Freeman Nomvalo, the new chief restructuring officer for Eskom Holdings SOC Ltd., will divide his time between managing the unbundling of the loss-making state power giant and his job as head of the South African Institute for Chartered Accountants, Bloomberg News reported. The role taken by Nomvalo, relatively unknown among economists and analysts, will be more of a process manager than a standalone company executive, according to a statement by the Department of Public Enterprises.
The economic challenge facing President Cyril Ramaphosa was laid bare as South Africa’s unemployment rate rose to its highest in more than a decade and the embattled state-owned Eskom power monopoly unveiled its biggest annual loss, the Financial Times reported. Joblessness in Africa’s most industrialised nation increased to 29 per cent in the second quarter, a 16-year high, according to official statistics released on Tuesday. The figure was 27.6 per cent in the first quarter.
South African President Cyril Ramaphosa is the "last hope" for Africa's most advanced economy, but his government must turn incentive policies into laws to secure more Chinese investment, a senior Chinese diplomat told Reuters, the International New York Times reported on a Reuters story. China is South Africa's largest trading partner and has pledged more investment than any other country since Ramaphosa embarked on a drive last year to attract $100 billion of new investment to lift the economy out of a slump.
Eskom Holdings SOC Ltd., which supplies about 95% of South Africa’s power and is reliant on government bailouts to remain solvent, is set to announce its second consecutive multi-billion rand annual loss on Tuesday, Bloomberg News reported. The big question is: How many billions? The state-owned utility forecast in January that its loss would widen to about 20 billion rand ($1.4 billion) in the year through March, from 2.3 billion rand the year before.
South Africa risks falling further into sub-investment territory after Fitch Ratings Ltd. cut the outlook on its assessment of the country’s debt to negative. Fitch reduced the outlook from stable while affirming the junk BB+ rating on nation’s foreign- and local-currency debt, it said in an emailed statement Friday, Bloomberg News reported. A negative outlook usually indicates that the next move could be a downgrade. The decision adds to the risk that the country could lose its last remaining investment-grade rating from Moody’s Investors Service.
Kenya will take at least 21 months to take back full control of its national carrier Kenya Airways, buying out minority shareholders and converting shares held by banks into Treasury bonds, a lawmaker briefed on the transaction said. The loss-making airline, which is 48.9% government-owned and 7.8% held by Air France-KLM, was privatised 23 years ago but sank into debt and losses in 2014, Reuters reported. Lawmakers voted to re-nationalise it this week.
A financial crisis confronting South Africa’s state power utility has become a national debt problem. Finance Minister Tito Mboweni Tuesday unveiled a second multi-billion dollar bailout for Eskom Holdings SOC Ltd. within five months, aid that may force the cash-strapped government to increase borrowing and taxes, Bloomberg News reported. That could in turn trigger a credit-rating downgrade and massive outflow of funds, raise the cost of new debt and stymie efforts to revive the moribund economy.
Kenya’s parliament voted on Tuesday to nationalise the country’s main airline Kenya Airways to save it from mounting debts, Reuters reported. The loss-making airline, which is 48.9% government-owned and 7.8% held by Air France-KLM, has been struggling to return to profitability and growth. A failed expansion drive and a slump in air travel forced it to restructure $2 billion of debt in 2017. The airline later proposed taking over the running of Nairobi’s main airport to boost its revenue.
The South African government’s decision to increase support for the embattled state power utility is wreaking havoc on the nation’s finances and may force it to increase borrowing and raise the budget deficit, Bloomberg News reported. Finance Minister Tito Mboweni told lawmakers in Cape Town on Tuesday that Eskom Holdings SOC Ltd. will get 26 billion rand ($1.9 billion) this financial year and 33 billion in 2020-21 to help it remain solvent. The additional bailout comes just five months after he announced a three-year 69 billion-rand cash injection for the utility.
South Africa’s High Court on Tuesday has ordered the Zambian government to halt the sale of Vedanta Resources’s majority-owned Konkola Copper Mines (KCM) until a final decision is made through arbitration, Reuters reported. Vedanta has been locked in a dispute with the Zambian government since May when Lusaka appointed a liquidator to run KCM, which is 20% owned by Zambia’s state mining company ZCCM and the rest by Vedanta. Zambia accused KCM of breaching the terms of its licence.