Ramaphosa in deep trouble, and R3.9 billion in government salaries down the drain
The South African rand weakened on Wednesday ahead of an anticipated interest rate cut by the US Federal Reserve and a local rate-setting meeting scheduled for Thursday.
The rand traded at 17.38 against the dollar, a decline of 0.2% from Tuesday’s close. The South African Reserve Bank is set to announce its own interest rate decision today, with economists surveyed by Reuters expecting rates to remain unchanged.
Local inflation unexpectedly slowed to 3.3% in August, attributed to lower fuel and food prices.
Johann Els, a chief economist at Old Mutual, noted that this softer-than-expected outcome raises the probability of a SARB rate cut at tomorrow’s meeting to around 50%
On Thursday, 18 September, the rand was trading at R17.41 to the dollar, R23.72 to the pound and R20.57 to the euro. Oil was trading slightly lower at $67.85 a barrel.
Here are five other important things happening in and affecting South Africa today:
Ramaphosa is in trouble: ANC president Cyril Ramaphosa faces backlash from national executive committee (NEC) members after praising the DA for running better municipalities. At an ANC event, he encouraged councillors to learn from their main electoral rival. This concession has sparked calls for action against him from seven NEC members, both historical allies and detractors of Ramaphosa, who said the ANC must act against the party president. [TimesLive]
R3.9 billion in salaries down the drain: The public service may be losing over R3.9 billion annually to ghost employees, based on a 1% compromise rate among the state’s 1.3 million employees. This figure, presented to parliament, highlights the scale of systemic fraud under investigation by the National Treasury, DPSA, and AGSA. [BusinessDay]
Another US anti-SA bill: U.S. Senate legislators have introduced a second bill to review relations with South Africa, sanction the ANC, and potentially remove the country from AGOA. The bill, named the US-South Africa Bilateral Relations Review Act, was proposed by Senator John Kennedy on 15 September.
[BusinessTech]
Blow to Eskom’s new power plant: The Supreme Court of Appeal has annulled a permit for Eskom to build a large natural gas power plant in Richards Bay, citing insufficient public consultation. This location will also host South Africa’s first liquefied natural gas import terminal. [Engineering News]
Big changes proposed for mobile data: Mzwandile Masina, chair of the Portfolio Committee on Trade, Industry, and Competition, said that data prices and validity periods in South Africa “must fall.” Following a briefing from the National Consumer Commission and the communications regulator, stakeholders discussed data costs and expiration in relation to section 63 of the Consumer Protection Act. This mandates a three-year validity period for data bundles and prepaid vouchers unless a longer period is agreed upon. [MyBroadband]
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