Star 2023-01-18

Moody’s vice-president senior credit officer Aurelien Mali says GDP in South Africa is now likely to track below 1% this year due to the severe power cuts SOUTH Africa’s economic growth could slump below 1% in 2023, slashing all the gains and recovery made since the Covid-19 pandemic, as a result of severe power cuts which continue to cripple productivity. This was a warning from ratings agency Moody’s Investors Service yesterday as Eskom’s rotational power cuts remained elevated at Stage 4 amid an absence of an energy security plan from the government. Moody’s vice-president senior credit officer, Aurelien Mali, yesterday said gross domestic product (GDP) in South Africa was now likely to track below their previously downwards growth forecast of 1% in 2023. This outcome would be significantly lower than…

Transaction Capital has plans in place for the recovery of SA Taxi, the one out of the group’s three divisions that underperformed in the past financial year, SA Taxi CEO Terry Kier said in the group’s integrated annual report released yesterday. The group’s WeBuyCars business did particularly well and contributed R540 million to core earnings attributable to the group in the year to September 30, 2022, 100% above the 2021 figure. Nutun, the digital business services company, contributed R409m to attributable group core earnings after increasing by 28% over the year. But SA Taxi, which mainly finances new and used minibus taxis, saw its contribution to core attributable earnings fall 26% to R304m. Kier said the floods in KwaZulu-Natal in April last year temporarily disrupted public transport services and damaged…

MINING production in South Africa fell for the 10th month in a row in November 2022 as the prolonged power cuts, which reached record levels last year, are expected to continue to hurt the sector. This means that the mining industry, which contributes about 9% to gross domestic product (GDP), will continue to be a drag on the economic output for the fourth quarter of 2022. Statistics South Africa (Stats SA) said yesterday that mining output slumped by 9% year-on-year in November, following an upwardly revised 11% decline in October due to the Transnet workers strike. This mining print was worse than market forecasts of a 6.85% drop, and a consecutive decline in output since January. Stats SA said the largest negative contributors were the platinum group metals (PGMs), which…

WHILE leading economists warn that the looming global recession will impact on the economies of struggling African countries, they are not too pessimistic. This as African countries are expected to shoulder the greatest impact of a global recession as they are highly dependent on foreign investment, international trade and imports, and they have been knocking on doors of multilateral finance institutions more than other regions to survive. At the World Economic Forum (WEF) Annual Meetings 2023 yesterday, a group of economists discussed the precarious outlook for the global economy this year on the back of a persistent Covid-19 pandemic, the war in Ukraine and rising costs of living. The group was unanimous that even though a global recession was forecast for this year, it would be a “shallow recession” instead…

COLLECTIVELY, eight insurers investigated by the Competition Commission for price-fixing could be fined up to 25% of their turnovers by the Competition Tribunal, making the penalties the highest ever fined by South Africa’s competition authorities. Competition Commission spokesperson Siyabulela Makunga said yesterday that while the hearings for the investigation were still some way off, and information from last year’s raids at the various insurers was still being analysed, the Competition Tribunal had the power to fine companies up to 25% of their turnover for repeat offenders, and “we always go for the maximum penalty”. He was responding to Business Report’s questions following the publication yesterday by News24, which had made a Promotion of Access to Information (PAIA) request for the commission’s court documents of information that showed the commission suspected…

The shares were down 5.71% in intraday trade yesterday and traded at R3.30. They have declined by 47.76% in the past year. In its financial performance update for the first half of the 2023 financial year, the IT group said it concluded a debt term sheet with Standard Bank, acting through its Corporate and Investment Banking division, subject to the successful conclusion of the capital raise. EOH said its remaining debt would be refinanced as follows: a R200 million, four-year amortising term loan; a R250m, three-year bullet term loan; a R250m, four-year revolving credit facility; and R500m in general banking facilities, which will include a working capital facility and ancillary banking facilities. EOH said this would ensure that the group emerged from the capital raise with a sustainable capital structure,…