Energy

5 important things happening in South Africa today

Luke Fraser

 ·3 Jul 2023

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

• NHI funding: A new government factsheet distributed by the Department of Health and the Presidency suggests that increased payroll and income taxes will be imposed to fund the National Health Insurance (NHI). Under the new system, employers and employees will contribute to the NHI in a similar way that contributions are made to the Unemployment Insurance Fund (UIF). Although the factsheet does not state at what level these taxes will be applied, given the scope of the NHI, these new taxes will have to be substantially higher. [News24]

• IPP problem: Brian Day, the chairperson of the SA Association of Independent Power Producers, says the new rules that investors in energy projects must meet to access the power grid will lead to many staying away. The new rules, which Eskom introduced last week, will require developers to meet a host of additional requirements, including signed purchase agreements and data on sun and wind availability over one and two years, respectively. Day said that the new requirements will require R30 million to get a project to a financial close, up from the roughly R6 million it takes now. [City Press]

• Life insurance boom: South Africa’s life insurance sector is making substantial gains following a challenging time during the Covid-19 pandemic. Since the beginning of 2023, the Life Insurance Index has grown by 17%, well above the JSE’s All Share Index’s rise of approximately 4%. Dudu Tembo from Argon Asset Management said that the sector is still staging an unwinding for the pressures caused by the pandemic, with insurers releasing some Covid-19-related provisions as mortality levels started to drop. [Moneyweb]

• New youth league president: Several delegates at the ANC Youth League’s 26th national elective conference say that newly-elected President Collen Malatji faces a challenging task to bring the organisation back to its former glory. Malatji was elected unopposed, with some delegates saying that his experience in politics made him the best candidate for the role. Prior to Malatji’s election, the ANCYL did not have a formal elected structure for eight years. [EWN]

• Markets: Despite the warning of heightened stages of load shedding during winter, a reduction in rolling blackouts helped the rand gain 4.6% during June. Looking ahead, Ashley Dickinson from Sasfin Securities said that the high interest rates might make South Africa more attractive to investors, which will help boost the rand. On Monday (3 July), the rand was trading at R18.79/$, R20.52/€, and R23.88/£. Brent crude is trading at $75.37 a barrel. [Business Day]