Here’s what is happening in and affecting South Africa today:
- Government’s agreement to hike wages for public servants has blown the budget by R30 billion, which has led to a decision to start ‘encourage’ thousands of workers over the age of 60 to take early retirement. The Department of Public Service and Administration said this will help to reduce the wage bill, and also help with youth unemployment. [DPSA]
- Sales figures for April show that the VAT hike hit South Africa harder than many economists expected. Sales slowed to 0.5% as VAT increased to 15% and motorists saw a massive hike in the petrol price. Adjusted for seasonal trends, it was a contraction of 1.2%. Only furniture retailers bucked the trend, increasing sales by 11%. [Stats SA]
- Eskom says it can’t guarantee that South Africa’s power isn’t under threat, as workers threaten to throw the country into darkness as they strike for higher wages. Eskom said that all its stations are running, but several are being affected by worker strikes. Some stations are already facing a coal supply crisis. [Bloomberg]
- Despite calls for cuts to wasteful spending, government departments have spent another R3.7 million on luxury vehicles for politicians. An investigation by the Daily Maverick has also turned up information suggesting that the procurement of the new vehicles sidestepped parliament’s finance committee. [Daily Maverick]
- South Africa’s rand recovered some ground on Wednesday, bouncing back against a weaker dollar despite retail sales data pointing to a sluggish economy at the start of the second quarter. On Thursday the rand was at R13.27 to the dollar, R17.77 to the pound and R15.66 to the euro.