Massive prepaid hit for Eskom, and bailout coming for Transnet

South Africa’s rand remained stable on Tuesday as traders assessed the potential impact of U.S. President Donald Trump’s tariffs on steel and aluminium imports, which could trigger a multi-front trade war.

The rand was trading at 18.45 against the U.S. dollar, unchanged from its previous close.

On Monday, Trump announced tariffs on steel and aluminium imports set at a flat 25%, with “no exceptions or exemptions,” in an effort to boost production in the world’s largest economy.

ETM Analytics noted in a research report that South Africa “will be minimally affected” by these tariffs.

On Wednesday (12 February), the rand strengthened slightly, trading at R18.53 to the dollar, R23.06 to the pound and R19.20 to the euro. Oil is trading lower at $76.75 a barrel.

Here are five other news stories making waves in South Africa today:

Eskom’s prepaid headache: A forensic investigation found a significant number of illicit prepaid power tokens created in the 2023/24 financial year. People with “privileged level access” to Eskom’s IT systems have been linked to the scheme. This and other thefts, such as illegal connections, contributed to Eskom losing revenue of R23 billion. [News24]

Bailout for Transnet must come: Stanlib, a major investor in government bonds with over R80 billion in public debt, has warned that delays in financial support for Transnet could undermine economic reforms. Victor Mphaphuli, Head of Fixed Income at Stanlib, stated, “Without government support, Transnet will struggle to sustain itself; the support will have to come through.” [BusinessDay]

Last legs for the Post Office: The South African Post Office (Sapo) may cease functioning by the end of the month because it has not received the R3.8 billion bailout necessary to complete its business rescue plan. [MyBroadband]

Cars to get cheaper in SA: BMW South Africa’s CEO has announced a plan that aims to reduce production costs, lower retail prices, and curb the influx of inexpensive new vehicles entering the country. [BusinessTech]

South Africa’s corruption fight stalls: While South Africans still have no official way of signing up for Starlink, existing roaming users in the country have recently received a major upgrade due to the SpaceX-owned satellite Internet service’s launch of a terrestrial ground station in Nairobi, Kenya, towards the end of January 2025. [Daily Investor]