5 things you need to know in South Africa today
·30 Aug 2016
Here’s what is happening in and affecting South Africa today:
- National Treasury reportedly has a plan to go “nuclear” should president Jacob Zuma succeed in removing finance minister Pravin Gordhan. According to an ‘insider’ talking to BizNews, the figurative ‘big red button’ will flatten South Africa’s economy (the rand, markets and stocks) and “destroy Zuma” in the process. It is said to be a last resort to protect the country’s coffers from would-be pillagers.
- A leaked draft report from Treasury on Eskom’s contracts has apparently revealed that the Guptas’ mining company Tegeta Exploration provided coal that failed to meet Eskom standards. The people who tested and reported on the poor quality of coal were suspended and blocked from speaking publicly. Eskom went on to sign a 10-year coal supply contract with Tegeta, and are on record claiming the coal met required standards.
- Nineteen out of 23 economists agree – South Africa is junk. A recent poll run by Reuters found that most economists see a ratings downgrade for South Africa in December 2016. They saw the Gordhan saga as a significant risk leading to the downgrade, with heightened political risk and slow growth also factoring in. On a rating cut to junk, economists expect the rand to head towards R16 to the dollar again.
- There are renewed calls withing the ANC for president Jacob Zuma to step down – this time coming from branches in the Eastern Cape (Nelson Mandela Bay and Buffalo City) as well as the ANC Youth League in the province. Members are concerned about the president’s ties to the Gupta family, and blame him for the party’s poor performance in the local elections.
- South Africa’s rand weakened against the dollar on Monday as the greenback rose on expectations that U.S. interest rates would rise soon, adding pressure on the currency which has been knocked by concerns over the finance minister’s future. On Tuesday the rand was trading at R14.44 to the dollar, R18.89 to the pound and R16.13 to the euro.
In global news: Asian shares bounced on Tuesday as doubts the Federal Reserve really would hike interest rates as soon as September restrained the dollar, while investors continued to count on more policy stimulus elsewhere in the world. Brent crude oil futures were trading at $49.34 per barrel, up 8 cents, while US crude futures were up 15 cents at $47.13 a barrel.
Loading ...