, and we expect an increase in the amount of political noise leading up to South Africa’s 2024 national elections. Ultimately, though, the direction of the economy will have the largest impact on trading and the various sectors both in the short and the long term. South African-focused equities need a meaningful improvement in the operating conditions of the country in order to see better results.”
Ninety One’s Hannes van den Berg, co-head of South African equity and multi-asset investment
- “Markets don’t like uncertainty, and I think if the ruling party remains 50% and above, that’s clear what happens. But if there’s a probability — and I think a lot of polls are indicating there is a probability — that it’s lower than 50%, markets will want to know, ‘OK, what does this mean? And, how are the leaders going to deal with it.’”
- “We think there’s an opportunity in the SA Inc. stocks — retail, banks, insurers and property companies. We also think there’s an opportunity for resources. China’s not going to be this big bang stimulus saviour that they were in 2017, but it will provide more constructive support to commodity demand into next year.
Old Mutual Investment Group fund manager Jason Swartz
- “Once we get closer toward seeing rate cuts, which will probably only happen toward the middle or end of the year, then there will be a lot of opportunity. And, I think probably we could quite easily then get back to those 2023 highs because earnings should have recovered by then.”
- “The eventuality of some cuts in interest rates could see some sort of uplift to really beaten-down domestic cyclicals, like clothing and retail, those businesses that have really struggled in a poor consumer and a low-growth South African environment.”
- “Our big underweight has been on the resources side, and that’s more just because, in terms of where we are in the cycle, we want to be defensive. We think from a commodity price perspective, we could see some downside there.”
3. NHI threatens to collapse health insurance:
In its current form, the government’s NHI Bill threatens to collapse the health insurance industry in South Africa, which employs thousands of people and adds billions of rands in value to the economy.
This is feedback from one of South Africa’s largest private hospitals, Netcare, whose chairman said in its annual report that it is committed to creating a sensible, constructive, and evidence-based National Health Insurance.
However, the government’s proposed NHI Bill is far from that, Netcare chairman Mark Bower said in his board chair’s review.
“The NHI Bill in its current form poses serious challenges of practicality and affordability,” Bower said.
It also lacks clarity on critical issues such as what will be covered by the NHI and what won’t, how it will be financed, and how much it will cost.
“We are particularly concerned about specific provisions in the Bill that prevent medical aid schemes from funding services provided by the NHI,” Bower said.
“In effect, these provisions take money out of the national health system and pose the real threat of collapsing the health insurance industry in SA.”
Bower said that international experience has shown that single-payer healthcare systems, funded by taxation, do not expand access to quality healthcare.
“A multi-payer model would ensure that after paying mandatory NHI tax, those with the means could still fund healthcare privately if they wish, relieving public money to be dedicated to the most vulnerable.”
He added that it is clear that a sustainable healthcare system that provides quality care to all needs strong public and private sector collaboration.
To this end, Netcare has made comprehensive submissions to the National Council of Provinces and the National Assembly on proposed amendments to the NHI Bill.
However, the Bill was passed by both chambers of Parliament without any consideration of the proposed amendments.
Through Business Unity South Africa and Business for South Africa, Netcare submitted a formal petition to President Ramaphosa asking him to send the Bill back to Parliament for revision.
“The petition expresses our collective belief that the Bill in its current form is not only unworkable and unaffordable, but also unconstitutional on substantive and procedural grounds,” Bower said.
Netcare said it stands ready to engage constructively with the government on various ways of ensuring universal access to quality healthcare in a sustainable way.
4. Sanral’s R6.4bn New Year’s construction boom:
South Africa’s beleaguered construction industry has been given a significant festive season boost by the SA National Roads Agency (Sanral).
Sanral CEO Reginald Demana said on Wednesday the road agency has started adjudicating R6.43 billion worth of tenders, which will be awarded early in 2024 and provide a welcome bonanza for the construction industry.
Demana said 1 040 bids were received for the 77 tenders, illustrating the significance of Sanral projects in the construction industry.
“We are encouraged and, at the same time, humbled by this overwhelming response.
“It also tells us that the numerous engagements we had with interested and affected parties across the country has paved the way for more effective collaboration with all our stakeholders in the industry,” he said.
The official shutdown period for the construction sector commenced on 14 December 2023, and the industry will resume work on 9 January 2024.
77 tenders
Demana said on Wednesday the 77 tenders for various road construction projects officially closed on 14 December 2023 after they were advertised at the end of November 2023 under the roads agency’s interim PPP.
“Sanral is currently adjudicating 77 tenders, which will give the construction industry a shot in the arm and get it off to a good start in the new year, helping to create thousands of jobs and inject billions of rands into the economy,” he said.
“While the rest of South Africa is winding down for the festive season, Sanral is working hard to get South Africa’s construction industry off to a flying start in the new year.
“The fact that our officials are working through the holidays to adjudicate these tenders is an indication of our commitment to fulfilling the promises we made to the South African public, and it shows that we are getting back to business as soon as possible.
“We understand the role that construction and infrastructure development plays in the construction industry and we are determined to overcome the disruptions which resulted from court challenges to our PPP adopted in May 2023.
“We are squarely focused on developing, maintaining and improving the national road network in line with our mandate from government,” he said.
Playing catch up
Demana added that Sanral is making every effort to catch up on the time the industry had lost by putting out 86 of the less complex consulting and construction tenders that were cancelled and subsequently readvertised at the end of November.
The breakdown of the 1 040 bids is:
- 124 bids for national contracts with an estimated value of R350 million;
- 279 bids received for the Northern Region, comprising Gauteng, Limpopo, Mpumalanga and the North West, with an estimated value of R548 million;
- 247 bids received for the Eastern Region, comprising Free State and KwaZulu-Natal, with an estimated value of R2.1 billion;
- 240 bids received for the Southern Region, which comprises the Eastern Cape, with an estimated value of R2.83 billion; and
- 150 bids for the Western Region (Northern Cape and Western Cape) with an estimated value of R600 million.
Progress welcomed
Master Builders South Africa (MBSA) executive director Roy Mnisi on Wednesday welcomed Sanral’s announcement about the adjudication of these tenders as “a positive step” because the construction industry would want to see these projects happening.
Mnisi said that taking into account the size of the contracts that Sanral issues from time to time, which involve quite a lot of money, main contractors and subcontractors are appointed, and it helps the industry if there are projects like this coming from the likes of Sanral, Eskom and other state-owned enterprises.
“We look forward to this, and hopefully, Sanral will be able to finalise the adjudication process and get the ball rolling as soon as the year begins,” he said.
5. Looming nurse shortage:
Private hospital group Netcare has once again warned that with the healthcare system heavily reliant on a nursing workforce of above the age of 50 and not bringing in new nurses, this is becoming a societal challenge that needs to be addressed urgently.
Chair Mark Bower in a letter to shareholders published in Netcare’s annual report on Monday said the worsening shortage of qualified nurses in SA should be a concern at all levels of society, not only for healthcare service providers.
All information sourced from articles posted by: Daily Maverick, BusinessTech, DailyInvestor, Moneyweb, and BusinessDay.
