News in South Africa 29th March:

1. Investigation on essential food prices:

South Africa’s Competition Commission said it’s investigating the price of a range of essential-food products, after consumers were subjected to “unjustified increases” over the past two years.

Investigation on essential food prices
Photo by Gustavo Fring

A probe is being conducted into the cost of goods, including bread, cooking oils, corn meal, rice, flour and margarine, the body said in a statement on Tuesday.

That’s after its research showed the retail price of items such as bread increased faster than producer costs of 15% from January to December 2022.

“The food sector remains a priority for the commission as poor consumers spend a significant portion of their income on essential food items,” it said.

“As food inflation remains elevated and load-shedding continues to affect business operations, food-price monitoring will remain a priority for the commission given its importance to the welfare of South Africans.”

Food prices rose 14% year-on-year last month, the highest level since April 2009, according to Statistics South Africa.

The findings come as the central bank’s monetary policy committee meets ahead of what is expected to be another interest rate hike of 25 basis points on Thursday.

In January, the South African Reserve Bank raised its 2023 forecast for food-price inflation to 7.3% from 6.2%, with Governor Lesetja Kganyago warning that it could continue to surprise on the upside.

2. SA is at risk of becoming a failed state:

Lord Peter Hain – a member of the United Kindom House of Lords, an anti-apartheid activist, and long-standing friend and ally of democratic South Africa – has added to the growing list of prominent persons warning that the country is heading in the direction of becoming a failed state.

Speaking to PSG Konsult on the group’s Think Big series, Hain said that South Africa is troubled, with power cuts, water cuts, and other service delivery failures continuing to plague to country.

He added that the country struggles with incompetence, as many in high-level positions at state-owned companies – including Eskom, Transnet, the SAPS, SAA and the water system – are unqualified and are bankrupting the country.

The situation will only worsen if corrupt politicians and incompetent officials are not rooted out, he said, adding that South Africans should ‘rise up’ to tackle the issue.

However, Hain is not recommending an insurrection, but rather a simple rejection of corruption – such as not paying bribes – as many small acts of rejection would add up to something more significant.

Adding to this, he said that businesses must not be complicit in tender corruption and not pay bribes to get a contract – even if it leads to job losses.

“I don’t say it’s easy to do. Obviously, these decisions are difficult, but unless you actually take the tough decisions and maybe make sacrifices in the short-term, you aren’t going to change anything,” he said.

3. Koeberg falls short of winter availability:

When newly appointed Minister of Electricity Kgosientsho Ramokgopa recently disclosed that Unit 1 of the Koeberg nuclear power station will return to service 45 days after the latest deadline of 23 July, he was putting it mildly.

The new target date of 13 September is a full 90 days after the original date of 8 June, when the 180-day outage was supposed to end.

This means the project team is overshooting its deadline by 50% and extending it to 270 days.

Apart from the fact that the unit’s precious 920 megawatts (MW) of generation capacity will be unavailable during the cold winter months when demand increases – thereby adding about one stage of load shedding – it leaves a very tight window for completion of the similar steam generator replacement in the other unit before the expiry of Koeberg’s licence in mid-2024.

The purpose of the steam generator replacements is to extend the lifetime of both units of Africa’s only nuclear power plant by a further 20 years.

In a statement last week Eskom celebrated a “major milestone”.

It said: “The first steam generator has been removed from the containment building and placed in the storage building that was erected to house the steam generators. This is a significant accomplishment for the Koeberg team, the contractor and the numerous local and international subcontractors involved in the project.”

According to a source close to the project who asked not to be named, all three steam generators should have been removed already and the focus should have been on the placement of the new ones by now.

This is now scheduled for November, which leaves about a month to spare if the second outage is done within the 180 days it is supposed to take.

4. How much do state nurses, porters and cleaners earn?:

If unions accept the government’s latest pay deal, nurses, cleaners and porters at state hospitals will have less money to take home than last year — as was the case for the 2022 and 2020 financial years, according to our analysis of data from the department of public services and administration

In the state’s final offer these workers will get a 3.3% increase compared with what their salaries were in the 2022/23 financial year (which ends on 31 March), says Oomang Parag, the spokesperson for the Public Service Coordinating Bargaining Council. 

Inflation was 7% in February, according to Statistics South Africa. 

Public servants have also been getting a R1 000 cash allowance (after tax) from the government since 2021. Until now, this cash payment wasn’t added to the figure that the state uses when it calculates how much to pay into people’s pension funds (which is usually 13% of someone’s “pensionable” salary, on top of the 7.5% that workers contribute each month themselves). 

But the new deal says that from 1 April, this amount will be part of the math, which will translate into a bigger pension contribution from the state. It will also create a higher starting point for future negotiations, says the public services department. 

On average, the cash payout represents 4.2% of public servants’ salaries. Since that’s now being added to the 3.3% increase to their baseline salary, the government says workers are getting a pay increase of 7.5% in total. 

5. Gordhan dispatched to China over locomotives dispute:

Public enterprises minister Pravin Gordhan will lead a delegation to China next month in a bid to break an impasse over the delivery of locomotives and spare parts by Chinese rail equipment maker CRRC E-Loco, says state-owned logistics company Transnet.

The two have engaged in legal battles after Transnet halted the supply of 1,064 locomotives from four original equipment suppliers, including CRRC, saying that 2014 contracts worth R54.4bn had been unlawfully awarded by the previous board and management.

“Minister Gordhan remains hopeful that talks with his Chinese counterparts will yield positive results,” Transnet said in a statement.

CRRC was not immediately available to comment.

Transnet says 161 locomotives supplied by CRRC E-Loco were currently not running after the Chinese company withheld spares and maintenance support, affecting operations on Transnet’s iron ore, coal and manganese export lines which contributes half of its revenue.

In January, Transnet said CRRC had shown unwillingness to engage with South African authorities to “normalise its operations” in the country.

All information sourced from articles posted by: DailyInvestor, BusinessTech, Moneyweb, Fin24, and TimesLive.

Leave a comment

Your email address will not be published. Required fields are marked *