SAA on precipice again; Black Friday sale boost; Zondo extension, New Eskom chair

By Linda van Tilburg

  • Business Day reports that South African Airways could suspend flights as soon as this weekend if the R2bn from the National Treasury that it pledged to fund the business rescue process at the airline does not materialise. The paper reports that without this funding, the airline is in danger of going into liquidation and while lenders did come through with their R2bn; it is reported that the Treasury “needs to sell assets to fund its side of the deal.” Plagued by debt and years of mismanagement and a crippling strike that grounded flights in November last year, SAA was placed in business rescue in a last-ditch effort to save thousands of jobs.
  • South African retail sales beat estimates and grew the most in seven months in November as specials offered by retailers boosted trade. Sales increased 2.6% from a year earlier, according to Statistics South Africa. Bloomberg reports that with consumer confidence still at a two-year low in the fourth quarter, most of the uptick in retail trade was due to the Black Friday special offers in November. Sales were 3.1% higher than in October, the biggest monthly increase this year. The impact of Black Friday trade has been visible in South African retail for the last three years and is gaining in popularity. Since 2017, November has shown the strongest month-on-month sales increase every year.
  • The government has appointed an interim chairperson for Eskom following the shock resignation of Jabu Mabuza. He is Professor Malegapuru Makgoba, who has been a board member since 2018 and has been behind the report on the Life Esidimeni disaster. Meanwhile, Eskom has taken the energy regulator to court demanding higher tariffs than last year. Reuters reports that the power utility has asked the High Court to allow it to impose a tariff increase of 16.6% from April this year and another increase of 16.7% from April 2021. The utility wants the Court to set aside Nersa’s tariff decision for the financial years from 2019 to 2022. It said Nersa included R69bn of state bailouts in the calculation of the revenue that Eskom is allowed to recoup through tariffs.
  • The Zondo Commission into state capture has asked to extend its work until the end of the year. An application was submitted by Deputy Chief Justice Raymond Zondo to the High Court in Pretoria on the 20th of December to extend the lifespan of his commission that would have lapsed at the end of February to the end of December this year. The inquiry has been running since August 2018. The commission said last week that it was going to hear an application for an order authorizing its acting secretary to issue a summons for former President Jacob Zuma to appear before the commission again. This was postponed because Zuma filed an affidavit saying he would be too ill to testify.
  • South Africa has made the list of the top 20 up and coming economies compiled by US News. The list of movers is the result of a global survey on countries’ economic potential. South Africa finds itself at number 17 of the economies that are regarded as movers, above Sri Lanka and just below Australia. It pips Switzerland in the movers rankings. Two other African countries that feature on the movers list is Egypt at number four and Morocco at the fourteenth spot. The United States registered a strong drop in global trust. More details on the full report from US News is on the Biznews website.