5 important things happening in South Africa today

·11 Aug 2022

Here’s what is happening in and affecting South Africa today:

Greylisting: More financial experts are saying that South Africa is likely to be added to a global money laundering and terrorist funding ‘greylist’, which could see billions of rands of investment flow out of the country’s economy. The country has until the end of August to make submissions to the Financial Action Task Force to avoid the listing. While the greylisting will undoubtedly be a black mark against South Africa, economists say it won’t be as bad as credit downgrades. [News24]

Rush job: The Minerals Council South Africa has warned energy regulator Nersa to steer clear of rushing through a new methodology for electricity tariffs, saying that it is incomplete and unimplementable. Nersa’s new methodology will overhaul how Eskom and municipalities determine their price increases, and the regulator wants to phase it in over several years. Critics argue that Nersa should instead make incremental improvements to its current methodology over the same time. [Moneyweb]

Cautionary tale: An investigation into green energy projects in the Eastern Cape reveals that around R56 million has been wasted on failed community development projects in small towns, with little to no paper trail or accountability processes in place. In contracts awarded to independent power producers, a certain percentage of spend must go to community development. However, the reported failures serve as a cautionary tale of how these projects can go wrong, leaving communities worse off. [Daily Maverick]

Dismissed: The Constitutional Court has dismissed Ace Magashule’s challenge to his suspension from the ANC. Magashule wanted the party’s step-aside resolution to be declared unconstitutional – however, the country’s top court said his appeal had no prospect of succeeding. Magashule is currently facing fraud and corruption charges relating to a R255 million rand asbestos tender awarded during his time as Free State premier. He refused to step aside as ANC secretary general and was suspended in May 2021. [ENCA]

Markets: The rand rallied nearly 1.5% following the release of the US CPI data on Wednesday. US Inflation came in at 5.9% year on year, prompting markets to position for a slower pace of hikes by the Fed. This bodes well for the rand, benefitting from a softer dollar. On Thursday, the rand was trading at R16.24/$, R16.69/€ and R19.80/£. Brent crude is trading at $97 a barrel. [Citadel]

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