Eskom tariff hike defeat, debt plan rubbished; Angola targets Dos Santos assets; Facebook, Huawei

By Jackie Cameron

  • Eskom loses its court battle to dramatically hike electricity tariffs. Eskom brought an application for urgent relief against the National Energy Regulator of South Africa to set aside a decision on the extent to which it can raise power prices, reports Bloomberg. The regulator last year allowed Eskom to raise prices by 8.1% in 2020 and 5.2% in 2021, well below the 16.6% and 16.7% increases the utility had sought, it says. North Gauteng High Court Judge Jody Kollapen ruled on Monday that the regulator, and not the court, was the appropriate body to determine tariff increases.
  • Analysts rubbish a proposal by trade union group Cosatu to use government employee pensions to take over about half of Eskom’s debt pile. The Congress of Trade Unions has proposed using government workers’ pensions to take over a chunk of Eskom’s debt, but that would amount to little more than a shifting of contingent liabilities, BNP Paribas South Africa told Bloomberg. Cosatu wants to take over R254bn of Eskom’s R454bn debt pile – a concern because the government will still bear ultimate responsibility.
  • Angolan president takes hard line on state capture by Isabel dos Santos, daughter of the former president and Africa’s richest woman. Angolan President João Lourenço is working to recover the assets of Isabel dos Santos, Africa’s richest woman, and those of other individuals that were allegedly illegally taken from the state. “More than simply freezing those assets, we are working and fighting to recover the assets,” Lourenço told reporters in the capital, Luanda, on Friday after being asked about the allegations against Dos Santos. “These are assets that are providing jobs outside Angola and serving other economies,” he said at a briefing during a state visit by German Chancellor Angela Merkel. In December, an Angolan court froze the local assets of Dos Santos, those of her husband and of one of her executives after prosecutors alleged that they engaged in irregular transactions with state-owned companies that cost the government $1.14bn. Dos Santos has denied any wrongdoing, saying the claims are part of a politically motivated campaign. We also pick up on the latest on the extradition of Manuel Chang, the Mozambican former finance minister wanted in connection with graft and who is in South Africa.
  • Billionaire Peter Thiel dumps more Facebook stock. An early investor in Facebook who once controlled 45 million shares of the social-media giant, unloaded most of his remaining stake last week. Thiel, a member of Facebook’s board, sold 53,602 shares held by his Rivendell One LLC for $11m, leaving him with about $2m of stock, according to a regulatory filing Friday. The transactions are the latest in a series of sales in recent years that have left Thiel with just 9,948 directly held shares. He sold most of his stake in 2012.
  • Donald Trump snubs Boris Johnson as their bromance sours over Huawei deal in UK. After months of promises that the UK would be next in line for trade negotiations with the Trump administration, US officials are signalling the European Union might still be the easier target for a quick outcome aimed at avoiding a transatlantic tariff battle, reports Bloomberg. Trade talks with the EU and UK are on separate tracks but because of “some structure” on the EU side, “reigniting that will be easier” than starting from scratch with the UK, White House economic adviser Larry Kudlow said in an interview. The newfound enthusiasm, continues Bloomberg, for an EU deal comes as the bromance between President Donald Trump and UK Prime Minister Boris Johnson took a serious hit when Johnson announced in late January that he’d allow Huawei Technologies to supply part of the country’s 5G infrastructure. His decision to rebuff US efforts to block the Chinese telecommunications company for national security reasons disappointed senior members of the Trump team.
  • Coronavirus hasn’t yet filtered through to the global economy, even though nearly 1,000 people have died, says Reuters. The coronavirus surpassed the death tally of SARS over the weekend with more than 40,000 reported cases and 910 deaths as of Monday morning, it says. Last week US markets mostly ignored the threat that the virus outbreak poses by notching up new all-time highs on all 3 major indices, says the news service.
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