Here’s what is happening in and affecting South Africa today:
- The Zuma government wants it all – the president wants additional tax hikes and cuts in government spending amounting to R25 billion on top of already announced measures to meet a revenue shortfall of R50 billion, all while pushing nuclear energy, national healthcare and free education – all of which the country simply cannot afford.
- Despite plunging deeper into junk status, South Africa is still enjoying investment from undeterred investors, who are choosing to buy its bonds cheap and pocket one of highest yield premiums offered in emerging markets. South Africa’s bond are luring in investors as yields approach 10%, despite a full junk status by S&P Global.
- Eskom has promised that it is not rushing ahead with nuclear energy, despite media reports that government was pushing forward and apparently rushing ahead with the project. The power utility said it was bound by an April court ruling that halted its procurement processes, and despite concerns, it has not violated that court order.
- ANC chair and presidential hopeful Baleka Mbete says that president Jacob Zuma should be given the chance to finish his presidential term with dignity. When asked if Zuma was fit to hold office, Mbete said he was the chosen president of the ANC, so to ask if he was fit wasn’t a logical question.
- The rand recovered on Monday from steep falls suffered late on Friday after S&P Global Ratings downgraded the local currency debt to sub-investment grade, taking some relief from Moody’s decision to only place South Africa on review for downgrade. On Tuesday the rand was at R13.77 to the dollar, R18.35 to the pound and R16.39 to the euro.