Business

5 important things happening in South Africa today

Staff Writer

 ·25 Aug 2023

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

Indebted municipalities in hot water: Municipal debt of R63bn is one of the most pressing challenges facing Eskom, which itself is also struggling with money problems. Eskom’s distribution group executive, Monde Bala, noted that penalties won’t work. “We can impose penalties for late payment, but when a municipality is not paying its bills, the penalty will be of little effect”. So, Eskom is now considering stronger enforcement of the distribution licence conditions. “If they don’t pay, they run the risk of losing their licences,” said Bala. [Business Day]

Eskom gets handout from China: After China donated emergency power equipment worth R167 million to South Africa, it has now pledged R500 million to be made available as a grant to deal with the energy crisis. Electricity Minister Kgosientsho Ramokgopa signed a memorandum of cooperation with five Chinese entities on Wednesday. Ramokgopa says they want to find a solution that doesn’t result in higher electricity prices for South Africans. [eNCA]

BEE to blame for Kusile problems: Construction on Kusile started in 2008 and was expected to take around six years to complete. However, its first unit only came into operation in 2017, and its fourth only reached commercial operation last year. The last two units – Units 5 and 6 – have not been commercially operational. Former President Thabo Mbeki said black economic empowerment requirements were to blame, noting they were used to delay the construction for years in order to find a suitable BEE-compliant contractor. [Daily Investor]

Satrix to delist three EFTs: Satrix announced the closure of three ETF funds after concluding they didn’t align with its strategic objectives and, while at a combined R29 million, lacked sufficient scale. Satrix Volatility Managed SA Defensive Equity ETF, with current assets of R7.1 million, the SA Volatility Managed Moderate Equity ETF, with R8.8 million, and the SA Volatility High Growth Equity ETF, R13 million. All will be closed on 26 September 2023. [News24]

Markets: The South African rand slid 1% on the last day of the BRICS summit on Thursday, largely due to US dollar strength ahead of the Federal Reserve’s Jackson Hole symposium, analysts said. On Friday (25 August), the rand was trading at R18.88/USD, R20.35/EUR and R23.72/GBP. Oil is trading at $83.64 a barrel. (Reuters)