News in South Africa 9th December:

1. SA – US trade issues:

South Africa could lose part of its preferential access to the US if its trade policies disadvantage American exporters relative to their developed-nation counterparts, according to people familiar with the matter.

SA - US trade issues
Photo by Martin Damboldt from Pexels

Thousands of South African products enter the world’s biggest market duty-free under the African Growth and Opportunity Act, or AGOA, and the so-called Generalized System of Preferences, or GSP. South Africa shipped more than $15 billion’s worth of goods to America last year, with $2.7 billion’s worth cleared under the two accords, US government data show.

AGOA is due to expire in 2025, and US officials have previously said the qualifying criteria for beneficiaries could be revised, or the program may be replaced.

It would be surprising if South Africa’s trade terms remain as favourable as they currently are, said the people who are familiar with the talks about the accord’s future and spoke on condition of anonymity as the discussions are private.

US lawmakers’ concerns that South Africa is taking advantage of its preferential market access while imposing tariffs that render American goods uncompetitive could trigger the change, the people said.

AGOA’s eligibility requirements include eliminating or working toward scrapping barriers to US trade and investment.

South Africa’s market access under the GSP, America’s oldest and largest trade-preference program for the world’s poorest economies, has been under review since 2020. That’s after the authorities accepted a complaint from a US private-sector group alleging that proposed changes to South African laws fail to provide for adequate and effective protection of American copyrights.

2. Power problems spread:

Not only is South Africa at large being hammered by load shedding but future energy bids are now being hampered by a lack of capacity on the grid.

Private energy projects have snapped up available grid capacity in highly competitive areas, and Eskom is now under further pressure to expand its grid to make room for much-needed developments.

3. Eskom in further chaos:

Eskom narrowly missed formally declaring Stage 7 load shedding on Thursday night. At the peak, it had 6 477 megawatts (MW) of load shedding and a further 447MW of interruptible load supply (cuts to its large industrial customers).

In effect, 7 000MW of demand was removed – meaning Stage 7 load shedding in all but name.

A last-minute decision to defer the start of maintenance at Koeberg unit one meant that it avoided an unprecedented escalation to Stage 7.

Once the Koeberg unit is taken offline for six months, a dependable 900MW of generating capacity is lost (it is currently only producing around 659MW according to an interview on eNCA, as the utility ramps down output ahead of the outage).

Originally, the deferral was only for a day, but Eskom said on Thursday the outage will now begin on Saturday.

There are serious and well-founded concerns that South Africa may experience Stage 7 or Stage 8 load shedding.

And with diesel stocks practically entirely depleted and no more money to buy additional stock until April, this risk is magnified.

Eskom plainly stated on Wednesday that it “has been forced to strictly preserve the remaining diesel for any extreme emergency situations such as multiple, simultaneous trips of generators”. When that stock runs out, all bets are off.

This is unchartered territory …

Under Stage 8, customers can effectively expect three four-hour long power cuts per day, meaning 12 hours of no electricity.

Because the schedules work across a four-day period and blocks may sometimes extend over two days (22:00 to 02:00), there may be worse days and ‘less bad’ days.

There is a big problem, though …

In September, Eskom System Operator GM Isabel Fick revealed that it does not have load shedding levels or schedules beyond Stage 8.

Beyond this point, where more than 8 000MW of load needs to be removed, it plans to issue individual instructions to provinces and municipalities.

4. Measles threatens festivities:

Health Minister Joe Phaahla has expressed concerns over the potential worsening of the measles outbreak during the festive season.

Phaahla addressed the media on Thursday on the sidelines of a health ministry meeting in Boksburg.

He said that the disease, which had been mainly concentrated in Limpopo, had now started spreading in other provinces, including Gauteng and the North West.

The United Nations International Children’s Emergency Fund said that measles was a deadly virus that spreads easily, especially among children.

Symptoms include fever, a dry cough, inflamed and watery eyes, and skin rash.

Health Minister Joe Phaahla said that at least 139 cases of the virus had been confirmed in South Africa.

“That’s why we agree that over the next week, we need to use all opportunities available to make sure that we can up our vaccination and provide more stock and more personnel to do that.”

5. Extra public holiday good for hospitality:

The newly-announced public holiday on 27 December has been welcomed by South Africa’s tourism and hospitality sectors, which now expect a flurry of last-minute bookings around the Christmas weekend.

Because of the “unique circumstances around the 2022 calendar”, President Cyril Ramaphosa declared Tuesday, 27 December “as a public holiday in lieu of Christmas Day.”

The public holiday on 27 December has been welcomed by the country’s tourism and hospitality sectors, which see it as an additional opportunity for South Africans to take some time off work to travel and unwind.

This, the sectors say, is likely to see an increase in last-minute bookings, a trend which has already emerged in the post-lockdown environment.

“We’ve found for this Festive Season that South Africans have left it quite late to book their December holidays, in comparison with previous years, and with the addition of this public holiday, there’s an even more compelling reason to get away locally,” Cindy Sheedy Walker, sales and marketing for Extraordinary, which operates a group of hotels and lodges in Southern Africa, told Business Insider SA.

“The tourism industry has responded to this trend towards last-minute booking by creating last-minute holiday deals and adding more value-adds. We expect close-to-home domestic travel to fly in the next 10 days or so, particularly since there’s such variety on offer for South African travellers across the board.”

“Ultimately, the more South Africans travel, the better for our economy, the more jobs we can create in the hospitality sector, which is one that can create jobs in areas where other industries operate. So, by doing tourism, and travelling locally, you are directly ensuring that someone is able to put food on their table.”

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

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