News in South Africa 9th November:

1. COP27 pledges $10bil to go green:

South Africa is one of the winners at COP27 — the International Partner Group (IPG) of five nations pledged an extra $10-billion to support the country’s transition investment plan from fossil fuels  — but it will be costly.

COP27 pledges $10bil to go green
Image taken by: Amol Mande

This was announced by President Cyril Ramaphosa, who was speaking at a virtual press briefing at COP27 in Egypt on Tuesday.

South Africa, which is the world’s 13th-biggest source of greenhouse gases, with almost half of its emissions coming from coal-fired electricity generation, is being supported by IPG partners France, Germany, United Kingdom, United States and European Union to move away from its reliance on coal.

Ramaphosa said the $8.5-billion the IPG pledged last year comes in the form of loans and grants. “The grant component was quite low, at 2.7%. The rest [98%] comprised concessional loans and loans from commercial institutions,” he said.

He added that South Africa told the partners the country required R1.5-trillion. “We need to restructure the Glasgow negotiations and have more grants as already we can see that our investment plan requires much more money to be properly and fully implemented. 

“We have communicated this to our partners and said, because South Africa carries a sizable loan burden, which it has to service from its fiscus, we require more grant funding.” 

Despite the indorsement, Ramaphosa called on the partners to honour their pledges because their failure to do so after COP26 in Glasgow and COP21 in Paris had created lack of trust between developing and developed countries.

He also called on lending partners such as development banks and the World Bank to reform their policies so that developing countries could pay back their loans.

SA ahead in renewables

Ramaphosa said South Africa is scaling up investment in renewable energy and is on course to retire a number of ageing coal-fired power stations.

In his weekly newsletter, the president said the move from fossil fuels to greener, cleaner energy sources cannot take place at the expense of economic growth and job creation.

“A transition to a low-carbon, climate change-resilient economy should not jeopardise South Africa’s developmental goals,” Ramaphosa said.

He explained the importance of the deal and the just transition more generally. 

“The imperative of a low-carbon transition that is just and inclusive is particularly important for developing economy countries, which are the worst affected by climate change. 

“Although Africa carries the least responsibility for climate change, the continent experiences much of its harshest effects. The same is true for vulnerable countries and communities in other parts of the world, including small island states.”

2. Big changes to BEE laws:

The government remains wholly committed to transformation and empowerment as envisioned in the Constitution, says Finance Minister Enoch Godongwana.

The Minister made the commitment during a press briefing on Tuesday on the new Preferential Procurement Regulations (2022 Regulations) under the Preferential Procurement Policy Framework Act, 2000 (PPPFA), which he gazetted on Friday.

He said the Regulations were aimed at aligning the regulations to the February 2022 Constitutional Court judgement. The judge ruled that the minister exceeded his powers in prescribing the 2017 Regulations.

“Organs of state must comply with the BBBEE Act when developing their procurement policies,” said Godongwana. “Procurement is a complex and highly contested arena in South Africa. Much of it is steeped in legalese and technical language. It is no accident that the Zondo Commission published a dedicated report on public procurement and made significant findings.”

The Minister said the purpose of the 2022 Regulations was to comply with Section 217 of the Constitution on procurement of goods and services by organs of state and comply with the PPPFA of 2000.

While National Treasury was finalising the Public Procurement Bill, which will empower the Minister of Finance to set preferential procurement, the 2022 Regulations repeal the 2017 Regulations and take effect on 16 January 2023, Godongwana said.

“In essence, the 2022 regulations, are a placeholder while we finalise the Bill,” he said.

3. Saice wants tender answers:

The South African Institution of Civil Engineering (Saice) has written an open letter to President Cyril Ramaphosa questioning the award by the South African National Roads Agency (Sanral) of tenders to joint ventures led by foreign companies, claiming that thousands of local jobs will not materialise as a result.

This follows the award of four tenders last week by the Development Bank of Southern Africa (DBSA), Sanral’s agent for the adjudication of tenders that were cancelled in May due to irregularities.

In the letter, Saice President Professor Marianne Vanderschuren said the institution is disappointed by the recent awarding of up to R6.65 billion worth of Sanral tender funds to foreign contractors.

Vanderschuren requested:

  • Details regarding the tender adjudication process and the criteria used to award these tenders to foreign companies;
  • Clarity on the procurement processes that will govern these infrastructure projects, which are key to the economic development of South Africa; and
  • Insight into how these procurement governance processes will be managed to ensure compliance.

Focus on growing the South african economy …

Saice referred to Ramaphosa’s State of the Nation address in February this year, specifically his comments stressing the importance of growing the South African economy, reducing the unemployment rate and combatting poverty and inequality.

It quoted Ramaphosa as stating: “We have given ourselves 100 days to finalise a comprehensive social compact to grow our economy, create jobs and combat hunger.”

Saice said Ramaphosa on 25 July further stated that: “The work to grow the economy and create jobs is going ahead with the support of all economic stakeholders.”

Vanderschuren said with these comments in mind, Saice is trying to understand how up to R6.65 billion worth of Sanral tender funds have been awarded to foreign contractors.

“We understand that South African tenders usually legislate the use of local materials and labour, requiring that a spend of 30% of the contract is designated to local jobs, and we, therefore, assume that these foreign companies will gain the other 70% of the contract value, up to the amount of R6.65 billion as quoted above.

“Further, our members have expressed their deep concerns related to the procurement of local labour and materials in these projects,” she said.

“Can government guarantee that this requirement will be enforced and honoured based on the experiences of foreign firms operating across Africa, which does not suggest this?”

4. Transnet coal export derailed:

After a train carrying export coal to Richards Bay was derailed near Ulundi on Tuesday, Transnet said it would meet with traditional leaders in the area as it is extremely concerned about disruptions to its operations.

“Transnet Freight Rail will over the next few days be engaging with amakhosi and the South African Police Service to resolve threats to the organisation as well as disruptions to its operations along the North Corridor this past week,” the rail utility said in a statement.

Earlier on Tuesday, Transnet reported that a train carrying export coal to Richards Bay derailed outside iNtshamanzi, near Ulundi. The cause of the incident is under investigation.

The North Corridor runs from Mpumalanga coal fields to Richards Bay. Chrome is also transported along the corridor.

Transnet said it is “extremely concerned” by the threats and disruptions to its operations, and highlighted its job creation and empowerment of businesses along the corridor.

South Africa’s coal exports to Europe have surged amid an energy crisis exacerbated by Russia’s invasion of Ukraine and subsequent sanctions. 

Transnet saw 70 derailments in 2021. 

5. FIC investigation into ISIS in SA:

The Financial Intelligence Centre (FIC) said law enforcement agencies are conducting an intensive investigation into alleged members of the terror group ISIS – who have been operating in this country.

On Monday, the US Treasury announced sanctions targeting companies owned by these alleged members – some of whom are being sanctioned for the second time.

The centre said it was acting on information received from the US.

FIC said it – along with law enforcement agencies – has been studying the activities of the individuals concerned.

“We as the Financial Intelligence Centre and other law enforcement agencies – which includes the hawks, the State Security Agency as well as crime intelligence, South African Police Service and the NPA work closely with the US. We received some early warnings on these individuals and we are actively looking at them,” said the FIC’s acting executive manager Pieter Alberts.

Alberts said some of these suspects – have in the past – appeared before South African courts.

“These guys are subject to investigations. Some of them appeared in South African courts but some of the cases were provisionally withdrawn in terms of getting evidence around these matters.”

Alberts said that none of these individuals targeted by US sanctions was in custody.

All information sourced from articles posted by: BusinessTech, Mail & Guardian, Moneyweb, Fin24, and EWN.

Leave a comment

Your email address will not be published. Required fields are marked *