Mboweni Holds Firm on Spending Cap, Eskom Loss Narrows to R15bn in 2022

LOCAL NEWS

• FinMin Mboweni says govt will stick to its fiscal framework presented in Feb against all odds, using all the resources necessary to ensure the spending cap is not broken.
  • Also defended intentions of creating a state bank, saying the current banking system is "not fully supportive of the development agenda we want"
• Eskom projects R15bn loss for 2022, narrowing from a loss of R20bn in 2021.
  • However unions are still calling for a 9.5-15% wage hike, as well as a doubling of allowances. Eskom says this in unaffordable – highlighting the projected loss.
  • Warns cash from operations is not enough to fund debt and a portion of its capex, remaining reliant on Govt.
  • To break even, purchase costs of coal would need to be cut by 30% – instead, they're increasing 7% this year
• Suspended ANC SG Magashule has submitted legal opinions on why he should not be suspended, most notably from former Mpumalanga premier Phosa,
  • who argues that the 'step aside' resolution is intrinsically voluntary, and if enforced without being tied to internal ANC disciplinary processes, would be unlawful.
  • Phosa says disciplinary processes need to be followed
• FinMin Mboweni says economic recovery will be a pipe dream as long as maladministration and ineptitude continues to impact local govt.
  • Notes 63 municipalities are in financial distress; 40 caught up in financial and service delivery crises; and 102 more have budgets they are unable to finance.
  • Says Govt is being forced – by the courts – to intervene in several areas.
• SA records 3,641 new covid cases as number and third wave risks steadily increase - EWN