South Africa

South Africa’s State airline is being approached by banks keen to discuss lending the carrier money, aided by a turnaround in the company’s finances, interim Chief Executive Officer John Lamola said, Bloomberg News reported. South African Airways (SAA) needs to finance a growth strategy that envisages its fleet more than doubling to 43 planes over the next five years. The company is constrained from seeking funds from the government, which is limiting bailouts to state-owned enterprises as it focuses on stabilising the nation’s debt.

South Africa’s central bank lowered borrowing costs for a second successive meeting and said its modeling showed further cuts were in the offing, but that the outlook remains highly uncertain, Bloomberg News reported. Policymakers cut the benchmark interest rate by 25 basis points to 7.75%, Governor Lesetja Kganyago told reporters at a briefing north of Johannesburg on Thursday. That was in line with expectations of all 20 economists in a Bloomberg survey.

South Africa’s Treasury plans to withhold funds from five municipalities next month over their unpaid water bills, part of an effort to compel local governments to pay for basic services, Bloomberg News reported. The Treasury will invoke a law allowing the authorities to block the payment of a so-called equitable share of money that’s allocated to municipalities to pay for services including water and electricity, according to a presentation by the department in parliament on Tuesday.

South Africa’s government is still considering whether to adopt a new fiscal anchor that will provide a sustainable long-term path for public finances, despite opposition from within the country’s biggest political party, Bloomberg News reported. The National Treasury said it is consulting with academics, international experts and other interested parties “to make inputs on fiscal-anchor policy options.” A discussion document will be released by the end of March, according to the budget update released in Cape Town on Wednesday.

South Africa’s central bank cut interest rates for the first time in four years and signaled a more optimistic outlook for inflation, Bloomberg News reported. The monetary policy committee reduced its benchmark rate by 25 basis points to 8%, Governor Lesetja Kganyago told reporters at a briefing north of Johannesburg on Thursday. That matched the median estimate of 24 economists in a Bloomberg survey. Only one analyst had penciled in a 50 basis-point cut.

South Africa's Land Bank has reached an agreement with its lenders to cure its debt default, the South African government said on Friday, Reuters reported. The state-owned agricultural bank defaulted on its debt in April 2020 and missed a restructuring deadline in March 2021. It had failed to agree a "liability solution" to emerge from default until now. "This... provides a basis for the bank's turnaround and rebuilding of its essential role in the South African economy and the agricultural sector in particular," the government said in a statement issued on behalf of Land Bank.

South Africa's justice minister on Friday denied corruption allegations against her related to a mutual bank scandal in which thousands of retirees lost their life savings, the Associated Press reported. VBS Mutual Bank, which held the savings of retirees mostly from the northern Limpopo province and also unlawfully secured investments from local municipalities, was declared insolvent and bankrupt in 2018 after it emerged that more than 2 billion rand ($112 million) had been stolen from the bank.

South African retailer Spar Group Ltd. is considering an offer to acquire cash-strapped West Pack Lifestyle, Bloomberg News reported. The nation’s second-largest grocer by revenue previously said it plans to expand beyond the food segment and win more market share in South Africa. West Pack, which sells homeware, has gone into business rescue — a local form of bankruptcy protection. The group also sits on a large debt pile that a purchaser would have to take on.