Latest news with #BaneleGinidza
IOL News
5 hours ago
- Business
- IOL News
Rand Water eyes legislative changes to enhance municipal water management
This comes as the bulk water provider sets to rollout more than R40 billion toward ageing infrastructure refurbishment over the next five years. Image: Supplied Banele Ginidza Rand Water is anticipating a change in legislation that could enable it to override poor municipal management of water and sanitation budgets, the provision of water services, and facilitate a choice of supplier for consumers while also ringfencing water and sanitation payments. This comes as the bulk water provider is set to rollout more than R40 billion upgrading the bulk water infrastructure and upgrading waste-water treatment works in municipalities over the next five years. Speaking at the latest PSG Think Big Series webinar on Tuesday, Rand Water CEO, Sipho Mosia, said this initiative was a direct response to the escalating challenges faced in municipal water management. Mosia said the entity was confident of the immediate future with reviews in legislation that would enable it to play a more proactive role in water distribution. "The prognosis looks good in terms of our ability to get more water into the system. This time last year we added about 150 million litres of water into the system. And we are going to be adding an additional 450 million of water into the system, which will in a period of about two years add 600 million litres. So the prognosis looks good, at least at the bulk level," Mosia said. "Already in 2025/2026, we are talking meeting the demands of 2031 in terms of the bulk water provision into the system. For those that invest in Rand Water, we are still maintaining the gross profit margins that I cannot disclose numbers now but its looking good. All we need to do as country is focus on distribution and the future looks rosy." Video Player is loading. 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Next Stay Close ✕ Mosia said the upgrades will be funded by the Department of Water and Sanitation, with the first rollout at the Emfuleni Municipality where 5 mega litres a day water treatment works is being built. He said the reviewing of some key pieces of legislation would ensure that water services and water authority functions would be mandated separately. One of Operation Vulindlela's objectives is to strengthen water resource management through reforms aimed at enhancing the overall management of water resources, improving water service delivery by local municipalities, and establishing or appointing ringfenced, professionally managed, and independently licensed utilities for water and sanitation services. "What the government is saying is that if you are a municipality and you are struggling with water services provision, it is not going to be given that you are going to be a water services provider. That is going to be taken away and given to a different entity that can be another municipality," he said. "That can be a district municipality or a local municipality that is capable. It can be given to a water board, to a private service institution. That is part of the reform that we are putting in place. We have already started at the Emfuleni Municipality where we are coming in as a service provider. The municipality is the authority and that will change." Mosia said the debt owed by municipalities to Rand Water has surged from R1.5bn in 2015 to more than R8bn by the third quarter of the 2024/25 period, putting a serious drain on the entity's ability to function. "We are still fine for now. We are able to raise capital in the market place but in the long term it's a matter of serious concern for us. And part of why we welcome the reforms is because they are getting towards ringfencing all the funds related to water and sanitation," Mosia said. "We have seen the water entity within the municipality is highly profitable. They generate enough revenue. They can be able to pay the bulk water to Rand Water. But because money has no colour in the municipality, the revenue is used for other services and therefore the municipalities do not pay for bulk water. "With these changes, particularly what we are implementing as a new model, the money that comes for water and sanitation will be ringfenced. What will then turn the situation around is that the money the municipality collects for consumers and water and sanitation will then go to bulk water provision and services that are related to that, including the upgrade and refurbishment of aging infrastructure in the value chain." BUSINESS REPORT
IOL News
18-07-2025
- Business
- IOL News
Mashatile calls for increased Chinese investment as trade deficit with China surges
Deputy President Shipokosa Paulus Mashatile delivers a keynote address at the South Africa-China Investment Forum, as part of his working visit to the People's Republic of China. Banele Ginidza Deputy President Paul Mashatile has issued a compelling invitation to Chinese corporations, advocating for increased investment in South Africa. Speaking at the South Africa-China Investment Forum in Beijing on Thursday, Mashatile highlighted a significant shift in the trade dynamics between the two nations, revealing that the trade deficit with China has escalated dramatically from less than $1 billion in the period between 1988 and 2000 to an alarming $9.71bn by 2023. Mashatile said ddressing these challenges necessitated expanding South Africa's export portfolio, encouraging value-added exports, and establishing a more balanced trade relationship. "We need to develop a more coordinated and strategic approach. We need to address challenges such as access to the Chinese market due to factors like tariff and non-tariff barriers, distance, and competition from other countries," Mashatile said. The essence of this trade imbalance, as Mashatile pointed out, stems from the current nature of the economic relationship where South Africa primarily exports raw materials and minerals while predominantly importing manufactured and capital goods from China. This disparity has raised concerns regarding the sustainability of such a model, particularly as both South Africa and China navigate increasing tariff barriers imposed by the United States. "As South Africa-China relations continue to deepen, new opportunities emerge for Chinese businesses seeking to enter the South African market, particularly in sectors such as renewable energy, green hydrogen, energy storage, infrastructure and logistics, our Special Economic Zones (SEZs), pharmaceuticals and medical devices, and the beneficiation of critical minerals, as well as in the digital economy," he said. Mashatile said South Africa sought to attract investments to increase greenfield investments, infrastructure investments, unlock funding or financial support, partnerships with SOEs, technology transfer and innovation partnerships, investments in SEZs and industrial parks, black industrialist partnerships, as well as capacity and technical assistance for SEZs. "Our SEZs offer an internationally competitive value proposition for the country with an attractive suite of incentives," Mashatile said. "They are located across the country, and each SEZ has unique offerings for investors, some of which could include tax relief, reduced corporate rate taxes and reduced costs for key inputs such as land, water and electricity." Mashatile highlighted the infrastructure investment plan as being in place to drive a range of projects in energy, water and sanitation, transport, digital infrastructure, human settlements, and agriculture and agro-processing. "The plan is supported by an Infrastructure Fund, offering investment opportunities in water development and irrigation projects across nine provinces, a road network expansion, a rehabilitation and maintenance program for construction companies, and high-demand spectrum," he said. Mashatile said South Africa's mineral exports, agricultural commodities, and manufactured items have achieved significant penetration in the Chinese market, aided by a steady flow of investment from Chinese companies since the announcement of President Cyril Ramaphosa's investment mobilisation drive. He said some of the existing partnerships included a major significant investment by the Industrial and Commercial Bank of China (ICBC), which purchased a 20% stake in the assets and earnings of Standard Bank for $5.5bn. Another major Chinese electronics manufacturer, Hi-Sense, entered the South African market in 1997. In 2013, the company established an industrial park. Mashatile cited other Chinese flagship companies such as Zhong Xing Communications (ZTE) and Huawei Technologies that were also expanding their presence in South Africa. "Over the last decade, 48 Chinese companies invested in South Africa with a capital investment of over $11.69bn," he said. BUSINESS REPORT
IOL News
11-07-2025
- Business
- IOL News
Financial and Fiscal Commission raises alarm over SOEs fiscal drag
The National State Enterprises Bill proposes the establishment of the State Asset Management Company to consolidate the State's shareholdings in SOEs with the State as the sole shareholder of a holding company. Banele Ginidza The Financial and Fiscal Commission (FFC) has sounded a clarion call to Parliament, highlighting alarming trends in the fiscal drag imposed by State-Owned Enterprises (SOEs). In a recent presentation to the Portfolio Committee on Monitoring and Evaluation, the FFC revealed that direct government transfers to SOEs rose significantly from 1% of GDP in 2015/2016 to 1.6% in 2021/2022. This stark upward trend raises pressing concerns over the sustainability of SOE funding and the need for urgent reforms. The Commission's damning analysis underscores a decade-long commitment from the government, which, between 2008/2009 and 2019/2020, spent approximately R160 billion to bail out financially troubled SOEs. The FFC's warnings come amid growing anxiety over the potential fiscal repercussions of the proposed National State Enterprises Bill, which it claims fails to adequately address long-standing governance and accountability concerns prevalent over the past 30 years. "In the 2025 Budget, our analysis shows that between 2024/2025 and 2025/2026 total government contingent liability will rise by about R9.4 billion with the bulk of it being centred around Eskom, Independent Power Producers and Transnet," the FCC said. The National State Enterprises Bill proposes the establishment of the State Asset Management Company to consolidate the State's shareholdings in SOEs with the State as the sole shareholder of a holding company. The Commission emphatically stated its opposition to the Bill in its current form, labelling it inadequate in tackling issues of misuse of public funds and insufficient in providing measures for consequence management related to irregular and wasteful expenditure. The FFC articulated a preference for establishing a holding company funded within the National Treasury's budget baseline, a proposal aiming to restore fiscal integrity in the management of SOEs. "The Bill does not have provision on consequence management specifically in the irregular, wasteful and corrupt expenditure. Without that, SOEs may continue to be vulnerable to improper public fund practices," said the Commission. "We are concerned about the clear lack of financial purpose in this transparency as well. Our initial advice was that the shareholding company should be within Treasury." Treasury appeared before the Portfolio Committee on Planning, Monitoring and Evaluation on Wednesday also expressing concerns on the potential of malfeasance in the Bill. Committee members, especially uMkhonto WeSizwe Party MP, Mzwanele Manyi, outrightly rejected the Bill, citing the fiscal risks associated with establishing the holding company, particularly the significant funding requirement of R615 million. Members of Parliament expressed scepticism regarding the feasibility of the innovative funding mechanisms proposed. Treasury also highlighted critical issues, particularly the proposed non-application of the Public Finance Management Act (PFMA) to the holding company and its subsidiaries, which could undermine transparency and accountability in financial management. Treasury cautioned that the centralisation model posed risks, such as increased political interference and the potential for State capture, emphasising the importance of ensuring that SOEs remained financially sustainable without undue reliance on public funds. Committee members raised significant concerns about the centralisation issues presented in the Bill. They argued that a centralised model could lead to a lack of transparency and accountability, making it more vulnerable to corruption and political interference. Members highlighted that consolidating oversight of SOEs under a single holding company might exacerbate existing vulnerabilities rather than mitigate them, potentially creating an environment where decision-making becomes opaque and less subject to scrutiny. BUSINESS REPORT
IOL News
08-07-2025
- Automotive
- IOL News
Volkswagen deal offers hope for Eastern Cape as Mercedes-Benz considers South Africa exit
Mercedes-Benz has temporarily halted production at its East London plant. The factory in East London plays a pivotal role in the province's economy, exporting nearly 90% of its vehicles to the US. Image: Supplied Banele Ginidza Volkswagen South Africa's (VWSA) recent agreement to become the sole global manufacturer of the VW Polo—producing both left and right-hand drive models for all markets—offers a beacon of hope for the struggling Eastern Cape Province. This announcement comes on the heels of alarming news from Mercedes-Benz South Africa (MBSA), which has indicated that the newly imposed 30% tariffs on exports to the United States may force the company to exit the country entirely. During a briefing by the Eastern Cape and Northern Cape Provincial Treasuries, acting Premier Mlungusi Mvalo expressed grave concerns about the potential departure of MBSA. Mvoko said Mercedes Benz had indicated that it would likely leave the country with the composition of the 30% tariffs, adding that this would be devastating for the province's economy. The factory in East London plays a pivotal role in the province's economy, exporting nearly 90% of its vehicles to the US. "You cannot imagine East London without Mercedez Benz. MBSA exports almost 90% of their cars to the US. In our interaction with MBSA, they have said that given these tariffs, it proves it will be difficult," Mvalo said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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"We are anticipating that MBSA might leave South Africa, but we are hoping that the discussion we have had at international level, as we had a delegation going to Stuttgart, that might save it. "Because if MBSA goes, even the East London Special Economic Zone would be gone because half of what the companies established there are suppliers to MBSA. And I am not talking about all those around East London. The livelihood of the whole East London, King Williams Town, is dependent on MBSA." The rampant anxiety surrounding MBSA's future escalated as Mvalo confirmed that the automotive sector, which accounts for a significant portion of the province's economic activity, might be facing dire challenges. "We have also lost Goodyear Tyres just a month ago. This is the second tyre manufacturing company that we have lost, as you know we lost Bridgestone Tyres last month. It's also going to have a ripple effects on all the industries because as you now that the Eastern Cape hosts the majority of the suppliers in the country in the automotive sector. About 80% of suppliers are in the Eastern Cape, you can imagine what will happen," Mvoko said. "Fortunately, VW is still with us with a new deal of manufacturing Polo for the whole world. So it just saved us but you will never know with things. So things are not very good with us. It is going to contribute to the high unemployment rate because now things are really challenging to say the least." Mvoko said the agriculture sector was not performing as anticipated as the second tier economy. Meanwhile, the Motor Industry Staff Association (MISA) said the decision by US President Donald Trump to impose 30% tariffs on the export of vehicles, components, tyres and parts exported from South Africa to the United States will kill any possible economic growth in South Africa. Martlé Keyter, MISA's CEO for operations, said the retail motor industry was already struggling amidst the uncertainty of tariff percentage increases. Keyter said the union was experiencing an increase in employers closing their doors, restructuring in terms of Section 189 of the Labour Relations Act or embarking on short time. According to Tiekie Mocke, manager of MISA's legal department, the negative impact on exports forced an employer within the retail motor industry to cut a five-day workweek back to a four-day workweek, effectively leaving employees out of pocket with at least one week's income per month. "This was done pro-actively to prevent retrenchments but cannot continue indefinitely," Mocke said. BUSINESS REPORT
IOL News
04-07-2025
- Business
- IOL News
South Africa faces potential export challenges with EU's carbon border adjustment mechanism
Acknowledging the environmental challenges posed by differing climate policies globally, the Commission is keen to ensure that substantial carbon emissions do not simply shift from the European Union (EU) to nations with less stringent regulations. Image: File photo Banele Ginidza As the European Commission (EC) gears up to launch plans for a Carbon Border Adjustment Mechanism (CBAM) in early 2026, South African industries are left contemplating the potential ramifications of this new regulatory framework. Affecting key sectors such as aluminium, steel, fertilizers, electrical energy, hydrogen, and cement, the proposed measures aim to mitigate risks of carbon leakage while promoting a low-carbon economy. The EC announced on Thursday that it was actively working on proposals to support producers in sectors identified as vulnerable to carbon leakage. Acknowledging the environmental challenges posed by differing climate policies globally, the Commission is keen to ensure that substantial carbon emissions do not simply shift from the European Union (EU) to nations with less stringent regulations. "The proposal, which is expected to be made by the end of 2025, aims to support producers of goods at risk of such carbon leakage and ensure equal treatment for all goods, whether produced and sold in the EU, imported into the EU or exported," the EC said. "This scheme would be in place for an initially defined period and then will be reviewed after the new 2026 ETS reform is approved." Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Under the CBAM framework, starting January 1, 2026, South African importers will incur penalties linked to greenhouse gas emissions associated with their products in the affected sectors. Last week, a provisional political agreement between the European Parliament and the Council highlighted an ambitious proposal to simplify and strengthen the CBAM regulations. This simplification is designed to ease administrative burdens for businesses while maintaining the essential climate goals of the mechanism. Local industries, government agencies and advocacy groups on Thursday said it was too early to read into the EC's intentions, especially as the proposals were scheduled to be made shortly before the implementation of the CBAM in January next year. "At this stage, we are still mulling over the implications of the European Commission's announcement and are not yet in a position to provide an informed or final view," said Nuraan Alli, communications executive at the Steel and Engineering Industries Federation of Southern Africa. "As such, we are unable to make a public comment at this time. We will gladly engage further once our position has been more clearly defined." The EC earlier in February proposed simplifications to the CBAM regulation to reduce administrative burdens for businesses, while maintaining the functionality of the CBAM measure. One significant change is the introduction of an exemption threshold, allowing companies that import less than 50 tons of CBAM goods per year to be exempt from compliance obligations. This adjustment is intended primarily to benefit small and medium enterprises (SMEs) by reducing their regulatory load, while still ensuring that 99% of emissions associated with CBAM goods are adequately addressed. The Commission underscored that the forthcoming simplifications will aid in cost-efficient compliance improvements, such as refining the authorisation procedure and streamlining data collection regarding embedded emissions in imported goods. However, final approval from the European Parliament and the Council is still required for these legislative adjustments to take effect. As these developments unfold, stakeholders in South Africa are keenly observing how the EU's CBAM may impact their operations, competitiveness, and the broader economic landscape. The implications are profound as international trade continues to wrestle with the competing demands of economic growth and environmental sustainability. BUSINESS REPORT
