Andrew Stegmann

Cheque Limits Reduced to R50,000 in South Africa

Following the recently announced rules from the Payments Association of South Africa (PASA) to reduce the maximum value of cheque limits to R50,000, businesses are urged to adopt electronic banking channels.

The updated rules come into effect in May 2020, with an eight-month grace period to be granted for cheques that are yet to be processed by the due date.

Kenneth Matlhole, FNB Business Spokesperson, said several businesses and public institutions that still have cheques built into their operations will be heavily impacted by the decision. This ranges from schools, churches, scrap metal dealers, agriculture, motor industry, fiduciary services and auctioneers, among others.

Matlhole unpacked important factors for businesses to consider as they reduce their reliance on cheques, prior to the implementation of the new rules:

Act now – depending on the nature of the business or institution, moving away from a traditional payments system may result in cash flow disruptions. Business should allocate enough time for migrating to new payments systems. It is also essential to ensure that staff members are trained accordingly.

Business to business transactions – whether the business is receiving or issuing cheques, it is advisable to communicate and inform business associates and suppliers about the new payment systems/ arrangements and reach a mutual understanding.

Businesses can offer discounts or incentives for suppliers or business associates to adopt electronic banking channels, to help speed up the process.

Moreover, when considering the administration process, storage of physical paper, and the cheques clearance waiting period, migrating to electronic payments which are more efficient will no doubt be an incentive to migrate to electronic payments.

The same guiding principles for alternative payment adoption should be applied to inter-company funds transfer where cheques have been used as a mechanism to allow for money flow between linked franchises and business entities.

Adopt electronic banking channels – once a thorough analysis of how the business uses cheques has been conducted, the next step is to identify the most appropriate and efficient electronic banking channel to use. Furthermore, businesses that are still receiving B2B cheque payments should ensure that their systems are updated and ready to accept electronic payments.

“Given the reduction of cheque limits due to several issues including fraud, it may not be viable for businesses to continue using cheques.

“Regardless of the final decision to be taken by businesses, on thing is clear, the imminent reduction of cheque limits to R50,000, leaves businesses and institutions with no choice but to ultimately reduce their reliance on cheque payments,” Matlhole said.

 

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

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

Andrew Stegmann

Finance Minister Tito Mboweni Tries to Keep the South African Reserve Bank from Being Nationalized

Finance Minister Tito Mboweni took to Twitter recently to ask what the ANC wanted to achieve by nationalizing the bank.

The African National Congress (ANC) has cautioned Finance Minister Tito Mboweni to be aware of the implications of his comments about the party’s position to nationalize the South African Reserve Bank.

Mboweni, who is also an NEC member, has tweeted that the ANC adopted the wrong resolution during its policy conference in 2017 by wanting the central bank to be nationalized.

The issue of what purpose the reserve bank should and should not serve has once again played out within the ANC.

Mboweni took to Twitter recently to ask what the ANC wanted to achieve by nationalizing the bank.

“As a long standing member of the ANC and its leadership structures, I know and understand our resolutions. I don’t need lectures on that. But on the SARB, I am convinced that we adopted a wrong resolution. What do we want to achieve? Our Strategic focus: Structural Economic Reforms,” Mboweni said recently.

“As of now, 90% of the SARB profits are handed over to the National Revenue Fund. So? What do we want to achieve? Tell the public. Lets debate. Don’t say internal debates, this is a fundamental National debate. Answer the question. What do you want to achieve by nationalizing the SARB. Don’t tell me about internal debates, NEC, etc. what do you want to achieve? Lets answer that fundamental question. Party spokesperson Pule Mabe said that the leadership of the ANC was expected to be consistent, coherent and united on policy positions. The leadership of the ANC is expected to appreciate the need to articulate a consistent, coherent and unified message on policy positions. Unfortunately, public spats initiated without any provocation feeds into the narrative of lack of policy certainty,” he continued.

ANC leaders counter-attacked each other last year about the mandate of the central bank, with some saying the mandate of the institution should be expanded to include job creation.

The party said that only the ANC national conference had the right and power to change any decisions.

 

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

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

Andrew Stegmann

South Africa Will Embrace Private Power Generation, President Ramaphosa Says

South Africa will embrace efforts by businesses to generate their own electricity, President Cyril Ramaphosa said recently, reacting to growing frustration at red tape throttling private power generation.

Ramaphosa is under pressure over nationwide power cuts that have dented economic output and sapped investor confidence in Africa’s most industrialized economy.

Ailing state-owned utility Eskom generates more than 90% of the country’s electricity but regularly struggles to meet demand because of breakdowns at its coal-fired power plants.

Many power-hungry companies such as mines want to build their own renewable energy plants to reduce their reliance on Eskom but have not been able to secure the necessary regulatory approvals.

“For the first time we are now saying let us have self-generation,” Ramaphosa told an economic conference in Johannesburg. “We have opened up a new era … that says we are now embracing the fact there are those companies and households that want to generate their own energy.”

“We cannot stop technology, we cannot stop the future from arriving,” he added.

South Africa’s mining industry body the Minerals Council on Monday urged the government to act urgently to bring online new power sources and ease licensing rules.

Roger Baxter, chief executive of the Minerals Council, told Reuters last month that miners could build between 500 megawatts (MW) and 1,500 MW of their own generating capacity over the next few years if regulations were eased.

Ramaphosa’s government has been slow to procure more power since the electricity cuts escalated last year.

Some labor unions and members of Ramaphosa’s governing African National Congress party are deeply suspicious of allowing in more independent power producers. A vocal coal lobby has also blamed renewable energy firms for hastening Eskom’s financial decline.

 

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

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

Andrew Stegmann

More South Africans are Going Meat-free, say Checkers and Pick n Pay

South African retailers have announced expanded product ranges as consumers increasingly turn to vegan and ‘flexitarian’ diets.

Both Pick n Pay and Checkers said that they had experienced increased demand for more plant-based options which was now reflected by the products they offered in-store.

Nicki Russell, head of Innovation and Trend at Pick n Pay, said that its research shows more customers are opting for a ‘flexitarian’ diet which incorporates more plant-based options and less meat.

“What started as Meatless Monday has since expanded to include more and more days of the week.

“We’ve been working really hard to bring customers new and innovative local plant-based offerings to create a one-shop destination for customers wanting to adopt a more plant-based lifestyle.”

Checkers said it has also seen a steady uptake in customer requests for more vegan and plant-based alternatives over the past 12 months.

“Demand for vegan, plant-based, meat-free and dairy-free options continue to grow. Whether a customer is strictly vegan or just cutting down on meat and dairy, we are making sure we meet their needs,” said Willie Peters, general manager of marketing at Checkers.

Peters said that Google Trends data shows that South Africa is the only African country with a sizeable vegan following.

“Checkers will always be guided by what its customers want and will continue to expand on its already extensive variety of vegan and/or plant-based ingredients, convenience meals, salads and snacks.”

 

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

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