5 important things happening in South Africa today

·31 May 2023

Here’s what is happening in and affecting South Africa today:

Gordhan’s conundrum: Minister of Public Enterprises Pravin Gordhan is applying for leave to appeal over the court order that said all hospitals, clinics, schools and police stations should not be subjected to electricity outages. Earlier in May, Judge Norman Davis said that the minister had 60 days to ensure that all these institutions were spared from load shedding. However, Gordhan said that the order is impossible to implement within 60 days. [News24]

Kar-shorter-ship: Rudi Dicks, the head of project management in the Presidency, says the government is in discussions to reduce the length of Karpowership contracts. Dicks said that the initial proposed contract length of 20 years could be reduced to five or 10 years. Mineral Resources and Energy Minister Gwede Mantashe and Electricity Minister Kgosientsho Ramokgopa have previously endorsed the move for the power ships; however, the latter said that contracts with emergency power producers should only last for three to five years. [News24]

Vaping black market: A new sin tax on vaping products, which will come into effect from 1 June, could see vapers turn to illicit trade in a similar manner to the government’s previous ban on cigarettes in 2020. Kurt Yeo from Vaping Saved My Life said that the new tax will wipe out a large number of vaping businesses, with evidence already showing that it is already promoting a black market for vaping products. The new sin tax is set to come into effect before the Bill which regulates vapes is passed into law. [Moneyweb]

Telkom’s comeback: Former Telkom CEO Sipho Maseko and a host of other investors have roughly R12 billion to invest in the struggling telecoms company. The move has been supported by major shareholders and will see the consortium acquire a 35% stake in Telkom. Maseko proposed an idea where Telkom’s physical assets, including its fibre and cellphone towers, are combined with those of Mauritius-based Axian Telecom. [Business Day]

Markets: The South African rand hit a record low on Tuesday on the back of a strengthening dollar and souring local investor sentiment that has seen massive capital outflows from the country. Greg Davies from Cratos Capital said that the local power crisis is making South Africa a less desirable destination for international investors. On Wednesday (31 May), the rand was trading at R19.76/$, R21.13/€, and R24.49/£. Brent crude is trading at $73.48 a barrel. [Nasdaq]

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