22 Sep 2023
5 important things happening in South Africa todayHere’s what is happening in and affecting South Africa today:Another electricity crisis: Ramokgopa says the government can’t afford what’s needed to expand the grid on its own, and without private finances, it will create another problem for generation capacity. Eskom will have to build 14,000km of new transmission lines over the next eight to 10 years to avoid another electricity crisis in the near future. This exceeds its current capacity for such infrastructure projects. Over the past 10 years, it has built a mere 4,300km of transmission lines. For this to happen, the country will have to achieve an infrastructure upgrade at a scale SA has never seen before, at a cost of at least R235 billion. [Business Day]
De Ruyter replacement disaster: Minister of Public Enterprises Pravin Gordhan rejected the Eskom board’s new CEO recommendation this week, citing the entity’s MOI requires three candidates for consideration. However, In reply to questions on Thursday, the board said while it was aware of the requirements of the MOI, its search did not present three appointable candidates, and it took Gordhan three months to inform the board that its recommendation was not compliant. Gordhan replied and said he was not delaying the process. News24’s Carol Paton has now revealed that behind-the-scenes political battles are likely to blame for the delay in appointing a new Eskom head. [News24]
Good news for SA’s growth forecast: The South African Reserve Bank (SARB) increased its forecasted economic growth for South Africa to 0.7% from 0.4%. Although credit growth to households and corporations has slowed in recent months, it has increased in real terms compared to last year. The forecast for investment for the year is revised up to 7.7% (from 4.4%). These demand trends enabled an upward revision to the Reserve Bank’s forecast for GDP growth. The Bank noted GDP growth forecast for 2024 and 2025 is unchanged from the previous meeting, at 1.0% and 1.1%, respectively. [Daily Investor]
Friday load shedding: Power utility Eskom says that load shedding will be in effect all day on Friday as minor generation defects and increased planned maintenance are putting the grid under strain. Stages 1 and 2 will be in effect the whole day. [BusinessTech]
Markets: South Africa’s rand took its direction from the dollar on Thursday, reacting little to an expected central bank decision to hold its main interest rate at 8.25%. On Friday (22 September), the rand was trading at R18.92/USD, R20.12/EUR and R23.31/GBP. Oil is trading at $92.88 a barrel. [Reuters]