BizBriefing: Mboweni to fight public servants on pay; SA introduces booze police; reviving clothing industry

* South Africa can’t implement a pay deal with public servants because it would precipitate a fiscal crisis, Finance Minister Tito Mboweni said. The government and labor unions will square off in the Labour Appeal Court this week (Dec. 2) over Mboweni’s proposal to freeze wages that have surged 51% since 2008, reports Bloomberg. Earlier this month Fitch Ratings and Moody’s Investors Service cut South Africa’s debt assessments deeper into junk, saying the state may struggle to stick to its plan to rein in spending. The Congress of South African Trade Unions, the nation’s largest worker federation, has warned the dispute over salaries could lead to the unraveling of its alliance with the ruling African National Congress, says Bloomberg.

* Mboweni said Zambia’s financial woes provided a cautionary tale and South Africa can ill afford to go down the same path. Zambia this month defaulted on its Eurobonds, the first African nation to do so since the onset of the coronavirus pandemic.The South African government would be compelled to borrow more than R78 billion rand ($5.1 billion) if the court backs the labor unions in their fight to have the wage agreement implemented, Public Service and Administration Minister Senzo Mchunu said in the court documents, says Bloomberg.

* The alcohol industry committed to train and deploy 80 community patrollers in eight police stations (10 patrollers per station) in the Covid-19 hotspots areas in the province, an industry body has announced. Working together with the Saps and Community Policing Forums, the patrollers will ensure compliance with the regulations in alcohol outlets in the catchment areas of the selected police stations. This comes as fears grow that the South African government will reintroduce strict measures to curb the spread of Covid-19. South Africa banned liquor distribution and sales earlier this year – which resulted in an illicit trade but also led to hardship for many business owners.

* Graft-tainted former SAA chair Dudu Myeni was ordered to pay the legal fees for organisations that have taken her on in court and settled her fees in cash. The Organisation Undoing Tax Abuse says at least R57,000 was paid in R200 notes. The incompetent, graft-tainted former SAA chairperson, and close friend of Jacob Zuma, Myeni has featured prominently at the Zondo Commission into State Capture. The inquiry has heard evidence that she accepted cash back-handers from individuals at Bosasa, linked to prison tenders. Former Bosasa COO Angelo Agrizzi told the commission that he hand edover R300,000 in cash to her every month for the Jacob Zuma Foundation. Evidence has revealed that Myeni also played a central role in making decisions at state entities like Eskom. What’s more, she faces criminal charges for revealing the identity of a witness. The man – known as ‘Witness X’ – was a company director who dealt with Myeni regularly. Read the full story, here.

* South African retailers including The Foschini Group and Woolworths Holdings are increasing investment in local clothing manufacturers – both to reduce a dependency on Chinese imports and secure a supply chain thrown into disarray by Covid-19 restrictions, reports Bloomberg. The companies have signed up to an industry plan that includes a target to source 65% of their goods from local manufacturers within the next decade. While progress toward the goal varies per chain, the spread of the coronavirus has sharpened their collective focus, it says. The pandemic caused “such disruptions to the supply chain that everyone’s sitting back and saying do we ever really want to be that reliant on China ever again?” TFG Chief Executive Officer Anthony Thunström said in an interview. “I think the penny’s dropped and retailers are looking more and more to buy locally.” The initiative comes as South African President Cyril Ramaphosa looks to revive a manufacturing industry that’s deteriorated since the lifting of apartheid-era sanctions two decades ago, which enabled companies to seek cheaper alternatives from overseas suppliers. Re-establishing the sector would help achieve a goal of creating jobs, easing an official unemployment rate that’s at a 17-year high. “As South Africa opened to trade in the late 1990s, China came in and decimated the market as cost was the only dictating factor,” said Lawrence Pillay, head of sourcing at Woolworths. “But the world has changed radically and there is now so much more than just the cost. Sustainability, carbon footprints, challenges of logistics — all of these factors are going to force a rethink.” Read the story, here on BizNews.

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