{"id":672153,"date":"2023-03-13T11:48:23","date_gmt":"2023-03-13T09:48:23","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=672153"},"modified":"2023-03-13T11:58:22","modified_gmt":"2023-03-13T09:58:22","slug":"south-africa-at-risk-of-becoming-a-failed-state","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/672153\/south-africa-at-risk-of-becoming-a-failed-state\/","title":{"rendered":"South Africa risks becoming a failed state"},"content":{"rendered":"

South Africa risks becoming a \u201cfailed nation state\u201d unless the government resolves challenges including an energy crisis, corruption and extreme unemployment, said MTN Group’s chief executive officer.<\/p>\n

Africa\u2019s largest wireless carrier said the rolling blackouts \u2014 known locally as load-shedding \u2014 lopped R695 million off its earnings before interest, taxes, depreciation and amortization last year. South Africa\u2019s state electricity company has imposed almost 12 hours of power cuts every day this year, prompting companies to spend money on power generators.<\/p>\n

President Cyril Ramaphosa last month declared a state of disaster to deal with the energy crisis that\u2019s curbing economic growth in Africa\u2019s most-industrialized nation.<\/p>\n

It\u2019s not just blackouts \u2014 the government also needs to create jobs to reduce the unemployment rate from 32.7% and improve the state-run rail and ports company\u2019s lack of capacity to ship goods that\u2019s stymieing plans by miners to expand.<\/p>\n

\u201cWe have time, but the time is now to act very, very decisively around these crisis issues that the country is facing,\u201d CEO Ralph Mupita said at a briefing on Monday. The state of disaster gives the country \u201ca unique opportunity to accelerate efforts to secure the resilience of critical national infrastructure such as telecommunications,\u201d he said.<\/p>\n

Still, MTN increased its full-year dividend to shareholders by 10% to R3.30 a share as revenue and profit rose. The board again anticipates paying a minimum ordinary dividend of at least R3.30 = per share this year, MTN said.<\/p>\n

\"\"

MTN Group CEO Ralph Mupita<\/p><\/div>\n

\u201cThe macroeconomic environment and regulatory restrictions in passing through high inflation are again becoming a short-term drag to what still looks like an interesting long-term growth story,\u201d said Peter Takaendesa, head of equities at Mergence Investment Managers. \u201cMTN management has executed very well on what they can control.\u201d<\/p>\n

MTN\u2019s shares, which have risen 6.8% this year, slumped 3.8% at 09h54 in Johannesburg.<\/p>\n

The company has R22 billion of cash and is keen to repay part of its $450 million of eurobonds early, Mupita said in an interview.<\/p>\n

\u201cMTN has a strong liquidity position of about R60 billion,\u201d he said.<\/p>\n

The company plans to use the stash to accelerate its network build out, and consider mergers and acquisitions, said Mupita. MTN concluded a towers deal in South Africa last year and sold part of its Nigerian unit in a public offer, which contributed about R12 billion to the group\u2019s strategy of paying down group debt and unlocking additional value by 2025.<\/p>\n

African telecommunications operators on the continent have been working on unlocking value from different parts of their businesses, such as towers, fibre and their fast-growing fintech operations.<\/p>\n

MTN said it has received offers for minority investments in its fintech business from potential strategic partners. It expects to conclude talks about the future of the unit by mid-May 2023. The firm also plans to separate its fibre business by 2024.<\/p>\n

\n

Read: South Africa is in trouble<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa risks becoming a \u201cfailed nation state\u201d unless the government resolves the many challenges it faces.<\/p>\n","protected":false},"author":59,"featured_media":656761,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[26],"class_list":["post-672153","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/672153","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=672153"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/672153\/revisions"}],"predecessor-version":[{"id":672179,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/672153\/revisions\/672179"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/656761"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=672153"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=672153"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=672153"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}