Tough South Africa budget may keep downgrade at bay

2019 ◽  
Keyword(s):  
South Africa ◽  
Trade Union ◽  
Early Retirement ◽  
Civil Servants ◽  
Medium Term ◽  
Power Utility ◽  
Wage Bill ◽  
Content Type ◽  
Revenue Collection ◽  
Skilled Staff

Significance The budget framework presented on February 20 provided a record 69-billion-rand (5-billion-dollar) rescue package for ailing power utility Eskom over three years. Despite measures to cut the large public-sector wage bill, growing revenue shortfalls have combined to lift deficit forecasts, while a longstanding expenditure ceiling has been raised. Impacts Plans to cap civil servants pay and perks will face opposition from the ANC’s trade union partners. An early retirement package for civil servants risks a possible exodus of more experienced and skilled staff. Efforts to overhaul SARS should result in improved revenue collection over the medium term but will prove costly in the interim.

South Africa urban reforms will weigh on 2016 election

2015 ◽  
Keyword(s):  
South Africa ◽  
Financial Distress ◽  
Urban Governance ◽  
Executive Turnover ◽  
Local Elections ◽  
Power Utility ◽  
Content Type ◽  
Political Interference ◽  
2016 Election ◽  
Public Sector Unions

Subject Urban governance in South Africa. Significance Amid preparations for 2016 local elections, the Treasury has warned that 86 out 278 municipalities are in "financial distress". Urban debt woes are causing fiscal risks elsewhere in the state apparatus, notably for power utility Eskom. Political interference in senior appointments and consequent high executive turnover and skills deficits are partly to blame. However, it is also clear that some municipalities are unviable. Impacts Municipalities in former 'homeland' areas will be hard to reform due to the added layer of government created by traditional chiefs. High wage demands from public sector unions may force municipalities to cut capital or maintenance spending, hurting service delivery. The fortunes of large cities such as Johannesburg will continue to diverge from smaller municipalities.

Madagascar's Rajoelina will look to bolster mandate

2019 ◽  
Keyword(s):  
International Relations ◽  
Medium Term ◽  
Power Utility ◽  
Content Type ◽  
Growth Prospects ◽  
Future Growth

Significance President Andry Rajoelina's new political platform, Isika rehetra miaraka amin'i Andry Rajoelina (IRD), is fielding candidates across all 119 districts, while presidential runner-up Marc Ravalomanana has 109 candidates running under his Tiako I Madagasikara (TIM) party. The bulk of the candidates, 515 in total, are running as independents. Impacts A failure by Rajoelina to pass a law on the recovery of illicit assets could strain international relations. A large independent contingent in parliament would make it difficult for Rajoelina to secure a stable majority. Reforming water and power utility Jirama over the short-to-medium term could have a major bearing on future growth prospects.

Prospects for African economies in 2019

2018 ◽  
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Gdp Growth ◽  
Medium Term ◽  
Content Type ◽  
Sub Saharan

Subject Prospects for African economies in 2019. Significance Sub-Saharan Africa’s gradual recovery is set to strengthen in 2019 with regional GDP growth seen accelerating to 3.1% from 2.7% in 2018, led by recoveries in the three largest economies -- Angola, Nigeria and South Africa. Looking ahead, economic growth is expected to average around 4% over the medium term, reflecting continuing convergence between high- and low-performing countries, although wide disparities will persist.

South Africa power utility probe will hit confidence

2015 ◽  
Keyword(s):  
South Africa ◽  
Power Utility ◽  
Content Type

Headline SOUTH AFRICA: Power utility probe will hit confidence

Prospects for African economies to end-2018

2018 ◽  
Keyword(s):  
South Africa ◽  
Ivory Coast ◽  
Medium Term ◽  
Political Transitions ◽  
Content Type ◽  
Policy Responses ◽  
Sub Saharan ◽  
Policy Shifts

Subject Prospects for African Economies. Significance Sub-Saharan African economies are expected to expand by 3.4% this year, up from 2.8% in 2017, reflecting continued recovery in the two largest economies (Nigeria and South Africa). However, medium-term growth is forecast to remain below 4%, as the consequences of delayed and insufficient policy responses to the commodities crisis take time to resolve. Some rapidly growing non-resource exporters (Ivory Coast, Senegal) could also slow under the weight of rising debt distress, particularly if private sources of growth fail to emerge. Political transitions in other countries (Angola, Zimbabwe) could be auspicious for the region's investment attractiveness -- if positive policy shifts develop further.

South Africa’s Eskom frailties will be put to the test

2020 ◽  
Keyword(s):  
Economic Crisis ◽  
Energy Production ◽  
Capacity Constraints ◽  
Load Shedding ◽  
Medium Term ◽  
Power Outages ◽  
Power Utility ◽  
Content Type ◽  
Plant Maintenance ◽  
Term Energy

Subject Eskom's overhaul. Significance State-owned power utility Eskom does not expect to have to institute ‘load shedding’ (power outages) during the current nationwide lockdown to combat the COVID-19 outbreak, with demand for electricity dropping by as much as 9,500 megawatts since it began. Recurring load shedding has been required since January as Eskom struggles with capacity constraints and undertakes crucial plant maintenance, with Pretoria promising various measures to alleviate the energy production crisis. Impacts With uncertainty rampant given the lockdown and economic crisis, recent short-to-medium term energy projections may fall by the wayside. Eskom’s belated 'unbundling' is finally underway, with CEOs named for the transmission, distribution and generation subsidiaries. Ongoing policy and legislative uncertainty will further dampen confidence in Pretoria’s reform commitments among the country’s miners.

Transport troubles to dampen South Africa productivity

2015 ◽  
Keyword(s):  
South Africa ◽  
South African ◽  
Transport System ◽  
Trade Union ◽  
Low Cost ◽  
Cape Town ◽  
Content Type ◽  
Ride Sharing ◽  
Low Cost Carriers ◽  
Cost Reductions

Significance Governance woes at the agency reflect broader difficulties facing reforms aiming to improve and expand the strained transport system. Impacts Trade union resistance to personnel restructuring at South African Airways could limit cost reductions, threatening its turnaround plan. Recently launched domestic low cost carriers FlySafair and Skywise could push established players to expand their regional routes. Rules that drivers for ride-sharing firm Uber obtain metered taxi licenses could slow, but not halt, its expansion in Cape Town. However, the competition posed to regular metered taxis could result in fresh intimidation, some of it violent.

Murky politics to hit South Africa power utility plans

2015 ◽  
Keyword(s):  
South Africa ◽  
Nuclear Power ◽  
Credit Rating ◽  
Power Supplies ◽  
Bad Faith ◽  
Power Utility ◽  
Content Type ◽  
Fiscal Constraints ◽  
Political Interests ◽  
Enriched Uranium

Significance Tsotsi faces a potential no-confidence vote over his handling of the utility's mounting crises which are imperiling power supplies and recently spurred the utility's second 'junk' credit rating. On March 12, Tsotsi had persuaded the board to suspend the utility's top four executives but it now accuses him of acting in bad faith, possibly under pressure from powerful political interests. Impacts The suspended chief executive's reinstatement is unlikely to improve Eskom's performance given his lack of energy sector experience. Fiscal constraints will keep an expanded nuclear power programme a distant ambition. Governance woes may strengthen US moves on South Africa to increase physical security around its enriched uranium reserves.

South Africa fragility to weigh on interest rate call

2015 ◽  
Keyword(s):  
South Africa ◽  
Interest Rate ◽  
South African ◽  
Credit Rating ◽  
State Intervention ◽  
Power Utility ◽  
Content Type ◽  
Reserve Bank ◽  
Wage Settlement ◽  
Term Energy

Subject South Africa's upcoming credit rating and interest rate decisions. Significance Fitch Ratings yesterday said it would not downgrade South Africa to 'junk' when it conducts its mid-year sovereign credit rating review. This is despite structural weaknesses in the economy, uncertainty over the management of power utility Eskom and possible disruptive strikes. The relatively doveish South African Reserve Bank (SARB) will monitor closely the effects of a strengthening dollar on the wider economy. Impacts The Eskom board's plan to remove controversial chairman Zola Tsotsi could be complicated by his alleged links to President Jacob Zuma. The murky nuclear 'deal' with Russia allows the state to appear to have a long-term energy plan, but raises governance concerns. Frustration over Eskom's mismanagement could expedite legislation allowing greater state intervention, but this could worsen the problem. The fiscal shock of a high public wage settlement could be cushioned by a 'contingency fund', but risks incentivising future high demands.

South African corporate governance faces more scrutiny

2018 ◽  
Keyword(s):  
Corporate Governance ◽  
Private Sector ◽  
South African ◽  
Trade Union ◽  
The South ◽  
Fund Manager ◽  
Content Type ◽  
High Profile ◽  
Revenue Collection ◽  
Reserve Bank

Subject South African corporate governance Significance South African corporate governance has come under intense scrutiny in recent months after the high-profile accounting scandal and fraud allegations surrounding retailer Steinhoff. Separately, a small lender, VBS Mutual Bank, has been placed into curatorship by the South African Reserve Bank (SARB), while auditing firms KPMG and Deloitte are subject to regulatory investigations into alleged complicity in public-private sector corruption. Impacts Prospective new leadership at the South African Revenue Service (SARS) could halt institutional rot and improve revenue collection. South African shareholders will demand greater board accountability and fund manager activism. The mooted part-privatisation of state assets will buoy investors, but sizeable trade union opposition is likely.

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