News in South Africa 2nd February:

1. SA Lockdown measures relaxed:

South African lockdown measures have been relaxed as the country records its lowest number of daily infections since the start of December.

SA Lockdown measures relaxed
“President Cyril Ramaphosa addresses nation on developments in South Africa’s risk-adjusted strategy to manage the spread of Coronavirus COVID-19” by GovernmentZA is licensed under CC BY-ND 2.0

Ramaphosa announced the country would remain on an adjusted Level 3 with the sale of alcohol, among other things, being permitted.

“In fact, the average rate of new infections has been steadily coming down over the last three weeks, indicating that we have now passed the peak of the second wave. In the past seven days, the daily average of new infections was around 5 500, compared to just over 10 000 infections in the previous seven days,” he said.

The number of hospitalisations has also decreased.

“At the peak of the second wave, we recorded over 2 300 hospital admissions in a day. This had fallen to 295 hospital admissions by the 29th of January. While all the indicators are heading in the right direction, we are still experiencing relatively high rates of transmission,” Ramaphosa added.

Earlier in the day Ramaphosa, Deputy President David Mabuza and Health Minister Zweli Mkhize welcomed a consignment of the country’s first one million Covid-19 vaccines from the Serum Institute of India which landed at OR Tambo International Airport on an Emirates flight.

Ramaphosa had this to say about further vaccines still to come:

  • In addition to the 1 million Covishield doses that we received today; another 500,000 doses from the Serum Institute of India is to arrive later in February.
  • We have secured 12 million doses in total from the global COVAX facility, which has indicated that it will release approximately 2 million doses by March.
  • We have secured 9 million vaccine doses from Johnson & Johnson, commencing with delivery in the second quarter. Johnson & Johnson has contracted Aspen, one of our pharmaceutical companies, to manufacture these vaccines in South Africa.
  • In addition, Pfizer has committed 20 million vaccine doses commencing with deliveries in the second quarter.

2. Indemnification delayed vaccines:

Insiders have revealed one of the obstacles getting in the way of Covid vaccine negotiations between government and pharmaceutical companies – indemnification.

The indemnification of pharmaceutical companies against “serious adverse events” during the vaccination process is internationally regarded as a vital precursor to the widespread roll-out of vaccines and forms part of all the current existing contracts.

Normally, pharmaceutical companies can insure against the risk of some of its vaccines causing harm which typically happens in a minuscule proportion of cases. But the astronomical size of the Coronavirus vaccine roll-out means even this tiny risk could turn into a huge financial risk to the producers of vaccines.

Consequently, governments which have already signed contracts with vaccine producers normally include a clause indemnifying the producers and try hard to find workarounds to ensure that the world can effectively start combatting the virus outbreak.

In South Africa, however, there is a complication – the indemnification of companies that contract with government is prohibited in the normal course of events by Section 66 of the Public Finance Management Act (PFMA).

From Treasury’s perspective, it is attempting to ensure contractual legality and equity, possibly mindful of the long battle with pharmaceutical companies over the HIV vaccine and intellectual property rights, which was eventually won by people living with HIV.

But from the perspective of the DOH, the Covid-19 crisis is a different situation entirely, and it considers Treasury’s attitude to be a kind of absurd dunderheadedness which is putting hundreds of thousands of lives at risk.

While section 66 does, in general, prohibit different branches of government from indemnifying service and product providers, it does allow the Treasury to suspend this clause with the explicit, written permission of the Treasury.

But DOH officials have faced enormous difficulty getting this sign-off, which was also apparently the reason why SA was late in paying its contribution of the Covax facility, the attempt to coordinate an international response to the vaccine issue by the international Vaccine Alliance, Gavi.

Covax recognised early the issue of indemnity could potentially be a stumbling block to quick vaccine delivery, and has established a workaround which essentially entails a general fund that can be claimed against in the event of “serious adverse events”.

3. No more surprises pleads alcohol industry:

While it is a relief that the liquor sales ban has been lifted, there should be “more structured engagement” from government with the sector so that they are not surprised with sudden restrictions, an industry representative has said.

President Cyril Ramaphosa’s announced on Monday night that the contentious ban on the sale of alcohol would be partly lifted.

“The sale of alcohol by licensed premises for off-site consumption will be permitted from Mondays to Thursdays, from 10:00 to 18:00. Duty-free shops, registered wineries, wine farms, micro-breweries and micro-distilleries will be able to sell alcohol for off-site consumption,” said Ramaphosa.

Restaurants, shebeens and taverns will also be able to sell alcohol from 10:00 to 22:00.

Sibani Mngadi, chairperson of the South African Liquor Brand Owners’ Association (Salba) said it was a relief that the ban was lifted and the decision was one the alcohol industry appreciated, particularly after the drop in Covid-19 cases.

However, he said protecting lives needs to be balanced with reviving the economy, “because that is also equally harming many people in terms of job losses, investment in South Africa and various other sectors that are impacted”.

Mngadi also called for “more structured engagement” from the government with the industry so that they are not surprised when restrictions are suddenly imposed. He added that it was important for alcohol producers and traders to also be involved in the consultation process on alcohol restrictions and bans.

4. Vehicle exports up:

While new vehicle sales in January were down compared to the same month last year, SA saw a second consecutive month of strong vehicle exports.

Aggregate domestic sales at 34 784 units reflected a decline of 5 629 units, or 13,9%, from the 40 413 vehicles sold in January last year.

Overall, out of the total reported industry sales of 34 784 vehicles, an estimated 28 716 units, or 82,6%, represented dealer sales, an estimated 11,4% represented sales to the vehicle rental industry, 3,5% sales to government, and 2,5% to industry corporate fleets.

The January 2021 new passenger car market at 23 853 units had registered a decline of 5 220 cars, or a fall of 18,0%, compared to the 29 073 new cars sold in January last year. The car rental industry accounted for a sound 16,1% of car sales in January 2021.

The January 2021 the exports sales number at 22 771 units represented a noteworthy increase of 6 468 vehicles or 39,7% compared to the 16 303 vehicles exported in January 2020. The current upward momentum in vehicle exports bodes well for a much-improved performance this year compared to 2020.

5. Vodacom trading update:

This morning, Vodacom released a trading update for the three months to end December. In South Africa, service revenue (R14.3 billion) rose 5.4%, while revenue from other countries fell slightly to R5.5 billion. The number of people who now use its mobile money service M-Pesa rose by 8% to almost 16 million, and monthly M-Pesa transactions now come to $24.2 billion, up 58% from a year before.

After both MTN and Telkom launched separate legal attacks on the key Icasa auction of spectrum, including for 5G, in SA, Vodacom said further delays to this process “will likely have a negative impact on consumers”.

All information sourced from articles posted by: Business Insider, BusinessTech, News24, Daily Maverick, Fin24, and Naamsa.

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