Here’s what is happening in and affecting South Africa today:
Load shedding: No load shedding is expected today after generating units came back online. Eskom warned that generation remains unreliable, however.
- Budget wall: The one thing finance minister Tito Mboweni needs to do alleviate South Africa’s financial woes, is the one thing he can’t do. The public wage bill accounts for 35% of the budget spend, and has increased by 40% over the last decade. However, unions have made it clear that any measures announced by Mboweni this week will be rejected, as they have not been consulted or approved any austerity plans. Wage negotiations for the public sector are only taking place later in 2020 – so Mboweni’s hands are tied. [Moneyweb]
- Covid fears rising: The JSE has taken a massive knock and experienced its worst day in 20 years on the back of global market jitters – mainly focusing on the Covid-19 outbreak which is spreading to more countries and killing more people. The World Health Organisation has not declared a global pandemic, but said the potential is there. The virus has killed over 2,600 people, but is said to be on the decline in China. However, new outbreaks have flared up in other Asian nations, and the Middle East. There are no confirmed cases in South Africa. [Enca]
- Eskom price hikes: Eskom is sticking to its arguments that it is using the methodology set out by the energy regulator to calculate price hikes based on missed revenue. Nersa expected Eskom to get R190 billion in revenue from electricity sales in 2018/19, however Eskom missed this target due to low sales (because of load shedding). It now wants to hike prices to make up the difference. It is also arguing against Nersa’s methodology, saying it is out of date, with the cost of coal and cost to run expensive diesel turbines much higher now. [Eskom]
- Pilchards recall: The National Regulator for Compulsory Specifications has ordered a recall of various brands of 400g pilchards in tomato sauce and chilli sauce, after its investigations found there was a fault in the canning process. the problem only presents after months of storage, with the contents reacting to the metal of the can, which poses a health risk for consumers. Buyers have been urged to return the products to the place they bought them for a refund. The products bear the markings starting with ZST29 and ZSC29 on top of the can. [Enca]
- Markets: South Africa’s rand tumbled more than 1% while stocks plunged to a two-month low as a sharp rise coronavirus cases overseas combined with concerns about the upcoming budget speech knocked down local assets. On Tuesday the rand was at R15.12 to the dollar, R19.57 to the pound and R16.42 to the euro. [XE]