South Africa

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.

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.

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.

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.

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.

South Africa’s government and national airline are being sued by a little-known investment firm, which wants the sale of a majority stake in the carrier scrapped and re-run due to a lack of transparency, Bloomberg News reported. This year’s acquisition of 51% of South African Airways by the Takatso Consortium -- made up of a local jet-leasing company and a private-equity firm -- for just $3 was “unlawful and constitutionally invalid,” according to documents filed at the High Court in Cape Town by Toto Investment Holdings Pty Ltd.

South Africa's economy grew more than expected in the first quarter, recovering to the level it was before the COVID-19 pandemic thanks to a strong performance by sectors like manufacturing, data from the statistics agency showed, Reuters reported. The growth trajectory will offer some comfort to South African President Cyril Ramaphosa, who has been under pressure to lift the growth rate. Gross domestic product grew 1.9% in the first quarter in quarter-on-quarter seasonally adjusted terms and by 3.0% year-on-year unadjusted in the first three months of the year.

Comair Ltd., operator of IAG SA-owned British Airways trips in South Africa, grounded all flights after running out of funds and is awaiting further investment, Bloomberg News reported. The carrier, which also runs the domestic low-cost airline Kulula, halted all ticket sales with immediate effect, according to a statement late Tuesday evening. The company’s administrators “believe the funding may be secured,” Comair said.

A digital rand in South Africa could cut the high cost of cross-border payments for banks but its introduction is still a few years away, a senior central bank official said, Reuters reported. However, regulation of crypto assets is in the offing and might come into force within nine to 15 months, South African Reserve Bank (SARB) Deputy Governor Kuben Naidoo told Reuters in an interview. It costs 13% of a transaction to remit money from South Africa to another country, more than double the average of the Group of 20 (G20) leading global economies, according to a 2021 World Bank report.