Sub-Saharan Africa needs significant additional funding to counter damage wrought by the coronavirus pandemic, bolster its economic recovery prospects and mitigate threats posed by climate change, according to the World Bank, Bloomberg News reported. The regional economy is expected to grow 3.3% in 2021, after contracting by an estimated 2% last year, the Washington-based lender said Wednesday in its latest Africa Pulse report. It raised its gross domestic product forecast by one percentage point from its April report, largely due to better-than-expected commodity prices.
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South Africa
South Africa's embattled national airline on Thursday flew its first plane since March 2020 after emerging from bankruptcy proceedings, france24.com reported. Passengers on the South African Airways (SAA) flight from Johannesburg to Cape Town were greeted on their departure by singing and dancing airline staff. Once Africa's second-largest airline after Ethiopian Airlines, SAA had survived for decades on government bailouts and had been shedding routes even before the COVID-19 pandemic struck.
South African Airways will need a more modern fleet to be competitive on routes outside its home continent following the Covid-19 crisis, according to interim Chief Executive Officer Thomas Kgokolo, Bloomberg News reported. The state-owned airline used to generate revenue on trips to cities such as London and Frankfurt, but its aging Airbus SE planes have prohibitive operating costs, he said in a panel discussion on Wednesday. “If we get the right fleet for those particular trips we should be able to minimize costs and become competitive,” Kgokolo said.
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South Africa said the private group looking to take a majority stake in the country’s dormant national airline is close to completing due diligence ahead of a planned resumption of flights later this month, Bloomberg News reported. The Takatso consortium has yet to identify any material issues that would scupper the South African Airways deal, the Department of Public Enterprises said in a presentation to lawmakers on Wednesday. The group is made up of Johannesburg-based Global Airways, which owns new domestic airline Lift, and private-equity firm Harith General Partners.
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South Africa’s economy is 11% bigger than previously estimated, after statistics authorities changed the way they calculate gross domestic product, Bloomberg News reported. GDP at current prices measured 5.52 trillion rand ($369 billion) in 2020, compared with a previous estimate of 4.97 trillion rand, said Joe de Beer, deputy director-general of economic data at Statistics South Africa, told reporters Wednesday in the capital, Pretoria. The economy remains Africa’s second-biggest, lagging behind Nigeria.
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Eskom Holdings SOC Ltd., the state utility that supplies most of South Africa’s power, said it’s seeking to appoint advisers on how to restructure itself into three separate units, a reorganization that was proposed to let it to better deal with an untenable debt burden, Bloomberg News reported. The separation of the Johannesburg-based company into transmission, generation and distribution units was first raised by South African President Cyril Ramaphosa more than two years ago.
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South African Finance Minister Tito Mboweni affirmed his commitment to reining in debt amid concerns that the coronavirus pandemic and a week of deadly riots will further erode the state’s already shaky finances. “We are not going to go to a sovereign debt crisis for now, at least not under my watch,” despite opposition to spending constraints, Mboweni said in an interview on Wednesday. “There is no such thing as a popular minister of finance -- it doesn’t exist, it’s a contradiction in terms.
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South Africa’s Treasury expects a relief package for businesses and individuals affected by this month’s deadly riots to cost 38.9 billion rand ($2.6 billion), Bloomberg News reported. The government will spend an additional 31.2 billion rand and grant 5 billion rand in tax breaks, while 2.65 billion rand will be reallocated from within the budget, Edgar Sishi, the acting head of the budget office, said in an online briefing on Wednesday. The program won’t require additional borrowing, Treasury Director-General Dondo Mogajane said at the briefing.
South African Airways (SAA) subsidiary Mango Airlines temporarily suspended all flights and services on Tuesday until further notice due to outstanding payments to Air Traffic Navigation Services, Mango acting CEO William Ndlovu said, Reuters reported. “Senior management and our shareholder are locked-in in emergency discussions to find an amicable solution to this impasse,” Ndlovu said in a statement. The budget carrier is in a dire financial position despite the South African parliament having approved a special allocation of 2.7 billion rand ($182.3 million) for SAA subsidiaries.
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South African Airways (SAA) subsidiary Mango Airlines will enter into a local form of bankruptcy protection known as business rescue, according to SAA’s interim chief executive Thomas Kgokolo told Reuters reported. SAA, which itself exited business rescue in April, is one of a handful of South African state companies that depended on government bailouts, placing the national budget under huge strain. “What we can say is that the board and shareholders have agreed that Mango will go into business rescue,” Kgokolo said in an interview with TV station eNCA.
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