Suburbs across Johannesburg, South Africa’s economic hub, were hit by widespread power outages on Friday that electricity providers were unable to explain.
“Technicians are on site to determine the cause of the outage,” Khulu Phasiwe, a spokesman for state-owned power utility Eskom Holdings SOC Ltd., said via Twitter.
There’s no estimated time for the restoration of electricity at this stage, he said.
Eskom has not implemented rolling blackouts in the city, Andrew Etzinger, Eskom’s acting head of generation, said via a mobile phone text message. A spokesman for Johannesburg’s City Power wasn’t immediately able to comment.
Eskom said earlier on Friday that there was a risk of blackouts because the power system “remained tight and vulnerable” and the power could be cut at short notice if there was a shift in plant performance.
“This could include a significant loss in generating plant due to unplanned technical breakdowns,” Eskom said in the statement.
South African billionaire Patrice Motsepe has announced that he will donate half the revenue generated by his assets to his foundation.
Microsoft founder Bill Gates on Wednesday hailed Patrice Motsepe’s decision to give half of the funds generated by his family’s holdings to the poor, as a milestone.
Motsepe is the first person outside of the Unites States to join the ‘Giving Pledge’, an initiative started by Warren Buffet and Gates, which encourages the super-wealthy to donate at least half of their money to charity.
The African Rainbow Minerals chair announced the funds will be channeled through the Motsepe foundation.
The money will be distributed to various issues affecting the poor including health, education, unemployment and the upliftment of women.
Gates has wished the South African billionaire well.
“It was a wonderful thing to hear how the Motsepe’s really, as part of their moral conviction as a family, believe in giving back. I want to congratulate them.”
Meanwhile, Motsepe said the most effective way to deal with joblessness and poverty is to create a business environment that is globally competitive and attractive to the private sector.
“We don’t want Africa to forever be a continent of charity and a continent of donations. We want Africa to be self-sustaining.”
The businessman said the donation will contribute towards making South Africa a better place.
“People in my position have a huge responsibility to South Africans who are less fortunate.”
Motsepe will consult with church and traditional leaders, as well as various charities, to decide where the money goes.
It has become an accepted premise among some South Africans that the current government is responsible for the troubles facing Eskom, whether it is the financial position of the utility being compromised by corruption or so-called policy sabotage when the government barred the company from building more power stations in the late 1990s.
This type of analysis makes sense on the face of it since there’s a clear line between cause (corruption, incompetence) and effect (the imminent collapse of Eskom, loadshedding).
The problem with clear-cut, emotionally satisfying answers is that they are often wrong. Nicholas Woode-Smith, an author and managing editor of the Rational Standard, has done an economic analysis of Eskom using principles from the Austrian school of economics.
It is clear from Woode-Smith’s work that the core problem of everything that is wrong with Eskom is its structure as a monopoly provider of electricity.
Eskom simply does not have the means to receive and interpret the vital market signals necessary to calculate what its electricity price should be.
When demand increases, because Eskom is a political entity, it cannot adjust prices accordingly to reflect this increased demand, and thus has to violate a fundamental law of economics.
If Eskom were allowed to adjust prices based on demand, sadly, it would still provide electricity inefficiently due to the lack of competition inherent in its legislated monopoly, but, at least it would then be able to ensure its own survival, albeit at the cost of consumers and the economy generally.
The situation as it is now, Eskom is harming both itself and the economy.
Corruption at Eskom didn’t start with Jacob Zuma or even in 1994. Back in 1984, the assistant chief accountant was caught embezzling R8 million.
There were blackouts too in the past due to an inability to match demand with supply. These and other problems led to the appointment of the De Villiers commission in 1984.
Eskom was always doomed to fail. It started failing long before the democratic era.
The fundamental reason why Eskom is doomed to fail is its structure as a state-owned, monopoly provider of electricity.
It is often claimed that if Eskom were to be privatised, the poor would suffer the most.
Well, that depends on whether you want them to suffer a little now or a lot more so in the future.
A market for electricity would introduce price competition, which, unlike Eskom’s political prices, would be market driven and would be sustainable.
Future consumers would not have to pay the price they do today.
It is worth remembering that we have had average annual increases in the electricity price of 12.46% since 2009.
Cumulatively speaking and taking account of inflation, this amounts to 119.61% over the March 2009 electricity price.
This, on its own, destroys the argument for keeping Eskom’s legislated monopoly for “the sake of the poor”.
The poor would likely not have been subjected to such large increases in so short an amount of time if private electricity providers had been allowed to compete with Eskom.
I believe that looking back to a mythical golden age when Eskom was beating the laws of economics contributes nothing to the urgent debate we need to have about how energy should be provided to the South African economy.
Should we continue sustaining Eskom at any cost, a company that has never been sustainable, or, rather, should we accept the laws of economics that have worked time and time again and leave energy provision to the market?
Mpiyakhe Dhlamini is a data science researcher at the Free Market Foundation
South African President Cyril Ramaphosa did not make many new announcements his state of the nation address on Thursday night, but he used the occasion to warn those who have dabbled in corruption that government agencies will be coming for them.
Using the momentum of the newly appointed head of the National Prosecutions Authority, Shamila Batohi, he announced the creation of a specialised unit to deal with serious corruption and associated offences.
Ramaphosa said he had agreed with Batohi for the urgent need to set up this office and would soon promulgate a proclamation that will outline the specific terms of reference.
This will send a shiver down the spine of many of his fellow ANC leaders against whom allegations have been made at the Zondo commission of inquiry into state capture.
The unit or directorate will focus on the evidence that has emerged from the Zondo commission, as well as other commissions and disciplinary enquiries.
It will identify priority cases to investigate and prosecute and will recover assets identified to be proceeds of corruption.
This unit, which is already being compared to the defunct Scorpions, will help respond to public complaints that too many public representatives and government officials who are implicated in wrongdoing are let off the hook.
It also means that many of Ramaphosa’s opponents who have defiantly held on to positions will be handled by these processes without forcing his hand to fire them.
A he spoke, opposition MPs taunted him about a R500 000 donation that his ANC campaign received from Bosasa last year, implying that he could also be found wanting by these probes.
Ramaphosa proceeded with the speech nevertheless, without acknowledging or responding to their heckling.
Ramaphosa spent a lot of time speaking about the work he had done in the last year since taking over from Jacob Zuma, who was forced to resign by the ANC.
In particular he repeatedly mentioned his investment drive, which has attracted millions of dollars in pledges but is yet to make a direct impact on the economy.
“We are on the cusp of seeing direct jobs from the initiatives,” he promised.
As expected, a plan is also being crafted for the embattled power utility Eskom.
“Eskom is in crisis and the risk it poses for South Africa are great,” Ramaphosa acknowledged.
He said bold and decisive action was necessary and some of the consequences would be painful.
Without mentioning the details, it was clear the plan would either involve major restructuring or possible job losses.
“Eskom has come up with a the nine-point plan which we support and plan to implement. Eskom will need to take urgent steps to reduce its costs.”
The president was afforded space by the Economic Freedom Fighters, which had threatened to interrupt his state of the nation address unless he gave a proper explanation for the Bosasa donation.
But he spoke uninterrupted, which was a fresh breath of air for a Parliament used to the interruptions when Zuma was speaking.
Ramaphosa also spoke about a restructured intelligence service.
He was going to re-establish the national security council in order to better coordinate intelligence and security-related functions.
This follows work done by a high-level review panel on state security agency.
The South African government’s plan to scrap work experience requirements for first time job seekers in the public sector has been welcomed by the local people.
“Any attempts to reduce youth unemployment is supposed to be welcomed, but the quality of service should not be affected,” Prof. Jannie Rossouw, head of the school of economic and business sciences at University of the Witwatersrand told Xinhua on Tuesday.
New graduates entering the job market will no longer be required to have work experience for an entry level government job starting from April 2019. With the country battling high levels of unemployment, Public Service and Administration Minister Ayanda Dlodlo on Monday noted that the new plan is aimed at tackling youth joblessness.
Dlodlo said the move will not have an impact on services delivered by government.
“This will be structured in such a way that it does not compromise the professional and technical requirements for various fields. All we want is to streamline career paths and align skills,” she noted.
For years, unions and organizations representing young people have complained that work experience requirements for first time job seekers by employers was making it difficult for young people to enter the job market.
In an interview with Xinhua, South Africa’s largest trade federation COSATU’s spokesperson Sizwe Pamla said the move was long overdue.
“This is going to work. The South African government policy needs to change to accommodate mostly black graduates. We should appreciate the fact that there’s no place where they sell experience.”
Pamla said employers should always be willing to offer young people opportunities to gain the necessary experience.
“Where do you expect these graduates with no experience to get experience from if you are not willing to give them opportunities. People who have graduated should not be treated as if they are illiterate,” Pamla said.
Several South African liquor outlets are apparently running out of Castle Lager beer, as a shortage of bottles affected production.
Refilwe Masemola, South African Breweries director of external communications, said a shortage of reusable bottles has slowed the production process. There have been delays in returning these bottles to SAB, Masemola said, without giving more details.
“Our production teams are [however] hard at work to ensure that those outlets that may be affected are well stocked over the coming days,” Masemola told Business Insider South Africa.
“We are in fact ahead of our production schedule, which should bring some comfort to our customers.”
Castle Lager is one of South Africa’s most consumed beers and was for the first time named the 25th most valuable beer brand in the world in 2018.
South Africa is, on average, one of the world’s highest liquor consumers, and consumption tends to increase considerably over the festive season.
Local licence holder for Starbucks in South Africa, Taste Holdings, has halted any plans to open more outlets of the US coffee chain as it struggles to make ends meet.
Taste, which also owns the jeweller Arthur Kaplan and Domino's Pizza, suffered operating losses of R87 million in the six months to end-August, with sales down 3%.
The group said that while the store network of twelve Starbucks outlets is profitable at a sales level, it's not producing the required return on its investment.
Setting up a new Starbucks store in South Africa costs between R5 million to R8 million, the group previously said. This is very expensive, says Simon Brown, founder and director of investment website JustOneLap.com. Brown estimates that the actual cost could now be higher than previously stated - perhaps even reaching R20 million.
Hitesh Patel, director of new business at Starbucks competitor Vida e Caffè, says the average cost of setting up one of its stores is only around R1.5 million.
That is is less than a third of the minimum cost of a new Starbucks outlet.
Taste has a 25-year licence deal to operate Starbucks stores in SA - and have to pay royalties to the US brand, which are proving to be costly, says Michael Treherne, retail analyst at the fund manager Vestact.
Due to the royalties and expensive store set-up costs, Treherne says Starbucks South Africa has had to resort to premium pricing - which is not at all good during a recession.
The difference between food prices is more pronounced. We could find a muffin at a Vida e Caffe outlet in Johannesburg for under R20, while the cheapest muffin at a Starbucks was R32.
The drinks brand has lampooned itself in their latest advert after a rebranding blunnder.
Coca-Cola brand Schweppes changed its branding a few months ago. It didn't go down well with customers.
Many people were confused by the similarity between Schweppes Soda Water and Tonic Water.
As an apology for the mess-up, Schweppes lampooned itself in an advert.
Drinks brand Schweppes lampooned itself in a Twitter advert this week after customers took to social media to complain about it rebranding – and the company promised to roll back a hated change to its branding.
#OhSchweppes, we're so sorry that our mix-up ruined your mixing. For the record, we agree with you - our packaging blunder wasn't our brightest moment. We'll be better.
The Coca-Cola brand had changed the look of its Soda Water drink – which had left many to confuse it with Schweppes Tonic Water.
Schweppes now admits that was "not our brightest moment".
Schweppes senior brand manager, Mukundi Munzhelele, taking ownership for coming up with the rebranding idea.
The senior brand manager, Mukundi Munzhelele, who came up with the bright idea, to marketing manager Nerisha Maharajh who signed off on it, various staffers took it on the chin and lampooned themselves for the mistake in the social media ad.
Marketing manager, Nerisha Maharajh after realising she was the Einstein who signed off on this "bright idea".
"The complaints we received were passionate and heartfelt," Munzhelele tells News men in South Africa.
"It was only fair to them (customers) that the actual people who worked on the campaign not only see the responses, but respond in a manner that was fitting."
Roger Gauntlett, general manager of Coca-Cola Southern Africa is not laughing at the tricked people.
According to Munzhelele, the team wanted to modernise the labels. But a change in colour caused a lot of confusion.
Schweppes changed the colour of its soda water branding on its bottles to grey, which made it look like its tonic water labels. It has now changed the labels - tonic water is yellow, and soda water has a stripe of grey.
"We took some time to look at our packaging with the feedback received from consumers and decided not to simply revert to the previous design," says Munzhelele.
The response sat well with many consumers who applauded the brand for taking responsibility.
JOHANNESBURG - The rand rose for a fourth straight session on Friday to end the week nearly 3% firmer, benefiting from political chaos in Britain and a revival of risk appetite linked to a thawing of United States (US)-Sino trade tensions.
Stocks ended slightly lower, with British American Tobacco taking the most off the benchmark index after the United States announced sweeping restrictions on flavoured tobacco products.
At 1530 GMT, the rand was 1.09% firmer at 14.0300.
Most of the gains were posted after the dollar wobbled as two Federal Reserve officials cautioned in separate television interviews about slowing global economic growth, raising doubts about the number of future US rate increases.
The rally followed Thursday’s strong gains, particularly against the pound, as Prime Minister Theresa May battled to salvage a draft Brexit deal.
Growing bets that the South African Reserve Bank (Sarb) may raise rates at its policy meeting on Thursday supported the already attractive carry yield offered by the rand.
It outpaced most other emerging currencies against the dollar on the day.
In a Reuters poll taken this week, 16 of 26 economists said the SARB would keep its repo rate at 6.50% while the rest forecast a 25 basis-point hike.
Bonds also rose, with the yield on the benchmark 2026 paper down 4.5 basis points at 9.115%.
On the bourse, the benchmark Top-40 index was down 0.17% at 45,851 and the broader All-share index lost 0.1% to 52,095.
BAT slumped 6% to R495.67, tracking falls in its London-listed shares. On Thursday the US Food and Drug Administration announced restrictions on flavoured tobacco products, including electronic cigarettes, in an effort to prevent a new generation of nicotine addicts.
Investment house Reinet Investment was also under pressure, falling 6.7% to R215.58 after the company reported a drop in net asset value, a key profitability measure for investment companies.