The world is changing fast and to keep up you need local knowledge with global context.
By Melani Nathan
- There have been many revival plans for SAA. The government recently announced that it may sell shares in SAA once the carrier has been resuscitated. Now insiders have revealed that government wants to sell a stake in it for an amount of upwards of R6bn. The bankrupt carrier has been grounded since March when the country went into lockdown. Although Ethiopian Airlines has said it would consider a deal for SAA, its Chief Executive Officer has made it clear he’s not interested in investing capital, says Bloomberg.
- With news that the Pfizer BioNTech Covid-19 vaccine has been approved for use in the UK, the race to procure vaccine deals is heating up. The two front-running vaccines from Pfizer and Moderna both use messenger RNA technology. This requires expensive cold chain technology to be distributed. Developing nations like South Africa are already on the back foot .“What worries me about government is the clear lack of communication,” says Francois Venter, a professor of medicine at the University of the Witwatersrand in Johannesburg and a former member of the ministerial advisory council on the virus. “We’re all sitting here terrified, not knowing if we get the vaccine.
- The South African banking sector has little reason to be cheerful this holiday season. Banks have seen falling revenue and rising costs. All four of the largest banks in the country have warned that profit will plunge. Some provinces are seeing a spike in Covid-19 infections, prompting speculation that the country could return to a stricter lockdown. Absa Group Chief Executive Officer Daniel Mminele is seeing “risk everywhere” even though its earnings, like Standard Bank’s, have benefited from faster growing markets on the rest of the continent. Many governments still have fiscal and debt challenges to navigate, he said. “It is too early to call whether we have got this behind us.”
- South Africa’s National Treasury and the state-owned Land and Agricultural Development Bank have been criticised for delays in negotiating a rescue package for the stricken lender, leaving creditors in the dark as debt repayments loom. Asset managers and other lenders are yet to receive a response to their queries about financial covenants and the mechanism of a new bond program that will be 60% backed by the government. The state-owned bank missed a repayment in April that triggered a cross-default event under its R50bn rand bond program. The partial guarantee means that about R16bn of the Land Bank’s R41bn of debt is not guaranteed. The bank, which owns almost 30% of loans to South African farmers, said last month that it can’t take on new clients or meet half the needs of existing customers until it gets another government bailout to keep operating.
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