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.
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South Africa
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.
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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.
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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.
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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.
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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.
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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.
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A new bidding process for the rescue of provisionally liquidated South African Express will open this week based on a re-evaluation of the airline's "intangible assets," according to the legal representative of the provisional liquidators, ch-aviation.com reported. This comes ahead of a liquidation court hearing of the state-owned regional airline now set for July 4, 2022, after it was postponed seven times since the airline was provisionally liquidated in April 2020.
SA Rugby will take the opportunity in front of a governmental sports portfolio committee to lobby for the return of crowds on Wednesday, the Daily Maverick reported. SA Rugby has kept the sport afloat over two COVID-wracked years, but it won’t be able to survive another year like the previous two. That is the dire warning from the governing body, which it will take to Parliament when it does a regular update to the portfolio committee on sport.
South Africa’s government plans to restructure state power utility Eskom Holdings SOC Ltd.’s debt before elections in 2024, and will only provide additional support if the company sells assets and cuts jobs, Finance Minister Enoch Godongwana said, Bloomberg News reported. Eskom, which supplies almost all of South Africa’s power, has 392 billion rand ($26 billion) of debt. The utility has said the liabilities need to be cut to 200 billion rand for it to be sustainable and accept support pledged by rich nations to help reduce South Africa’s dependence on coal and cut carbon emissions.
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