News in South Africa 7th June:

1. Eskom tames load shedding:

Power utility Eskom says that recoveries in generation capacity will allow it to suspend load shedding every day until the evening peak.

Eskom tames load shedding
Photo by lil artsy

The group said that load shedding will be suspended between midnight and 16h00 on Tuesday (6 June), followed by stage 3 load shedding from 16h00 today until midnight.

This pattern will repeat until further notice, it said.

The incredible shift from Stage 6 load shedding to Stage 3, potentially even lower, was arguably always predictable.

Just weeks ago, the country was on edge, anticipating Stage 8 – or worse – load shedding during the winter months. This will likely not come to pass.

It is a stone-cold fact that Eskom’s coal generation fleet performs far better in winter than in summer.

The reduction of partial load losses and the non-existence of the summer heat in Mpumalanga means the output from the plants is generally ahead of what would be experienced in the hotter months. Basically, fears of Stage 8 (or worse) are probably overblown. For now, at least.


“Eskom will publish another update as soon as any significant changes occur,” it said.

The schedule is as follows:

Tuesday, 6 June 

  • Suspended: until 16h00
  • Stage 3: 16h00 to 00h00

Wednesday, 7 June 

  • Suspended: 00h00 to 16h00
  • Stage 3: 16h00 to 00h00

Repeat until further notice

2. Ramaphosa meets with CEOs:

President Cyril Ramaphosa and his cabinet met with business leaders as concerns over the country’s energy crisis, logistic constraints and close ties with Russia grow.

Attendees discussed collaborating to obtain inclusive growth, inspire confidence in the economy and create jobs, the Presidency said in a Twitter post.

Five years after Ramaphosa ushered in a wave of business optimism that he’d revive the economy crippled by industrial-scale corruption under his predecessor, executives are running out of patience with the president, who is seeking reelection next year.

Economic stagnation stoked by record daily power cuts, rampant crime, disintegrating infrastructure and foreign policy missteps is leading investors to the exits.

Yields on the benchmark 10-year generic government bond have risen 129 basis points this year to 12.1%, foreign buyers have been net sellers of the nation’s stocks, and the rand has plunged 11%. 

Executives, including Daniel Mminele, Nedbank chairman, and MTN CEO Ralph Mupita, have called for urgency in resolving domestic hindrances to economic growth and warned the country is at risk of becoming a so-called failed state.

Others, such as FirstRand CEO Alan Pullinger, have criticized the country’s relationship with Russia.

The government’s indifference to the war in Ukraine and its friendship with Russia is “foolhardy in the extreme”, he said.

3. SA narrowly avoids a recession:

Despite record levels of load shedding and aggressive rate hikes, South Africa’s first-quarter GDP grew by 0.4%.

This was exactly in line with economists’ consensus forecast, according to a Thomson Reuters poll.

The economy shrank by a revised 1.1% in the fourth quarter of 2022. Growth in the first quarter means South Africa avoided a technical recession, which is defined as two consecutive quarters of a shrinking economy.

While the South African economy is now slightly bigger than before the Covid pandemic, it still remains below its peak in the third quarter of last year.

Real GDP at constant 2015 prices, seasonally adjusted. Source: Statistics SA

The SA Reserve Bank previously estimated that load shedding will shave two percentage points off GDP growth this year. The bank’s aggressive rate hiking cycle – 475 basis points over 18 months – is also restricting the economy.

Still, the manufacturing industry continued to grow (1.5%), with food and beverage output expanding the most in the first quarter.

The finance, real estate and business services industry (+0.6%), personal services industry (+0.8%) and the transport, storage and communication industry (+1.1%) also saw growth.

4. Latest GDP figure not worth celebrating:

The South African Federation of Trade Unions (Saftu) said it didn’t believe it was worth celebrating the country’s new gross domestic product (GDP) figure.

Manufacturing and finance were the main drivers for economic growth, while agriculture was the biggest drag on the GDP.

While the economy rebounded to pre-COVID-19 levels in the first three months of 2023, Saftu spokesperson Trevor Shaku said the latest improvement was not enough.

“The economy grew by 0.4% in the first quarter of 2023, compared to a 1.1% decline in the fourth quarter of 2022. Like we said before, the South African economy has established a trend of a zig-zag growth path from one quarter to another, which on average, annually, amounts to negligible growth.”

Shaku also tore into the central bank, saying that rising interest rates were sabotaging the economy.

“The governor of the Reserve Bank of New Zealand, [Adrian Orr], was honest enough to admit this sinister strategy to fix the economy by stabbing the people. In November 2022, Governor Orr admitted that they were engineering a recession to get inflation down.

“This is what [governor of the South African Reserve Bank] Lesetja Kganyago was trying to do, and his efforts are already bearing terrible results as desired by them.”

5. Municipalities face criminal charges over water quality:

The Department of Water and Sanitation (DWS) has laid criminal charges against some municipalities, while others have been instructed to notify their residents that the water may not be safe to drink following the latest water watch reports.

The DWS has issued non-compliance notices to 90 municipalities instructing them to correct the shortcomings identified in the Green Drop Report.

According to the Green, Blue and No Drop Watch Reports, released by the department on Tuesday (6 June), there has been a decline in drinking water quality and an increase in non-revenue water since the last reports were issued.

The Green Drop Watch Report indicates that 50% of municipalities whose wastewater treatment systems were found to be in a critical state in the 2022 Green Drop Report have failed to develop and implement plans to improve them.

The Green, Blue and No Drop Certification programmes are tools to provide regulatory information regarding water services, which are primarily the constitutional responsibility of municipalities.

The reports keep the public and stakeholders updated with credible data and information about the country’s water and sanitation services.

They also recognise water service institutions that achieve compliance and excellence in providing such services.

The 2022 full Green Drop Report, released in April 2022, found 334 out of 850 municipal wastewater systems in 90 municipalities in critical condition, receiving Green Drop scores of 30% and below.

Presenting the reports on Tuesday, DWS Director-General, Dr Sean Phillips, said in 2013 – when the last Green Drop assessment report was done – 248 out of 824 municipal wastewater systems were in critical condition, indicating a decline between 2013 and 2022.

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

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