South Africa in deep trouble, and GNU to hold ‘special’ meeting

South Africa’s rand remained stable on Friday after a volatile week. It initially weakened due to the postponement of the national budget before recovering, thanks to rising global gold prices.

The rand ended the week trading at 18.32 against the dollar, remaining relatively stable since the budget hiccup.

The budget delay, caused by disagreements within the coalition government over a proposed increase in value-added tax, is the first in South Africa’s post-apartheid history and creates uncertainty ahead of the expected mid-March presentation.

TreasuryONE’s Andre Cilliers said that markets will be watching for a focus on debt consolidation and expenditure cuts in the revised budget, which could strengthen the rand.

On Friday (21 February), the rand strengthened slightly, trading at R18.33 to the dollar, R23.23 to the pound and R19.27 to the euro. Oil is trading lower at $74.30 a barrel.

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

South Africa is in deep trouble: Ann Bernstein, the executive director of the Centre for Development and Enterprise (CDE), believes that South Africa is facing a potential “catastrophic unemployment crisis” if it does not urgently eliminate barriers to economic growth. She stated, “We’re in deep trouble, and simply continuing with our usual practices or making slow, hesitant reforms is not enough.”[MyBroadband]

Plan for private help for Eskom: The Cabinet plans to hold a special meeting after the cancellation of Finance Minister Enoch Godongwana’s budget policy statement. Reports indicate that the budget will be the only item on the agenda as parties in the Government of National Unity (GNU) seek to address concerns about the proposed tax hike.[EWN]

Good news over greylisting: The Treasury is confident that South Africa will exit the FATF’s money-laundering greylist by October, as only two items on their agreed plan remain to be addressed. [Business Day]

Mantashe in charge of saving SA from high power prices: Minister of Mineral and Petroleum Resources Gwede Mantashe will lead a newly established task team of four ministers aimed at addressing the obstacles to industrial development in South Africa, particularly the high cost of electricity. [News24]

Load shedding reduced to stage 4: Power utility Eskom says that load shedding will be reduced to stage 4 from 00h30 on Monday (24 February) following the successful return of most downed units. [BusinessTech]