‘Bomb squad’ deployed in Joburg, and bad news for a wealth tax in South Africa

The South African rand weakened on Wednesday, 7 May, as investors took profits following a strong rally against the dollar. 

The rand was trading at 18.28 to the US dollar, which reflects a decrease of approximately 0.5% compared to Tuesday’s closing level. 

Andre Cilliers, a currency strategist at TreasuryONE, noted that traders were reducing their long positions in the rand in anticipation of the US Federal Reserve’s interest rate announcement later in the day. 

The Fed announced that it would maintain current rates, amid concerns about an economic slowdown attributed to US President Donald Trump’s tariffs.

On Thursday, 8 May, the rand was trading at R18.23 to the dollar, R24.31 to the pound and R20.64 to the euro. Oil was trading slightly lower at $61.59 a barrel.

Here are five other important things happening in and affecting South Africa today:

Johannesburg ‘Bomb squad’: During the SOCA, Johannesburg Mayor Dada highlighted the city’s crisis and state of decay. In response, Morero announced a “bomb squad” task force aimed at addressing key issues like potholes, illegal electricity connections, land invasions, illegal mining, dumping, and undocumented migrants to defuse the ticking time bomb that is Johannesburg. [Moneyweb]

Bad news for a wealth tax: In South Africa, 2,850 individuals with over R50 million in net assets hold R245 billion locally and R150 billion abroad. They paid R7 billion in personal income tax. Finance Minister Enoch Godongwana warned that a proposed wealth tax could drive them to change their tax residency, which the country cannot afford. [Business Day]

Eskom explains reasons for missed target: Eskom’s current energy availability factor (EAF) is 57%, below the 70% target for 2025. This shortfall is due to increased planned maintenance during the summer to prepare for winter demand and comply with regulatory obligations. Eskom emphasised that this is a necessary investment in long-term reliability. [Mybroadband]

Malema ‘denied’ UK Visa: The UK home office said that they were regrettably unable to process EFF leader Julius Malema’s Visa application for his scheduled address on 10 May at the conference hosted by the African Society of Cambridge University. The EFF said the outcome was “nothing more than an expression of bureaucratic process being used to suppress political dissent.” [Mail & Guardian]

Proton not leaving SA: In CMH’s latest annual report, CEO Jebb McIntosh noted that Proton’s import and distribution have been “challenging and costly” since its return to South Africa in September 2022. He mentioned that the current inventory will be sold in the first half of the financial year, after which the future strategy will be determined. In response, Proton emphasised its long-term commitment to South Africa, stating, “Proton is not exiting the South African market” despite the speculation. [TopAuto]