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SOUTH AFRICA: ANC To Propose Reduced VAT Hike As Cabinet Meets For Budget Talks

SOUTH AFRICA
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  • The African National Congress (ANC) will propose a downsized 0.75pp VAT hike during today's Cabinet meeting and ask the Democratic Alliance (DA) to consider it, or else it would enter talks with the opposition Economic Freedom Fighters (EFF), the Sunday Times reported. While the plan to moot a smaller VAT increase was mentioned last week, the ANC appears to be ready to take a more assertive posture. Separately, the Congress of South African Trade Unions (COSATU) proposed a pension contributions holiday as a way to plug the fiscal hole. The Cabinet will hold its second special meeting to iron out differences on the delayed budget later today, after it resolved a week ago to put together a team led by Deputy President Paul Mashatile and task it with preparing a report on available options ahead of the revised March 12 budget deadline.
  • South African Reserve Bank (SARB) Governor Lesetja Kganyago said that a review of the central bank's inflation target is still on the table, even as it was not mentioned in the initial version of the 2025 Budget.  The Governor said that he was waiting for the outcome of a review by the National Treasury and would not take any unilateral action.
  • Eskom said that it was forced to shut down unit 2 of the Koeberg nuclear plant after an unplanned, non-technical trip during ongoing works on unit 1, which remains offline. The unit was expected to return online within 48 hours and did not necessitate the implementation of loadshedding. Koeberg power plant contributes around 5% of national power supply.
  • The US's top diplomatic envoy in South Africa stepped down and will be replaced by another diplomat on March 14, according to a Bloomberg report. One of Charge d'Affairs Dana Brown's last tasks in office was representing the US at the summit of G20 Foreign Ministers in Johannesburg, which was snubbed by Secretary of State Marco Rubio.
  • Absa Manufacturing PMI will be published at 09:00GMT/11:00SAST.
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  • The African National Congress (ANC) will propose a downsized 0.75pp VAT hike during today's Cabinet meeting and ask the Democratic Alliance (DA) to consider it, or else it would enter talks with the opposition Economic Freedom Fighters (EFF), the Sunday Times reported. While the plan to moot a smaller VAT increase was mentioned last week, the ANC appears to be ready to take a more assertive posture. Separately, the Congress of South African Trade Unions (COSATU) proposed a pension contributions holiday as a way to plug the fiscal hole. The Cabinet will hold its second special meeting to iron out differences on the delayed budget later today, after it resolved a week ago to put together a team led by Deputy President Paul Mashatile and task it with preparing a report on available options ahead of the revised March 12 budget deadline.
  • South African Reserve Bank (SARB) Governor Lesetja Kganyago said that a review of the central bank's inflation target is still on the table, even as it was not mentioned in the initial version of the 2025 Budget.  The Governor said that he was waiting for the outcome of a review by the National Treasury and would not take any unilateral action.
  • Eskom said that it was forced to shut down unit 2 of the Koeberg nuclear plant after an unplanned, non-technical trip during ongoing works on unit 1, which remains offline. The unit was expected to return online within 48 hours and did not necessitate the implementation of loadshedding. Koeberg power plant contributes around 5% of national power supply.
  • The US's top diplomatic envoy in South Africa stepped down and will be replaced by another diplomat on March 14, according to a Bloomberg report. One of Charge d'Affairs Dana Brown's last tasks in office was representing the US at the summit of G20 Foreign Ministers in Johannesburg, which was snubbed by Secretary of State Marco Rubio.
  • Absa Manufacturing PMI will be published at 09:00GMT/11:00SAST.