Andrew Stegmann

Eskom Plans to Keep South Africa’s Electricity On This Winter

Public enterprises minister Pravin Gordhan has provided an update on the current electricity crisis in South Africa, stating that there is a plan for winter, and the next nine months.

At a media briefing on Wednesday (3 April), Gordhan said that Eskom and the Department of Public Enterprises has a better understanding of the challenges facing the power utility, and how to tackle them.

South Africa was hit with unexpected stage 4 load shedding in March, leaving roads grid-locked and citizens without power for hours at a time.

During that time, Gordhan could not provide any guideline on how to end load shedding, saying that an independent team of engineers was in the processes of assessing Eskom’s power plants to determine the extent of the problems.

While the team’s work is not yet complete – needing an additional few weeks – there is now enough information to plot a way forward, Gordhan said, particularly in preparation for the winter months, where demand on the grid is higher.

The minister said that while the aim is to ensure no future load shedding going forward – this is not a guarantee. “(If this aim fails), at the most, we will see only level 1 load shedding between now and the end of August,” he said.

Eskom chair, Jabu Mabuza, provided an update on major constraints that led to load shedding:

Coal stockpiles have improved;
Coal quality is also being focused on;
Eskom has been able to source more diesel, and is handling forward planning around diesel better;
Eskom is not retrenching workers, but is looking at voluntary separation packages to tackle its workforce issues.

Plan for winter

Eskom’s plan for winter is to look at different scenario’s based on available capacity on the national grid. The power utility has installed capacity of 46,500MW, with support from 2,000MW from renewable sources.

Unplanned outages due to boiler leaks, led to as much as 13,000MW being taken off the grid last month.

In a ‘no load shedding’ scenario, these unplanned outages need to be kept below 9,500MW, Gordhan said.

These are the scenarios:

Scenario 1

Unplanned outages is kept to under 9,500MW
No load shedding
Planned outages within a range of 3,000MW to 5,000MW

Scenario 2

Unplanned outages exceed 9,500MW
Maximum of 26 days of stage 1 load shedding over the 5 months
Eskom said that its units actually perform better in winter, due to lower temperatures, so it is confident it will be able to keep unplanned outages below the 9,500MW limit.

To keep the situation at scenario one, Eskom said it will increase supply from existing units, while bringing more power online.

Key to the plan, Gordhan said that there needs to be a shift from all South Africans in how they consumer electricity, along with more accountability from Eskom.

“Clearly plans are nice to have, the key is the discipline to ensure that implementation occurs. We need increased levels of accountability, said Gordhan. We are appealing to all to reduce the use of electricity. We don’t want load shedding,” he said.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: American Public Power Association [1], [2].

Andrew Stegmann

Home Affairs Department to Review Residency Status of Foreign Pastors

Home Affairs Minister Siyabonga Cwele says his department is considering a review of their status as permanent residents.

The Department of Home Affairs is set to take a hard look at high-flying pastors who’ve moved to South Africa to run lucrative ministries.

Home Affairs Minister Siyabonga Cwele says his department is considering a review of their status as permanent residents.

So-called “miracle” pastors are also facing closer scrutiny from the South African Revenue Service, while the African National Congress has called for rogue religious leaders to be investigated by the CRL Commission.

Cwele told Parliament’s home affairs committee that becoming a permanent resident of South Africa involves certain conditions that must be met.

“There are many of these things in the public [eye], like these priests who come from foreign countries to do work here. We’ve asked the department to review their status. Because if you come here, you say you’re coming to run a factory – there’s no factory called a church.”

The minister says it’s not about being against people from other countries.

“Quite clearly, we are not xenophobic but if you come to our country under certain conditions you must stick to those conditions.”

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Andrew Stegmann

MPs Concerned About Home Affairs’ Contract for Visas

The Portfolio Committee on Home Affairs wants the renewal of a contract to outsource the processing of visas reviewed, likening it to the controversial Cash Paymaster Services (CPS) contract.

The committee recently resolved to write to Minister of Home Affairs Siyabonga Cwele to review the contract with VFS Global.

The committee heard that the contract with VFS Global was renewed for two years in December, without it going through the open tender procurement process. The department initially contracted VFS Global in 2010.

Chief director of immigration services at the department Richard Stolz said the extension of the contract “was legally provided for”. He said there would have been an “immense” reputational risk to the department if there was a discontinuity in their operating model.

But MPs are highly critical of the deal.

DA MP Haniff Hoosen said it destroyed job creation in South Africa because the deal meant that several local companies providing visa services had to close their doors.

ANC MP and chairperson of the Portfolio Committee on Tourism Lusizo Sharon Makhubela-Mashele, who also attended the meeting, likened it to the South Africa Social Security Agency’s (Sassa’s) controversial dealings with CPS.

Committee chairperson Hlomani Chauke also subscribed to this idea.

“The extension creates a perception of another Cash Paymaster Services (CPS), which was the only service provider at the South Africa Social Security Agency said to have the capacity to render services. It is even more concerning that the department has extended the scope of work of VFS to establish services in countries it did not have previously,” Chauke said in a statement released after the meeting.

Several MPs said it seemed like the law was amended to deliberately give VFS Global a monopoly.

“Maybe, if we can’t conclude these issues, we must refer it to the Zondo commission [into state capture]. It is part of state capture,” Chauke said.

“Deliberately, you have amended legislation to create this monopoly. It killed all the small players.”

After being castigated by the committee, deputy director general of immigration services Jackie Mckay said: “We note all of the issues that are raised here.”

He acknowledged that it was not the first time that the committee had raised it.

“We take note of it.”

He said before the contract expired, they had started with an open tender process, but in April last year received a legal opinion to not follow such a process.

“That threw a spanner in the works,” Mckay said.

“We have no interest in who is delivering the service, as long as the service is delivered to us.”

Mckay said “serious, serious capacity problems” had been the bane of his existence.

“We just don’t have the staff.”

He said they had approached Treasury on several occasions, to no avail. This did little to appease the committee.

In his statement, Chauke said the committee would like to hear from Cwele about the possibility of going out on an open tender process and his plans to build capacity within the department to quickly process visa applications.

Cwele will be expected to respond to the committee within a week to ensure that the matter is dealt with before Parliament rises.

“While the committee acknowledges that Parliament has no right to inform the department on whom to contract for services, it would be a dereliction of its duty if it did not highlight cases where the department is deliberately breaking its own rules and guidelines,” read the statement.

“It is even more concerning that capacity in key tourism markets, such as Nigeria and India, is lacking, leading to few processed applications impacting on the numbers of tourists coming into the country,” Chauke said.

VFS Global describes itself as the “world’s largest outsourcing and technology services specialist for governments and diplomatic missions worldwide” on its website.

“The company manages the administrative and non-judgmental tasks related to visa, passport, identity management and other citizen services for its client governments. This enables them to focus entirely on the critical task of assessment.”

The company’s headquarters are in Dubai, its parentage is Swiss and it is a portfolio company of EQT, a global private equity firm headquartered in Stockholm, Sweden.

Last week, the committee also asked Cwele to investigate the department’s contract for the automated biometric identification system with technology company EOH.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: PhilippN [1], [2].

Andrew Stegmann

Tax Reform, Digitization Key to African Financing Development

Africa must digitise its economies, broaden its tax base, prevent further deterioration of fiscal and debt positions, and aim for double-digit growth to achieve the UN 2030 global goals (SDGs), and the AU Agenda 2063 according to the 2019 Economic Report on Africa released recently at the Conference of Ministers.

This year’s Economic Report on Africa, a flagship publication of the United Nations Economic Commission for Africa (ECA) focuses on fiscal policy. Government revenues account for 21.4%, insufficient to meet countries’ development financing needs.

“The Report identifies several quick wins in Africa’s pursuit of additional fiscal space to finance its accelerated development,” Vera Songwe, the ECA’s Executive Secretary stated at the launch. “[It also] focuses on the instrumental role of fiscal policy in crowding-in investment and creating adequate fiscal space for social policy, including supporting women and youth-led small and medium enterprises.”

But, a decade away from the SDG, she added that “African countries continue to search for policy mixes to help accelerate the achievement of the SDGs. However, for many countries, financing remains the biggest bottleneck with implementing capacity a close second.”

While analysing and highlighting both challenges and opportunities, the Report also recommends comprehensive macroeconomic reforms aimed at building financial resilience, placing emphasis on the need for Africa to accelerate growth to double digits by 2030 and to boost investment from its current 25 per cent of GDP.

While economic growth in Africa remained moderate at 3.2 per cent in 2018 – due to “solid global growth, a moderate increase in commodity prices and favourable domestic conditions”, the Report emphasises that Africa needs to do more, and work towards achieving a fine balance between raising revenue and incentivizing investments, in order to boost growth.

In some of Africa’s largest economies—South Africa, Angola and Nigeria – the Report reveals, growth trended upwards but remains vulnerable to shifts in commodity prices. East Africa remains the fastest growing, at 6.1 per cent in 2017 and 6.2 per cent in 2018, while in West Africa, the economy expanded by 3.2 per cent in 2018, up from 2.4 per cent in 2017. Central, North and Southern Africa’s economies grew at a slower pace in 2018 compared to 2017.

On the issue of Africa’s debt burden, the Report reveals that debt levels remained high as African countries increased their borrowing, to ease fiscal pressures most of which have been precipitated by the narrowing of revenue streams that have gone on since the commodity price shocks of 2014.

It argues that African countries can increase government revenue by 12–20 per cent of GDP by adopting a policy framework that strengthens revenue mobilisation, including through digitalising African economies stating that digitization could enhance revenue mobilization by up to 6 per cent.

“Digital identification can broaden the tax base by making it easier to identify and track taxpayers and helping taxpayers meet their tax obligations. By improving tax assessments and administration, it enhances the government’s capacity to mobilize additional resources. Digital ID systems yield gains in efficiency and convenience that could result in savings to taxpayers and government of up to $50 billion a year by 2020.”

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: Helloquence [1], [2].