News in South Africa 3rd December:
1. Government wage deal battle:
Although South Africa’s fiscal position has gradually weakened over the past three years, the government cannot walk away from implementing the final year of a three-year wage deal, legal counsel for public sector unions argued on Wednesday.
Unions – including the Public Servants Association (PSA), the SA Democratic Teachers’ Union, the National Professional Teachers’ Organisation of SA, the Health and Other Services Personnel Trade Union of SA, and the National Education, Health and Allied Workers’ Union (Nehawu) – approached the Labour Appeal Court to compel the government to stick to its end of the 2018 wage agreements.
Despite this being the final year of the three-year deal, the government unilaterally decided to announce a freeze on public sector wage increases earlier this year in line with its bid to save R160 billion over the next three years.
Advocate Jeremy Gauntlett , appearing on behalf of Finance Minister Tito Mboweni, argued that the wage agreement is invalid and unenforceable given that the public finances have vastly changed since the agreement was signed, due in part to the Covid-19 pandemic.
The R37.8 billion required to finance the wage increases, Mboweni says in court papers, comes at a time when the “rest of the country’s workforce (including higher-echelon public servants, Cabinet and Parliament) have accepted salary cuts or freezes as a consequence of the economic climate and Covid-19 crisis”.
2. Covax payments still needed:
South Africa is yet to make a payment of R500 million to COVAX, the international initiative designed to secure equitable access to Covid-19 vaccines for middle- and low-income countries.
Head of health regulation and compliance as well as former acting director-general for the Department of Health Dr Anban Pillay confirmed on Wednesday the payment was yet to be made as the department was awaiting a range of approvals from National Treasury.
This despite statements by Finance Minister Tito Mboweni, during a Bloomberg Invest Africa webinar on 24 November, that “the R500 million is in the pocket, is in the consortium”.
3. Hot spots may incur new restrictions:
President Cyril Ramaphosa is expected to address the nation on Thursday night.
A 10pm curfew and a partial ban on the sale of alcohol, that has been agreed to by some of the big liquor traders, were discussed as the National Command Council sat on Wednesday to respond to a resurgence in coronavirus infections in a number of hotspots in the country, including Nelson Mandela Bay and the Garden Route.
The Nelson Mandela Bay metro, that includes the city of Port Elizabeth and the towns of Uitenhage and Despatch, have been collectively identified as the epicentre of the current resurgence of Covid-19 in the country.
Towns on the Eastern Cape’s Sunshine Coast, including Port Alfred and Bushmans River, Graaff-Reinet, Aberdeen, Patensie, Jeffreys Bay and Makhanda have also been declared hotspots for outbreaks in the province.
4. Ramaphosa faces motion of no confidence:
resident Cyril Ramaphosa is set to face a motion of no confidence vote in parliament today, brought by the African Transformation Movement. With the DA already saying it will abstain, and the ANC said to be backing Ramaphosa, analysts say the motion will likely be dead on arrival.
However, the ATM – which has ties to controversial figures, and represents certain interests and factions within the ANC – is pushing for a secret ballot vote, in the hopes that there are enough against Ramaphosa within the ANC for the motion to succeed.
5. Italtile profits:
Italtile’s half-year headline profit will be up at least 20% with home-improvement sales bolstered by the current work-from-home trend.
- Total retail store sales grew by 16.4% for the review period, while like-for-like retail store sales increased by 14.9%.
- Manufacturing sales for the review period were up 16.0% compared to the previous corresponding period.
- Double-digit growth was reported across all of the Groups operations (retail brands, supply chain and manufacturing businesses).
The improved sales are attributable to a range of factors including:
- the Groups local integrated supply chain which ensured consistent availability of a wide product range;
- the current work-from-home trend, precipitated by the Covid-19 pandemic (pandemic), which boosted demand for home improvement products;
- lower interest rates and payment holidays, which have supported homeowners spend on their primary asset their homes. In addition, with restrictions on travel and leisure activities, some funds previously allocated to transport and recreational pastimes were reallocated to home improvements; and
- managements continued focus on improving the customer shopping experience, including implementing rigorous risk mitigating measures to ensure a safe operating environment for customers and staff.
Italtile’s results for the six months ending 31 December 2020 will increase by at least 20% compared to the earnings per share and headline earnings per share of 55.3 cents for the six months ended 31 December 2019, with earnings per share and headline earnings per share expected to be in excess of 66.4 cents per share.