SAA slashes flights; inflation rises; scary costs of power cuts; Shoprite; Lesotho murder drama

By Jackie Cameron 

  • South African Airways cut 38 local and international flights this week, as its new bosses moved to downsize the cash-strapped national carrier. SAA has been on the brink of collapse. It hasn’t published audited financial statements for the year through March 2019, point out Bloomberg journalists, because it couldn’t be sure of its status as a going concern, meaning up-do-date information of its route performance isn’t publicly available.
  • Inflation has risen, but it has now been at or below the 4.5% midpoint of the target range for 13 months, the longest such streak in 14 years, says Bloomberg. The central bank wants inflation expectations anchored close to the midpoint of its target range of 3% to 6%. While Wednesday’s data show muted price growth, Governor Lesetja Kganyago said last week the monetary policy committee sees the rate averaging 4.7% this year before stabilising at 4.5% from the third quarter of 2021. The MPC unexpectedly cut its benchmark interest rate to the lowest level in four years last week and its quarterly projection model implies another cut of 25 basis points in fourth quarter of the year.
  • The costs of loadshedding are huge, with power shortages costing South Africa as much as R118 billion rand ($8 billion) last year, a drain on the economy that’s set to continue for two to three years unless urgent action is taken, a new study has found. There were 1,352 gigawatt-hours of power cuts last year, the most on record, and the estimated economic impact ranged from R59 billion to R118 billion, the Council for Scientific and Industrial Research, a state research institution, is quoted as saying. Bloomberg says that energy shortages have probably cost the country R6bn to R12bn so far this year, with 143 gigawatt-hours of cuts, it said. The International Monetary Fund and the World Bank both expect Africa’s most industrialized economy to expand less than 1% this year, mainly due to the electricity crisis, adds the news agency.
  • A murder drama is unfolding in Lesotho and threatens to destabilise the small country. Lesotho’s government faced demands from protesters to step down immediately amid an investigation into the murder of the prime minister’s second wife and allegations that it gave Chinese businessmen control of the country’s key wool, mohair and meat industries. Prime Minister Thomas Thabane has said twice he will resign without saying when, and police seek to question the 80-year-old over the 2017 slaying on Wednesday. His current wife, a suspect, is on the run since his phone was linked to the crime scene. Both his own party and the opposition have called on him to resign. In a petition handed to the government in the capital Maseru, seen by Bloomberg, protesters demand that farmers be compensated for their wool and mohair after monopoly buyer Guohui Shi failed to pay them.
  • Shoprite shares rose almost 5% on Wednesday on the back of healthy sales growth driven by its core South African supermarkets business. This performance was all the more remarkable because it comes as a tough economy weighs on consumer finances, according to analysts. Shoprite has grown its total sale of merchandise by 7% to R81.2bn ($5.62 billion) in the six months to Dec. 29, with its South African supermarkets business growing sales by 9.8%, says Reuters.