Standard Bank CEO’s message about BEE, and South Africa eight weeks in Eskom danger zone

The rand declined on Friday as traders considered the potential effects of U.S. President Donald Trump’s comprehensive tax-cut and spending bill. 

Additionally, pressure increased on countries to finalise trade deals before the United States’ July 9 deadline. 

The rand was trading at 17.63 against the dollar, which represents a decrease of approximately 0.6% from Thursday’s closing value. 

Analysts noted in a research report that the advantage of this bill is that it will likely boost U.S. demand in the short to medium term. 

However, the downside is that forecasts are pessimistic regarding its ability to generate enough GDP growth to offset the increased spending.

On Monday, 7 July, the rand was trading at R17.49 to the dollar, R23.92 to the pound and R20.61 to the euro. Oil was trading slightly lower at $68.70 a barrel.

Here are five other important things happening in and affecting South Africa today:

Standard Bank CEO’s message about BEE: Standard Bank CEO Sim Tshabalala says South Africa is overregulated but believes black economic empowerment (BEE) should be adjusted, not abolished. He acknowledged BEE has led to unintended consequences and corruption, but emphasised the problem lies in its implementation, not the concept itself. [News24]

Eskom red zone: As of Friday, Eskom’s power stations’ weekly average breakdowns were 14,496 MW, exceeding the 13,000 MW “safe” threshold for eight consecutive weeks. This places South Africa at high risk of load shedding. Despite improvements in open-cycle gas turbine (OCGT) usage, the capacity offline due to breakdowns remains high. [MyBroadband]

National security concern: President Cyril Ramaphosa has called allegations by KwaZulu-Natal Police Commissioner Nhlanhla Mkhwanazi, regarding collusion between Police Minister Senzo Mchunu and organised crime, a serious national security concern. Ramaphosa noted he would discuss further actions after the BRICS Summit in Brazil. [eNCA]

Transformation fund will be ring-fenced: In his budget vote speech on Friday, Tau stated that the Transformation Fund would he enterprise and supplier development (ESD) contributions by the private sector to the Transformation Fund will be ring-fenced, aggregated and managed centrally. [Business Day]

Good news for SA’s meat industry: South Africa has reached an agreement with Brazil to prevent a local shortage of polony, Viennas, and Russians. The country depends on Brazil for 95% of the 220,000 tonnes of mechanically deboned poultry meat (MDM) imported annually, which is essential for products like polony and canned meatballs. Brazil is the world’s largest supplier of MDM. [News24]