The world is changing fast and to keep up you need local knowledge with global context.
By Jackie Cameron
- President Cyril Ramaphosa has wowed the investment community with a series of planned reforms aimed at lowering the cost of doing business and increasing interest in South African goods and services. In his weekly newsletter to citizens, President Ramaphosa promised the following: -To prioritise immigration reform in order to attract more skilled workers and grow tourism; Use technology for visas; Implement a more efficient system for registering properties, through e-deeds; Make it easier for small and large organisations to secure development funding through one application form to multiple institutions; Cut the time it takes to grant licences and permits.
- The controversial requirement for travellers to have unabridged birth certificates for all children is widely expected to be scrapped. Ramaphosa was promoting South Africa to international investors at the Financial Times Africa Summit 2019 where he said state capture has cost a staggering R1 trillion. You can listen to him speak on BizNews.com.
- Eskom is on the government’s radar, with the troubled energy utility holding back economic growth. But, as Bloomberg reports, there are signs the government is getting set to overhaul Eskom. The news agency points to the following five factors:
- Appointment of new chief executive officer
The utility, which provides about 95% of the country’s power, has been without a permanent CEO since Phakamani Hadebe quit in July. The post has been temporarily filled by its chairman, Jabu Mabuza, who has said his replacement will be named by the end of the month. Among three candidates shortlisted are former LNG Canada CEO Andy Calitz and Jacob Maroga, who was Eskom CEO from 2007 to 2009.
- Release of policy paper
Public Enterprises Minister Pravin Gordhan is overseeing the drafting of a special policy paper that will spell out the government’s envisioned future for Eskom. It’s likely to flesh out a proposal to split the utility into generation, transmission and distribution units under a state holding company. The paper could be referred to cabinet as soon as Oct. 16, and will be released by the end of the mont
- Debt reorganisation
Eskom owes R450bn ($30bn) and isn’t generating enough cash to pay the interest, but there are talks behind the scenes to address this.
- Finalisation of energy blueprint
The Integrated Resource Plan, which has been years in the making and maps out South Africa’s energy mix for the next decade, is due to be discussed by the cabinet on Wednesday and then released for public comment, according to Mineral Resources and Energy Minister Gwede Mantashe. A March draft envisions the nation’s electricity output capacity rising more than 40%, with the bulk of that is to come from renewable sources.
- Mid-term budget
The government has allocated R128bn to Eskom over the next three fiscal years so it can continue to pay its bills. Finance Minister Tito Mboweni will spell out where the money will come from when he releases his mid-term budget on Oct. 30.
- Brexit is rocking the pound with more volatility expected. Bloomberg reports that the pound swung as traders attempted to read the tea leaves on the likelihood of the UK securing a Brexit deal as soon as this week. Sterling pared declines after falling 1.2%, as UK Prime Minister Boris Johnson pledged to “get Brexit done” despite skepticism from the European Union, says Bloomberg. Hedge funds and asset managers have been paring their bets on a weaker pound, according to the Commodity Futures Trading Commission. Traders, says Bloomberg, are repositioning for what could be a swift and brutal move in the currency when the outcome of this week’s negotiations becomes clearer. The clock is ticking down to Thursday’s crunch summit of EU leaders, where Johnson could secure a deal before presenting it to the UK Parliament on Saturday, or hurtle faster toward a chaotic exit on Oct. 31, adds the newswire. “What’s really important here is that you have engagement,” said Deutsche Bank AG’s global head of currency research George Saravelos, who sees the Brexit talks as a potential game-changer for markets. “There’s a notable shift away from this hard Brexit strategy,” he said in a Bloomberg Television interview.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.