5 important things happening in South Africa today

·21 Jun 2023

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

Eskom wage problem: Peter Attard Montalto from Intellidex says Eskom’s new three-year wage deal will leave the embattled power utility with a R1.3 billion shortfall in its budget. As per the deal, 80% of Eskom’s employees will receive a 7% increase annually for three years and a once-off R10,000 cash bonus this year and in 2024. Montalto said that Eskom may claim that it can cut costs and employment to offset the increase but noted it is already doing this to cover the cost of diesel. He added that the increased tariff would have to cover it, as National Treasury has imposed a borrowing ban on the utility. [Moneyweb]

Retrenchments unlikely: Amid a weak economy – caused by load shedding, rising input costs, and rate hikes – many companies are expected to retrench their staff members. However, Econometrix’s Azar Jammine said that many companies are already operating with fewer employees following widespread retrenchments during the Covid-19 pandemic, so there may not be any more room to let go of more staff. Jammine added that companies would likely save costs in other ways, such as insulating themselves from Eskom and Transnet. [News24]

MTN’s complaint: MTN says IHS – which owns nearly 6,000 thousand of its towers following an over R6 billion sale – is intentionally breaching its shareholders’ agreement by blocking a deal to increase its voting powers in line with its shareholding. Although MTN owns 26% of IHS Towers via its Dutch subsidiary B.V., the group’s voting rights are capped at 20%, which looks to be the centre of the issue with the IHS board. MTN said that it submitted a governance proposal to IHS, but accused the NYSE-listed company of not notifying its shareholders of the proposal. [MyBroadband]

Premier wins interdict: The Special Investigating Unit (SIU) says it is exploring all available legal options after the Eastern Cape High Court interdicted it from investigating the academic qualifications of Eastern Cape Premier Oscar Mabuyane. The premier is accused of being fraudulently admitted to a Master’s programme at the University of Fort Hare, as he lacked an honours degree. However, the SIU said that it was optimistic for Part B of the two-pronged court application, which deals with the admission and award of the Master’s degree. [EWN]

Markets: South Africa’s rand and stocks lost over 1% on Tuesday as the dollar firmed on U.S. housing data. Domestically, Stats SA will release Consumer Price Inflation data for May, with economists at the BER and Nedbank expecting to see a decline. On Wednesday (21 June), the rand was trading at R18.39/$, R20.07/€, and R22.47/£. Brent crude is trading at $76.12 a barrel. [Nasdaq, BusinessTech]

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