Here’s what is happening in and affecting South Africa today:
Load shedding: No load shedding is expected today, but unplanned outages have increased to over 12,000MW, so the possibility of load shedding being implemented remains. Emergency reserves are being used to supplement power.
- Moody’s budget review: Ratings firm Moody’s says that government’s plans to cut spending on its wage bill are all well and good, but there is a lot of uncertainty around its actual capacity to do so – and banking on bringing stability to failing state-owned companies is also a big risk. Even if government succeeds at this, it doesn’t remove the fact that the budget deficit will continue to climb. On the revenue side, Moody’s says government’s goals are achievable. On expenditure – major doubts. [CNBC Africa]
- Wage cut clarity: National Treasury has moved to try and soften the outrage over government wage bill cuts, saying that actual wages won’t be cut or even frozen. The idea is that the R160 billion saving over three years will be coming from capping wage increases at inflation – instead of the one or two percent above inflation that’s typically budgeted in. Treasury says salaries will increase, just not by as much as they did in the past. [TimesLive]
- Emergency wage talks: ANC leaders are calling an emergency meeting on government’s proposed wage bill cuts, which will eventually include leadership from the party’s alliance partners, Cosatu and the SACP. The ANC’s position on the wage adjustments will be vital, as it has the potential to further divide the party and its members in government, or its alliance partners. Analysts have said this will be a true test for leadership, as lines have been drawn, and a battle over the cuts looms. [Bloomberg]
- Wuhan evacuations: 132 South Africans will be evacuated from Wuhan in China, confirming earlier reports that such a move was imminent. While none of the South Africans being evacuated – mostly students – have been infected with the Covid-19 virus or are showing any symptoms, they will be quarantined once in South Africa for 21 days as an added precaution. There have been no confirmed cases of the virus in South Africa. Nigeria has confirmed the first case in Sub-Saharan Africa. [Daily Maverick]
- Markets: The rand strengthened on Thursday, a day after Finance Minister Tito Mboweni proposed cuts to the public sector wage bill. Financial markets cheered the proposal as rising public sector wages have long been a threat to the country’s stretched public finances. But some analysts are skeptical that the minister will be able to achieve the wage cuts, given entrenched opposition from labour unions. On Friday the rand was at R15.60 to the dollar, R20.08 to the pound and R17.14 to the euro. [XE]