Serious allegations against major South African steel company, and households poorer than they were nine years ago
The South African rand weakened on Monday as investors took profits following a rally that had pushed the currency to a nine-month high.
The rand was trading at 17.58 against the dollar, nearly 1% lower than its close on Friday. The currency strengthened on Friday due to a weaker dollar and a rise in gold prices.
This follows comments from US Federal Reserve Chair Jerome Powell indicating a possible rate cut at the Federal Reserve’s September meeting.
Now, investors are awaiting domestic economic data to assess the health of South Africa, the continent’s most industrialised economy.
This week’s economic calendar includes releases on South Africa’s business cycle leading indicator, producer inflation, money supply, private sector credit, and trade balance and budget balance figures.
On Tuesday, 26 August, the rand was trading at R17.60 to the dollar, R23.69 to the pound and R20.48 to the euro. Oil was trading slightly lower at $68.48 a barrel.
Here are five other important things happening in and affecting South Africa today:
Serious allegations against AMSA: Steel manufacturers Cape Gate and Scaw have raised concerns about ArcelorMittal SA (AMSA), alleging predatory pricing on long steel products after AMSA’s recent government bailout. They urged the Competition Tribunal to intervene, stating that Amsa’s below-market pricing could harm competition in the long run. [BusinessLive]
South African households poorer: According to DebtBuster’s latest Debt Index report, South Africans’ purchasing power has declined significantly. Since 2016, nominal incomes have risen by only 2%, while inflation has increased by 51%. Consequently, today’s paychecks buy 49% less than they did nine years ago. [TimesLive]
Treasury takes over pensions: Finance Minister Enoch Godongwana has appointed Stadi Mngomezulu as the acting CEO of the Government Pensions Administration Agency (GPAA) while Kedibone Madiehe is investigated for alleged procurement breaches costing over R1.2 billion. Mngomezulu is currently the deputy director-general for corporate services at the National Treasury. [News24]
Win for homeowners in Tshwane: The Tshwane Municipality is exploring its options after failing to overturn a court ruling that deemed its city cleansing practices unlawful. On Monday, the Pretoria High Court dismissed the municipality’s application for leave to appeal its earlier decision, which invalidated the levy. [EWN]
Sasol looking to curb US tariff hit: Sasol is trying to address the impact of a 30% tariff on its chemical exports to the US, which could affect $80 million in sales, according to CFO Walt Bruns. The tariff threatens billions of exports from South Africa. Bruns said they might mitigate $20 to $30 million by passing costs to customers or reallocating products to Asia. [CNBC Africa]
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