News in South Africa 22nd October:
1. Civil groups demand end to lockdown:
Public participation group Dear South Africa has asked Cooperative Governance and Traditional Affairs Minister Nkosazana Dlamini-Zuma to provide the evidence that supported her decision to extend the lockdown earlier this month or prepare for an urgent court date.
In a letter delivered to the minister on this week, Dear South Africa attorneys Hurter Spies Inc asked the minister to provide written reasons for the extension of the lockdown announced on October 14, backed by supporting documentation and expert evidence. She has also been asked to give a commitment that no further lockdowns will be announced.
The minister has been given until October 30 to reply or, according to the letter, Dear South Africa “will be compelled to approach the high court for appropriate relief”.
Hurter Spies attorney Daniel Eloff says seven months into the lockdown, there is no evidence that the extended lockdown is curbing the spread of the virus. The number of cases peaked in July and has been in steady decline since then.
The Actuarial Society of South Africa has also modelled the likely spread of Covid-19, and slashed its original projections of deaths to 27 000. Pandemics and Data and Analytics (Panda), which updates its model regularly, estimates just 20 000 deaths by the end of the year.
2. SAA to receive R10.5 billion:
Public enterprises minister Pravin Gordhan says differences between himself and finance minister Tito Mboweni over funding SAA were overcome by “a clear government mandate authorised by a cabinet decision” to provide the airline with R10.5bn to cover the costs of restructuring.
Mboweni has to find the funds in the current budget for the bailout, which is expected to be detailed in next week’s MTBPS. Mboweni has stated in the past the he does not support the continued bailing out of the airline. Government wants to reboot the airline.
3. Ramaphosa calls for unity:
President Cyril Ramaphosa is calling on South Africans to work together.
Ramaphosa addressed Members of Parliament after they debated the plan on Wednesday.
The president says this is not the time to grandstand, but to close ranks to achieve a common purpose.
Ramaphosa said South Africa is not alone in experiencing an economic crisis of this depth.
Opposition parties have laid into the economic recovery plan, saying it won’t fix an ailing economy ravaged by corruption and mismanagement.
But the president is standing firm, saying what his plan needs is new resolve and determination.
4. No further damage at Sasol’s Lake Charles project:
Sasol says Hurricane Delta, which hit on 9 October – a couple of weeks after Hurricane Laura – has not resulted in further damage to its troubled Lake Charles Chemicals Complex in Southwest Louisiana.
Laura cost Sasol 170 kilotons in total net saleable tons in the past quarter. All of its operations are not yet online following Laura, but Sasol says all remaining units are expected to return to operation by the end of the month.
FY21 forecast:
Given the impact of Hurricanes Laura and Delta, the Base Chemicals joint venture partnership and the
current market conditions, Sasol expects the LCCP ring-fenced EBITDA* for FY21 to be between US$ 50m – US$ 120m, including anticipated insurance proceeds resulting from claims in respect of Hurricane Laura.
Steady state:
Incorporating the impact of the Base Chemicals joint venture partnership, Sasol forecasts a steady state LCCP
ring-fenced EBITDA of between US$ 600m – US$ 700m based on their current market outlook. It is estimated that a
US10c/gal change in the ethane price will have an impact of approximately US$ 74m on annual EBITDA at steady state
* EBITDA guidance provided is for all LCCP plants, adjusted for 50% EBITDA contribution from the west ethane cracker, LLDPE and LDPE plants, post the LCCP partnering transaction.
5. Eskom pricing questioned:
Daily Maverick Insiders are worried about electricity costs.
Although based on a small sample size of 46 participants , the consensus is that electricity prices are spiking: 36.6% of participants said their electricity costs had gone up by more than 50% in the last 12 months while 26.8% recorded hikes of between 11-25%.
“[We are the] same number of people in the house. [Despite this], the utility bill increased from R4,000 to more than R13,000 from July to August 2020,” said an Insider from Alberton on the outskirts of Johannesburg.
Another said: “[I am a] direct Eskom client. [Electricity has] gone from affordable to unaffordable. Previous average was R3,000 to R4,000; now R6,000 to R8,000 a month,” said a Bapsfontein resident.
All information sourced from articles posted by: BusinessTech, Business Insider, Moneyweb, ENCA, BusinessDay, and Daily Maverick.
