Ramaphosa sends a warning to ministers, and prepaid electricity meter trouble in South Africa
The South African rand experienced a significant decline following the release of disappointing mining production figures.
It had already been under pressure throughout much of Tuesday’s trading session, as heightened trade tensions between Washington and Beijing weakened risk sentiment.
The rand was trading at 17.41 against the dollar, approximately 0.6% lower than the previous day’s close. The US dollar remained stable against a basket of other currencies.
On Tuesday, the US and China began implementing additional port fees for ocean shipping firms, marking the high seas as the latest front in the ongoing trade war between the two largest economies in the world.
Like other currencies sensitive to risk, the rand often reacts to global influences such as US policies and economic data.
Domestically, data from Statistics South Africa revealed that the nation’s mining output fell by 0.2% year-on-year in August, in contrast to a revised increase of 5.1% in July.
Economists surveyed by Reuters had predicted a production growth of 1.0%, with analysts from Nedbank anticipating a modest growth of 0.7%, citing a boost from rising precious metal prices.
On a more positive note, business confidence improved in September, driven by strong tourism, higher precious metal prices, and increased exports. On the Johannesburg Stock Exchange, the Top 40 index was down 0.4%.
On Wednesday, 15 October, the rand was trading at R17.33 to the dollar, R23.14 to the pound and R20.14 to the Euro. Oil was trading slightly lower at $62.18 a barrel.
Here are five important things happening in and affecting South Africa today:
Ramaphosa’s warning to minister: President Cyril Ramaphosa warned that he will dismiss any Cabinet members if credible evidence arises that leads to criminal charges against them. He addressed concerns from some members of the National Council of Provinces (NCOP) who claimed that he does not treat all ministers accused of corruption equally. [EWN]
Prepaid meter trouble: Eskom and several South African metros are implementing “smart” prepaid meters to combat electricity theft, but it’s not a complete solution. Some customers have stopped purchasing electricity after switching from postpaid to prepaid. City Power identified discrepancies in account data post-conversion and will review the prepaid tariff structures, which, until July 2024, excluded fixed service and network charges. [MyBroadband]
Changes coming to municipalities: Minister of Cooperative Governance and Traditional Affairs, Velenkosini Hlabisa, expressed that the current local government system is ineffective. He said he is looking at reforms to the local government system, including a revised funding model and the closure of unnecessary municipalities. [Newsday]
South Africa’s getting left behind: Moody’s predicted South Africa’s GDP will grow by 1.6% next year, the most optimistic estimate among major agencies. However, it also warned that stronger growth is needed to manage debt. This is below the nearly 5% growth expected for the rest of sub-Saharan Africa. [Business Day]
ANC battling to unfreeze bank accounts: The ANC plans to urgently appeal a court order freezing its bank accounts, which has led to a complete operational standstill. Treasurer-general Gwen Ramokgopa stated that the freeze has caused “operational paralysis.” [Daily Maverick]
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