How the ANC broke Eskom

Source: MyBroadband

Eskom was once so successful that it was supplying more than half the electricity in Africa.

However, years of corruption, incompetence and political meddling has brought Eskom to its knees, and it is now begging for bailouts to stay afloat.

The company’s growing debt burden, which already exceeds R400-billion and can grow to R600-billion in the next three years, means it is technically bankrupt.

So bad is the situation that former Finance Minister Nhlanhla Nene said Eskom is the single biggest risk to South Africa’s economy.

The image below provides an overview of how Eskom changed over the last 10 years:

Image credit: MyBroadband

By Gerry Smith for Bloomberg 

Tech giants like Google and Facebook are threatening the media business by capturing a growing share of advertising dollars.

Yet many of those companies, which made fortunes selling highly targeted online ads, have become big buyers of a decidedly low-tech medium: print advertising.

“If you look now at companies like Netflix and Google, we’re seeing our biggest print advertisers now tend to be these digitally native companies that want to announce something to the world,” New York Times Chief Operating Officer Meredith Kopit Levien said Monday at an investor conference. “So there’s irony in that.”

Despite the shifting media landscape, it’s still hard to match the prestige of the Gray Lady, Levien said.

“There are things that an ad in the New York Times does for a marketer that there isn’t another vehicle,” she said.

The Trade Desk, an online ad marketplace, bought ads in both the New York Times and News Corp.’s Wall Street Journal in September. But the tech company poked fun at its own campaign.

“Possibly the worst ad we’ll ever run,” the company said in the announcement. It then plugged its own “more targeted, data-driven approach” to buying ads.

For the Times, Silicon Valley ad campaigns may not be enough to revive the print business, which has been shrinking for years as readers move online. But it has helped stem some of the bleeding.

The Times’ print advertising revenue was roughly flat last quarter, after falling about 12% in the second quarter and 2% in the first quarter. The growth of digital subscriptions, meanwhile, has helped make investors more confident about the 167-year-old business. The stock is up 45% this year.

Source: IT News Africa

As South Africa’s business sector continues to expand across a myriad of digital platforms, cybercrime continues to threaten this burgeoning digital sphere. “There are many victims of cybercrime, with limited recourse available in terms of current South African law. The need for tighter and more effective legislation is pressing,” says Grant Christianson, e4’s Group Legal Advisor.

The end of October 2018 hopefully saw the legislative cycle for the Cybercrimes Bill nearing completion, as the Department of Justice and Constitutional Development tabled an updated version. Christianson says that the existing laws have become problematic in adequately combatting cybercrime and the new Bill is needed to effectively “fill-the-gaps” that exist in current legislation and the common law.

“According to the South African Banking Risk Information Centre (SABRIC), South Africa’s annual loss is estimated at R2,2 billion, making it a significant threat to an already volatile economy.”

While the Bill does no longer address cybersecurity, he says that it will provide a framework for combatting cybercrime. Initially drafted in 2015, it addresses criminal activity that is computer-based and is related to unlawful access to, interference with or distribution of data, electronic communications, information systems and networks. He says the Bill also creates new offences for hacking; phishing, cyber bullying, unlawful interception and distribution of data, ransomware, cyber forgery and extortion, as well as acts involving malware and identity theft. Anyone convicted is likely to be fined and/or imprisoned up to 15 years.

The Bill is also expected to align with international best practice: “There will be a requirement to co-operate with other countries to effectively deal with multi-jurisdictional cybercrime activity, as often the cyber offence is created in one jurisdiction and felt in another,” says Christianson.

As a country, with the third highest number of cybercrime victims worldwide, South Africa is a target. Christianson says that mobile technology will further impact users as the country’s growing reliance on the app economy and other mobile trends will drive cyber criminals to penetrate mobile networks: “As devices become more connected and smarter, users are more exposed and so the threat grows. Digitisation is a trend that has no end in sight and while it brings with it innovation and exciting changes, cybercrime continues to grow in parallel.”

While the timeframe for the Bill’s signature is uncertain, Christianson says that it is at least in its final stages and once signed into law, the law-enforcement industry can become more proactive in its pursuit of cybercriminals.

By Cheyenne MacDonald for DailyMail

Google’s private browsing options may not be as incognito as you’d expect.

New research into Google’s ‘filter bubbles,’ in which search results are personalized based on the data it’s collected about you, has found that logging out or switching to Incognito Mode does almost nothing to shield you from targeted results.

By comparing search results for controversial topics, including gun control, immigration, and vaccinations, the study (notably conducted by rival search engine, DuckDuckGo) uncovered significant variations in what different users were shown.

New research into Google’s ‘filter bubbles,’ in which search results are personalised based on the data it’s collected about you, has found that logging out or switching to Incognito Mode does almost nothing to shield you from targeted results.

Despite the common assumption that logging out or going Incognito provides anonymity, DuckDuckGo points out that this isn’t really the case.

Websites use several other identifying factors to keep tabs on users’ activity, including IP addresses.

To highlight the issue, DuckDuckGo recruited volunteers in the US to perform a series of searches for the terms ‘gun control,’ ‘immigration,’ and ‘vaccinations.’

All were tasked to do this at the same time, at 9pm ET on Sunday, June 24, in Incognito, logged out, and then logged back in.

The study also controlled for location, DuckDuckGo notes.

This made for 87 sets of results in total, with 76 desktop users and 11 mobile users.

Despite the anonymised conditions, which would be expected to produce the same results across the board, most of the participants still appeared to see personalised results.

Private searches for gun control, for example, yielded 62 different sets of results for the 76 participants.

Similar trends were seen in searches for the other two terms, with 57 variations in ‘immigration’ results, and 73 variations in ‘vaccinations’ results.

Users were shown links in different orders, and some were shown links that were not displayed to others.

News and Video infoboxes, in particular, demonstrated ‘significant variation.’

A search for ‘immigration,’ for example, pulled up six variations from six different sources in the Videos infobox, while ‘gun control’ led to 12 variations from 7 sources.

According to DuckDuckGo, the findings indicate that ‘it’s simply not possible to use Google search and avoid its filter bubble.’

While the motivations behind the study are undoubtedly biased, the findings still stand as a reminder that true anonymity on the internet isn’t as straightforward as it might seem.

Loadshedding is here to stay

Source: MyBroadband 

South Africa should prepare for “years of gloom” and citizens must start stockpiling candles and torches, thanks to what lies ahead at Eskom.

According to a report in the Sunday Times, Eskom’s load-shedding and financial problems “could drag the country into a death spiral”.

Eskom needs to spend billions of rand on maintenance in 2019 and has promised that load-shedding will subside by March, but the report quoted energy analyst Ted Blom who said coal shortages will continue until 2025.

“About 80% of Eskom power generation relies on coal,” said the report.

Eskom has been described as being at a “coal cliff”, where there are not enough coal mines to supply its needs, and that new mines will take years to develop.

Eskom has made headlines in recent weeks for its coal shortages, and in November 10 of its power stations had less than 10 days of coal supply left.

With coal shortages comes more load-shedding, and while this is a severe problem for people who want to go about their daily lives, it can be a death sentence for businesses and the economy.

Continued load-shedding may even force the ratings agencies to downgrade SA to junk status due to all the local investments which would disappear.

Econometrix chief economist Azar Jammine stated in the report that this has led South Africa’s growth rate to drop to the second-worst among the G20 countries.

Economist Mike Schussler described this as “a nightmare for SA”, and said we are “at the edge of a cliff”.

Eskom technically bankrupt
The Organisation Undoing Tax Abuse (Outa) recently said Eskom’s financial results indicate a company that “is technically bankrupt”.

While presenting its 2018/2019 interim results, Eskom revealed that its 2007 debt of R40 billion has swelled to R419 billion and is estimated to exceed R600 billion in the foreseeable future.

In addition, Eskom’s huge staff complement including fixed-term contractors has increased to 48,628 in 2018 from 47,658 in 2017, costing South Africans R29.5 billion in March 2018.

Eskom’s dire financial situation is set to get even worse as its full year loss is set to grow to R15 billion – up from the expected R11.2 billion.

Outa said Eskom does not have a sustainable business model or a comprehensive financial plan to claw itself out of the debt hole it is currently in.

“If Eskom was a private company, it would either be under business rescue or in liquidation,” said Ronald Chauke, Outa’s energy portfolio manager.

He said the appointment of Calib Cassim as Eskom’s permanent chief financial officer may offer some stability and comfort that the rot will stop.

However, Outa said, it’s the power utilities’ declining revenues which inhibit it from turning into profitability or controlling its ever-increasing operational costs.

Eskom moves turnaround strategy to 2019
Eskom has also said that it only expects to launch its turnaround strategy in 2019 after at least two delays of its much-anticipated recovery plan.

The power company’s long-term strategy has been approved by the board, but the plan is seen as being implemented “in the new year”.

This news come after a third day of scheduled power outages on Saturday due to inadequate energy availability.

Financial constraints limited maintenance amid unplanned outages from an aging fleet of power stations, making matters worse.

How SA climbed its way out of a recession

By Lameez Omarjee for Fin24

The SA economy has officially emerged from recession, Stats SA announced on Tuesday morning, following a 2.2% rise in GDP growth for the third quarter of the year.

The economic growth figures were broadly in line with the expectations of economists surveyed by Fin24 prior to publication, who had projected growth rates of between 0.8 and 2.6%.

The rand firmed by as much as 1% shortly after the release of the results.

However, despite the rebound, economists still expect overall GDP growth for the year to be weak, below 1%.

Here’s what boosted growth in the third quarter:

1. Manufacturing industry expands

Growth was mainly driven by the secondary sector, which grew by 4.5%. This was aided by a 7.5% increase in manufacturing. Large contributions came from steel and metals, and motor vehicle production, among other things.

2. Agriculture rebounds

Even though the primary sector contracted by 5.4% in the quarter – mainly due to a large drop in mining – the agriculture industry rebounded following two quarters of substantial contractions.

During the third quarter, increased production in field crops, horticultural and animal products, helped improve growth to 6.5%.

Earlier on Tuesday, Bloomberg reported that confidence in the industry had declined to its lowest in nine years. The agribusiness confidence index dropped from 48 to 42, mainly due to concerns over weather conditions and a lack of clarity on land reform policy.

3. Transport industry rebounds

The tertiary sector grew by 2.6% during the quarter. The transport, storage and communication industry in particular expanded by 5.7%, rebounding from a -4.9% contraction in the second quarter and improving from 0.9% growth reported in the first quarter.

4. Finance, real estate and business services continue growth trend

Also within the tertiary sector, the finance, real estate and business services industry continued its growth trend, increasing by 2.3% during the quarter.

Additionally, the trade industry – particularly wholesale, retail and food and beverages – and catering and accommodation increased by 3.2%.

5. Expenditure-led growth

Expenditure GDP grew to 2.3%, following a decline of -2.6% and -0.7% reported in the first and second quarters respectively. Government expenditure grew by 2.2%, while household expenditure grew by 1.6%.

However, gross-fixed capital formation declined -5.1% during the quarter, largely due to a decline in investment in construction works, transport equipment and residential buildings, according to the StatsSA report.

The President signed the National Minimum Wage Act into law on 23 November 2018.

In terms of this Act, all employers, irrespective of which industry they are operating in, must pay at least the minimum wages as set out below:

R 15.00 per hour for domestic workers;
R 18.00 per hour for farm workers; and
R 20.00 per hour in respect of all other employees.

The effective implementation date for these wages have not yet been promulgated but all indications are that it will become effective on 1 January 2019.

Exemptions
Although the Act makes provision for employers to apply for exemption from the minimum wage, it is clear from the draft exemption regulations that the Department of Labour is simply paying lip service to this principle.

The maximum exemption an employer will be able to qualify for will be a 10% reduction on the prescribed minimum wage, which will only be granted for a year, and which will be adjudged on the employers’ profitability, solvency and liquidity. This outcome hardly seems worth the effort taking into account the inevitable red tape that will accompany the application.

By Tia Frapolli for The NPD Group

The holiday season presents consumers with a perfect opportunity to get in touch with their creative side – a behaviour that bodes well for the US office supplies market.

Several arts, crafts, and traditional supplies categories that require creativity and offer an experience will be among the top industry performers this holiday. And, we know from NPD’s Holiday Purchase Intentions Survey that experiential gifting is not only trending with consumers, but set to grow over last year. In fact, the survey found that four out of 10 consumers plan on giving these types of gifts this year.

When it comes to the craft-related categories, consumer shopping behavior indicates a preference for discovering and purchasing these products in-person as opposed to online. Specifically, NPD data shows that acrylic paints, paint brushes, specialty note cards, and canvases all have a very low penetration in the e-commerce channel. In fact, over 95 percent of purchases in each of these categories are made in-store.

Tied to such products, we expect that popular holiday craft activities will include ornament decorating and homemade holiday décor. In addition, as spending time with friends and family is top of mind during the holidays, we expect the ever-popular canvas painting parties to continue to grow this season, and there are the sales numbers to show for it—canvas sales have grown by 20 percent over the past year.

Coinciding with the maker’s movement and popularity of hand lettering, this season we also expect to see a rise in holiday card making with custom lettering. A variety of writing instruments used for this activity are already seeing growth; collectively, sales of gel, porous, and fountain pens as well as dual, ultra, and extra fine color markers have grown by 8 percent leading up to the holiday season.

Without a doubt, consumers let their creativity shine during the holiday season, and this presents a favorable opportunity for the office supplies industry to get in on the action.

Source: IOL

As the festive season has kicked off in earnest and consumers spend more, FNB on Monday warned that approximately 56 percent of middle income consumers in South Africa spend all their monthly income in five days or less after receiving it.

This is according to data from FNB’s Retail segment, which categorises middle income consumers as those who earn a gross monthly income of between R7 000 up to R60 000.

Raj Makanjee, chief executive of FNB Retail, said that for many consumers it was not only a matter of living from one salary payment to another, the reality is that their monthly salary just does not last for 30 days.

Makanjee encouraged consumers to exercise financial discipline, saying that financial discipline was not dependent on having greater income but requires deliberate steps.

“These consumers tend to struggle with money management, with the shortfall leading to sacrifices in important areas such as having back up or emergency saving that can be used to pay for unforeseen expenses. High spending and limited savings cause consumers to rely on credit to get through the month, making them more vulnerable to be caught in a debt trap,” Makanjee said.

Christoph Nieuwoudt, chief executive of FNB Consumer, said more than half of consumers miss at least one debit order over a 12-month period, indicating the pressure consumers are under.

“For almost 40 percent of such customers, debt repayments make up more than half of their take-home-pay, which we consider to be very high. The main driver of this is large numbers of microlender loans and store cards that consumers take up. The ideal scenario for a consumer is to have one provider who gives them a transactional account and the right type of credit when needed,” Nieuwoudt said.

The bank said said it had also seen that 30 percent of middle income consumers who are saving, save for emergencies and at least one other longer-term goal.

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