The world’s four largest
LPG storage tanks at the Bidvest Tank Terminals site in Richards Bay. Image Bidvest
The supply of liquid petroleum gas (LPG) is set to be made easier and more reliable with the erection of the 22 600-ton Mounded LPG Facility at Richards Bay. Bidvest Tank Terminals has constructed the R1-billion storage facility for Petredec, which trades, transports and distributes LPG and other commodities.
South Africa’s annual consumption of LPG, currently at 400 000 tons, is expected to rise to 600 000 tons. If a private partner can be found, a liquid natural gas (LNG) plant will produce 2 000 MW at Richards Bay. This forms part of national government’s allocation of 3 126 MW to natural gas in its medium-term energy policy to 2030.
The National Department of Mineral Resources and Energy (DMRE) decided in 2016 that one of the first two gas-to-power plants to be constructed under the Independent Power Producer Procurement Programme would be allocated to Richards Bay. This has the potential to turn the Richards Bay Industrial Development Zone (RBIDZ) into an energy hub. The fact that neighbouring Mozambique has significant offshore deposits is a factor in this ambition. To produce its allocation of 2 000 MW, the plant would have to use a million tons a year of LNG.
An indication of the scale of activity in Mozambique came in 2019 when Anadarko Petroleum, a US company, signed off on a $20-billion project to build an LNG plant. The projected spin-offs for the South African economy are estimated to top R7-billion.
Eni, one of the world’s biggest energy companies, has an agreement with Sasol Petroleum International to explore for hydrocarbons off the coast of KwaZulu-Natal.
The regulator and promoter of oil and gas exploration in South Africa, Petroleum Agency South Africa, has awarded coalbed-methane-gas exploration rights in KwaZulu-Natal to NT Energy Africa, which has a partnership with the Central Energy Fund. These awards are for onshore exploration. The Petroleum Agency SA is an agency of the National Department of Energy.
Getting fuel to the province of Gauteng is the key mission of the new multi-purpose pipeline (NMPP). Refined products such as jet fuel, sulphur diesel and both kinds of octane petrol are carried. The infrastructure of Transnet Pipelines is said to reduce the number of fuel tankers on South African roads by about 60%.
KwaZulu-Natal is home to two major oil refineries and is the first link in the pipeline chain that links Gauteng province, the industrial heartland of South Africa, with vital fuels. The Port of Durban handles 80% of South Africa’s fuel imports. KwaZulu-Natal is thus a key player in the country’s oil and gas industry.
MSC Orchestra arrives in Durban on maiden visit. Image: MSC Cruises
The KwaZulu Cruise Terminal (KCT) consortium has won the contract from Transnet National Ports Authority (TNPA) to finance, build and run the new Durban Cruise Terminal. The terminal is expected to start functioning for the 2020/21 cruise season.
Within the Port of Durban there are a number of specialised facilities. One of the busiest is the Container Terminal and that is the subject of a large upgrading project. The Port of Richards Bay, the link to the world for South Africa’s coal exporters, is constantly adding to its facilities, the latest being a floating dock, for which approval has been given to be constructed within the port.
The cruise terminal is an important step forward for Durban and fits in well with the larger project that links the port to the upgraded southern end of the promenade, the Durban Point Waterfront. A joint venture between MSC Cruises SA and Africa Armada Consortium, KCT will spend about R220-million on the financing‚ construction‚ maintenance and operation of the cruise terminal for a 25-year concession period. Construction began in 2019.
The cruise terminal will cover a 32 000 m² area that will cater for two ships and at least 5 000 passengers. A ship with 2 000 passengers is worth in the region of R2-million per day for the host city. The number of annual passengers is expected to grow from the current 200 000 to more than 700 000 by 2040. Durban’s hosting of 60 ships per annum is expected to rise to 150 or more. South Africa attracts 0.5% of the world’s cruise-ship market which comprises about 15.4-million passengers annually.
MSC Musica uses Durban as her base port and is joined by MSC Opera during the summer months, sailing from Durban to Mozambique and other destinations in the Indian Ocean. A popular offering is the “Tour to Nowhere” cruise. In 2019 MSC Orchestra made its first visit to Durban.
Container terminal
Several projects are underway within the Port of Durban to increase capacity. Transnet National Ports Authority (TNPA) and Transnet Port Terminals (TPT) are combining to upgrade infrastructure and buy new equipment to improve efficiencies at the Ro-Ro terminal (vehicles and break bulk) and Maydon Wharf (mixed cargo and agriculture) but the biggest project is at the Durban Container Terminal (DCT).
DCT has a capacity of 3.6-million TEUs (twenty-foot equivalent units) and the current project aims to extend that beyond five-million TEUs. The Brics New Development Bank has approved a loan of $200-million for the DCT expansion project.
Drydock
Drydock construction. Image: Transnet
Durban’s drydock complex is undergoing a series of refurbishments and upgrades. The R48-million 35 m outer caisson was the first project to be completed and now it’s the turn for the inner caisson and drive system to be fixed, at a cost of R61.5-million. Two Durban companies, Lodemann (Managing Contractor) and Channel Construction (Design and Build), are responsible for the project, which will ensure the sustainability of the ship-repair sector within the port.
TNPA states that the multiplier effect in the marine sector creates five jobs for every direct job. The drydock project created direct jobs for 29 skilled employees.
Richards Bay
The Richards Bay Coal Terminal (RBCT) is the key component of the port on the northern coast of KwaZulu-Natal but the port’s managers and associated Special Economic Zone (SEZ) are looking to diversify beyond the other types of freight which also form part of the port’s key mandate.
Chief among the diverse offerings being looked at are alternative energy generation and opportunities in the gas sector. A feasibility study is being done on a gas-to-power plant and a large new liquid petroleum gas import and storage terminal was recently built for Petredec by Bidvest Tank Terminals.
Ship repair is another option which will open up other opportunities in marine manufacturing.
TNPA has approved in principle the construction of a floating dock near the existing Small Craft quay. TNPA will have to create new onshore infrastructure and do some dredging before it can call for tenders from the private sector to build the dock, which would be able to handle large and ultra-large cargo vessels (Capesize).
Richards Bay is a deepwater port. Among its 13 berths are terminals that handle dry-bulk ores, minerals and break-bulk cargo.
The quay of the Richards Bay Coal Terminal (RBCT) is 2.2 km long with six berths and four ship-loaders. The 276 ha site contains a stockyard that can store 8.2-million tons while the terminal itself has a design capacity of 91-million tons per year. More than 900 ships visit RBCT every year.
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First published as a Special Feature written by John Young in KwaZulu-Natal Business 2020/21 edition.
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A national competition found a Port Elizabeth automotive components company to be the country’s “Factory of the Year” in 2019. This follows the award of “Africa’s Industrialist of the Year” to a Port Elizabeth entrepreneur whose automation company exports to 18 countries.
It comes as no surprise that the automotive sector in the Eastern Cape produces excellence and innovation. The long-term presence of Mercedes-Benz South Africa, Volkswagen South Africa, Isuzu and Ford has now been bolstered by a multi-phase R11-billion investment by Beijing Automotive Group South Africa at the Coega Special Economic Zone (SEZ). The automotive components and service industry from which the two award-winners sprung is similarly diverse, with everything from tyres, windshields and batteries to catalytic converters being manufactured and exported.
Eberspächer South Africa, an exhaust systems manufacturer, won the 2019 Factory of the Year competition, which is run by management consultants AT Kearney. Quinton Uren won the Industrialist award for the work of his company, Jendamark Automation.
The manufacturing assembly solutions that the company creates in Port Elizabeth are exported to 18 countries. International orders make up 90% of the company’s business.
The kind of technical excellence represented by the two award winners is something of a signal of a way forward for the regional economy – investment in high-value manufacturing and services to stimulate growth and job creation.
The investment pathway presented by the Eastern Cape Development Corporation (ECDC) in preparation for the 2019 Eastern Cape Investment Conference specified nine sectors within manufacturing where the province wants to attract investment:
Maritime
Pharmaceuticals
Green/renewables
Agri-processing
Materials
Light manufacturing
Automotive
Petrochemicals
Capital goods.
The ECDC, the official investment promotion agency of the Eastern Cape, further outlined the factors that make the province an attractive investment destination: transport infrastructure, land, labour, government incentives and raw materials. Sectors with high potential in the province include agriculture, mining and energy, manufacturing, tourism, construction and knowledge-based services.
Eastern Cape Premier Oscar Mabuyane reported in 2019 that several large investment commitments have been made in the province. At the time of the conference he was MEC for Economic Development, Environmental Affairs and Tourism. He cited:
SAB, R438-million plant upgrade
Mercedes-Benz SA, R10-billion
Aspen Pharmacare, R3.4-billion
Nestlé, R663-million
Yekani Technologies, R1-billion at Coega SEZ
MultiChoice, R900-million at ELIDZ
Volkswagen SA, R6.1-billion
BAIC, R11-billion at Coega SEZ.
Since that conference, mining company Bushveld Minerals has announced that it will spend about R150-million on a vanadium electrolyte plant in East London. The product will be used in vanadium redox flow batteries by Bushveld and by international customers. East London is home to First National Battery, a subsidiary of Metair.
The presence of two Special Economic Zones (SEZs) in the province helps make the Eastern Cape attractive to investors. The facility in East London is in the process of changing its official status from Industrial Development Zone (IDZ) to SEZ but it remains a kind of SEZ.
In the period March 2019 to January 2020, the Coega SEZ (shown in the main picture) signed four new lease agreements with organisations that will collectively invest more than R100-million. This comes after a most productive 2018/19 period when R2.6-billion was invested by 18 entities. The variety of investments received by the two SEZs is detailed further in a separate article elsewhere in this journal.
A work bench in the country’s top factory. Image: Eberspächer South Africa
Perhaps the most consequential investments into the SEZs are in the automotive and energy sectors. Although the automotive investments are not game-changers in the sense that a new sector is being introduced, the scale of the investments is impressive. With two new Chinese car-makers (FAW and BAIC) in the Coega SEZ, increased production volumes will ensure that jobs are created. The sector already accounts for more than 400 000 jobs in the province.
In support of tourist initiatives in the eastern parts of the province and to bolster the economy of rural areas, the South African National Roads Agency is working on projects valued at nearly R7-billion, while the project pipeline for to 2021/22 is budgeted at more than R5-billion.
Oil and gas
The oil and gas sector could ignite a whole new type of economy, and kickstart the Oceans Economy. National government has named the Coega SEZ as the potential site for a 1 000 MW Liquefied Natural Gas (LNG) plant. The value to the regional economy of the project is estimated at R25-billion. A gas-fired power plant (Dedisa) is operating at Coega and there are plans to expand this sector.
Since the company Aegean Bunkering Marine Services was licensed in 2016 by the South African Maritime Safety Authority (SAMSA) and Transnet to supply bunker fuel to ships passing through Algoa Bay, many additional ships have used these services, adding more than R70-million to the local economy. If the drive to convert to oil and gas is successful (and the hope is that feedstock will come from offshore gasfields once they are developed) then a string of downstream benefits could accrue.
Provincial authorities are working with SAMSA to ensure that the province’s ports play a role in bunkering and supplies to the oil and gas sector.
The Provincial Government of the Eastern Cape is developing an Oceans Economy Master Plan which will include provisions to support small-scale fishers and to develop the small harbours at Port St Johns, Cape St Francis and Port Alfred. Other areas for strategic development include Coffee Bay, Mdumbi and Port Grosvenor on the Wild Coast.
Port Elizabeth is gearing up to embrace the Oceans Economy. A new national headquarters of the South African International Maritime Institute opened in the city, and the Oceans Campus of Nelson Mandela University will devote its resources to researching how best the province and country can exploit the maritime sector.
These institutions will support an existing provincial maritime economy which is underpinned by three major ports: Port Elizabeth, East London and Ngqura. Port Elizabeth’s major cargoes are manganese and vehicles while both East London and Ngqura support Special Economic Zones (SEZs). There are plans to move manganese stockpiles to Ngqura which will free up space for a waterfront development in the Port Elizabeth harbour.
Geography
The Eastern Cape extends over 169 580 square kilometres, representing 13.9% of South Africa’s land mass. The dry western interior is one of the country’s premier sheep-rearing destinations and it is the home of the mohair industry.
The mountainous regions of the north and east of the province support timber plantations while the coastal belt in the south-west is well-watered and is good for dairy farming. The province has spectacular beaches stretching from the surfer’s paradise at Jeffreys Bay all the way to the famed Wild Coast. Two major airports at Port Elizabeth and East London provide good air links and smaller towns such as Mthatha and Bhisho have airports. Mthatha is served by SA Express.
Municipalities
The Eastern Cape has six district municipalities and two metropolitan municipalities.
Buffalo City Metropolitan Municipality
Towns: East London, King Williams Town
The Port of East London is South Africa’s only river port. The airport, rail links and the East London IDZ contribute to making this an important regional centre. Buffalo City hosts a variety of manufacturers from vehicles to batteries and cotton textiles and is responsible for 19.6% of provincial GDP.
There are many opportunities for agri-processing because of the fertile hinterland and as part of the Sunshine Coast, tourism is an important contributor to the local economy.
Nelson Mandela Bay Metropolitan Municipality
Towns: Port Elizabeth, Uitenhage, Despatch
With two ports, a large airport and a concentration of manufacturing concerns, the Nelson Mandela Bay metropole is one of the province’s key economic drivers. It contributes 38.7% to provincial GDP. Volkswagen, General Motors and Ford are all located within the municipality, as are several automotive supplier companies. Aspen, a pharmaceutical company, and South African Breweries are examples of other large concerns. Nelson Mandela Bay has a population of 1.1-million and many educational institutions.
The Nelson Mandela Bay Stadium and St George’s Park cricket ground host provincial and international sports matches. Superb beaches and plentiful outdoor options make the area a popular tourist stop. The Addo Elephant National Park is less than an hour’s drive from the Port Elizabeth city centre.
Alfred Nzo District Municipality
Towns: Matatiele, Mount Frere, Mount Ayliff
The smallest district is in the mountainous north-east, with hiking trails for tourists. There is scope for expansion of tourist activities, and a transfrontier park between South Africa and Lesotho could boost the area’s economy. Subsistence agriculture and forestry are the major economic activities.
Amathole District Municipality
Towns: Cathcart, Stutterheim, Morgan’s Bay, Willowvale, Butterworth, Alice, Bedford
The rural Amathole District surrounds the metro-politan area of Buffalo City. Pineapple and forestry are two of the most important agricultural activities. Popular resorts on the Wild Coast attract many tourists to the area. Hogsback and other towns near the Amatole Mountains offer beautiful scenery and popular beaches. Alice hosts the main campus of the University of Fort Hare.
Chris Hani District Municipality
Towns: Middelburg, Molteno, Dordrecht, Cradock, Queenstown, Lady Frere, Elliot
Sheep farming is an important part of the economy. Some coal is found in the north and tourist activities include fly-fishing. The Foodcorp factory in Molteno manufactures Ouma rusks. Queenstown is a centre for cattle farming and has some manufacturing activities.
The Mountain Zebra National Park is near Cradock. The Grootfontein Agricultural College and Research Station is in Middelburg, and the Marlow Agricultural College is near Cradock.
Joe Gqabi District Municipality
Towns: Aliwal North, Burgersdorp, Lady Grey, Rhodes, Barkly East, Ugie
Cattle and sheep farming make up 80% of land use, while commercial forestry is a big contributor to employment. There are large forestry plantations at Ugie and Mount Fletcher.
Maize is grown along the Orange River and wheat in the foothills of the Drakensberg mountains. Tiffindell has been revived as a ski resort. The village of Rhodes hosts a “Stoepsit” festival in February.
OR Tambo District Municipality
Towns: Mthatha, Coffee Bay, Port St Johns, Qumbu, Bizana, Flagstaff
OR Tambo District Municipality encompasses some of the province’s least-developed areas and contains one of South Africa’s most important ecological areas, the Pondoland Centre of Plant Endemism. There is mining in some areas but plans for titanium mining on seaside dunes are being contested. A Wild Coast Spatial Development Initiative exists to plot further development. Forestry is a big employer.
Sarah Baartman District Municipality
Towns: Graaff-Reinet, Humansdorp, Jeffreys Bay, Makhanda (Grahamstown)
The western part of the province contains the biggest municipality geographically. Large commercial farms in the Karoo produce high-quality meat, wool and mohair, while the coastal belt has dairy farming and some forestry.
The Kouga Valley is a big deciduous fruit producer, while the Kirkwood/Addo area is known for its citrus. Sarah Baartman has three of the region’s national parks and several private game farms. Makhanda hosts the National Arts Festival, Rhodes University and several fine schools.
Eastern Cape Province regional overview by John Young, Eastern Cape Business 2020 edition.
Entering the green and sustainable finance space is a real opportunity for financial services to be a force for good. In Guernsey, where we have taken a stake at the forefront of financing climate change, we see it as finance with purpose – binding together a sustainable economy with a sustainable plan for ethical living.
The potential for transition to a low-carbon economy is huge, and finance can very much be part of this solution.
Guernsey, a global finance centre providing specialist services for a sophisticated client base across the world, has really taken a stake in green and sustainable finance in recent years.
In June we hosted online our own Sustainable Finance Week, a series of daily webinars and podcasts with leading figures from sustainable finance drawn from UK, Europe and Hong Kong. You can listen back to our discussions around private capital’s role in greening the global economy, here: https://www.weareguernsey.com/finance-events/2020/sustainable-finance-week/
Two years ago Guernsey introduced the Guernsey Green Fund, the world’s first regulated green fund product, enabling any Guernsey fund to be certified as green, based on an assessment of investment credentials against an internationally-recognised taxonomy.
Our industry steering group Guernsey Green Finance has become a member of the United Nations’ Financial Centres for Sustainability (FC4S) network – alongside more than 20 global finance centres including London, Paris, Hong Kong and Shanghai.
There is now global recognition of the commercial opportunity presented by green finance, as well as the environmental imperative, as highlighted by the International Panel on Climate Change’s (IPCC) report for climate action to be taken to restrict global warming to a maximum of 1.5 °C over the next dozen years.
There are challenges. The value chain must be untangled to unlock the private capital needed to make green finance much more widely available through society. Then where there is a need for capital from issuers, there will be opportunity for investors.
Dr Andy Sloan, Guernsey Finance
The big challenge facing us all in green finance is the aspiration and action gap. Some people are very committed – but that does not always translate into activity on the ground.
We are talking about trillions of pounds-worth of financing required to find its way into real assets and climate mitigation projects. Blockers include a lack of transparent product, and a lack of consistent standards, so it is good to see moves continuing to develop a standard taxonomy.
We need to start shifting gears and to funnel capital investment into projects around the world. In my view, the demand is clearly there, both from investors looking for green assets, and for emerging technologies and developing green infrastructure looking for funding. What is currently missing is the means to bring the two together.
Having confidence in the product is key, and that is our rationale with the Guernsey Green Fund. I can only see the market for similar products continuing to grow. It is our purpose as financial centres to help smooth and facilitate the growth of green finance around the globe, and to connect investors to opportunities. This will be critical to meeting IPCC targets and building a sustainable future for the husbandry of our planet.
A few weeks ago, when the pandemic was nearing its peak, a number of hand-selected CEOs and senior decision-makers from mining corporates, the finance community and service providers rated the impact of Covid-19 on African Mining.
In the report you can see the initial impact on their African businesses, operations and investment decisions, and their forecasts on investment levels and procurement levels over the next 6-12 months.
Small businesses are a critical driver in boosting the South African economy. Smart Procurement’s Supplier MatchUp Sessions recognise this with an initiative geared to link suppliers to buyers. It has been an ongoing feature of the Enterprise and Supplier Development (ESD) Expo for many years and, for the first time, the event was hosted online in May 2020.
“We simply cannot let COVID-19 and the lockdown bring us to our knees, so the Supplier MatchUp sessions are vital in encouraging a dialogue between small businesses and large organisations. They give corporate buyers an opportunity to address suppliers and provide them with important information on how to become a supplier to their organisation,” says Jodi-Lee Rood, Project Director for Smart Procurement, the organisers of the event.
The inaugural online event presented over 40 SMMEs with the opportunity to engage in a Q&A session with big-business buyers.
The supply chain and procurement category managers from PPECB, Pick ‘n Pay, University of Cape Town, Distell and BP covered issues like supplier registration processes, the types of commodities that these businesses are currently looking for (where the opportunities lie for SMMEs), as well as supplying SMMEs with the details of key Category Managers within their organisations.
All SMMEs who attended the sessions were registered on Smart Procurement World’s SmartXchange platform, a value-add-linkage platform for all Smart Procurement World event attendees. The platform allows for big business buyers and SMMEs to create an online profile for all-year-round meetings and networking.
Testimonials from SMMEs who attended:
“This was super awesome! We can’t thank you enough and sincerely hope that you plan to arrange more of these. Please don’t stop. You have no idea what a difficulty it is to access potential clients at the right level and this is one of the best initiatives that I have encountered for this year. Thank you very much.” ~ Nisha Maharaj, Niche Integrated
“Thank you very much for this one-of-a-kind opportunity.” ~ Dipitseng Manamela, Dihlashana Group
“This was a great opportunity to engage with buyers. I attended all the meetings and they were all insightful.” ~ Jabulani Mahlangu Inkwa Investments
“The #LocalIsLoyal Pledge initiative was also launched at the event. This is a movement for procurement and supply chain professionals to pledge their support and commitment to local businesses. We encourage local businesses to get involved by visiting the SmartXchange website – www.smartxchange.org.za,” says Rood.
For more information on the upcoming series of Smart Procurement World events for 2020 please visit www.smartprocurementworld.com
In reaction to the lockdown in South Africa, Smart Procurement World managed the incredible feat of producing the first-ever online Smart Procurement World regional event, in less than two months.
The conference was aimed at bringing critical information on the procurement and supply chain sectors to a variety of private and public sector delegates, as well as representatives from local SMMEs and other neighbouring countries such as Kenya and Tanzania. Held on 19 and 20 May, the event attracted over 160 delegates and was deemed a resounding success by all stakeholders, delegates and sponsors.
Debbie Tagg (COO of event organisers Smart Procurement) said that the keynote address by Andy Potter (Business Development Director, EMEA, Ansarada) – ‘Fixing the Future of Procurement’ – was a clear reinforcement of the key messages for professionals at this time. “Procurement needs to innovate and take advantage of technology to face the rapid change of pace in business, now more than ever. The fact is that good organisations not only need talented people but also ‘smart’ tools to be more productive and to get better results.”
The event, which welcomed Oracle as a Strategic Partner, provided a wealth of information for the delegates through a number of thought-provoking presentations from international and local (South African) speakers.
Dennis Mlambo, a Former Group Supply Chain Exec at Denel gave an insightful and engaging presentation about being a Future Thinker and the way forward for SOEs and how they can perform better.
Rob Van Den Wijngaard, Director of the Financial Shared Services Centre at Leiden University, joined from the Netherlands. He talked about shifting the dial in procurement and redesigning procurement processes to be more end-to-end. “We have seen a shift in procurement over the years and one needs to create a guiding vision and goal plan of where you are now as an organisation and where you want to be. Customer-orientated digital transformation, the optimisation of operations and service delivery, all need to be updated to the new way of working,” Rob Van den Wijngaard.
Barloworld’s Sydney Tshibubudze shared COVID-19 business resilience intervention tactics, that addressed cutting costs and managing cash flow, as well as reducing supplier risks.
Smart Procurement’s online platform was also able to facilitate interactive panel and breakaways sessions with robust discussion. These included a range of topics targeted at niche procurement sectors, allowing for discussion time and a huge amount of engagement.
The programme covered everything from Enhancing the Impact of Procurement on Job Creation, Investing in Cloud Solutions and Re-skilling, to Collaborating with partners and even competitors to overcome challenges. Technology could not be overlooked in the COVID-19 crisis, the Technology Zone Panel Discussion was very insightful and demonstrated how different organisations are maximising procurement during this time to mitigate risk. What was highlighted, is that the public sector in South Africa has a lot of work to do to catch up in this area, but there are initiatives underway to do so.
“As the nation went into the lockdown and our economy essentially ground to a halt, the City of Cape Town has been hard at work responding to this crisis. Our focus is on supporting SMMEs, ensuring business retention and even expansion, by taking advantage of the opportunities every crisis presents. By working together, and by supporting SMMEs through initiatives like the Smart Procurement programme we can find ways through this crisis,” said Alderman James Vos, Mayoral Committee Member, City of Cape Town.
For more information on the upcoming series of Smart Procurement World events for 2020 please visit the website at www.smartprocurementworld.com
Johannesburg, 1 June 2020; Covid-19 is accelerating and reshaping South African and African manufacturing. It’s compounding existing challenges while simultaneously eradicating established practices, subsequently altering the manufacturing world as we know it.
Looking into the future of manufacturing, is an aspect many manufacturing CEOs will be actively exploring, and requires new approaches and new forms of collaboration to increase overall resilience.
In the uncertain world we are currently living in, all businesses want to look into the ‘crystal ball’ to find out, what now, where to next and what will be the impact on business. Unfortunately, no one can rightly predict the future, but a change in thought processes to begin to think like futurists and create strategies to ensure that businesses have more robust plans is vital to overcome the impact of Covid-19.
A 3-part web-series is currently underway hosted by the Manufacturing Indaba and Futureworld. They comprise thought-provoking and progressive sessions that are set to educate and inspire African industrialists to transition from a state of panic and crisis control, to identifying and capitalising on latent, yet consequential opportunities that have the propensity to take manufacturing businesses to unprecedented levels.
The upcoming and second webinar to be hosted will feature:
> Part 2: Future of Manufacturing:
From global to local, closer alignment of value chains, augmenting with tech (IOT, 3d Printing, 4IR, etc), decentralization and new demand.
11h00 – 12h00 : 5 June 2020
> Part 3: How to lead in times of uncertainty:
The human elements of leadership, acting on imperfect information, confronting biases and ensuring we value humanness.
11h00 – 12h00 : 12 June 2020
The 3-part series is live and Part 2 specifically speaks to supporting a change of thinking and to look at the future. Remember the Future is a matter of choice, not chance, so please do join us.
The Chartered Institute of Government Finance, Audit and Risk Officers (CIGFARO) continues to support the Public Sector in their endeavours to respond to the COVID-19 pandemic.
The COVID-19 crisis has highlighted electricity tariffs. Andre De Ruyter, Eskom Chief Executive, said: “Eskom sold 46% of its electricity to municipalities, which was then sold to consumers, with mark ups which are as high as 10% to 18%, creating an impression that electricity tariffs were too high.” He further highlighted that 20 municipalities owed Eskom more than R26-billion.
What was not disclosed to the reader is the level of cross subsidisation between municipal customers and Eskom customers and the diverse tariffs charged to municipalities by Eskom. What is also omitted and needs scrutiny is the reluctance of Eskom, as the service provider of a municipal service, to work with Municipalities to collect outstanding Municipal debt in terms of a Service Delivery Agreement.
The reduction in electricity demand over the eight weeks of the National Lockdown, has enabled Eskom to address urgent repairs to address capacity issues.
CIGFARO aims to further the interests of Practitioners in the Financial and related areas by advising institutions, commissions and other bodies and persons on some of the facts at hand. Certainly, the debt by Municipalities is regretted. However, the responsibility and commitment of Eskom to assist Municipalities is imperative in order to ensure every person who can afford to pay are paying for the full basket of municipal services with such payment including the payment of Municipal taxes.
The revenue collection processes by municipalities are complex and, in some instances, very emotional and cumbersome. Rates is the main source of revenue for general municipal expenditure. Utility income is for funding the utility service itself and the related aspects of keeping an efficient service in place. It has proven to be very difficult to collect revenues where the only collection method is rates because of rights enshrined in the Constitution in the Bill of Rights.
The best methodology, acknowledged by National Treasury in the Inter-Ministerial Task Team on Revenue, is the suspension of electricity or the use of electricity provision as a credit control method to collect outstanding debt.
The reluctance of Eskom to comply with National legislation through the signing of Service Level Agreements with municipalities where Eskom is the electricity supplier, either in whole or in part, was raised by the South African Local Government Association (SALGA) in parliament. Even at that level it has not resulted in any positive outcome. Municipalities will be in a better financial position if Eskom complies with section 81 of the Local Government Municipal Systems Act, 32 of 2000, as amended, by signing the required Service Delivery Agreement (SDA) as envisaged.
President of CIGFARO says, “We are always willing to engage stakeholders and work together in building better lives for all.” It is also imperative to ensure that all organs of state work together to ensure a better life for all.
For more information visit the website at: www.cigfaro.co.za – Media Room
Media release by David Maynier, Western Cape Minister of Finance and Economic Opportunities
We welcome the announcement by President Cyril Ramaphosa last night that the whole of South Africa will be moving to Alert Level 3 from 1 June 2020, and that all economic activity will resume except for certain sectors.
Minister David Maynier
We are particularly glad to hear that the construction sector will be allowed to resume activity under Alert Level 3 as this is critical to saving jobs and the economy in the Western Cape. This sector is already under enormous strain and an estimated 100,000 direct and indirect jobs could be lost due to the impact of Covid-19. And so, we will be working closely with the sector to help them implement the necessary health and safety measures on construction sites ahead of Alert Level 3.
More details on which sectors will not be allowed to open are likely to be confirmed with the release of the Alert Level 3 regulations by the Minister of Cooperative Governance and Traditional affairs, Nkosazana Dlamini-Zuma. As we have with the Alert Level 4 regulations, and in particular for the e-commerce and construction sectors, where we think that further consideration can be made for these sectors to safely open we will make further submissions to national government to do so.
We remain concerned about the tourism sector which is a major contributor to jobs and the economy in the Western Cape, and at present is only looking likely to open under Alert Level 2. This sector has already been hard-hit and could cost the Western Cape around 104 504 direct and indirect jobs in 2020. And so, where we think there are opportunities for tourism to open up safely and responsibly under Alert Level 3 we will request that national government allow this.
We firmly believe that if done responsibly, the economy in the Western Cape can open up while preventing the spread of Covid-19, and we are committed to supporting businesses through this crisis.
For assistance in understanding the regulations, guidance on workplace safety or help navigating the financial relief packages email us at supportbusiness@wesgro.co.za
To avoid a return to a hard lockdown, it is imperative that every business that is operating now, or which opens under the new alert level, plays by the rules, and implements the necessary health and safety measures as instructed by national government to avoid further negative impacts on their respective sector.
It is just as important that every person returning to the workplace always adheres to the safety guidelines that are put in place by their employer, even when taking a break in a communal area.
Every employer and employee has a responsibility to ensure that our economy stays open in the Western Cape. We all need to stay safe in order to save jobs.
We will all have to pull together, and we will all have to work together, in the coming days, and weeks, and months because, in the end, it is up to all of us to stop the spread of Covid-19 in the Western Cape.
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