Here’s what is happening in and affecting South Africa today:
- Hopes for a DA/EFF coalition in major metros appear to be dashed, as the EFF – a key player for any party looking for majority control – looks ready to abstain from any solid agreements, opting to support or oppose on a case-by-case basis. This would leave metros like Johannesburg and Tshwane in unstable positions with two minority governments vying for power over each decision.
- Courts have struck down the 9.4% tariff hike granted to Eskom this year, saying that the utility did not follow the correct process in applying for it. The increase was a “special fee hike” granted by Nersa for Eskom to gain back over R11 billion to make up for the heavy use of diesel-powered generators. The court called Nersa’s decision unfair and irrational.
- The rand retreated on Tuesday with a recent rally running out of steam as the currency failed to break a signficant technical resistance level – and despite favourable risk conditions globally due to an anticipated delay to U.S. interest rate hikes. On Wednesday, the rand was trading at R13.46 to the dollar, R17.52 to the pound and R15.15 to the euro.
- In global news, Asian shares pulled back from a one-year high and the dollar strengthened on Wednesday, after an influential Federal Reserve official said interest rates could rise as soon as September.Wall Street shares retreated from record highs, with the S&P 500 .SPX losing 0.55 percent.
- Oil prices fell away from 5-week highs early on Wednesday, as analysts doubted a successful outcome from producer talks to rein in ballooning oversupply. Brent crude oil futures were trading at $48.85 per barrel, down 38 cents, while US crude futures were at $46.30 per barrel, down 28 cents.
In other news: The Vaal Dam, the key water source for much of Gauteng, is at its driest point in years, at 34% capacity. Boats have been removed from the dam, but a water crisis has not yet been declared.