5 important things happening in South Africa today

·4 Oct 2023

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

Bad news comes with petrol hike: Economists say the petrol increase has come at a bad time and will likely push inflation back quite a bit above 5%. “With this petrol price coming through with the currency a bit weaker, I think the Reserve Bank will be nervous, with the distinct possibility that it will push interest rates up again. Obviously, that then hurts even more because you’ve still got to pay for the higher petrol price, the higher energy price, the higher food price,” said Chief Economist at Stanlib Asset Management, Kevin Lings. [702]

Egg rations: Grocery retailers are rationing eggs to customers in a bid to ensure regular supply as South Africa’s worst-ever avian influenza outbreak continues to gather momentum. Woolworths, for example, has “implemented a limit on whole egg purchases in our stores to six eggs per customer” while it worked with its farmers to “ensure regular supply returns as soon as possible”. The government, meanwhile, is working on introducing a temporary rebate on import duties for chicken products to help support the industry. [News24]

Coal power to stay in SA: Electricity minister Kgosientsho Ramokgopa on Tuesday moved to clarify that there are no plans for Eskom to shut down any more coal-powered stations with the aim of replacing them with renewables. Eskom does, however, intend to install renewable capacity at current sites while they are still operational. Now, only Komati has been shut down for repurposing and repowering. Ramokgopa added that coal would continue to be used to generate electricity despite calls to cull coal by international climate change initiatives. [Business Day]

R100 billion loss: South Africa’s mining industry has seen a nearly R100 billion slide in profit this year as lower commodity prices and a tough operating environment, marked by load shedding and railing constraints, took their toll. This is according to PwC’s annual 2023 SA Mine report. As concerns mount that South Africa is facing a fiscal crisis, the mining sector’s downturn will be felt by the government, which benefitted from taxes and royalties from the industry in the previous two years. The sector’s reported tax expense dropped to R48 billion, a 34% decline. [News24]

Markets: The South African rand extended losses on Tuesday, bearing the brunt of the stronger dollar and surging U.S. Treasury yields, analysts said. On Wednesday (4 September), the rand was trading at R19.32/$, R20.23/€, and R23.35/£. Brent crude is trading at $90.88 a barrel. [Reuters]

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