Major International Business Headlines Brief::: 21 March 2019

Thu Mar 21 08:26:56 CAT 2019

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Major International Business Headlines Brief::: 21 March 2019

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*  Slower US growth means no rate rise for 2019, says Fed

*  South Africa's FDI inflows reach five-year high in 2018

*  Ford accelerates electric vehicle investment

*  Moroccan phosphate miner OCP's profit jumps 19 percent in 2018

*  Levi Strauss worth $6.5bn in stock market return

*  Suspended Steinhoff CFO helps authorities with fraud investigation

*  Brexit: Toilet paper maker stockpiles in a case of no-deal

*  S.African court rules extension of wage agreement to AMCU valid and lawful

*  Google hit with €1.5bn fine from EU over advertising

*  South Africa's February inflation tame, central bank to keep rates pat

*  Government spends £7m as no-deal ferry bookings start

*  Nigeria to sell stakes in joint oil assets to boost coffers

*  Trump spooks markets with China trade tariffs warning

*  No end date for South African power cuts as capacity shortages persist

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Slower US growth means no rate rise for 2019, says Fed

The US Federal Reserve does not expect to raise interest rates for the rest of 2019 amid slower economic growth.

After a two-day meeting, monetary policymakers voted unanimously to keep the US interest rate range between 2.25%-2.5%.

Fed members changed their outlook for 2019 from the two increases predicted in December to no movement.

The central bank warned that "growth of economic activity has slowed from its solid rate in the fourth quarter".

It said: "Recent indicators point to slower growth of household spending and business fixed investment in the first quarter."

Joe Manimbo, senior market analyst at Western Union Business Solutions, said: "The Fed did a big about-face on policy.

"The fact that the Fed threw in the towel on a 2019 rate hike was particularly dovish."

'Patient'

Fed chairman Jerome Powell maintained his stance that the central bank would continue to be "patient", telling a press conference: "It may be some time before the outlook for jobs and inflation calls clearly for a change in policy."

The Nasdaq turned positive, up 0.35% at 7,750.7 points, while the Dow Jones Industrial Average and the S&P 500 trimmed earlier falls. Bank stocks were among the biggest losers, and finance firms tend to make bigger profits when interest rates are higher.

The dollar fell against the Japanese yen and the euro, but was higher against the pound which was trading lower as tensions heightened over the UK's exit from the European Union next week.

Analysis of the so-called "dot plot - where members of the Fed's Federal Open Market Committee indicate where they expect interest rates to move to - also revealed that they anticipate only one increase in 2020.

Mr Powell said that there was a positive outlook for the rest of the year, with the unemployment rate under 4% and inflation below the central bank's 2% target.

But he said that "we are also very mindful of what the risks are", which include slower global growth and no resolution on either Brexit or US-China trade talks.

The Fed also said that is will slow the monthly reduction of US Treasury bonds it holds from $30bn to $15bn from May onwards ending in September.

During the financial crisis, the Fed spent heavily to help kick-start the US economy.

It has been reducing its a $4.2trn portfolio of US Treasury bonds and mortgage-backed securities since 2017.

The Fed is getting just a little more wary about economic prospects. For sure, these developments are nothing like as dramatic as a cut in interest rates would have been. Nobody expected that and we didn't get one.

But the hint that we should no longer think in terms of any rise at all this year and only one in 2020 is consistent with the picture of a softening economic outlook.

There is also a striking contrast between the growth that Feds policymakers think the US can sustain - about 2% - and what President Trump's administration believes is achievable, which is more like 3%.

That difference matters. If at some stage in the future the Fed thinks the economy is overheating it will raise rates. President Trump has criticised the Fed for rate rises it has already made, and he won't like it any more if they resume.--BBC

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South Africa's FDI inflows reach five-year high in 2018

PRETORIA (Reuters) - South Africa’s foreign direct investment more than doubled in 2018 to reach its highest in five years, the central bank said on Wednesday, giving a boost to President Cyril Ramaphosa’s pledge to woo investors to help revive a struggling economy.

Africa’s most industrialised economy has barely grown in the past decade with fiscal missteps and corruption contributing to weak business and consumer confidence.

The South African Reserve Bank (SARB) said in its quarterly bulletin that foreign direct investment inflows rose to 70.7 billion rand ($4.88 billion) in 2018 from 26.8 billion rand the prior year.

The FDI inflows were the highest since 2013, when the country recorded investments of 80.13 billion rand.

SARB’s balance of payments unit head Piet Swart said the higher inflows could be attributed to a more positive investor environment in 2018.

However, portfolio investment inflows fell to 90 billion rand in 2018 from 278.8 billion rand the previous year, with outflows of 33.9 billion rand recorded in the final quarter of 2018.

Ramaphosa, who has made reviving the economy a top priority since taking over from scandal-plagued Jacob Zuma in February 2018, said last year he wants $100 billion of new investments from foreign and domestic firms over the next five years.

The 2018 inflows were recorded despite outflows of 8.2 billion rand in the last three months of 2018 as South African subsidiaries repaid short-term loans to foreign parent companies, the bank.

South Africa relies heavily on foreign money to cover its large budget and current account deficits.

Ramaphosa, however, faces several challenges in the quest to attract more investment, including electricity generation shortages.

South Africa has experienced its worst power cuts in years this year as state utility Eskom struggles with repeated faults at its coal-fired power stations, along with low water levels at hydroelectric plants and diesel shortages.

($1 = 14.4799 rand)

Ford accelerates electric vehicle investment

Carmaker Ford is expanding production of all-electric vehicles after deciding that rapid growth in market meant it needed to accelerate its plans.

It is investing about $900m (£682m) in new production capacity at a plant in Michigan, creating about 900 jobs.

Head of global operations Joe Hinrichs said it had "taken a fresh look" at the growth in electric vehicles.

Ford, the number two US carmaker, also said it would start production of autonomous vehicles in about two years.

The company has been in talks with Germany's Volkswagen about an alliance to invest and built electric and autonomous vehicles. Mr Hinrichs said the talks had been positive, but there was nothing to announce.

Last year, Ford set out a long-term plan to invest about $11bn in new vehicle technologies.

Mr Hinrichs told reporters: "When we were taking a look at our $11bn investment in electrification, it became obvious to us that we were going to need a second plant in the not-too-distant future to add capacity for our battery electric vehicles."

The latest investment will focus on Ford's Flat Rock plant in south-east Michigan, which employs about 3,400 people building the Mustang and Lincoln Continental cars.

Ford was already planning an all-electric sport utility vehicle in 2020 that will be built at its factory in Cuautitlan, Mexico.

In January, the company said it wanted to have about 40 hybrid and all-electric cars in its model line-up by 2022 - about 16 of which will be fully electric.

"As we ramp up AV production, this plan allows us to adjust our investment spending to accommodate the pace of growth of this exciting new technology," Mr Hinrichs said.

Carmakers are investing heavily in alternative vehicle (AV) technology because of pressure from regulators in the US, China and Europe to cut carbon emissions.

The recent Geneva Motor Show, which Ford did not attend, was dominated by the unveiling of new electric cars and concepts.--BBC

Moroccan phosphate miner OCP's profit jumps 19 percent in 2018

RABAT (Reuters) - Morocco’s OCP, the world’s leading phosphate exporter, reported a 19 percent rise in 2018 full-year net profit to 5.4 billion dirhams ($562.79 million) on Wednesday, citing steady demand and higher prices in international markets.

Revenue rose 15 percent to 55.9 billion dirhams, the company said in its preliminary annual results.

The fertiliser and phosphate company said that its earnings before interest, tax, depreciation and amortisation (EBITDA) margin was 30.5 percent, up from 26.2 percent in 2017.

The preliminary results did not show the cost of debt which is expected to be announced in Monday’s full annual results.

In the first half of 2018, the cost of debt rose to 805 million dirhams, from 236 million dirhams in the same period a year ago. Net debt stood at 45 billion dirhams, up from 42.90 billion dirhams.

OCP, which is 95 percent state-owned, is the world’s largest phosphate exporter controlling 75 percent of the world’s reserves.

After the automotive and the agricultural sectors, phosphates and its by-products were Morocco’s third-largest exporting sector with 51.7 billion dirhams of sales in 2018, according to the foreign exchange regulator.

OCP has a 65 percent market share of phosphates-based fertilisers in Africa, where it plans production plants to tap into what it sees as the potential for fertiliser use to increase five-fold from about 5 million tonnes currently.

($1 = 9.5950 Moroccan dirham)

Levi Strauss worth $6.5bn in stock market return

Levi Strauss will be worth about $6.5bn (£5bn) when the denim-maker rejoins the stock market after 34 years away.

Shares in the inventor of the blue jean have been priced at $17 each, just above the target range of $14-16.

Levi's has sold $623m worth of shares to institutional investors before allowing the public to buy stock in the 166-year old company on Thursday.

The Haas family, descendants of the founder Levi Strauss, have sold shares worth around $357m.

The company will be listed under the symbol LEVI on the New York Stock Exchange and the stock has been priced at the top end of a $14 to $16 range.

Levi's wants to continue to grow the company from men's jeans to more products for women as well as expanding its tops business.

Levi's ride 1980s denim trend to market

The firm also said: "We believe we have a significant opportunity to deepen our presence in key emerging markets, such as China, India and Brazil, to drive long-term growth."

Jeans have regained their popularity in recent years after the "althleisure" trend when people opted to wear jogging bottoms and leggings instead of denim.

In 2017-18, global sales of jeans expanded by 4.3%, according to Euromonitor International, a market research provider.

In the US, after four years of falling demand, sales rose by 2.2%.

Founder Levi Strauss moved to San Francisco in 1853 during the California gold rush, opening a dry goods business. But he struck gold when in 1873 he and a partner received a patent on using rivets to make clothes - which increased their durability.--BBC

Suspended Steinhoff CFO helps authorities with fraud investigation

JOHANNESBURG (Reuters) - The suspended former chief financial officer of Steinhoff is helping authorities with investigations into $7 billion-plus accounting fraud at the South African retailer, he said on Thursday.

Ben la Grange is one of eight individuals named in an investigation of what an independent report by auditor PwC said was a complex scheme in which intercompany deals worth 6.4 billion euros ($7.3 billion) were wrongly recorded as external income to prop up profits and hide costs in underperforming subsidiaries.

“I am cooperating with all government agencies,” said La Grange, who was suspended last August but remains on the Steinhoff payroll as a consultant.

Former CEO Markus Jooste, who could not reached for comment through his lawyer, is among the eight executives named in the 15,000-word report conducted by PwC over the past 15 months. Jooste has previously denied any wrongdoing.

Steinhoff is under investigation by South Africa police, the Financial Sector Conduct Authority capital markets watchdog and exchange operator JSE.

The state prosecutor in Oldenburg, Germany, has also been investigating the company for suspected accounting irregularities since 2015.

Steinhoff first disclosed the hole in its accounts in December 2017, shocking investors who had backed its reinvention from a small South African business to a multinational retailer at the vanguard of the European discount furniture retail industry.

($1 = 0.8803 euros)

Brexit: Toilet paper maker stockpiles in a case of no-deal

One of the UK's major toilet tissue importers has been stockpiling to ensure it can maintain supplies in the event of a no-deal Brexit.

German-owned Wepa has stockpiled an extra 600 tonnes of finished product, or about 3.5m rolls, in UK warehouses.

UK boss Mike Docker said Wepa was now chartering ships to import materials, rather than use trucks.

Last week, Morrisons' chief executive said the supermarket had seen an increase in demand for toilet paper.

David Potts speculated it might be related to people stockpiling goods ahead of the end of the March deadline for the UK to leave the EU.

If there is no negotiated plan to keep trade running smoothly after Brexit, there are fears that customs checks and changes to border rules could lead to delays to goods moving in and out of the country.

Wepa in the UK is based in Bolton, and has a production site in Bridgend, in South Wales. It has taken on an extra 60,000 square feet of warehousing space for stockpiling.

In addition to the finished product, it has also shipped in extra cardboard and tissue.

Wepa sells toilet paper and kitchen roll which used by retailers for their own-brand products. Customers include Lidl, Morrisons, Sainsbury's, and Tesco.

Shipping loo roll

When the firm starting preparing its so-called "Brexit buster" plan, it looked at the worst-case scenario - leaving without a deal - and prepared for that, Mr Docker said.

It was planning to start shipping tissue from a supplier in Naples, rather than using trucks, as that was felt to be more environmentally friendly, and to cut down on paperwork.

Brexit made the firm accelerate those plans, he said.

In October last year, former Europe minister Denis McShane highlighted Britain's dependence on toilet roll imports in an article he wrote for Prospect Magazine.

Mr McShane said that the UK was Europe's biggest importer of loo paper, and that Britons use two-and-a-half the European average number of rolls per year.

He speculated people might have to resort to using "torn-up newspapers as in bygone days" in the event of a disorderly Brexit.

The Confederation of Paper Industries said the UK used about 1.3 million tonnes of tissue per year, 1.1 million of which was imported either in finished form or as a components.

Stockpiling

Last week, Morrisons' Mr Potts said that the retailer had seen a "small amount" of stockpiling affecting sales.

"We've seen quite a tick-up in [sales of] painkillers and toilet rolls," Mr Potts said. "Whether that has any bearing on how people are feeling about Brexit, I don't know."

Mr Docker said Wepa had seen a recent minimal increase in customer orders for toilet rolls, but nothing outside of normal monthly fluctuations.--BBC

S.African court rules extension of wage agreement to AMCU valid and lawful

JOHANNESBURG (Reuters) - South Africa’s labour court ruled on Wednesday that the extension of a wage agreement to cover all gold unions and non-unionised employees of mining group Sibanye-Stillwater is valid and lawful, the miner said.

Sibanye had in December extended the agreement, reached the previous month with the National Union of Mineworkers, UASA and Solidarity, to all employees at its South African gold operations, including members of the Association of Mineworkers and Construction Union (AMCU).

AMCU had however rejected the extension as unscrupulous and said it would remain on strike, disputing the miner’s argument that the action was illegal because of the extension.

AMCU has been on strike at Sibanye-Stillwater’s gold operations since mid November in a pay dispute.

In February it wanted to extend the strike to at least 11 other mines, including the gold and platinum operations of Anglo American, and operations of Harmony Gold and Lonmin.

But the labour court rejected AMCU’s request to hold an industry-wide strike.

“We are extremely pleased with the ruling provided by the Labour Court,” Sibanye-Stillwater Chief Executive Neal Froneman said in a statement.

“It provides a clear path forward to resolving the ongoing strike in a manner which does not compromise our values or undermine our other stakeholders, who have also been negatively impacted by the AMCU strike action,” Froneman added.

Froneman urged AMCU to respect the ruling and allow due processes to be followed.

AMCU was not immediately available for comment.

Google hit with €1.5bn fine from EU over advertising

Google has been hit with a €1.49bn (£1.28bn) fine from the EU for blocking rival online search advertisers.

It is the third EU fine for the search and advertising giant in two years.

The case accuses Google of abusing its market dominance by restricting third-party rivals from displaying search ads between 2006 and 2016.

In response, Google changed its AdSense contracts with large third parties, giving them more leeway to display competing search ads.

Google owner Alphabet makes large amounts of money from advertising - pre-tax profits reached $30.7bn (£23bn) in 2018, up from $12.66bn in 2017.

"Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anti-competitive contractual restrictions on third-party websites.

"This is illegal under EU anti-trust rules," said EC commissioner Margrethe Vestager.

Google's global affairs head, Kent Walker, said: "We've always agreed that healthy, thriving markets are in everyone's interest.

"We've already made a wide range of changes to our products to address the Commission's concerns.

"Over the next few months, we'll be making further updates to give more visibility to rivals in Europe."

Last year, the EU competition authority hit Google with a record €4.34bn fine for using its popular Android mobile operating system to block rivals.

This followed a €2.42bn fine in 2017 for hindering rivals of shopping comparison websites.

AdSense fine

The European Commission said that websites often had an embedded search function.

When a consumer uses this, the website delivers both search results and search adverts, which appear alongside the search result.

Google's "AdSense for search" product delivers those adverts for website publishers.

The Commission described Google as acting like "an intermediary, like an advertising broker".

In 2006, Google started to include "exclusivity clauses" in contracts which stopped publishers from placing ads from Google rivals such as Microsoft and Yahoo on search pages, the Commission said.

>From 2009, Google started replacing the exclusivity clauses with "premium placement" clauses, which meant publishers had to keep the most profitable space on their search results pages for Google's adverts and they had to request a minimum number of Google adverts.

Publishers also needed to get written permission from Google before making any changes to how rival ads were displayed, letting Google control "how attractive, and therefore clicked on, competing search adverts could be", the Commission said.

Search giant

The restrictive clauses "led to a vicious circle", Ms Vestager said in a media conference.

"Google's rivals, they were unable to grow, and to compete, and as a result of that, website owners had limited options for selling advertising space on those websites, and were forced solely to rely on Google," she said.

"There was no reason for Google to include these restrictive clauses in their contracts, except to keep rivals out of the market," she added.

Between 2006 to 2016, Google had more than 70% of the search intermediation market in the EU. It generally had more than 90% of the search market and more than 75% of the online search advertising market, the Commission added.--BBC

South Africa's February inflation tame, central bank to keep rates pat

JOHANNESBURG (Reuters) - South African inflation was in line with forecasts in February at 4.1 percent annually and 0.8 percent month-on-month as food prices remained steady, supporting expectations the central bank will keep interest rates unchanged.

Price growth has trended below the mid-point of the Reserve Bank’s target of between 3 and 6 percent for three months in a row, prompting calls for a cut in lending rates to support flagging economic growth.

Headline consumer inflation quickened to 4.1 percent year on year in February from 4.0 percent in January, while on a month-on-month basis prices rose 0.8 percent after falling 0.2 percent a month before, Statistics South Africa said on Wednesday.

There is political pressure to broaden the central bank’s mandate to include fostering economic growth as well as price stability. That tweak may have come a step closer after President Cyril Ramaphosa said the government would pursue nationalisation of the bank — a key resolution of the ruling African National Congress ahead of May elections.

A Reuters poll on Wednesday found the bank was likely to leave rates unchanged next week, however, and with a weak currency threatening to stoke inflation, it probably won’t cut this year after leaving rates steady at 6.75 percent in January.

Analysts see consumer prices climbing steadily in 2019 due to higher fuel prices. Ailing power utility Eskom, which has cut power nationwide for the last seven days amid a deepening operational and financial crisis, is set to hike tariffs by 13 percent this year.

“There isn’t much pressure on prices coming from the demand side with latest round of power cuts, which will instead put pressure on growth,” said Nedbank economist Busisiwe Radebe.

“So we don’t see inflation breaching the bank’s upper target this year, but as food prices begin to rise you’ll perhaps see a mild tightening cycle begin later this year.”

Government spends £7m as no-deal ferry bookings start

The government has paid £7m for its controversial extra ferry contracts which will be used in the event of a no-deal Brexit.

The money covers the first fortnight of the services, which will transport vital goods such as medicines.

The ferries may be needed in case of congestion on south east coast roads.

In December the Department for Transport contracted three suppliers to provide additional capacity on cross-channel ferries that carry lorries.

Brittany Ferries and Danish ferry company DFDS will run the additional services after the government's deal with the third supplier it contracted - Seaborne Freight - collapsed.

Shortly after it was awarded the contract, the BBC found out that Seaborne had no ships and had never run a ferry service.

A number of ports, including Portsmouth, Plymouth and Immingham, are part of the government's contingency planning for a no-deal.

They could be used by the government's additional ferry services to avoid the feared bottlenecks at Dover and Calais.

The government has begun to pay for these additional services to operators.

Even though the importers will still pay for their transit into the UK, it is unlikely that the government will recoup the costs. This is part of its no-deal contingency budgets.

These services will help to ensure that crucial - so called "category one goods" get through to the UK, in the event of a no-deal. Such goods typically include medicines for the NHS and chemicals needed for the UK water system and additives needed for fuels.

Current predictions from the Department for Transport, are that in the event of a no-deal, the first few weeks after exiting the EU will be fine for logistics.

They believe this to be the case because lots of UK businesses and government departments have stockpiled goods.

But, as weeks progress, they expect the situation could become very different.

Flight disruption?

The government source also confirmed that almost all their flight agreements are now in place, stipulating that there should be no disruption to flights.

But the crunch point could be customs checks for passengers. Even though the planes are on-time and flying, can passport inspectors in the UK and overseas process the huge numbers of travellers who will become third country nationals from outside the EU quickly enough?

However, some airports on the continent that are hugely popular with tourists from the UK, have guaranteed the government that they are ready for any outcome. They are well aware they need to protect their very important tourist incomes from British holidaymakers.

Eurostar will see a severe change to its operation in the event of no deal. Recent delays were exacerbated by customs officials in France striking because of testing no deal customs checks. If those new checks become reality, it is thought that up to 50% of services could be cancelled

Attention has been focused on how to keep vital trade routes across the English Channel flowing as smoothly as possible.

Planning for Operation Stack, the holding pattern for lorries in Kent in the event of huge delays on the approach to Dover, is almost all complete.

The government says that Manston Airport, the disused airfield just north of Dover which will be a huge lorry park, will be fully operational by next Friday if the UK leaves the EU with no deal.

The problem could be for passengers. For freight and lorries, substantial plans are in place, to keep drivers in static position for hours.

But for people in cars, waiting for similar times is not an option. If the delays become protracted, sources suggest that the government may issue guidance that people should not travel.--BBC

Nigeria to sell stakes in joint oil assets to boost coffers

ABUJA (Reuters) - Nigeria plans to cut its stake in joint oil ventures with multinational oil companies to 40 percent this year, its budget minister said, as the country seeks to boost revenue to grow an economy recovering from recession.

Oil companies including Royal Dutch Shell, Chevron and ExxonMobil, operate in Nigeria through joint ventures with the state-owned NNPC.

NNPC owns 55 percent stake in its joint venture with Shell and 60 percent stakes with others.

The government has considered reducing its majority stakes in these joint ventures for more than a decade but was under little pressure as higher oil prices boosted state coffers.

Budgets under Muhammadu Buhari, who starts a second term in May, have been Nigeria’s largest ever and the government has been seeking to boost revenue after it emerged from a 2016 recession two years ago.

Budget Minister, Udoma Udo Udoma, said the government will intensify efforts to improve its finances including the “immediate commencement of the restructuring of the joint venture oil assets so as to reduce government shareholding to 40 percent,” he said in a statement.

He added during a presentation to lawmakers that Buhari wanted the oil restructuring completed this year.

Buhari won re-election last month for another four years, defeating his pro-business rival Atiku Abubakar, who had touted selling the state-owned NNPC as one of his key reform policy.

In 2017, the debt office said the government wanted to raise 710 billion naira ($2.32 billion) via restructuring its equity in joint venture oil assets and that it had captured the proposals in the 2018 budget.

In the past, Nigeria has held talks with oil companies regarding financing agreements for joint ventures after it struggled to fund its portion of such partnerships through cash calls which have often been delayed in parliament.

The government has asked the petroleum regulator to collect past-due oil license charges and royalties, within three months.

The country has also ordered oil majors to pay nearly $20 billion in taxes it says are owed to local states.

Buhari has presented an 8.83 trillion naira budget for 2019, laying out plans to drive growth. He has directed NNPC to take measures to achieve the targeted oil production of 2.3 million barrels per day this year, the minister said.

($1 = 306.3000 naira)

Trump spooks markets with China trade tariffs warning

US stocks have fallen after President Donald Trump said his administration was considering leaving tariffs on China for a "substantial period".

Mr Trump said that a trade deal with Beijing was "coming along nicely", but his comments dampened hopes a deal would be reached soon.

US negotiators are due to visit China next week to resume talks.

Wall Street baulked at Mr Trump's comments, with the benchmark Dow Jones falling almost 1%.

The Nasdaq and the S&P 500 also fell.

Mr Trump said: "We're not talking about removing them, we're talking about leaving them for a substantial period of time because we have to make sure that if we do the deal with China that China lives by the deal."

The US delayed the introduction of higher tariffs on $200bn worth of Chinese imports following three months of talks, after which Mr Trump said the nations were "very very close" to an agreement.

The US had threatened to raise import duties on Chinese goods from 10% to 25% on 1 March.

Following his remarks, the Dow Jones dropped by 0.73% to 25,698 points. The S&P 500 fells 0.57% to 2,816.5 and the Nasdaq slid 0.36% to 7,695.9.

Mr Trump also said that the US was taking in "billions and billions" from tariffs.

However, the most recent deficit figures showed that the US's trade gap with the rest of the world jumped to a 10-year high of $621bn (£471.2m) in 2018.--BBC

No end date for South African power cuts as capacity shortages persist

JOHANNESBURG (Reuters) - South Africa’s Public Enterprises Minister Pravin Gordhan said on Tuesday he cannot say yet when rolling blackouts will end, as power utility Eskom struggles with capacity shortages that threaten to thwart efforts to boost economic growth.

Eskom supplies more than 90 percent of the power in South Africa but has suffered repeated faults at its coal-fired power stations, along with low water levels at hydroelectric plants, diesel shortages and loss of imports from Mozambique.

Around 17,000 megawatts of Eskom’s installed capacity of 45,000 megawatts was unavailable, Gordhan said.

“Engineers are visiting the power stations themselves to give us an independent view of what is going wrong and how quickly we can repair what is going wrong,” Gordhan told journalists.

“We need to complete these investigations, and we will come back to you in the next 10 to 14 days.”

Eskom has continuously implemented power cuts since Thursday, with up to 4,000 megawatts cut from the grid on a rotational basis.

The power cuts have disrupted businesses, particularly the small- and medium-sized firms, and have also prompted frustrations among ordinary people ahead of an election in May.

Apart from faults at the new Medupi and Kusile mega power plants, three other coal-fired plants were suffering severe problems, Eskom executives said.

The executives also said Eskom was expecting to receive a diesel shipment on Friday to replenish its fuel supplies. Eskom burns diesel when it cannot produce enough from its coal plants.

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Zimbabwe 

Independence Day

Zimbabwe

18 Apr 2019 

Good Friday

19 Apr 2019

Easter Saturday

20 Apr 2019

Easter Sunday

21 Apr 2019

Easter Monday

22 Apr 2019

Workers Day

01 May  2019

Africa Day

25 May 2019

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Skype:         Bulls.Bears 

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