Weekly Political and Economic Review 05 April 2019

1. Priority Bills

1.1 Political Party Funding Bill

− On Thursday The Independent Electoral Commission (IEC) decide to delay

the implementation of the Political Party Funding Bill, due to the number of

responses received following the publication of the draft regulations;

− The IEC has indicated that it received more than 5000 public submissions,

thus causing it to proceed with caution and consider all the submissions

before implementation;

− The Bill makes it a requirement for political parties to disclose their sources

of funding and prohibits certain donations from being made directly to

parties;

− On the 22nd of January 2019, President Cyril Ramaphosa signed the

Political party Funding Bill into law;

− At the time, the move was hailed as a victory for democracy as it enhanced

the democratic values of transparency, accountability, equity and fairness;

− In terms of the new Act, a donation of less than R100 000 does not need

to be declared and there is a cap of R15 million that one person can donate

to a party per year;

− The Bill was expected to be operational from the 1st of April, but has not yet

been put into effect.

2. MP Found Guilty by Ethics Committee

− Parliament’s Ethics and Members Committee has found Deputy Minister of

Correctional Services, Thabang Makwetla, guilty of breaching its code of

ethics;

− The breach in the code of ethics relates to the installation of security

infrastructure to Makwetla’s home by Bosasa, which the Deputy Minister

failed to disclose;

− The complaint, led by DA Chief Whip John Steenhuisen, related to the

installation of CCTV cameras, an alarm system and an electric fence to

Makwetla’s home;

− The Deputy Minister insists that he provided evidence to the committee

stating that he persistently resisted accepting benefits that would create a

conflict of interest;

− Makwetla also questioned the soundness of the committee’s findings;

− "It is obvious that the rules of natural justice were not adhered to. In this

respect, I intend writing to the chair of the committee to express my

displeasure and to insist that justice be done, without fear or favour, on

account of a disciplined and balanced evaluation of all the facts at hand on

this matter (or at their disposal)," Makwetla said in a statement;

− Makwetla will be fined a 30 days salary and will be reprimanded in

Parliament.

3. Author Exposes Ace Magashule’s Alleged Corruption

− Journalist and author, Pieter-Louis Myburgh, has released a new book,

titled 'Gangster State - Unravelling Ace Magashule's web of capture',

detailing shocking claims of Ace Magashule’s alleged corruption during his

tenure as Free State premier;

− According to the book, Magashule ensured that business people who were

awarded government tenders paid sums of money directly to him after

securing payment;

− The book also alleges that the former Free State Premier visited the

Saxonwold home of the controversial Gupta brothers frequently;

− In a tweet published on the 30th of March, Ace Magashule dismissed the

claims, describing them as ‘fake news’. He maintained that the ANC will

secure a resounding victory despite the allegations;

− The ANC came out to express support for its Secretary-General in a written

statement. According to their statement, the book and its claims form part

of a well-calculated media attack to their election campaign;

− The ruling party later announced its plan retract their statement of support

for Magashule after consulting with its leadership, but shortly decided

against this;

− “After receiving a legal brief we have been advised not to retract our

statement,” ANC acting spokesperson Dakota Legoete said;

− The author has firmly stood by the claims made in the book, stating that he

has documents to substantiate his claims.

4. NHI to be a reality in next Administration, says Health Minister

− Minister of Health, Aaron Motsoaledi, has expressed the government's

eagerness to implement the National Health Insurance (NHI) over the next

five years;

− Speaking at the ANC’s election manifesto briefing on the 31st of March,

Motsoaledi said that a war room has been established in the presidency to

finalise the bill and ultimately implement NHI;

− Motsoaledi asked the President to take over the implementation of the NHI,

as it is too big to be handled by the Department of Health alone;

− The Minister also stated that the NHI may be referred to as ‘Ramaphosa-

care’, as the President is now in charge of the bill;

− The NHI will see a change in 12 healthcare laws, including the Health Care

Act of 2003.

5. Commissions of Inquiry

5.1 PIC Inquiry

5.1.1 Commission of Inquiry Extended

− President Cyril Ramaphosa has extended the lifespan of the PIC Inquiry

into allegations of impropriety at the Corporation;

− The Commission submitted an interim report on the 15th of February and

was scheduled to hand in its final report by the 15th of April;

− The new date for the final submission has been extended to the 31st of

July;

− The extention, requested by the chairperson of the Commission Justice

Lex Mpati in the interim report, is to to ensure that proper investigations

are conducted well in advance of the final submission date.

5.1.2 VBS Payments

− Senior PIC Manager of Portfolio Management and Valuations, Khaya

Zonke, took to the stand and shed light on the PIC’s involvement in the

VBS saga;

− According to Zonke, VBS Mutual Bank held ambitions of becoming a

national financial institution and strategically sought to raise funds from the

PIC, municipalities, churches, stokvel groups and taxi associations;

− Deputy Reserve Bank Governor Kuben Naidoo appeared before the

Commission on the 2nd of April to shed light on the involvement of PIC

officials in the fall of VBS Mutual Bank;

− Head of Risk, Paul Magula, had informed the Commission that he was

unaware of what was occurring at the VBS beyond what was made known

through audit reports and the board;

− Naidoo, however, said that Magula used two front companies to receive

payments of R7.6 million to buy his silence.

5.1.3 Iqbal Survé Testifies Before the Commission

− Chairperson of Independent Media and Head of Sekunjalo, Dr Iqbal Survé,

concluded his testimony before the Commission on the 2nd of April;

− The Commission had previously heard about how three companies linked

to Survé - Ayo Technology Solutions, Independent Media and Sagarmatha

had sought funding from the PIC;

− Companies linked to Survé had come under scrutiny after receiving a total

of about R5.35 billion in funding from the PIC;

− Survé denied allegations that his company Ayo Technologies ignored

procedure to secure a controversial R4.3 billion loan from the PIC;

− He also stated that he holds former PIC head Dan Matjila in high regard

and that their business dealings were above board;

− On the PIC’s investment in Independent Media, Survé stated that the

transaction was considered high risk;

− The R2 billion investment in Independent Media saw the PIC holding a 25%

stake in the company;

− Survé also informed the Commission that Deputy Finance Minister Mondli

Gungubele told ANC NEC members that he would crush his companies;

− Survé believes that there is political interference within the PIC;

− The businessman called on the PIC to contribute more towards

transforming the economy and criticised its BEE model.

5.2 State Capture Inquiry

5.2.1 Authorities Took Ten Years to Act on SIU Report

− Former lead investigator in the Special Investigating Unit’s (SIU) probe into

Bosasa, Clinton Oellermann, took to the stand on the 1st of April;

− Oellermann headed an investigation, between 2007 to 2009, into the

awarding of tenders to Bosasa by the Department of Correctional Services

as mandated by a presidential proclamation;

− The report was handed over to the NPA in 2009 and highlighted corrupt

activity amounting to billions of Rands linked to the tenders;

− Some Bosasa officials were implicated, including former COO Angelo

Agrizzi, and former Correctional Services officials Patrick Gillingham and

Linda Mti;

− Charges linked to the findings of the report were only made in 2019, ten

years after the report had been handed over to the NPA;

− Oellermann told the Commission that Bosasa had brought litigation against

the SIU to halt the investigation;

− Because of this, Bosasa struck a deal with the unit stating that the SIU

would not be allowed to interview Bosasa officials;

− Bosasa CEO Gavin Watson could not be interviewed as a result of the

agreement;

− Watson’s name did not appear on the report as most of the evidence

gathered was hearsay.

5.3 Mokgoro Inquiry

5.3.1 Final Report Handed Over to The President

− Retired Constitutional Court Justice Yvonne Mokgoro has handed over her

final report on the fitness of suspended senior National Prosecuting

Authority (NPA) officials Adv. Nomgcobo Jiba and Adv. Lawrence Mrwebi

to hold office;

− The report marks the end of the inquiry’s work following six weeks of

hearings relating to the conduct of both advocates;

− According to Inquiry Spokesperson, Bongiwe Gambu, Mokgoro will meet

with the President to give a formal presentation of the report;

− The findings and recommendations of the report are still unknown;

− The President’s spokesperson has confirmed receipt of the report and said

the President was still studying it.

6. Eskom Updates

6.1 Eskom Cost SA R14.5 trillion For Emergency Coal, Says SIU Report

− A Special Investigating Unit (SIU) report has revealed that SA signed R14.5

trillion in contracts after the first round of load shedding experienced by the

country in 2008;

− Most of these contracts had a ten-year lifespan and were entered into

without proper tender processes;

− The R14.5 trillion value is the cost of the contracts for the entire duration of

the contracts over ten years;

− The long-term agreements were allegedly signed by Eskom to benefit coal

suppliers;

− The report was handed to former President Jacob Zuma in July 2017 and

was never released by the presidency;

− The DA has challenged President Ramaphosa to release the report, saying

that the public has a right to be informed of its contents.

6.2 Load Shedding Expected in Winter

− On the 3rd of April, Public Enterprises Minister Pravin Gordhan and

Eskom board chair Jabu Mabuza hosted a media briefing at Lethabo

Power Station to provide an update on the state of the utility;

− Mabuza announced that the construction of the controversial Kusile and

Medupi power plants will go ahead as planned;

− With Medupi being 95% complete and Kusile 89% complete, the board

found no logical reason to stop;

− Eskom unveiled their ‘winter plan’ to ensure optimal electricity supply over

the coming months;

− To limit unplanned outages, Eskom plans to implement stage 1 load

shedding over the next 5 months up to a maximum of 26 days.

6.3 Eskom Signs $180m Loan Agreement

− The New Development Bank (NDB) and Eskom signed a loan agreement

for the Renewable Energy Integration and Transmission Augmentation

project;

− The agreement was signed by NDB VP and COO Xian Zhu and Eskom

CFO Calib Cassim at the 4th annual NDB meeting in Cape Town;

− The project is set to integrate a total of 670 MW of renewable energy into

Eskom’s grid, and increase electricity supply to target areas for sustainable

development;

− Speaking on the agreement, NDB VP and COO Xian Zhu has said: “We

are happy to support this important project that will contribute to the

development of grid connection infrastructure in South Africa and support

the shift to a more sustainable energy path in the country”;

− Eskom has welcomed the support of the NDB, stating that the agreement

will assist in driving the utility’s goals of reducing South Africa’s carbon

dioxide emissions.

6.4 SA Law Firm Plans Class Action Against Eskom Load Shedding

− De Beer Attorneys has announced their plan to sue Eskom over load

shedding;

− The firm intends to take action against Eskom over losses suffered by

businesses and commercial entities as a result of the power outages;

− According to the firm, the state-owned entity has a legal obligation to

provide South Africans with electricity;

− Load shedding, they believe, is a situation caused by Eskom’s negligence;

− The group has called on all businesses who have suffered quantifiable

losses because of load shedding to contact them and file a case;

− Each case will be individually evaluated based on their personal merits.

7. Cape Chamber of Commerce to Host Electricity Summit

− The Cape Chamber of Commerce and Industry is set to hold an electricity

summit later this month;

− Apart from talks by industry experts, discussions will also be held to debate

solutions to load shedding;

− Service providers will also present their solutions to the current energy

crisis;

− The Cape Chamber of Commerce & Industry has stated that businesses

should not rest until viable solutions have been explored and implemented.

8. SARS Announces $14bn Shortfall

− SARS acting Commissioner, Mark Kingon, has announced that SARS

collected R1.28 trillion for the financial year ended March 2019, missing its

R1.3 trillion target;

− SARS has experienced a consistent collection fall since 2015 owing to

weak economic growth and administrative weakness;

− While SARS collected more tax during the financial year, it also paid out

more in refunds amounting to R287.8-billion;

− The acting Commissioner has stated that the results are still preliminary

and will be subject to a detailed financial reconciliation and a final audit.

9. SARS Agrees to a New Wage Deal

− SARS met with union leaders to negotiate a new offer following the national

outbreak in strike action in the previous week;

− Workers were demanding an 11% increase. SARS, however, has offered

a three-year deal which includes an 8% increase for the first year;

− Members of the Public Servants Association (PSA) reached an agreement

with SARS and signed the deal on the 31st of March;

− Nehawu signed the agreement on the 2nd of April, although stating that they

are unsatisfied with it;

− Nehawu Spokesperson Khaya Xaba has said: “We’re not happy with the

three years, it would’ve been better if it was a year. But it doesn’t mean

we’ll not stop fighting.”;

− SARS hopes that the new wage agreement will bring much needed stability

to the agency.

10. Petrol Hike

− The Energy Department announced a petrol price hike implemented from

the 3rd of April;

− The price of 95 unleaded increased by R1.26 per litre at the coast and

R1.31 per litre in Gauteng, bringing the new prices to R15.49 per litre and

R16.13 per litre respectively;

− The price of diesel increased by between 81 and 82 cents;

− The Department said that the increase was influenced by local and

international factors;

− The Automobile Association (AA) has expressed their concern at the recent

hike;

− The increase, according to AA, will not only affect motorists but consumers

in general;

− Carbon Tax will also be implemented in June 2019, adding 9 cents per litre

to the petrol price and 10 cents per litre for diesel;

− Taxi Association Santaco has warned that the increase will also raise taxi

fare prices;

− The Association estimates that new prices will come into effect between

June and July this year.

11. Xenophobic Attacks Condemned

− Violence broke out against foreign nationals in an informal settlement

North of Durban. Over 200 foreign nationals were attacked, with some

fleeing their homes;

− International Relations Minister Lindiwe Sisulu called an urgent meeting

with African ambassadors in Pretoria following the brutal attacks against

foreigners in Durban;

− The purpose of the meeting, also attended by Minister of Police Bheki

Cele, was to discuss how the government can work with stakeholders and

communities to curb such attacks;

− Sisulu has strongly condemned the attacks and has called on police law

enforcement agencies to deal with criminals without fear or favour;

− In an interview with Ukhozi FM in Durban, President Cyril Ramaphosa also

condemned the attacks, stressing that such actions chase away investors

and may strain the economy.

12. President Ramaphosa in Equatorial Guinea

− President Cyril Ramaphosa embarked on a working visit to Equatorial

Guinea on Tuesday the 2nd of April where he held talks with his counterpart

President Obiang Nguema Mbasongo;

− The President was accompanied by International Relations and

Cooperation Minister Lindiwe Sisulu and Minister of Defence and Military

Veterans Nosiviwe Mapisa-Nqakula;

− Following the working visit, South Africa and Equatorial Guinea have

agreed to strengthen their political, diplomatic and economic relations for

the benefit of their people;

− The two countries have also made a commitment to work towards

strengthening South-South cooperation, and inter-African cooperation in

particular;

− The two countries also witnessed the signing of the Rules of Procedure for

a Joint Permanent Commission;

− South Africa and Equatorial Guinea have also entered into to a number of

bilateral cooperation agreements, including a General Cooperation

Agreement and two agreements on defence cooperation.

13. NDB And DBSA Sign Loan Agreement

− The New Development Bank (NDB) and the Development Bank of

Southern Africa (DBSA) have signed a $300-million loan agreement for the

Greenhouse Gas Emissions Reduction and Energy Sector Development

project;

− The agreement was signed by NDB VP and COO Xian Zhu and DBSA

CEO Patrick Dlamini at the annual NDB meeting in South Africa;

− The NDB has granted the loan without a sovereign guarantee;

− The Greenhouse Gas Emissions Reduction and Energy Sector

Development project is intended to support renewable energy projects in

South Africa and facilitate the shift to a more sustainable energy path;

− The objective of the project is to drive investment into renewable energy

that will contribute to the power generation mix and reduce carbon dioxide

emissions in the country as per the National Development Plan.

14. DTI to Host Intellectual Property (IP) and Technology Commercialisation

Colloquium

− The Department of Trade and Industry (DTI) has partnered with the

Companies and Intellectual Property Commission to host a colloquium in

Pretoria from the 8th to the 9th of April;

− The purpose of the colloquium is to provide a platform for the Intellectual

Property (IP) and innovation community to discuss the challenges

inhibiting IP protection and its commercialisation;

− Some of the stakeholder expected to be present at the colloquium

includes inventors, academics, patent attorneys, industry partners,

SMMEs, technology consultants, commercialisation specialists, venture

capitalists, incubators, technology transfer offices, as well as high school

learners and university students;

− Speaking on the colloquium, Trade and Industry Minister Dr Rob Davies

has said: “It will further create an understanding on how best [existing IP

can] be fully exploited for the benefit of the country”.

15. SA Hosts BRICS Bank Annual Meeting

− South Africa hosted the 4th BRICS’ New Development Bank (NDB) annual

meeting from the 1st of April in Cape Town;

− The theme of the event was “Partnership for Sustainable Development”,

recognising the need for infrastructural development;

− Three of the five projects approved for funding from the bank during the

meeting are South African;

− In a written statement, Finance Minister Tito Mboweni indicated that the

three projects are separate from the loan agreements signed by the NDB

to Eskom and the Development Bank of South Africa;

− “The three new projects that were approved by the NDB board are for

Eskom, the Industrial Development Corporation (US$80 million), and the

Trans-Caledon Tunnel Authority (US$220 million) for the implementation

of Phase II of the Lesotho Highlands Water Project and financing the

construction of water transfer infrastructure,” the minister said;

− Mboweni has declared the meeting a resounding success.

ELECTION WATCH

1. IEC Partnership Creates Platform to Combat False Information

− The IEC has revealed an online complaint platform, Real411.org, for the submission of

misleading information in the run-up to the national elections;

− The platform was launched on the 1st of April in Pretoria. This is in response to the rise in

disinformation via digital platforms and the negative effects it might have on the integrity of

the elections;

− The IEC has partnered with Media Monitoring Africa, Sanef and the Committee to Protect

Journalists in making the platform a reality;

− “We hope this will combat the scourge of disinformation intended to unfairly influence the

election,” IEC CEO Sy Mamabolo said.

2. ANC Crowdfunding to Raise Election Funds

− The ruling party has announced that it will use crowdfunding to raise funds for its election

campaign;

− The initiative was launched by ANC Treasure General, Paul Mashatile;

− Party spokesperson, Dakota Legoete, said the move would allow ANC supporters and

ordinary South African citizens to contribute money to the party’s campaign;

− A donation call centre has been established to facilitate the initiative.

3. ANC To Remove Candidates Who Fail Integrity Commission's Scrutiny

− The ANC has indicated that members on the National and Provincial lists who do not pass

the integrity Commission’s scrutiny might be removed from the list of party’s representatives

in Parliament and Provincial legislatures;

− This follows a decision by the ruling party’s NEC to submit the names of individuals found

wanting by branch members to the Commission;

− Once recommendations have been made by the Commission, the appropriate action will be

taken by the party against implicated persons, said ANC Deputy Secretary-General Jessie

Duarte;

− The party has indicated, however, that members suspected of crimes will be treated as

innocent until they are found guilty by the law.

4. IEC Receives Candidate List Objections

− The IEC has received objections to 53 candidates across nine political parties by the set

deadline for objections;

− The ANC has the highest number of affected candidates;

− The IEC’s chief electoral officer Sy Mamabolo said that political parties with candidates that

were objected will be given the opportunity to respond.

5. Fewer Young People Have Registered to Vote

− According to a GroundUp report, the number of young people registered to vote in the

upcoming elections has substantially decreased from 2014;

− The number of voters between the ages of 18 and 19 dropped by 47%, while the number of

registered voters between 20 and 29 decreased by 4%;

− Considering that the population increased by 7,5% over the same period, the drop is even

more concerning;

− The reason for the decrease has not yet been determined.

AFRICA WATCH

1. Ghana Elections

Ghanaian Independent Candidate Contests Elections

− Marricke Kofi Gane, a UK-trained certified accountant, has expressed his intent to contest

the upcoming elections scheduled for December 2020;

− Gane used social media to announce his bid and has gained a considerable amount of

support from voters. His petit manifesto has also been made available online;

− Ghana’s political climate has been dominated by the New Patriotic Party (NPP) and the main

opposition National Democratic Congress (NDC);

− Gane boasts about not being “tainted” by the political system and promises to give Ghana

much needed change and renewal.

2. Algeria

Bouteflika Resigns

− Abdelaziz Bouteflika, who has been President of Algeria for the past 20 years, has stepped

down from office;

− Bouteflika submitted his resignation to the Constitutional Council with immediate effect on

the 2nd of April amidst massive civilian protests;

− Army Chief of Staff, Lieutenant General Ahmed Gaed Salahm had recently called on the

Constitutional Court to declare President Abdelaziz Bouteflika unfit to run office;

− On the 31st of March, thousands of protestors took to the streets to demand for Bouteflika to

step down.

3. Senegal

President Macky Sall’s Inauguration

− Macky Sall was inaugurated as President of Senegal for his second term on the 2nd of April;

− Sally won the elections held on the 24th of February with 58% of the vote, beating four

opponents;

− A total of 18 African heads of state were present at the event, including Nigerian President

Muhamed Buhari, Rwandan President Paul Kagame, and DR Congo President Felix

Tshisekedi;

− Sally promised to serve the people of Senegal diligently and encouraged citizens to maintain

the nataion’s tradition of being a peaceful, stable, and inclusive country