by Here’s what is happening in and affecting South Africa today:
Coronavirus: Global Covid-19 infections have hit 165.86 million confirmed, with the death toll reaching 3.44 million. In South Africa, there have been 3,641 new cases, taking the total reported to 1,625,003. Deaths have reached 55,568 (+61), while recoveries have climbed to 1,531,993, leaving the country with a balance of 37,442 active cases. The total number of vaccines administered is 597,406 (+39,236).
- Pipe dream: Finance minister Tito Mboweni says that economic recovery will remain a pipe dream in South Africa as long as maladministration and ineptitude continue to dog local government. Mboweni told parliament that municipalities were in a grim state, as political infighting and political interference marred service delivery and created administrative stumbling blocks. He noted that 63 municipalities are in financial distress; 40 are caught up in financial and service delivery crises; and 102 more have budgets they are unable to finance. He said national government is being forced – by the courts – to intervene in several areas. [TimesLive]
- Huge loss: Eskom is projecting a loss of R15 billion for 2022, narrowing from a loss of R20 billion in 2021. The power utility is negotiating with worker unions over wage hikes, where unions are demanding a hike between 9.5% and 15%, as well as a doubling of allowances. Eskom is arguing that it does not have money to meet any of these demands – highlighting the projected loss. The group is offering a 1.5% increase. It says that cash from operations is not enough to fund debt and a portion of its capital expenditure, and so it continues to rely on support from government. To break even, it would have to reduce the purchase cost of coal by 30% – instead, it’s increasing 7% this year. [Fin24]
- Step aside: Suspended ANC secretary general Ace Magashule has submitted legal opinions on why he should not be suspended, with the most prominent being from former Mpumalanga premier Mathews Phosa, who argues that the ‘step aside’ resolution is intrinsically voluntary, and if enforced without being tied to internal ANC disciplinary processes, would be unlawful. Magashule was suspended on the basis of his standing corruption charges. However, Phosa says that disciplinary processes need to be followed. President Cyril Ramaphosa was given the go ahead from all major decision making bodies within the party to suspend Magashule, who refused to abide by the order, and tried to suspend Ramaphosa in-turn. [Daily Maverick]
- Acquit: Jacob Zuma is now seeking to be acquitted from all corruption charges against him. This will be his next move, if he successfully gets state prosecutor Billy Downer to recuse himself from the case. Zuma faces hundreds of counts of corruption, fraud, racketeering and money laundering, with state prosecutors struggling for over a decade to get the case in to this point. The former president has employed every delaying tactic in the book to stop the case going to trial. His latest is the recusal plea. The process has also been frustrated by Zuma’s problems with legal representatives who keep dropping him or being dismissed before getting to court. [Business Day – paywall]
- Markets: South Africas rand ticked higher on Thursday ahead of the MPC briefing, while most other emerging market currencies rose slightly. The Reserve Bank held rates, as expected, but rising inflation expectations, as well as eventual US Fed tightening are expected to push the bank into hiking rates. Relatively higher interest rates in the country have benefited the rand, as waning concerns over the Covid-19 pandemic spurred a return to carry trades. The currency is about 4% higher this year and is among the best performing EM currencies. On Friday, the rand was at R13.99/$, R17.12/ and R19.85/£. [Reuters]
