Eskom slashes SA growth; Zim pot smoking hot; investment bankers steal millions; Brexit; Mediclinic

By Jackie Cameron

  • Eskom’s blackouts could cost SA R5bn a day, a leading economist has warned. Eskom, which provides about 95% of South Africa’s electricity and is seen as the biggest threat to the economy, cut 2,000 megawatts from the grid due to unplanned breakdowns at its plants, it said in a statement late on Wednesday. The blackouts could last for a week, Jan Oberholzer, the utility’s chief operating officer, told Talk Radio 702. That’s according to Bloomberg news agency. If the current level of power cuts continue for that long “that would give you about 0.1% of economic growth that would be lost”, Econometrix Chief Economist Azar Jammine told Bloomberg by phone. “The damage that this is inflicting on the willingness to invest in the economy will be longer term.” Intermittent blackouts have dogged the economy since late 2005, caused by delays in building new plants, coal shortages and maintenance backlogs.
  • Finance Minister Tito Mboweni said on Thursday that South Africa’s mid-term budget, which covers fiscal planning for the next three years, may be presented on October 29, a day earlier than scheduled, to accommodate President Cyril Ramaphosa’s travel plans, says Reuters. The mid-term budget covers fiscal planning for the coming three years.
  • The Zimbabwe government has launched the country’s first legal cannabis farm in the Harare Central Prison, but it insists that prisoners won’t get a whiff. “The project is the first of its kind,” said Perence Shiri, the agriculture minister, according to Bloomberg. Shiri was speaking at an event opening the project at Harare Central Remand Prison. Prisoners, reports Bloomberg, will not be tending the crop as the cannabis will be grown by the Zimbabwe Industrial Hemp Trust, a private company, which will take advantage of the tight security of the prison to run the pilot project.
  • The corporate side of corruption in Africa has been laid bare in a sensational court case involving bankers from a leading global bank. Former Credit Suisse Group AG banker Andrew Pearse told a jury in Brooklyn, New York, that he pocketed at least $45m in illicit payments for his role in the arrangement of loans worth $2bn to companies in Mozambique, says Bloomberg. Pearse, 49, who had pleaded guilty to conspiracy, testified that at least four other Credit Suisse bankers also took millions of dollars in bribes from shipbuilder Privinvest Group. Pearse is a key witness against Jean Boustani, a Privinvest salesman described by prosecutors as the “mastermind” of a scheme to defraud US investors. Prosecutors allege Mozambican government officials, corporate executives and investment bankers stole about $200 million in loan proceeds.
  • Prime Minister Boris Johnson’s Brexit deal with the European Union was barely agreed before it ran into trouble at home, as his Irish allies in parliament said they could not support it, reports Bloomberg.
  • South Africa-born tech entrepreneur Elon Musk has been named among the world’s richest people in the car industry. Musk is number 3 on the list of automotive wealth, compiled by Bloomberg, after Bill Gates, who is best known for heading Microsoft but also has a car dealership called AutoNation Inc, and Larry Ellison, founder of database company Oracle and second-largest shareholder in Tesla. Musk is ahead of the owners of Germany’s BMW and China’s Geely brands. Bloomberg says of Musk’s total wealth of $23bn. “Likely the most famous person invested in the segment – certainly the most colourful – the South African divides his time between Tesla, the maker of luxury electric vehicles, and SpaceX, a rocket manufacturer. Musk has garnered acclaim for his visionary leadership and criticism for failing to meet deadlines and engaging in public disputes.
  • Mediclinic shares were the top performers in Johannesburg on Thursday. This was the second day running that the company’s shares have powered upwards on the back of a report that its finances are better than expected.