News in South Africa 24th February:

1. Budget speech at 14:00 today:

Finance minister Tito Mboweni will deliver the 2021 budget this afternoon at 14h00.

Budget speech at 14:00 today
“Minister Tito Mboweni delivers 2020 Budget speech in Parliament” by GovernmentZA is licensed under CC BY-ND 2.0

Analysts and economists are not hopeful of any significant strides in turning the South African economy around, given tight budgetary constraints and little wiggle room on both the revenue and expenditure side of the balance sheet.

No tax increases, vaccine rollout spending details and no costly bailouts of state-owned enterprises.

These were just some of the issues raised by opposition parties who wanted Finance Minister Tito Mboweni to include them, when he tables his budget on Wednesday afternoon.

Opposition parties said that all indications were that Mboweni would slap South Africans with a tax increase.

While the government has to find additional sources of revenue to fund its economic recovery, parties said that a tax increase would be detrimental for already burdened South Africans.

2. Sibanye-Stillwater purchases stake in battery producer:

In a 30 million euro deal Sibanye-Stillwater has bought a 30% stake in the Finnish lithium producer Keliber to expand its position in the lucrative battery minerals market.

Sibanye-Stillwater will make an initial phased equity investment of EUR30 million, for an approximate 30% equity shareholding into Keliber. In addition a further EUR10 million equity issuance will simultaneously be offered to the existing Keliber shareholders, on the same terms as Sibanye-Stillwaters EUR30 million investment.

This financing, together with a combination of Sibanye-Stillwaters extensive mining expertise that will complement the skills and local knowledge of the experienced Keliber team, will ensure the continued progress of the project to a build ready phase. The EUR40 million investment will allow for the completion of further detailed mining optimisation studies, permitting, metallurgical test work and detailed engineering design. In addition, the Kaustinen region is highly prospective and further exploration work to increase the current Mineral Resource and Reserve
base will be undertaken. The initial project work will be overseen by a joint technical committee, working under the guidance of the Keliber Board, on which Sibanye-Stillwater will have representation.

3. Zweli Mkhize contacts benefit from Covid:

Health Minister Dr Zweli Mkhize’s long-time personal spokesperson and his former private secretary pocketed Covid-19 cash as paid consultants for a shadowy contractor appointed by the Department of Health. The company, Digital Vibes, has secured DoH contracts worth more than R82m for work related to the pandemic.

Digital Vibes, an obscure communications company from KwaZulu-Natal, appointed two close associates of Health Minister Zweli Mkhize as paid consultants after it secured an irregular communications contract from the Department of Health (DoH).

The DoH appointed Digital Vibes in late 2019 through a contentious closed tender to provide communications services for the government’s National Health Insurance (NHI) roll-out.

The scope of work was extended in March 2020 to include communications services for Covid-19.

In a period of just nine months, the firm obtained orders from the DoH for Covid-19 projects valued at more than R82-million.

The same company also clinched a contract from the Department of Cooperative Governance and Traditional Affairs (Cogta) in 2018, while Mkhize led this department.

In both instances, Tahera Mather, Mkhize’s long-serving personal spokesperson and alleged family friend, scored consultancy jobs from Digital Vibes after it had secured the government contracts.

The DoH denies that there was a conflict of interest, but it says that it is currently investigating the deal.

4. New vehicle sales decline:

Motus, an importer and seller of the Hyundai, Renault, Kia and Mitsubishi brands in SA, Australia and the UK, saw a 16% fall in the number of new vehicles (57,503) sold in the past six months, while there was a 12% increase in pre-owned vehicles (43,160).

Its interim revenue improved by 6% in part due to sales of pre-owned vehicles in South Africa. This was partly offset by the reduced revenue in the car rental business and lower workshop activity levels.

Full financial highlights:

  • Revenue up 6%, R44 343 million (2019: R41 954 million)
  • Operating profit down 6%, R1 724 million (2019: R1 831 million)
  • Profit before tax up 4%, R1 287 million (2019: R1 243 million)
  • Earnings per share up 6%, 507 cents per share (2019: 479 cents per share)
  • Headline earnings per share up 2%, 526 cents per share (2019: 517 cents per share)
  • Interim dividend per share 160 cents per share (2019: nil cents per share paid)
  • Free cash flow generated from operations R4 759 million (2019: R1 121 million)
  • Net debt to equity 24% (2019: 74%)
  • Net debt to EBITDA (debt covenant) 1,0 times (Required: to be less than 3 times)
  • EBITDA to net interest (debt covenant) 3,7 times (Required: to be greater than 3 times)
  • Return on invested capital# increased to 12,8% (2019: 11,2%)
  • Weighted average cost of capital# increased to 9,3% (2019: 8,4%)

5. Matric pass rates down:

The recent matric results announced by Minister of Basic Education Angie Motshekga reflected a pass rate of 76.2%, down by more than five percentage points compared with last year’s results.

Additionally, the “real matric pass rate”, which measures the number of students who were enrolled in grade 10 two years earlier and passed their matric exam in 2020, is now 44.1%.

The Department of Education noted in its report that it was concerned with the significant decline in the pass rate for Mathematics and Physical Science.

A pass refers to the achievement of 30% or more in a subject.

Particular focus has been placed on maths and science – subjects needed for further study in STEM fields, which are in high demand in the country. Trends show a continued decline in results for these subjects, with fewer learners electing to take them on altogether.

The matric results data reflects the Mathematics pass rate fell by 0.8 percentage points to 53.8%, while the Physical Science pass rate fell by 9.7 percentage points to 65.8%.


All information sourced from articles posted by: BusinessTech, Business Insider, EWN, Fin24, Daily Maverick, Sharenet, and MyBroadBand.

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