News in South Africa 7th July:
1. PPE corruption investigations halted:
Briefings on investigations into various cases of PPE corruption and other Covid-related contracts had to be put on hold this week.
The report on the health department’s dodgy R150-million Digital Vibes tender, which benefited Health Minister Zweli Mkhize but then got him put on special leave, was handed to President Cyril Ramaphosa by the Special Investigating Unit (SIU) as scheduled on 30 June. That’s on public record.
What hasn’t been on public record, until Tuesday’s meeting of the Standing Committee on Public Accounts (Scopa), was that more information was added to that report on 2 July.
“The Presidency could only commence to consider the report once the additional information reached them on 2 July 2021. In view of the Presidency is considering [sic] the report, SIU respectfully requests Scopa to reschedule the requested update by the SIU on the investigation involving Digital Vibes,” read a letter that SIU boss advocate Andy Mothibi wrote to Scopa on the eve of Tuesday’s meeting.
Scopa Chairperson Mkhuleko Hlengwa raised this at the start of the meeting — “At this point in time they [the SIU] are not in a position to engage until the flow of information is resolved” — and later read the letter into the record.
The SIU request came as the acting Minister in the Presidency, Khumbudzo Ntshavheni, in a series of letters since Monday, indicated that because the Presidency had received only progress reports on the Covid-19 PPE corruption, it could not brief Scopa.
The Presidency also was not in a position to brief on the disciplinary proceedings, steeped in litigation, of Public Works Director-General Sam Vukela, who was, in late July 2020, suspended in relation to mismanagement and overspending on state funerals.
2. Confusion over vaccines for travel:
Can you apply for special dispensation to receive a Covid-19 vaccine if you need to travel? As of Tuesday afternoon, that is no longer clear.
For part of Monday and Tuesday, South Africa had a process to apply for special dispensation to receive a vaccine, aimed in part at those too young to be due vaccine shots yet, but who need to travel.
The department of health published the details of a “request for vaccination for special circumstances” process on Monday.
But on Tuesday afternoon, acting health minister Mmamoloko Kubayi said the circular that had created the process was now withdrawn, and that the decision to set up the process had not been cleared by an interministerial committee that decides who gets vaccines.
The circular was removed from the government’s SACoronavirus website. But a form for use in applications was still available for download from the same site.
A terse formal withdrawal of the circular, “in its entirety”, was subsequently issued, in the form of another circular. The number of questions received about it “indicate that the Circular is unclear about its intentions”, said the new notice.
The deputy director general in the department of health who had issued both the original circular and the follow-up withdrawing it, Nicholas Crisp, did not immediately respond to questions.
In the withdrawn circular, applicants were told to email email@example.com to receive a voucher number for the Electronic Vaccine Data System (EVDS), which would enable a walk-in vaccination.
The special-circumstances system was expected to be mostly used for those who need to travel, and the health department said the reasons for travel that would be considered were for:
- business or work-related travel
- study at an accredited educational institution
- sportspeople who need to travel outside of South Africa to represent the country, and
- accessing medical care.
3. Cabinet meeting over lockdown:
A cabinet meeting will be held today, with eyes on several key decisions that need to be made.
Chief among these is a decision on the reopening of schools, and a decision on whether or not to reopen TERS payments for those who have been affected by the latest lockdown level 4 restrictions.
Some workers who can’t earn an income due to the level 4 lockdown regulations could receive Temporary Employer-Employee Relief Scheme (TERS) payments soon – if Cabinet agrees to it at a meeting on Wednesday.
Cosatu and the Restaurant Association of South Africa confirmed that an agreement was reached at the National Economic Development and Labour Council (Nedlac) to reinstate TERS.
However, acting spokesperson for the Department of Employment and Labour Musa Zondo said: “We can’t confirm anything until Cabinet concurs – which is where the process is.” Zondo said that the sectors that may receive TERS also still need to be confirmed, because Cabinet “may very well have a different view”.
Many businesses are currently closed, including cinemas, gyms, bars, casinos and restaurants.
“We will make the announcement once all processes are finalised,” Zondo told Fin24. Cabinet will discuss the TERS payments on Wednesday.
RASA CEO Wendy Alberts said government had a responsibility to intervene in aiding businesses whose operations were hindered by the level 4 national lockdown.
“Fourteen months into lockdown we find ourselves trying to get reprieve. The law is clear that we need to be compensated when their ability to earn an income is impeded by the lockdown restrictions being imposed on our businesses with no other mechanisms to assist us,” said Alberts.
4. Record financial year for insurers:
Record financial year for non-life insurers in stark contrast to financial devastation faced by clients largely in the tourism and hospitality industry.
Insurance Claims Africa (ICA) has fired the latest salvo in their ongoing battle with South Africa’s short-term insurers over Covid-19 business interruption claims and settlement delays, saying on Tuesday that these insurance companies are “actually making super profits” during Covid, yet are still stalling paying out most claims.
The latest censure was made by ICA CEO Ryan Woolley and the group’s chairman Mike Gaines during a briefing update on the claims debacle which has been raging for over a year and with several cases still before the courts.
ICA – Southern Africa’s largest independent insurance claims specialist – is currently representing over 850 companies with Covid-related business interruption insurance claims against insurers. Western Cape-based Ma-Afrika Hotels, which won a high-profile case against industry giant Santam, is one of ICA’s clients.
While short-term insurers including Santam, Old Mutual Insure, Guardrisk, Hollard and others have either paid out or agreed to offer interim payment relief to the tune of more than R3 billion for such claims, a much larger amount in claims remain unpaid, in dispute in the courts or stuck in adjudication bottlenecks in these companies.
Woolley and Gaines backed up their ‘super profits’ condemnation against the short-term insurance industry at Monday’s briefing by highlighting new independent research undertaken by economist Roelof Botha, who is an economic advisor to the Optimum Investment Group, together with Keith Lockwood from the Gordon Institute of Business Science.
Botha expressed similar views during the ICA briefing and said that the research shows that “unappropriated profits” of the country’s short-term insurance (STI) or non-life insurance industry increased by more than 20% in 2020 to a new record of R53.5 billion.
He further pointed out that the total assets of SA’s STI industry increased 12% to a level of more than R220 billion.
However, he also noted that paradoxically the value of unpaid STI claims rose by more than 17% to a record high of R49.4 billion in 2020, despite record profits.
5. Restaurants challenge restrictions:
The Restaurant Association of South Africa (RASA) is backing a legal challenge against South Africa’s adjusted level 4 lockdown restrictions, which it says have hammered the industry.
The court challenge is being brought by South Africa Breweries (SAB), with the group challenging the country’s latest alcohol ban on administrative law grounds.
RASA said that it ‘wholeheartedly’ supports the court action and said it is seeking immediate relief on the liquor restrictions put onto the restaurant industry.
“RASA is calling for an immediate reversal of the level 4 lockdown restrictions and a proper representation on the ministerial portfolio for tourism and hospitality so that the restaurant industry can be adequately represented,” it said.
The association has also begun surveying its members, with much of the focus on how much longer restaurants can continue to operate under the strict curfew and alcohol restrictions.
SAB said it has been left with no other choice but to defend its rights and protect its business, and the group has already imposed an investment freeze of around R5 billion following the previous alcohol bans.
“SAB regrets the government’s unfortunate decision to ban the sale of all alcohol for the fourth time in the last 18 months. SAB is deeply concerned by the continued discrimination of the legal alcohol trade, resulting in a burgeoning illicit industry.”