South Africa

South African President Cyril Ramaphosa played down suggestions that an amendment to the central bank’s mandate is imminent, while confirming that a possible change remains under discussion, Bloomberg News reported. Any change to the mandate of the South African Reserve Bank, which focuses on curbing inflation, will take time, Ramaphosa, told reporters in Johannesburg on Monday. Last week Gwede Mantashe, the chairman of the ruling African National Congress, said the party had agreed at its national conference to change the mandate, prompting a decline in the value of the rand.
Read more
South Africa's unreliable power supply and its high level of government debt are two of the main risks to its financial stability, the country's central bank said on Tuesday, Reuters reported. Africa's most developed economy has seen 170 days of rolling blackouts this year due to a maintenance backlog of state utility Eskom's ageing coal-fired power plants. This has not only hit corporate productivity but also hurt investor sentiment, the South African Reserve Bank (SARB) said in its biannual health check of the financial system.
Read more
S&P Global Ratings expects South Africa’s government to fulfill its commitments to investors in Eskom Holdings SOC Ltd. as it finalizes a plan to tackle the state-owned utility’s massive debt burden, Bloomberg News reported. Finance Minister Enoch Godongwana said last month the government may shift between one-third and two-thirds of the power company’s debt of about 400 billion rand ($23.2 billion) onto its own balance sheet and attach strict conditions to the relief. Details, including the quantum and terms, of the transfer are expected to be announced in February’s budget.
Read more

South African cinema group Ster-Kinekor has exited a local form of bankruptcy protection called "business rescue" after nearly two years, its administrator said on Friday, Reuters reported. Ster-Kinekor was placed under administration in January 2021, citing losses and financial distress due to COVID-19 and related restrictions forcing closures and prohibiting large gatherings in public spaces. Meanwhile studios either postponed blockbusters or released them directly on home streaming platforms, denting box office earnings.

Read more
Tongaat Hulett Ltd., the 130-year-old South African sugar maker, is being placed in administration after failing to recover from an accounting scandal that exposed a mountain of debt, Bloomberg News reported. The decision was taken after creditors rejected a restructuring plan that would have given the company leeway on some of its outstanding loans and access to 1.5 billion rand ($84 million) needed to keep operations going. Tongaat had repaid about half of the 12 billion rand of debt that emanated from the scandal that erupted in 2019.
Read more
The South African branch of McKinsey & Company, the global consulting firm, was charged in a corruption scandal involving work the company completed advising the country’s state-owned freight rail and port operator. It may be the first time in McKinsey’s 96-year history that the firm has faced criminal charges, the New York Times reported.
Read more
South Africa's central bank delivered another big interest rate hike on Thursday, taking its main lending rate back near pre-COVID levels as it battles to bring inflation back to target, Reuters reported. The South African Reserve Bank (SARB) raised its repurchase rate by 75 basis points (bps) to 6.25%. The rand pared gains against the U.S. dollar after the decision was announced, as some traders had positioned for a larger hike. The SARB has now raised rates for the sixth time in a row, adding a total of 275 bps to the repo rate since its latest tightening cycle began in November 2021.
Read more
Debt owed to South African towns and cities almost doubled over the past five years, weighing on municipal finances and increasing the risk that the supply of basic services such as water and electricity will be disrupted, Bloomberg News reported. Consumers owed municipalities 255.4 billion rand ($14.8 billion) by the end the financial year through June 30, compared with 232.8 billion a year earlier, according to data the National Treasury published on Friday. Households account for 71% of this.
Read more
South Africa's Remgro Ltd said on Thursday it will buy hospital chain operator Mediclinic International in a consortium with Switzerland's MSC Mediterranean Shipping for 3.7 billion pounds ($4.49 billion), Reuters reported. The offer, which was the consortium's fourth after the earlier ones were rejected by Mediclinic's board, values the company at 6.1 billion pounds ($7.41 billion), Remgro and Mediclinic said in a joint statement. Mediclinic is South Africa's third biggest operator of hospitals and billionaire tycoon Johann Rupert's Remgro already owns up to 45% of the company.
Read more
South Africa’s minister in charge of embattled state-owned companies gave an impassioned defense of the sale of a majority stake in the national carrier for about $3 — a deal that’s subject to a lawsuit from one of the spurned bidders, Bloomberg News reported. The privatisation of South African Airways (SAA) is a vital reform for the country’s battered economy, Public Enterprises Minister Pravin Gordhan, 73, said in an interview at Bloomberg’s Johannesburg office.
Read more