An economic review of the past week

Published Apr 7, 2018


JOHANNESBURG - Several lobby groups are frothing at the mouth after Energy Minister Jeff Radebe signed a R56 billion contract with 27 independent power producers (IPPs) this week.

The renewable energy project is expected to add 2 300 MW of electricity to the national grid over the next five years.

This would assist in denting the scourge of unemployment, currently sitting at a dizzying 26.7 percent.

However, the National Union of Metalworkers of SA (Numsa), Transform RSA and the Coal Transporters Forum were not impressed with Radebe’s decision to sign the long drawn out agreement with the IPPs.

Numsa and Transform RSA last month approached the courts wanting an urgent interdict preventing the signing of the agreements, pending the main application launched by Coal Transporters Forum, due to be heard in a few months’ time.

However, Gauteng High Court judge Dawie Fourie ruled that the application was not urgent, paving way for the signing of the agreements.

Unperturbed, energy analyst Andrew Kenny dubbed renewable energy a disaster and an absolute waste of money.

This week also saw the South African Revenue Service announced that it had collected R700 million less in taxes in the 2017/18 financial year than its February revised target.

Preliminary figures showed that it only managed to collect R1.216 trillion during the period, which is less than the R1.217trln the former Finance Minister Malusi Gigaba, announced as a target during the Budget Speech in February.

In other news, the South African Chamber of Commerce and Industry Business Confidence Index declined by 1.3 index points from 98.9 points in February to 97.6 points in March.

On the transport front, the South African Airways said it would only make a profit in four years after registering a further financial loss of R3.7 billion over the nine months to the end of 2017, as revenue dipped about R1bn below its forecasts for the period under review. 

The embattled airline predicted that its turnaround strategy would start reaping fruit in four years’ time.

Trending on social media was former president Jacob Zuma’s brief appearance in the Durban High Court on Friday.

Zuma, who faces one count of racketeering, two counts of corruption, one count of money laundering and 12 counts of fraud, is accused of taking bribes from French arms maker Thales over a contract worth R30 billion during his time as KwaZulu-Natal MEC for economic affairs and tourism and then deputy ANC president. Zuma, who begrudgingly resigned as president of South Africa in February following a recall by his own political party, is expected to appear in court again on June 8.


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