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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

More blackouts expected as industrial
action continues across South Africa

CAPE TOWN South Africa (Xinhua) -- South Africa will be plunged into darkness again as a result of a continuous strike by employees at power stations, authorities warned on Tuesday.

The electricity system remains constrained with a high probability of Stage 1 rotational load shedding this evening, said state-run electricity utility Eskom which provides more than 95 percent of the electricity consumed in the country.

Eskom said it will advise if load shedding will be conducted in either stage 1, stage 2, stage 3 or stage 4, dependent on the capacity shortage.

Stage 1 requires 1,000MW to be rotationally loadshed nation-wide, stage 2 requires 2,000MW, stage 3 requires 3,000MW and stage 4 calls for up to 4,000MW to be rotationally loadshed nationally at a given period.

Load shedding is conducted rotationally as a measure of last resort to protect the power system from a total collapse or blackout.

"We encourage residents and businesses to please use electricity sparingly to ease the demand of electricity," the utility said.

The generation and distribution of electricity in the country has been constrained after Eskom employees downed tools last month to press their demand for wage increases.

The strike shows no sign of abating because cash-strapped Eskom cannot afford to raise wages for its workers.

Electricity supply network has been affected by acts of sabotage and intimidation that characterize the current industrial action by members of trade unions, according to Eskom.

Eskom is now facing a serious coal shortage at seven power stations.

The utility has sought the services of the Commission for Conciliation, Mediation and Arbitration (CCMA) to facilitate the engagement between Eskom and union leaders to resolve the impasse.

"We are hopeful that all parties will put South Africa first as we endeavor in finding an amicable solution," said Eskom.

The South African Police Service (SAPS) has been mobilized to maintain order and to enable safe access to power stations as these are national key points, Eskom said.

The current situation has given rise to fears that similar load shedding is on the way as in 2014 and 2015 when frequent load shedding gripped the country.
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UPDATE:

South African African National Congress supports constitutional
amendment on expropriating land without compensation

JOHANNESBURG South Africa (Xinhua) -- South Africa’s ruling party, the African National Congress (ANC), on Tuesday announced it will support the amendment to Section 25 of the Constitution to "explicitly" expropriate land without compensation.

South Africa’s President Cyril Ramaphosa said on late Tuesday night that his country faces many challenges, particularly the issue of land expropriation.

"On land reform, the ANC applauds our people, from all walks of life - including the rural poor, farm labourers, the unemployed, the landless, urban residents, farmers and traditional leaders - for expressing their views on this critical matter."

"Our people have been expressing their views on the land question openly and without any fear or favour," said Ramaphosa. It had become "patently clear that our people want the Constitution to be more explicit about expropriation of land without compensation, as demonstrated in the public hearings."

He stated that "a comprehensive land reform programme that enables equitable access to land will unlock economic growth, by bringing more land in South Africa to full use, and enable the productive participation of millions more South Africans in the economy."

Accordingly, the ANC will through the parliamentary process to finalize a proposed amendment to the Constitution that outlines more clearly the conditions under which expropriation of land without compensation can be affected.

"The intention of this proposed amendment is to promote redress, advance economic development, increase agricultural production and food security. It will also transform the unjust spatial realities in urban areas," said the president.
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EARLIER REPORTS:

South African government submits bill to
Parliament on high economic concentration

CAPE TOWN South Africa (Xinhua) -- The South African government on Monday submitted the long-awaited Competition Amendment Bill to Parliament as the country is braced for bold economic transformation.

Minister of Economic Development Ebrahim Patel described the bill as a significant policy shift by the government.

The amendments provide for an extension of the mandate of the competition authorities and the executive to address high levels of economic concentration and limited transformation in the South African economy and abuse of market power by dominant firms.

The bill also allows the executive to intervene in mergers by foreign firms which impact national security interests in the country.

Soon after the bill was submitted, the ruling African National Congress (ANC) called on Parliament to fast-track consideration of the bill "as the country urgently needs bold economic transformation."

"We note that the bill has been through a thorough process of consultation with business and organised labor.

"We call on the social partners to work closely to begin implementation of the core elements and to join us in opening the economy to small and medium businesses," ANC national spokesperson Pule Mabe said.

He said many studies on the South African economy have indicated the high levels of economic concentration in different sectors.

"This has a negative impact on innovation, investment, growth and job creation. It also leads to higher prices for consumers, and limits the opportunities for small and medium businesses to participate," said Mabe.

Therefore, the bill provides the Competition Commission with the powers to conduct market inquiries in sectors where ownership and market share have become highly concentrated.

It proposes remedies that can lead to greater economic participation, and lower prices for consumers.

Under the bill, the competition authorities can impose conditions on mergers which result in a greater spread of ownership in companies, particular black South Africans and workers in those companies.

This is in line with the call by the ANC to promote greater worker ownership in the economy and is part of the bold vision of economic transformation that the country needs, said Mabe.

"The ANC once again affirms its policy to deconcentrate the levels of ownership in South Africa and open the economy for greater participation and jobs," he said.

But the bill has been met with criticism. Critics argue that it could overload the competition authorities to the point where their effectiveness could be jeopardized.

Others have cautioned that the legislation could constrain the space for other policies aimed at supporting industrialization, particularly where greater collaboration might be required to bolster certain manufacturing sectors.

The bill would now be subjected to scrutiny by Parliament, which would also determine the schedule for the processing of the legislation.
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International Monetary Fund highlights impediments to South African growth

CAPE TOWN South Africa (Xinhua) -- The International Monetary Fund (IMF) on Monday highlighted several impediments to South Africa’s growth, including policy uncertainty and regulatory overreach that hinders private investment.

South Africa also faces inefficiencies in state-owned enterprises (SOEs), labor market rigidities, insufficient competition in product markets and corruption, the IMF said as it published the outcome of its consultations with South Africa that took place between May 28 and June 11.

During the consultations, IMF officials met with various stakeholders from different sectors, including the government, SOEs, business, organized labour and academia, according to the South African National Treasury.

In its report, the IMF keeps its growth forecast of 1.5 percent in 2018 for South Africa, the same as its World Economic Outlook (WEO) projection in April.

The IMF’s concerns on fiscal policy relate to the rapid increase in public debt as a share of GDP, which has doubled over the last decade, depleting fiscal buffers and constraining fiscal policy space.

Risks related to potential SOEs bailouts will further constrain fiscal policy, the IMF said.

The IMF deems the current monetary stance appropriate but emphasized that monetary policy authorities should be cautious given fiscal risks and the need to build buffers.

While acknowledging South Africa’s recent reform efforts to combat corruption, the IMF argued that to improve growth and reduce poverty, these actions have to be followed by strict enforcement of good regulations.

In addition, clear communication of policies and regulatory decisions is essential to clarifying any uncertainty that is weighing on investor sentiment, the IMF said.

But the IMF also pointed out that South Africa’s economy remains well integrated in the global economy, diversified and has a sophisticated financial services sector.

In response to the IMF report, the National Treasury said the government concurs with the IMF’s views on the urgency to advance the implementation of its reform agenda as set out in the National Development Plan, which calls for economic growth of 5.4 percent per year and a 6-percent decrease in unemployment by 2030.

"We remain committed to achieving inclusive growth that will create jobs, eradicate poverty and reduce inequality," the Treasury said.

In regards to the IMF’s concerns on fiscal policy and debt levels, the Treasury reaffirmed the government’s commitment to reduce the deficit and stabilize debt.

South Africa’s gross borrowing requirement in 2017/18 was 246 billion rand (about 18.7 billion U.S. dollars), consisting of 217.3 billion rand (about 16.5 billion dollars) for the budget deficit and 28.7 billion rand (about 2.2 billion dollars) for debt repayments, according to the National Treasury.
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South African expert calls for preparation for fourth industrial revolution

JOHANNESBURG South Africa (Xinhua) -- The fourth industrial revolution presents challenges and opportunities which calls for proactive approach to reap its rewards, said South African Reserve Bank deputy governor Daniel Mminele on Wednesday.

Speaking at the University of Zululand, Mminele said the universities and other higher learning institutions have a role in preparing the country for the fourth industrial revolution.

"New technologies will transform the world we live in.

"The exponential speed and scope of this transformation brings with it the potential for unlimited possibilities and endless opportunities, but also massive challenges," said Mminele.

He stated that policy makers, central banks, business leaders and organizations like BRICS and G20 are grappling with the implications of the fourth industrial revolution.

Mminele encouraged universities to equip students with the right skills to suit industrial revolution.

He said artificial intelligence might be slower to reach emerging economic but inevitable.

"It is not only the low-skilled jobs or tasks that are at risk of being eliminated, but also the more highly qualified professional jobs like those of financial analysts," he said.

"There was a time when ideas like driver-less cars and talking robots were only found in sci-fi movies, and seemed so imaginative and unrealistic," he said.

Mminele called for proactive actions by countries warning that the transformation would be fast and is not far.

A McKinsey report estimates that, by the year 2030, at least one-third of the activities of 60 percent of all the occupations could be automated.

This means that, globally, up to 375 million people may need to change jobs or learn new skills within the next 12 years, Mminele said.

He noted that Africa’s growing and dynamic population gives Africa an advantage to embrace fourth industrial revolution.

"The World Economic Forum asserts that the region’s capacity to adapt to the requirements of future jobs, relative to the region’s exposure to these future trends, leaves little space for complacency.

On a bigger scale, urgent efforts are needed to close the continent’s skills gap," he said.

He said the fourth industrial revolution would also affect the future of monetary policy as "prices could be lowered, for example, as retail sales become digitalized, as many already are."

"As a result, inflation could decelerate because online retailers face much lower operational costs than traditional businesses," he said.

Mminele observed that the more use of the new technology the more possibility of cyber attacks and financial stability risks.

"A robust cyber-resilience and cyber-risk framework is crucial to creating an enabling environment for financial services innovation," he said.
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Johannesburg Stock exchange starts week on
upbeat as investors await interest rate decisions

JOHANNESBURG South Africa (Xinhua) -- The Johannesburg Stock exchange (JSE) closed higher on Monday as investors waited on key global interest rate decisions later this week.

The South Africa’s rand was stable against major global currencies on Monday, despite a sell-off in equities on major international markets.

Naspers was 1.28 percent lower at R3,315.08. It is down 5.3 percent so far in 2018.

The market reacted positively to the latest local money supply and credit data, at the close of the market.

Private sector credit extension (PSCE) grew at an annual rate of 5.68 percent in June, from 4.54 percent in May, Reserve Bank data showed.

The all share was 0.26 percent higher at 57,313.14 points and the top 40 dropped 0.2 percent. Industrials shed 0.2 percent, platinums 0.58 percent, resources 0.3 percent, but banks gained 1.36 percent.

The gold index rose 2.53 percent and food and drug retailers lost 0.1 percent.

Sasol lost 1.1 percent to R511.7.

Sibanye-Stillwater rose 6.21 percent to R7.87.

FirstRand advanced 1.34 percent to settle at R67.9.

Massmart gained 3.8 percent to R117.5, after releasing a statement earlier in which it reported a slight uptick in trading conditions.

Ellies Holdings closed flat at 34c, after earlier reporting an 8 percent increase in group revenue for the year to end-April.

Diversified miner Glencore fell 1.03 percent to R55.96 and Anglo American 1.02 percent to R289.99.

Standard Bank gained 1.87 percent to R203.01 and Nedbank 1.82 percent to R273.5.

Among property stocks, Nepi Rockcastle rose 2.76 percent to R120.95.

             

 

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